BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

Beijing Chunlizhengda Medical Instruments Co., Ltd.

Equities

1858

CNE100001TP1

Medical Equipment, Supplies & Distribution

Market Closed - Hong Kong S.E. Other stock markets 04:08:28 2024-05-20 am EDT			5-day change	1st Jan Change
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Apr. 29	Beijing Chunlizhengda Medical Instruments Co., Ltd. Reports Earnings Results for the First Quarter Ended March 31, 2024	CI
Mar. 28	Beijing Chunlizhengda Medical Instruments Co., Ltd. Proposes Final Dividend for the Year Ended 31 December 2023, Payable on 31 July 2024	CI

Beijing Chunlizhengda Medical Instruments : PROPOSED A SHARE OFFERING PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND INTERNAL MANAGEMENT POLICIES AND NOTICES OF EGM AND CLASS MEETINGS

July 24, 2020 at 10:05 am EDT

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Beijing Chunlizhengda Medical

Instruments Co., Ltd.* (北京市春立正達醫療器械股份有限公司), you should at once hand this circular to the purchaser or transferee or to the bank or stockbroker or other licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

北京市春立正達醫療器械股份有限公司

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1858)

PROPOSED A SHARE OFFERING

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND

INTERNAL MANAGEMENT POLICIES

AND

NOTICES OF EGM AND CLASS MEETINGS

The EGM, the Domestic Shareholders' Class Meeting and the H Shareholders' Class Meeting will be held at 9:30 a.m., 10:30 a.m. (or the time immediately after the conclusion of the EGM) and 11:00 a.m. (or the time immediately after the conclusion of the Domestic Shareholders' Class Meeting) respectively on Monday, 10 August 2020 at No. 10 Xinmi Xi Er Road, Southern District of Tongzhou Economic Development Zone, Tongzhou District, Beijing, the PRC.

The forms of proxy for use at the EGM and the Class Meetings are enclosed and are also published on the website of the Hong Kong Stock Exchange (http://www.hkexnews.hk) and the website of the Company (http://www.clzd.com). If you intend to appoint a proxy to attend the EGM and/or the Class Meetings, you are requested to complete and return the enclosed forms of proxy in accordance with the instructions printed thereon not less than 24 hours before the time fixed for holding the EGM and/or the Class Meetings or any adjournment thereof (as the case may be). Completion and return of the forms of proxy will not preclude you from attending the EGM and/or the Class Meetings and voting in person if you so wish. Shareholders who intend to attend the EGM and/or the Class Meetings in person or by proxy should complete and return the reply slips in accordance with the instructions printed thereon on or before Wednesday, 5 August 2020.

* For identification purposes only

24 July 2020

		CONTENTS
			Page
DEFINITIONS .	. . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX I	-	INVESTMENT PROJECTS FOR PROCEEDS
		RAISED FROM THE A SHARE OFFERING AND
		THE FEASIBILITY ANALYSIS REPORT OF
		BEIJING CHUNLIZHENGDA MEDICAL
		INSTRUMENTS CO., LTD. . . . . . . . . . . . . . . . . . . . . . .	20
APPENDIX II	-	PROPOSAL ON UNDERTAKINGS IN CONNECTION
		WITH THE MATTERS ABOUT THE A SHARE
		OFFERING AND CORRESPONDING RESTRICTIVE
		MEASURES
APPENDIX II.A	- LETTER OF UNDERTAKING ON MATTERS
		RELATING TO CONTINGENT REPURCHASE
		INVOLVED IN THE SHARE OFFERING OF
		BEIJING CHUNLIZHENGDA MEDICAL
		INSTRUMENTS CO., LTD. . . . . . . . . . . . . . . .	28
APPENDIX II.B	- STATEMENT ON THE PROSPECTUS AND
		OTHER INFORMATION DISCLOSURES
		AND COMPENSATION LIABILITIES OF
		BEIJING CHUNLIZHENGDA MEDICAL
		INSTRUMENTS CO., LTD. . . . . . . . . . . . . . . .	29
APPENDIX II.C	- PROPOSAL ON SHARE PRICE
		STABILISATION MEASURES UPON
		LISTING OF SHARES OF BEIJING
		CHUNLIZHENGDA MEDICAL
		INSTRUMENTS CO., LTD. . . . . . . . . . . . . . . . .	30
APPENDIX II.D	- LETTER OF UNDERTAKING ON THE
		RESTRICTIVE MEASURES UPON
		NON-FULFILMENT OF SUCH
		UNDERTAKINGS BY BEIJING
		CHUNLIZHENGDA MEDICAL
		INSTRUMENTS CO., LTD. . . . . . . . . . . . . . . .	36
APPENDIX III	-	ANALYSIS ON REMEDYING THE IMPACTS OF THE
		DILUTION OF CURRENT RETURN AS A RESULT OF
		THE A SHARE OFFERING AND PROPOSAL ON THE
		REMEDIAL MEASURES . . . . . . . . . . . . . . . . . . . . . . . .	37

- i -

			CONTENTS
				Page
APPENDIX IV	-	THREE-YEAR SHAREHOLDER DIVIDEND RETURN
		PLAN AFTER THE A SHARE OFFERING OF BEIJING
		CHUNLIZHENGDA MEDICAL INSTRUMENTS CO.,
		LTD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	42
APPENDIX V	-	PROPOSED AMENDMENTS TO THE ARTICLES OF
		ASSOCIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	47
APPENDIX VI	-	PROPOSED AMENDMENTS TO CERTAIN
		INTERNAL MANAGEMENT POLICIES
APPENDIX VI.A	- RULES OF PROCEDURES OF THE GENERAL
			MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . .	118
APPENDIX VI.B	- RULES OF PROCEDURES OF THE BOARD
			MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . .	129
APPENDIX VI.C	- MANAGEMENT MEASURES FOR USE OF
			PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . .	137
APPENDIX VI.D	-	MANAGEMENT MEASURES FOR
			INFORMATION DISCLOSURE MATTERS . .	147
APPENDIX VI.E	- MANAGEMENT MEASURES FOR PROVISION
			OF EXTERNAL GUARANTEES . . . . . . . . . . . .	171
APPENDIX VI.F	- WORKING SYSTEM FOR INDEPENDENT
			DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . .	180
APPENDIX VI.G	- MEASURES FOR ADMINISTRATION OF
			RELATED PARTY TRANSACTIONS . . . . . . . .	190
APPENDIX VI.H	- MANAGEMENT SYSTEM FOR REGULATING
			FUND TRANSACTIONS BETWEEN
			RELATED PARTIES . . . . . . . . . . . . . . . . . . . . .	205
APPENDIX VI.I	-	INVESTOR RELATIONS MANAGEMENT
			SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	211
APPENDIX VI.J	-	EXTERNAL INVESTMENT MANAGEMENT
			SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	221
APPENDIX VI.K	- IMPLEMENTING RULES OF THE
			CUMULATIVE VOTING SYSTEM . . . . . . . . .	229
APPENDIX VI.L	-	INTERNAL CONTROL SYSTEM . . . . . . . . . . . .	234

- ii -

		CONTENTS
			Page
APPENDIX VI.M	-	INTERNAL AUDIT SYSTEM . . . . . . . . . . . . . . .	246
APPENDIX VI.N	-	RULES OF PROCEDURES OF THE MEETING
		OF SUPERVISORY COMMITTEE . . . . . . . . . .	256
NOTICE OF THE EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . .	261
NOTICE OF THE DOMESTIC SHAREHOLDERS' CLASS MEETING . . . . . . . . .	265
NOTICE OF THE H SHAREHOLDERS' CLASS MEETING . . . . . . . . . . . . . . . . .	268

- iii -

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have

the following meanings:

"A Share(s)"	ordinary share(s) subscribed for in RMB, which are
	proposed to be issued by the Company under the A
	Share Offering;
"A Share Offering"	the Company's proposed initial public offering of no
	more than 38,428,000 A Shares, which will be listed on
	Shanghai Stock Exchange or Shenzhen Stock
	Exchange;

"Articles of Association"

"Board" or "Board of Directors"

"Class Meeting(s)"

the articles of association of the Company (as amended from time to time);

the board of Directors;

the 2020 second class meeting for holders of Domestic Shares to be held immediately after the conclusion of the EGM, and the 2020 second class meeting for holders of H Shares to be held immediately after the conclusion of the said class meeting for holders of Domestic Shares, or any adjourned meeting thereof respectively;

"Company"	Beijing Chunlizhengda Medical Instruments Co.,
	Ltd.* (北京市春立正達醫療器械股份有限公司), a joint
	stock company incorporated in the PRC with limited
	liability and the H Shares of which are listed on the
	Main Board of the Stock Exchange;
"CSRC"	China Securities Regulatory Commission;
"Director(s)"	the director(s) of the Company;
"Domestic Share(s)"	ordinary shares of nominal value of RMB1.00 each in
	the share capital of the Company, which are
	subscribed for in RMB by Chinese citizens and/or
	entities incorporated in the PRC and are credited as
	fully paid up;
"Domestic Shareholder(s)"	holder(s) of Domestic Shares;
"Domestic Shareholders'	the 2020 second Domestic Shareholders' class meeting
Class Meeting"	of the Company to be held at 10:30 a.m. (or the time
	immediately after the conclusion of the EGM) on
	Monday, 10 August 2020;

- 1 -

	DEFINITIONS

"EGM" or "Extraordinary	the 2020 third extraordinary general meeting of the
General Meeting"	Company to be held at 9:30 a.m. on Monday, 10
	August 2020 at No. 10 Xinmi Xi Er Road, Southern
	District of Tongzhou Economic Development Zone,
	Tongzhou District, Beijing, the PRC;
"Group"	the Company and its subsidiaries;
"H Share(s)"	overseas listed foreign shares with a nominal value of
	RMB1.00 each in the ordinary share capital of the
	Company, which are listed on the main board of the
	Stock Exchange;
"H Shareholder(s)"	the holder(s) of H Shares;
"H Shareholders' Class	the 2020 second H Shareholders' class meeting of the
Meeting"	Company to be held at 11:00 a.m. (or the time
	immediately after the conclusion of the Domestic
	Shareholders' Class Meeting) on Monday, 10 August
	2020;
"Hong Kong"	the Hong Kong Special Administrative Region of the
	PRC;
"Latest Practicable Date"	21 July 2020, being the latest practicable date prior to
	the printing of this circular for ascertaining certain
	information contained in this circular;
"Listing Rules"	the Rules Governing the Listing of Securities on the
	Stock Exchange;
"PRC" or "China"	the People's Republic of China which, for the purpose
	of this circular, excludes Hong Kong, the Macau
	Special Administrative Region of the People's
	Republic of China and Taiwan;
"RMB"	Renminbi, the lawful currency of the PRC;
"Share(s)"	the Domestic Share(s) and/or the H Share(s);
"Shareholder(s)"	the holder(s) of the Share(s);
"Stock Exchange"	The Stock Exchange of Hong Kong Limited;
"Supervisory Committee"	the supervisory committee of the Company;
"%"	per cent.

- 2 -

DEFINITIONS

Words importing the singular shall, where applicable, include the plural and vice versa. Words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall, where applicable, include corporations.

Any reference in this circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Listing Rules, the Securities and Futures Ordinance or any modification thereof and used in this circular shall, where applicable, have the meaning assigned to it under the Listing Rules, the Securities and Futures Ordinance or any modification thereof, as the case may be.

If there is any inconsistency between the English and Chinese versions of this circular, the English version shall prevail unless otherwise stated.

For identification purpose only

- 3 -

LETTER FROM THE BOARD

北京市春立正達醫療器械股份有限公司

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1858)
Executive Directors:	Registered office and Headquarters
Mr. Shi Chunbao	in the PRC:
Ms. Yue Shujun	No.10 Xinmi Xi Er Road
Mr. Xie Feng Bao	Southern District of Tongzhou
	Economic Development Zone
Non-Executive Director:	Tongzhou District
Mr. Wang Xin	Beijing
	the PRC
Independent Non-Executive Directors:	Postal Code: 101112
Mr. Ge Changyin
Mr. Ho Wai Ip	Principal Place of
Mr. Weng Jie	Business in Hong Kong:
	20th Floor, Winbase Centre
	208 Queen's Road Central
	Sheung Wan
	Hong Kong
To the Shareholders
Dear Sir or Madam,

PROPOSED A SHARE OFFERING

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND

INTERNAL MANAGEMENT POLICIES

AND

NOTICES OF EGM AND CLASS MEETINGS

1. INTRODUCTION

Reference is made to the announcements of the Company dated 3 November 2015, 22 April 2020 and 5 June 2020 in relation to the A Share Offering.

On 5 June 2020, the Board approved and resolved to submit to the EGM and Class Meetings (as the case may be) for approval of the following resolutions in relation to the A Share Offering:

SPECIAL RESOLUTIONS

the A Share Offering;
proposal on the use of proceeds from the Company's A Share Offering and feasibility analysis;

- 4 -

LETTER FROM THE BOARD

proposal on distribution of accumulated profits before the A Share Offering;
proposal on granting authorization to the Board and its authorized representatives to fully handle the specific matters in relation to the A Share Offering;
proposed amendments to the Articles of Association;

ORDINARY RESOLUTIONS

proposal on undertakings in connection with the matters about the A Share Offering and corresponding restrictive measures;
proposal on the analysis on remedying the impacts of the dilution of current return as a result of the A Share Offering and the responsive measures;
proposal on the three-year shareholder dividend return plan after the A Share Offering;
rules of procedures of the general meetings;
rules of procedures of the Board meetings;
management measures for use of proceeds;
management measures for information disclosure matters;
management measures for provision of external guarantees;
working systems for independent directors;
measures for administration of related party transactions;
management system for regulating fund transactions between related parties;
investor relations management system;
external investment management system;
implementing rules of the cumulative voting system;
internal control system; and
internal audit system.

- 5 -

LETTER FROM THE BOARD

Besides, the Company has agreed with the proposal regarding the amendments to the rules of procedures of the meeting of Supervisory Committee at the meeting of the Supervisory Committee convened on 5 June 2020 and to submit certain amendments to the rules of procedures of the meetings of Supervisory Committee to the EGM for consideration and approval by the Shareholders.

The purpose of this circular is to provide you with relevant information to enable you to make informed decision on whether to vote for or against the above resolutions to be proposed at the EGM and the Class Meetings (as the case may be).

2. PROPOSED A SHARE OFFERING

The Board will submit its application for the A Share Offering to the CSRC, the relevant stock exchange in the PRC, and other relevant regulatory authorities. The A Share Offering is subject to (among others) approval of the Shareholders at the EGM and the Class Meetings by way of special resolutions and approval from the CSRC, the relevant stock exchange in the PRC, and other relevant regulatory authorities.

The details of the A Share Offering are as follows:

(1) Class of Shares to be	: Shares to be issued are domestic listed ordinary
issued	shares denominated in RMB (A Shares).
(2) Nominal value of	: RMB1.00 per Share.
Shares
(3) Number of A Shares to	: The number of A Shares proposed to be issued will not
be issued	exceed 38,428,000 A Shares, representing no more
	than 10% of the total share capital of the Company
	upon the completion of the issuance. The Company
	and the lead underwriter can exercise the
	over-allotment option and the number of Shares to be
	over-allocated shall not exceed 15% of the size of the
	A Share Offering. The specific number of A Shares to
	be issued will be determined by the Board based on
	the authorization granted at the EGM and the Class
	Meetings and the negotiation with lead underwriters
	based on specific circumstances and the final number
	of total issued A Shares shall be subject to the limit
	approved by the CSRC. All of the Shares to be issued
	are new Shares and does not involve the transfer of
	existing Shares.

- 6 -

		LETTER FROM THE BOARD

(4)	Pricing methodology	: The issue price will be determined by making
		enquiries with offline investors, or by the Company
		and the lead underwriter(s) after negotiation, or by
		such other methods as permitted by the CSRC and
		other relevant regulatory authorities.
		When determining the issue price of the A Shares, the
		Company will take into consideration the following
		factors: (i) the operational and financial conditions of
		the Company; (ii) the prevailing market conditions;
		(iii) the market demand for the A Shares; (iv) the
		industry which the Company operates in; (v) the
		requirements under the applicable laws and
		regulations; and (vi) the average price-to-earnings
		ratio of other A share listed issuer(s) who operate in
		the same industry which the Company operates in.
		Based on the Company Law of the PRC, the issue
		price of the A Shares shall not be lower than the
		nominal value of the Shares of the Company, i.e.
		RMB1.00 per Share. There are no other legal or
		regulatory requirements stipulating the price floor in
		the A Share Offering. The Company does not intend to
		issue the A Shares at a price lower than the latest
		audited net asset value per share prior to the A Share
		Offering.
(5)	Method of issue	: The A Share Offering will be conducted by a
		combination of offline placement and online
		subscription, or such other method(s) of issue as
		permitted by the CSRC and other relevant regulatory
		authorities, with reference to market conditions and
		other relevant factors.
		Online subscription is a public subscription through
		the online trading system of the relevant stock
		exchange in the PRC. Any individual or institution
		holding a securities trading account can participate in
		such online subscription via (i) telephone; (ii)
		self-service terminal; or (iii) online.
(6)	Target of subscribers	: Investors who are in compliance with the
		requirements under PRC laws, regulations and
		regulatory documents.

- 7 -

LETTER FROM THE BOARD

According to Article 11 of the Initial Public Offering Shares Issuance Placement Rules 《( 首次公開發行股票配售細則》) of the PRC, the Company and its underwriters are prohibited from allocating the A Shares in its initial offering to certain parties, including but not limited to, (i) the Company, its shareholders, actual controllers, Directors, supervisors, and senior management, and any companies which any of them has direct and indirect actual control, joint control or in which they have material influence and the controlling shareholders of such companies, its subsidiaries or any other subsidiaries that such companies control, and other employees of the Company; (ii) close family members of the natural persons in (i), including spouses, children and their spouses, parents and parents-in law, brothers, sisters and their spouses, brothers-in-law and sisters-in law, parents of sons-in-law and daughters-in-law, for their subscription. The Company and its underwriter(s) shall strictly follow all applicable PRC laws and regulations in allocating the A Shares to potential subscribers under the A Share Offering.

Furthermore, prior to the issuance of A Shares, the Company will provide a list of related parties (as defined under the relevant listing rules of the relevant stock exchange in the PRC) of the Company and all connected persons (as defined under Chapter 14A of the Listing Rules) of the Company to its sponsor to the A Share Offering. Its sponsor will then review the list and submit the list to the relevant stock exchange in the PRC and the underwriter(s) to the A Share Offering. All persons listed on this list, including the related parties (as defined under the listing rules of the relevant stock exchange in the PRC) and connected persons (as defined under Chapter 14A of the Listing Rules) of the Company will not be permitted to subscribe for any A Shares in the A Share Offering. The Directors believe that such measures can ensure no A Shares under the A Share Offering will be allocated to and subscribed by the connected persons of the Company (as defined under Chapter 14A of the Listing Rules).

- 8 -

LETTER FROM THE BOARD

(7)	Form of underwriting	: The A Share Offering will be underwritten by the lead
		underwriter(s) on a standby commitment basis.
(8)	Place of listing:	: Shanghai Stock Exchange or Shenzhen Stock
		Exchange.
		The place of listing is expected to be ascertained
		before the year end of 2020. Further announcements
		regarding the place of listing will be made by the
		Company as and when appropriate.
(9)	Valid period of the	: The A Share Offering shall be subject to approval by
	resolution	shareholders at the EGM and the Class Meetings.
		Upon approval, the proposed A Share Offering shall

be valid for 12 months from the date of passing of the relevant resolutions at the EGM and the Class Meetings.

The Company will seek the Shareholders' approval for continuing to proceed with the A Share Offering if it does not complete within the 12 months validity period, unless the Board subsequently decides not to proceed further with the A Share Offering.

The A Share Offering will be voted item by item and is subject to approval by Shareholders at the EGM and the Class Meetings and approval by the CSRC, the relevant stock exchange in the PRC and other relevant regulatory authorities. Upon the completion of the A Share Offering, the Company will apply for the conversion into a joint stock company with limited liability with domestic and overseas listed shares. The Domestic Shares in issue will be converted into A Shares upon the completion of A Share Offering. Further, the A Share Offering will be made pursuant to the specific mandate to be sought at the EGM and the Class Meetings, which shall become effective upon approval by the Shareholders at the EGM and at the Class Meetings.

3. OTHER RESOLUTIONS RELATING TO THE A SHARE OFFERING

3.1. Proposal on the use of proceeds from the Company's A Share Offering and feasibility analysis

The proceeds raised from the A Share Offering (net of related expenses) will be used for the integrated construction project of orthopedic implant and ancillary materials, the construction project of research and development centre, the construction project of marketing networks and supplementary liquidity. The smooth implementation of the said projects can allow us to capture the domestic and overseas market demands, enrich the product structures, optimize the product deployment, enhance the risk-averse capacity, improve the integrated competence and profitability of the Company, as well as securing the long-term development in the future.

- 9 -

LETTER FROM THE BOARD

The total investment amount required for the above projects is approximately RMB2 billion. If there is any shortfall in funding these projects by the proceeds in the A Share Offering, the Company will fund such shortfall by its own funds or bank loans. If the actual proceeds raised from the A Share Offering are more than the amount required for the above projects, the excess portion will be used in the development of the Company's main business or to supplement the working capital of the Company. Before the proceeds raised from the A Share Offering are in place, the Company may make an initial investment to the above projects with its own funds or bank loans according to the market conditions, and after the proceeds raised are in place, the Company can replace the initial investment funds.

If the A Share Offering could not proceed, the Company will carry out the investment projects through its internally generated funds or other fund raising activities and the total investment amount for the investment projects would be adjusted accordingly.

The Board formulated the "Investment Projects for Proceeds Raised from the A Share Offering and the Feasibility Analysis Report of Beijing Chunlizhengda Medical Instruments Co., Ltd." 《( 北京市春立正達醫療器械股份有限公司A股發售募集資金投資項目及可行性研究報告》), the details of which are set out in Appendix I to this circular.

This proposal will be approved by way of special resolution at the EGM and the Class Meetings, respectively.

3.2. Proposal on distribution of accumulated profits before the A Share Offering

The undistributed accumulated profits of the Company before the A Share Offering should be distributed among all new and existing Shareholders according to their respective shareholdings following the A Share Offering.

This proposal will be approved by way of special resolution at the EGM and the Class Meetings, respectively.

3.3. Proposal on undertakings in connection with the matters about the A Share Offering and corresponding restrictive measures

For the purpose of protecting the interest of investors, pursuant to the Company Law of the PRC 《( 中華人民共和國公司法》), the Securities Law of the PRC 《( 中華人民共和國證券法》), the Measures for the Administration of Initial Public Offerings and Listing of Shares 《( 首次公開發行股票並上市管理辦法》), the Opinions of the CSRC on Further Promoting the Reformation of New Share Offering System 《( 中國證監會關於進一步推進新股發行體制改革的意見》) formulated by the CSRC, and other relevant regulatory requirements of the relevant stock exchange in the PRC, the Company shall make relevant undertakings in relation to the A Share Offering, and formulated certain restrictive measures in the event that the Company is unable to fulfil such undertakings. The major contents of the undertakings and restrictive measures are as follows: the undertakings on no fraudulent issuance in

- 10 -

LETTER FROM THE BOARD

the A Share Offering of the Company, the absence of false representation, misleading statement and material omission in the prospectus for the application for the A Share Offering and listing of the A Shares in the PRC, the proposal for price stabilisation within three years after the A Share Offering and the restrictive measures upon non-fulfilment of such undertakings.

The Board specially formulated the "Letter of Undertaking on Matters relating to Contingent Repurchase involved in the Share Offering of Beijing Chunlizhengda Medical Instruments Co., Ltd." 《( 北京市春立正達醫療器械股份有限

公司關於公司本次發行涉及的或有回購事宜的承諾函》), "Statement on the Prospectus

and Other Information Disclosures and Compensation Liabilities of Beijing

Chunlizhengda Medical Instruments Co., Ltd." 《( 北京市春立正達醫療器械股份有限

公司關於招股說明書及其他信息披露資料及賠償責任的聲明》), "Proposal on Share Price Stabilisation Measures upon Listing of Shares of Beijing Chunlizhengda Medical Instruments Co., Ltd." 《( 北京市春立正達醫療器械股份有限公司股份上市後股份價格穩定措施的議案》) and "Letter of Undertaking on the Restrictive Measures upon Non-fulfilmentof such Undertakings by Beijing Chunlizhengda Medical Instruments Co., Ltd." 《( 北京市春立正達醫療器械股份有限公司未能履行承諾時的約束措施的承諾函》). Please refer to Appendix II to this circular for details.

This proposal will be approved by way of ordinary resolution at the EGM and the Class Meetings, respectively.

3.4. Proposal on the analysis remedying the impacts of the dilution of current return as a result of the A Share Offering and the responsive measures

In accordance with the requirements of relevant laws and regulations, such as the Several Opinions of the State Council on Further Promoting the Healthy Development of Capital Market 《( 國務院關於進一步促進資本市場健康發展的若干意見》), Opinions of the Office of State Council on Further Strengthening the Protection of Legal Interests of Small and Medium Investors in Capital Market 《( 國務院辦公廳

關於進一步加強資本市場中小投資者合法權益保護工作的意見》) and the Guidelines on

Matters relating to Dilution of Current Returns of Initial Offering and Re-financing

and Major Asset Reorganization 《( 關於首發及再融資、重大資產重組攤薄即期回報有

關事項的指導意見》), the Board of the Company formulated the "Analysis on Remedying the Impacts of the Dilution of Current Return as a Result of the A Share Offering and Proposal on the Remedial Measures" 《( 關於填補A股發售攤薄即期回報的影響分析及應對措施的議案》) to protect investors' interest, the details of which are set out in Appendix III to this circular.

This proposal will be approved by way of ordinary resolution at the EGM and the Class Meetings, respectively.

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LETTER FROM THE BOARD

3.5. Proposal on the three-year shareholder dividend return plan after the A Share Offering

According to the CSRC's Decisions on Amending Some Provisions on Cash Dividends by Listed Companies 《( 關於修改上市公司現金分紅若干規定的決定》) and other relevant laws and regulations and the relevant provision of the Articles of Association as applicable after the A Share Offering, and in order to optimize the provisions in relation to profit distribution, and enhance the transparency and implementations of dividend distribution policy for Shareholders to supervise over the operation and appropriation of profits of the Company, the Company formulated the "Three-year Shareholder Dividend Return Plan after the A Share Offering of Beijing Chunlizhengda Medical Instruments Co., Ltd." 《( 北京市春立正達醫療器械股份有限公司A股發售後三年股東分紅回報規劃》), the details of which are set out in Appendix IV to this circular.

This proposal will be approved by way of ordinary resolution at the EGM and the Class Meetings, respectively.

3.6. Proposal on granting authorization to the Board and its authorized representatives to fully handle the specific matters in relation to the A Share Offering

The Board proposed to approve granting authorization to the Board and its authorized representatives to fully handle the Company's application for the A Share Offering and specific matters at the EGM and Class Meetings, respectively. The content and scope of the authorization include, but are not limited to:

in accordance with the laws, regulations, relevant regulatory requirements of the CSRC, relevant stock exchange in the PRC and other relevant regulatory authorities and the resolutions approved by the EGM and/or the Class Meetings, to determine, adjust and implement, in collaboration with the sponsor (lead underwriter(s)), the detailed proposal on the A Share Offering (including but not limited to the timing of the A Share Offering, the final number of A Shares to be issued, the final issue price and methods of issue, etc.);
to appoint the relevant intermediaries and determine their professional fees;
to determine the stock exchange and sector of listing by taking into account the actual situation of the Company and after consulting with the relevant authorities;
to prepare, sign, deliver and amend the documents and to sign material contracts relating to the A Share Offering in accordance with relevant laws, regulations and requirement of relevant regulatory departments;

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LETTER FROM THE BOARD

to make appropriate adjustments to specific arrangements of the use of proceeds and investment projects in accordance with relevant laws, regulations and the requirement of the government competent authorities;
upon the approval of the CSRC in respect of the A Share Offering and its listing, to revise the relevant provisions of the Articles of Association in accordance with the actual circumstances of the A Shares Offering;
to handle matters in relation to the initial registration of the A Shares, the listing and circulation of the A Shares on the relevant stock exchange in the PRC, the circulation of lock-up matters and other related matters after the completion of the A Share Offering;
to handle matters relating to the registration filing in relation to the A Share Offering; and
to handle other matters relating to the A Share Offering and the listing of the A Shares.

The valid period of the authorization is 12 months from the date of passing of the resolution at the EGM and Class Meetings.

This proposal will be approved by way of special resolution at the EGM and the Class Meetings, respectively.

3.7. Proposed amendments to the Articles of Association

Pursuant to the relevant laws and regulations of the PRC, the Board proposes to amend the Articles of Association to be effective upon the listing of the A Shares. The amended Articles of Association will take effect from the date of the completion of the A Share Offering. The major amendments to the Articles of Association include: (i) the provisions relating to the number of new A Shares to be issued; (ii) the provisions mandatory for the listing and issuance of the A Shares; (iii) the amendments to the Articles of Association based on the updates to the contents and/or numbering of the relevant legal provisions in the Company Law 《( 公司法》) and Guidelines for Articles of Association of Listed Companies 《( 上市公司章程指引》) of the PRC; and (iv) other amendments to the Articles of Association in accordance with the regulatory rules of the regulatory departments in the PRC for the domestic listed companies, which are aimed to meet the needs for the corporate governance and normative operations after the issuance and listing of the A Shares, including but not limited to the requirements of the laws of the PRC, such as Guidelines No. 3 on the Supervision and Administration of Listed Companies - Distribution of Cash Dividends of Listed Companies《上市公司監管指引第3號 - 上市公司現金分紅》, Notice Regarding Further Implementation of Cash Dividends Distribution of Listed Companies《關於進一步落實上市公司現金分紅有關事項的通知》, Guidelines on the Establishment of Independent Directorship of Listed

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LETTER FROM THE BOARD

Companies《關於在上市公司建立獨立董事制度的指導意見》, etc. As of the date of this circular, the information regarding the finalized number of A Shares to be issued has not been provided. The Company will fill in the relevant information once such information is finalized.

Please refer to Appendix V to this circular for the details of the proposed amendments to the Articles of Association. The Articles of Association is prepared in Chinese without an official English version. Any English translation is for reference only. If there is any inconsistency, the Chinese version shall prevail.

This proposal has been approved by the Directors at the Board meeting and is submitted for consideration and approval by the Shareholders by way of special resolution at the EGM and the Class Meetings, respectively. After the approval by the Shareholders, the proposal will take effect upon the completion of the A Share Offering and its listing in the relevant stock exchange of the PRC.

3.8. Proposed amendments to certain internal management policies

To further optimise the corporate governance structure of the Company for the purpose of the A Share Offering, the Board proposes to amend and adopt a total number of 26 internal management policies, including, but not limited to:

rules of procedures of the general meetings;
rules of procedures of the Board meetings;
management measures for use of proceeds;
management measures for information disclosure matters;
management measures for provision of external guarantees;
working systems for independent directors;
measures for administration of related party transactions;
management system for regulating fund transactions between related parties;
investor relations management system;
external investment management system;
implementing rules of the cumulative voting system;
internal control system; and
internal audit system.

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LETTER FROM THE BOARD

The proposed amendments to certain of the above internal management policies of which 14 resolutions in total, such as rules of procedures of the general meetings, rules of procedures of the Board meetings, management measures for use of proceeds, management measures for information disclosure matters, external investment management system, are subject to the approval of the Shareholders at the EGM by way of ordinary resolution, and will come into effect upon the listing of the A Shares.

Please refer to Appendix VI to this circular for details of the proposed amendments to the internal management policies that are subject to the approval of the Shareholders at the EGM.

The internal management policies mentioned above are formulated in accordance with relevant laws, regulations and listing rules of the PRC, some provisions of which may be different from the requirements of the Listing Rules. In the event that the requirements of the Listing Rules and the internal management policies mentioned above are different, the Company will comply with all relevant listing rules on which the Shares are listed, whichever is stricter or impose greater obligation.

4. OTHER INFORMATION FOR THE A SHARE OFFERING

4.1. Benefits of and reasons for the A Share Offering

The Directors consider that the A Share Offering will enhance the corporate image of the Company, further broaden the Company's funding channels and increase the Company's working capital and recognitions of capital market by attracting large institutional and medium and small investors. The Directors also believe that the A Share Offering will be beneficial to the Company's business growth, financing flexibility and business development, and be beneficial to obtain more financial resources and improve the competitiveness of the Company, and be beneficial to the long term development of the Company.

The Directors consider that the A Share Offering is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

4.2. Effects of the A Share Offering on shareholding structure of the company

Assuming that a total of 38,428,000 A Shares are permitted to be issued under the A Share Offering and the issued share capital of the Company remains unchanged prior to completion of the A Share Offering, the shareholding structure of the Company as at the date of this announcement and immediately after the completion of the A Share Offering is set out as follows:

Immediately after

completion of the A Share

Offering (assuming the

As at the date of the Latest

over-allotment option is

Practicable Date

not exercised)

fully exercised)

Approximate

percentage

of the

issued share

capital of

Number of

the

Number of

the

Number of

the

Company

Non-public Shareholders

Domestic Shares

250,000,000

72.3%

A Shares to be converted from

Domestic Shares in issue

250,000,000

65.1%

250,000,000

64.1%

Public Shareholders

A Shares proposed to be

issued under the A Share

Offering

38,428,000

10.0%

44,192,200

11.3%

H Shares

95,852,000

27.7%

95,852,000

24.9%

95,852,000

24.6%

Total

345,852,000

100%

384,280,000

100%

390,044,200

100%

As at the Latest Practicable Date, based on the publicly available information and to the Directors' knowledge, all the H Shares are held by the public and the Company has maintained a public float above 25% which satisfies the requirements under the Listing Rules. Assuming that all 38,428,000 A Shares under the A Share Offering are issued upon approval and that all are issued to non-connected persons of the Company, the percentage of the H Shares held by the public in the total number of Shares after the issuance is expected to be approximately 24.9%, and the percentage of the Shares (total of A Shares and H Shares) held by the public in the total number of the Shares after issuance is expected to be approximately 34.9%. The Company's public float will still be able

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LETTER FROM THE BOARD

to comply with the requirements of Rule 8.08 of the Listing Rules. The Company will closely monitor its public float to ensure its compliance, at all times, with relevant public float requirements.

As at the Latest Practicable Date, the Company has not entered into or intends to enter into any agreement with any connected persons of the Company in connection with subscription of A Shares.

4.3. Fund raising activities in the past twelve months

During the period from the date of listing of the H Shares of the Company on the Stock Exchange (i.e. 11 March 2015) to the Latest Practicable Date, no fund raising activities were conducted.

4.4. Expected timeline for the A Share Offering

The expected timeline for the A Share Offering is as below:

Upon the approval of the Shareholders, the Company will submit an application for the A Share Offering (including the prospectus and other relevant documents, etc.) to the relevant stock exchange in the PRC before the year end of 2020.
The relevant stock exchange in the PRC will raise questions to the Company by way of inquiry letter and the Company will then provide written responses accordingly (the "Q&A"). The length of time of the Q&A would depend on the number of questions the relevant stock exchange in the PRC may have and whether the Company can properly address their concerns. The Q&A is estimated to be completed within 6 months.
Upon completion of the Q&A, the relevant stock exchange in the PRC will arrange a review meeting (the "Meeting") with its listing committee (the "Listing Committee"). The Company and representatives from the sponsor will attend the Meeting and response to the Listing Committee.
After the Meeting and upon the approval by the Listing Committee, the relevant stock exchange in the PRC will submit an application to the CSRC for registration of the Shares.
Upon the completion of the registration of the Shares in the CSRC, the Company will arrange for the issuance of the A Shares. The major tasks of the issuance of the A Shares include performing road show, determining strategic allotment if needed, offline placement and online subscription, determining whether or not to adopt overallotment option, etc., after which the process of the issuance of the A Shares will be completed.

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LETTER FROM THE BOARD

The Company will then determine the listing date of the A Shares. The existing Domestic Shares in issue of the Company will be converted into A Shares on the listing date of the A Shares.

The expected timeline for the A Share Offering above is based on the best estimation of the Company. It will be subject to change based on the current and future market conditions and development of the Company.

5. THE EGM AND CLASS MEETINGS

Notices convening the EGM, the Domestic Shareholders' Class Meeting and the H Shareholders' Class Meeting to be held at 9:00 a.m., 10:30 a.m. (or the time immediately after the conclusion of the EGM) and 11:00 a.m. (or the time immediately after the conclusion of the Domestic Shareholders' Class Meeting) respectively on Monday, 10 August 2020 at No. 10 Xinmi Xi Er Road, Southern District of Tongzhou Economic Development Zone, Tongzhou, District, Beijing, the PRC, respectively, are set out on pages 261 to 270 to this circular and their respective reply slips and proxy forms are also enclosed hereto.

In order to be qualified to attend and vote at the EGM and H Shareholder Class Meetings, holders of H Shares whose transfers have not been registered must deposit the transfer documents together with the relevant share certificates at the office of the H Share registrar of the Company, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong by no later than 4:30 p.m. on Tuesday, 4 August 2020.

Shareholders whose names appear on the Company's register of members at the close of business on Tuesday, 4 August 2020 are entitled to attend and vote at the EGM and/or the Class Meetings.

The forms of proxy for use at the EGM and the Class Meetings are also enclosed. Such forms of proxy are also published on the websites of Hong Kong Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.clzd.com). If you intend to attend the EGM and/or the Class Meetings by proxy, you are requested to complete and return the enclosed proxy form(s) in accordance with the instructions printed thereon and deposit the form not less than 24 hours before the time appointed for the holding of the EGM and/or the Class Meetings or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM and/or the Class Meetings if you so wish. Shareholders who intend to attend the EGM and/or the Class Meetings in person or by proxy are requested to complete the enclosed reply slip in accordance with the instructions printed thereon and deposit the reply slip on or before Wednesday, 5 August 2020.

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LETTER FROM THE BOARD

Under the Listing Rules, no Shareholders are required to abstain from voting at the

EGM and the Class Meetings respectively.

6. PROCEDURES FOR VOTING AT THE EGM AND CLASS MEETINGS

According to Rule 13.39(4) of the Hong Kong Listing Rules, the vote of Shareholders at the EGM and/or the Class Meetings will be taken by poll. Accordingly, all the resolutions could be taken by poll at the EGM and/or the Class Meetings pursuant to the Articles of Association.

7. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

8. RECOMMENDATIONS

The Directors believe that the proposals mentioned above are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that Shareholders vote in favour of the resolutions to be proposed at the EGM and/or the Class Meetings as set out in the notice of the EGM and/or the Class Meetings.

Yours faithfully,

By Order of the Board

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

Shi Chunbao

Chairman

Beijing, the PRC

24 July 2020

For identification purposes only

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APPENDIX I INVESTMENT PROJECTS FOR PROCEEDS RAISED FROM THE A SHARE OFFERING AND THE FEASIBILITY ANALYSIS REPORT OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

INVESTMENT PROJECTS FOR PROCEEDS RAISED FROM THE A SHARE OFFERING AND THE FEASIBILITY ANALYSIS REPORT OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

Pursuant to the offering plan in relation to the initial public issue and listing of A shares, requirements under relevant laws and regulations and regulatory documents, as well as the actual situation of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (the "Company"), the Company has prepared the following investment projects for proceeds raised from the A Share Offering and the Feasibility Analysis Report of Beijing Chunlizhengda Medical Instruments Co., Ltd.

OVERVIEW OF THE INVESTMENT PROJECTS FOR PROCEEDS RAISED

After deducting the issue expenses, all proceeds raised from the issue will be used on the following projects:

		AMOUNT OF
		PROCEEDS TO
		BE USED
		(RMB10	PROPORTIONS
NO.	PROJECT NAME	THOUSAND)	(%)
1	Integrated construction project for	86,000.00		43
	orthopedic implant and supporting
	materials
2	Construction project for research and	68,000.00		34
	development centre
3	Construction project for marketing network	16,000.00	8
4	Project for the replenishment of liquidity	30,000.00	15

	Total	200,000.00		100

The total amount of proceeds to be used on the above projects shall not exceed RMB2 billion in aggregate. If the actual net proceeds raised from the issuance of A shares exceeds the intended capital requirements of the above investment projects, the excess amount will be reasonably used after the corresponding legal procedures in accordance with the relevant laws, regulations and regulatory documents. If the actual net proceeds raised are insufficient for the intended capital requirements of the above investment projects, the Company will finance those projects by its own funds or bank loans.

Before the receipt of proceeds raised from the issuance of A shares, the Company will subsidize the implementation of above use of proceeds with own funds and bank loans based on the actual progress of each investment project. Upon the receipt of proceeds raised, such proceeds will be utilized for replacing the own funds applied in such investment projects and/or repayment of outstanding bank loans.

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APPENDIX I INVESTMENT PROJECTS FOR PROCEEDS RAISED FROM THE A SHARE OFFERING AND THE FEASIBILITY ANALYSIS REPORT OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

DETAILS ON THE PROJECTS TO BE INVESTED BY PROCEEDS RAISED
1. Integrated construction project for orthopedic implant and supporting materials
  1. Project Summary

The project is located in Wei County Hi-Tech Industrial Development Zone of Hebei province, which lies at the east end of Kuayue road, south end of Northern 1st Ring Road, north end of Mianfang road and west end of Binhe road. The Company intends to utilize the purchased land to carry out the construction works, construct ancillary facilities, install equipment and recruit personnel. The Company intends to use RMB860 million of the proceeds raised.

Products of the project are divided into implants, consumables and surgery devices. After the completion of the project, the Company will effectively enhance the production capacity of implants and consumables, realise the production and processing capacity of supporting materials while the production capacity of surgery devices will be expanded.

2. The Necessity of Investing in the Project

With the explosive growth of aging population in China, the increase in penetration of orthopedic implants and the gradual improvement of the social security system, the market size of joint and spinal implant products will be on the rise in the domestic market in the future and it is expected that the demand for the products of the Company will maintain a rapid growth in the domestic market. Meanwhile, the demand for the products of the Company in overseas market will continue to grow. It is necessary for the Company to significantly increase its production and supply capacity to satisfy the demand in domestic and overseas markets and ensure the future development.

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APPENDIX I INVESTMENT PROJECTS FOR PROCEEDS RAISED FROM THE A SHARE OFFERING AND THE FEASIBILITY ANALYSIS REPORT OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

The competition in the orthopedic medical instrument industry becomes increasingly fierce. In the development process, the Company needs to follow the evolving trend of the technology industry, continue to develop new products, and effectively improve the Company's ability to withstand risks. This project, which follows the evolving trend of the industry and ensures that the products produced can precisely meet the clinical need of patients and involves advanced technology and added value, will boost the Company's comprehensive strength and profitability.
With the population aging, gradual improvement of the medical insurance system and increase in medical awareness, the market of orthopedic implants is expanding but the advanced orthopedic implants, such as joint and spine, are mainly imported and there is a huge room for substituting the imported implants. In recent years, the national medical reform policy has been steadily implemented, including the implementation of purchasing high-value medical consumables with target quantity and a triage treatment system, which will provide development opportunities for domestic medical devices to substitute the imported devices. Under the general background of control on medical fees, as a leading enterprise in orthopedic implants production in China, the Company has a comprehensive product range, complete quality control and cost control processes. Products of the Company are designed according to the physiological characteristics of Chinese people which have a stronger market competitiveness. After this project is completed, the production capacity of the Company's products will be expanded, which help the Company to seize the opportunity to growth, increase the market shares and, consolidate and enhance the Company's industry status.

3. Integrated evaluation of the project

Benefiting from the huge market demand for joints and spine related

high-end orthopedic implant consumables and its obvious trend of substituting imports, this project will improve the Company's operation quality, market competitiveness and corporate efficiency, and hence effectively reducing the Company's cost, saving expenses, exploring new profit source and enhancing the overall economic benefits.

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APPENDIX I INVESTMENT PROJECTS FOR PROCEEDS RAISED FROM THE A SHARE OFFERING AND THE FEASIBILITY ANALYSIS REPORT OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

Construction project for research and development centre
1. Project Summary

In order to further enhance the Company's research and development capacity and its level of techniques, the Company intends to use the proceeds of RMB680 million for construction of research and development centre, purchase of equipment for research and development, environment set-up required for research and development as well as testing on products, recruitment of professional staff related to the research and development on orthopedic medical device products. The Company intends to construct a new research and development centre in Wei County, Hebei Province, which includes different centres focusing on research and development on Class I, II and III medical devices, etc. Upon the completion of project, the emphasis will be put on addressing knotty problems with the key techniques on the upper and lower streams of industrialization, improving the quality of products, maintaining the domestically leading quality of products, as well as securing its corporate competitiveness by minimizing the costs.

2. The Necessity of Investing in the Project

In recent years, the standard of the orthopedic medical device industry in the PRC has developed rapidly. However, the technology of orthopedic medical device industry in the PRC remains at a lower-medium standard in general, and the orthopedic medical device industry requires high research and development capabilities from the company as it is a technology-driven industry and there are still gaps in terms of research and development capabilities between the Company and international orthopedic giants. In order to accelerate the enhancement of the Company's technologies, enrich the technology reserve and strengthen the advantages in technologies, it is necessary for the Company to establish a new research and development centre. Upon the completion of the research and development centre project, it will benefit the overall management of the Company's research and development and further enhance the capabilities in independent research and development. At the same time, the exchanges with hospitals and industry experts will be more in-depth, the external collaborations will be strengthened and the research and development system will be further optimized so as to reduce the gap with international industry giants and promote a prosperous development of the Company continuously.

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APPENDIX I INVESTMENT PROJECTS FOR PROCEEDS RAISED FROM THE A SHARE OFFERING AND THE FEASIBILITY ANALYSIS REPORT OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

With the gradual implementation of a series of supportive policies and regulations by the PRC along with the continuous enhancement of the standard of economic development, the disposable income of residents continue to increase and the market demand for medical device products no longer stops at high quality, instead, there are higher demands for qualities such as the technologies adopted by the products, raw materials used and whether the features of products meet the demand for customization. These demands drive the medical device industry to continuously develop new products, expand the product lineup and complete the upgrade for existing products. On the other hand, the Company have to complete the update and upgrade of products in order to adapt to the development trend of the industry. As such, it is necessary for the Company to establish a new research and development centre of high standard so as to ensure that the quality standard of products is enhanced and product upgrade is realised.
The existing research site of the Company is unable to provide the independent research spaces required for the expansion project and even hinders the implementation of new projects. As a result, the Company is in need of a new research site to improve the research environment. When the construction of the project is completed, the new research and development centre will be able to improve the research environment, meet the demand of space for equipment and staff as well as facilitate and strengthen the exchanges of the domestic and foreign orthopedic medical device industry, deepen the communication between research and development team and clinical experts to significantly enhance the efficiency of research and development.

3. Integrated evaluation of the project

The research and development centre project will include the

construction of a research and development centre at Wei County, Xingtai of Hebei Province. Upon the completion of the project, the research and development system of the Company will be further optimised, the efficiency of research and development will be significantly enhanced and product upgrade will be further accelerated. Overall speaking, the project will bring a higher economic efficiency to the Company.

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APPENDIX I INVESTMENT PROJECTS FOR PROCEEDS RAISED FROM THE A SHARE OFFERING AND THE FEASIBILITY ANALYSIS REPORT OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

Project for the construction of marketing network
1. Project Summary

The project will construct a marketing network covering the PRC on the basis of the existing marketing network, in order to strengthen the Company's capabilities in market sales, customer services and management of distributors to further expand the market shares of products and enhance the market competitiveness of the corporate. The particulars of the project include: 1) conducting marketing training sessions in cities including Guangzhou, Shanghai and Chengdu; 2) deploying stations for marketing and distributing; and 3) establishing and upgrading a reporting system and CRM (Customer Relationship Management). The amount of proceeds to be used for the project of the construction of marketing network is RMB160 million.

2. The Necessity of Investing in the Project

Driven by the huge population base of the PRC, acceleration in the aging of the society and the increasing medical demand, the joint prosthesis market of the PRC will maintain a growing trend in the future. In view of the favorable market development opportunity, the Company must optimize its marketing network and strengthen the capabilities in corporate sales and customer services to promote a healthy and sustainable development of the Company.
The recognition from clinician is essential for the marketing of high-value consumables for orthopedic implants. The marketing training centre, reporting system and CRM system and the domestic and foreign deploying stations for marketing and distributing proposed to be established and upgraded in the project will strengthen the establishment of logistic network of the Company, enhance the Company's capabilities in customer

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APPENDIX I INVESTMENT PROJECTS FOR PROCEEDS RAISED FROM THE A SHARE OFFERING AND THE FEASIBILITY ANALYSIS REPORT OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

service and the training and teaching capabilities of doctors and staff of distributors when using and selling the Company's products.

As the Company develops rapidly in recent years, the Company's production capacity increases continuously and the product lines are increasing. In addition, after the investment projects with proceeds raised are put into production, the production capacity of the Company will be greatly increased. Since the coverage of the existing marketing network of the Company is limited, it is difficult to meet the demand of future market expansion and customer services. Therefore, the Company needs to make greater effort in its investment in the construction of marketing network, expand its marketing team and promote the consumption of the additional production capacity generated by the investment projects by the proceeds raised.
In accordance with the requirement of relevant national policies, medical instruments enterprises and distributors should take corresponding measures to reduce circulation. The existing marketing network of the Company at present may not be able to better meet the future development needs, therefore, it is necessary to further establish a marketing network that is closer to the end-users and has a wider coverage. Establishing a more comprehensive marketing network across the country is an inevitable requirement for enhancing the viability of the enterprise and achieving sustainable development.

3. Integrated evaluation for the project

The marketing network construction project conforms to the trend of

national policy, it is able to consume the additional production capacity of the investment projects by proceeds raised and enhance the ability of end-user sales and customer services. Upon completion, the project will generate better economic benefits for the Company.

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APPENDIX I INVESTMENT PROJECTS FOR PROCEEDS RAISED FROM THE A SHARE OFFERING AND THE FEASIBILITY ANALYSIS REPORT OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

(IV) Project for the replenishment of liquidity

Necessity of replenishment of liquidity
1. Leveraging on the vigorous development of the orthopedic implant consumables industry, the core business of the Company continued to grow steadily during the reporting period. With the further expansion of the operating scale of the Company, there is a large capital demand on raw material purchase, production equipment purchase, etc.
2. With the gradual promotion and implementation of the "Two-Invoice System" for medical instruments, alongside the revenue of the Company increase, the proportion of credit sales will gradually increase, and the trade receivables and repayment cycle will increase as well. The Company will have a higher demand for liquidity and ensure there is sufficient working capital which has high significance in counterbalancing risks.
3. Along with the implementation of the production expansion plan, the future gearing ratio of the Company is expected to increase. The use of proceeds to make up working capital will be beneficial to optimising capital structure, reducing repayment risks, alleviating financial pressure and thus enhance the overall operating performance.
Impact of replenishment of liquidity on the financial conditions

Replenishing liquidity with proceeds raised in this Issuance will meet the continuous increasing demand for the capital of the Company. In order to lay a foundation for realising future profit growth targets and business development goals, and reducing the Company's financial risks, the capital structure of the Company will be rationally adjusted.

- 27 -

APPENDIX II.A	LETTER OF UNDERTAKING ON MATTERS RELATING TO CONTINGENT
	REPURCHASE INVOLVED IN THE SHARE OFFERING OF
	BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

The English version of this appendix is an unofficial translation of its Chinese version. In

case of any discrepancies, the Chinese version shall prevail.

LETTER OF UNDERTAKING ON MATTERS RELATING TO CONTINGENT REPURCHASE INVOLVED IN THE SHARE OFFERING OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

As Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter referred to as the "Company") proposed to apply for an initial public offering and listing of the Shares in the PRC, pursuant to the Securities Law of the People's Republic of China and other laws and regulations, and the requirements under related rules and normative documents, the Company made the following undertakings:

The Company guarantees that there will be no fraudulent issuance in the public offering and listing.
In the event that the Company does not meet the conditions for share offering and listing and obtains issuance registration by deception, where the shares are so issued and listed, the Company will launch the share repurchase program within five working days after confirmation and affirmation by the CSRC and other competent authorities to repurchase all new shares of the Company's public offering. Controlling shareholders and the de facto controllers of the Company will then supervise the launch and completion of the Company's new share repurchase program. When implementing the above-mentioned share buyback and repurchase, if relevant laws and regulations and the Articles of Association provide otherwise, such provisions shall prevail.

We hereby make the above undertakings.

For identification purposes only

- 28 -

APPENDIX II.B	STATEMENT ON THE PROSPECTUS AND OTHER INFORMATION
	DISCLOSURES AND COMPENSATION LIABILITIES OF BEIJING
	CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

The English version of this appendix is an unofficial translation of its Chinese version. In

case of any discrepancies, the Chinese version shall prevail.

STATEMENT ON THE PROSPECTUS AND OTHER INFORMATION DISCLOSURES

AND COMPENSATION LIABILITIES OF BEIJING CHUNLIZHENGDA MEDICAL

INSTRUMENTS CO., LTD.*

As Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter referred to as the "Company") proposed to apply for an initial public offering and listing of ordinary shares denominated in Renminbi (A Shares) in the PRC, the Company undertakes that the Prospectus and other information disclosures for the Company's initial public offering and listing do not have false representation, misleading statement and material omission, and the Company bears joint and several legal liabilities for the truthfulness, accuracy and completeness of the Prospectus.

The Company will compensate the investors for any loss on securities trading suffered by them due to any false representation, misleading statement and material omission in the Prospectus and other information disclosures for the Company's initial public offering and listing according to law.

Within ten trading days after the securities supervision and administration authority or other competent authorities affirm that the Prospectus and other information disclosures of the Company contains false representation, misleading statement and material omission, the Company will initiate compensation work for investors loss. Investors loss shall be determined according to the amount negotiated with investors, or based on the method or amount determined by the securities supervision and administration authority and judicial authority.

For identification purposes only

- 29 -

APPENDIX II.C	PROPOSAL ON SHARE PRICE STABILISATION MEASURES
	UPON LISTING OF SHARES OF BEIJING CHUNLIZHENGDA
	MEDICAL INSTRUMENTS CO., LTD.

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

PROPOSAL ON SHARE PRICE STABILISATION MEASURES UPON LISTING OF SHARES OF BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

Beijing Chunlizhengda Medical Instruments Co., Ltd. (hereinafter referred to as the "Company") proposed to apply for an initial public offering and listing of A Shares (hereinafter referred to as the "offering and listing") in the PRC, to protect Shareholders' interests, boost investors' confidence and stabilise share price after the offering and listing, with plans formulated as follows:

Conditions for initiating share price stabilisation measures

If, within three years after the offering and listing of the Company, the closing price of the shares of the Company for 20 consecutive trading days are lower than its latest audited net assets per share of the Company (if, after the base date for audit for the latest period, the net assets or the total number of shares of the Company has changed due to profit distribution, conversion of capital reserves into share capital, additional offering, placing of shares, the net asset per share shall be adjusted accordingly) and the requirements of the securities regulatory body on changes in share capital such as repurchase or shareholding increase (hereinafter referred to as the "conditions for initiating share price stabilisation measures") are met, the Company, controlling shareholders (and/or the de facto controllers), Directors remunerated by the Company (excluding Independent non-executive Directors) and senior management shall initiate the corresponding measures to stabilise the share price of the Company.

Before the expiry of the above 20 trading days, depending on the changes in share price, the Company may, if it complies with relevant regulations of stock exchange including disclosure of information, hold meetings with investors and communicate with investors with regards to operations and financial indicators of the listed companies.

Specific measures

The Company, controlling shareholders (and/or de facto controllers), Directors remunerated by the Company (excluding Independent non-executive Directors) and senior management are obligors who undertakes the obligations of initiating the share price stabilisation mechanism of the Company (hereinafter referred to as the "obligors"). Within 10 trading days from the date of triggering the measures, the obligors shall communicate with the Company to determine the share price stabilisation plan and adopt one or more of the following measures to stabilise share price of the Company after listing:

1. Repurchase of shares by the Company

If the Company is required to implement the share price stabilisation measures, the Company will repurchase some of the shares of the

- 30 -

APPENDIX II.C	PROPOSAL ON SHARE PRICE STABILISATION MEASURES
	UPON LISTING OF SHARES OF BEIJING CHUNLIZHENGDA
	MEDICAL INSTRUMENTS CO., LTD.

Company from the public shareholders in accordance with the regulations under relevant laws, regulations and regulatory requirements such as the Administrative Measures on Repurchase of Public Shares by Listed Company (for trial implementation) 《( 上市公司回購社會公眾股份管理辦法（試行）》) and obtain approval from regulatory authorities or other relevant authorities (if required) and on the condition that the shareholding structure of the Company will not be inconsistent with the conditions for listing. Pursuant to the requirements of the laws, regulations and the Articles of Association, the Company shall convene a meeting of the Board of Directors to consider the share price stabilisation plan within 3 trading days from the date of fulfilling the above condition, submit the plan for consideration at the general meeting. Upon the fulfilment of the conditions for initiating share price stabilisation measures, the Company shall announce the specific plan of implementation after the convention of meeting of the Board of Directors and the passing of resolution on share repurchase in accordance to the law.

The Company's repurchase of shares shall be funded by internal or raised capital and the repurchase price shall base on the repurchase plan as announced and the repurchase should be executed by the way of centralized competitive bidding, offer or other methods approved by securities regulatory department. If before the implementation of the share repurchase plan, the Company's shares price does not satisfy the pre-conditions for initiating the share price stabilisation measures, the Company may cease to implement the plan.
If the price of the Company's share triggered the condition for initiating share price stabilisation measures for multiple times within one accounting year(except when share price stabilisation measures are implemented and implementation of such share price stabilisation measures is completed and when the closing price of the shares for 20 consecutive trading days remain lower than its latest audited net asset value per share, beginning on the date of announcement by the Company), the Company shall continue to implement the above share price stabilisation proposals and the amount to be used in a single repurchase shall not be less than 10% of the latest audited net profit attributable to shareholders of parent company and shall not be less than RMB10 million.
In the event of appointing new Directors (excluding Independent non-executive Directors) and senior management, the Company shall request those newly appointed Directors and senior management remunerated by the Company to perform the relevant undertakings made by Directors and senior management at the listing of the Company.

- 31 -

APPENDIX II.C	PROPOSAL ON SHARE PRICE STABILISATION MEASURES
	UPON LISTING OF SHARES OF BEIJING CHUNLIZHENGDA
	MEDICAL INSTRUMENTS CO., LTD.

When the conditions for initiating share price stabilisation measures are met and the Company fails to fulfil the above undertakings due to reasons other than events of force majeure, the Company shall propose new undertakings and accept the following restrictive measures, until the completion of new undertakings or completion of implementation of relevant remedies: ① the Company shall disclose publicly the reason for its failure to fulfil the undertakings and apologise to the shareholders of the Company and the public investors at the general meeting and on the media designated by the CSRC and stock exchange; ② the Company should volunteer to be monitored by the public and regulatory authorities, make timely corrections and continue to perform such public undertakings; ③ the Company shall submit supplemental undertakings or alternative undertakings to investors to protect their interest as much as possible; ④ the Company shall compensate investors against the losses caused by the Company's violation of relevant undertakings in accordance to the law; ⑤ for controlling shareholders (and/or de facto controller), Directors of the Company (excluding Independent non-executive Directors), senior management who have not fulfilled the undertakings made by them, or due to their own reason the Company failed to fulfil the undertakings made, the Company is entitled to suspend the cash dividend (if any) corresponding to shares held by them, and suspend the remuneration they should receive from the Company until such persons perform the relevant undertakings.

2. Increase in shareholding by the Company's controlling shareholders (and/or de facto controllers), Directors (excluding Independent non-executive Directors), senior management

When the conditions for initiating share price stabilisation measures are met, the Company's controlling shareholders (and/or de facto controllers), Directors (excluding Independent non-executive Directors), senior management shall implement the following specific share price stabilisation measures in accordance with the regulations under relevant laws, regulations and Articles of Associations, provided that the Company's condition for listing shall not be unaffected:

When the Company has to adopt the share price stabilisation measures and after the adoption and completion of implementation of the share price stabilisation measures, the Company's share price still fulfils the pre-conditions that triggers share price stabilisation measures, the Company's controlling shareholders (and/or de facto controllers), Directors remunerated by the Company (excluding Independent non-executive Directors) and senior management shall purchase the Company's shares from secondary market through bidding to stabilise the share price of the Company. In accordance to the relevant regulation, the Company shall disclose the plan of purchasing the Company's shares of the above controlling shareholders (and/or de facto controller), Directors (excluding Independent non-executive Directors) and senior management. 3 trading days after the Company's disclosure of the plan of purchasing the Company's shares of the above controlling

- 32 -

APPENDIX II.C	PROPOSAL ON SHARE PRICE STABILISATION MEASURES
	UPON LISTING OF SHARES OF BEIJING CHUNLIZHENGDA
	MEDICAL INSTRUMENTS CO., LTD.

shareholders (and/or de facto controllers), Directors (excluding Independent non-executive Directors) and senior management and the above controlling shareholders (and/or de facto controllers), Directors (excluding Independent non-executive Directors) and senior management shall implement the plan to purchase shares according to the plan.

For purchase of the Company's shares from secondary market through bidding and trading, the purchasing price shall not be higher than the latest audited net asset value per share.
If the Company's share price had triggered the above mentioned conditions initiating share price stabilisation measures for multiple times within one accounting year (excluding the Company's controlling shareholders (and/or de facto controllers), Directors remunerated by the Company (excluding Independent non-executive Directors), senior management during the period of implementation of share price stabilisation measures and completion of implementation of such share price stabilisation measures and where the closing price of the shares for 20 consecutive trading days remain lower than its latest audited net asset value per share since on the date of announcement by the Company), the Company's controlling shareholders (and/or de facto controllers), Directors remunerated by the Company (excluding Independent non-executive Directors), senior management shall continue to implement the above share price stabilisation measures basing on the following policies: ① the amount to be used in a single purchase of shares shall not be less than 10% of the total amount of after-tax remuneration received from the Company in the previous accounting year during the period when they act as Directors or senior management and ② the amount utilised in one single accounting year to stabilise share price shall not exceed 30% of the total amount of after-tax remuneration received from the Company in the previous accounting year during the period when they act as Directors or senior management. If the amount exceeds the above criteria, such share price stabilisation measures will not be implemented in the current year. However, in the event that conditions for initiating share price stabilisation measures continue to arise in the next accounting year, the share price stabilisation proposal shall be implemented according to the above policies.

- 33 -

APPENDIX II.C	PROPOSAL ON SHARE PRICE STABILISATION MEASURES
	UPON LISTING OF SHARES OF BEIJING CHUNLIZHENGDA
	MEDICAL INSTRUMENTS CO., LTD.

The shareholding distribution shall satisfy the conditions of listing after controlling shareholders of the Company (and/or de facto controllers), directors of the Company remunerated by the Company (excluding independent non-executive directors), senior management have purchased shares of the Company. The aforementioned controlling shareholders of the Company (and/or de facto controllers), directors of the Company (excluding independent non-executive directors), senior management should purchase shares of the Company in compliance with the relevant laws, regulations and the requirement of regulatory documents. If it is necessary to be approved by the securities regulatory authorities, stock exchange, securities registration management authorities, the corresponding approval procedures shall be performed.
Directors (excluding independent non-executive directors) and senior management who are newly hired within three years after the issuance and listing of the A Shares and remunerated by the Company shall make the equivalent undertaking.

When the pre-conditions for initiating share price stabilisation measures are met and controlling shareholders of the Company (and/or de facto controllers), directors of the Company remunerated by the Company (excluding independent non-executive directors), senior management fail to fulfil the above undertakings due to reasons other than events of force majeure, the aforementioned controlling shareholders of the Company (and/or de facto controllers), directors of the Company remunerated by the Company (excluding independent non-executive directors), senior management shall propose new undertakings and accept the following restrictive measures, until the completion of new undertakings or completion of implementation of relevant remedies: ① controlling shareholders of the Company (and/or de facto controllers), directors of the Company remunerated by the Company (excluding independent non-executive directors), senior management shall disclose publicly the reason for its failure to fulfil the undertakings and apologise to the shareholders of the Company and the public investors at the general meeting and on the media designated by the CSRC and stock exchange; ② controlling shareholders of the Company (and/or de facto controllers), directors of the Company remunerated by the Company (excluding independent non-executive directors), senior management volunteer to be monitored by the public and regulatory authorities, make timely corrections and continue to perform such public undertakings; ③ controlling shareholders of the Company (and/or de facto controllers), directors of the Company remunerated by the Company (excluding independent non-executive directors), senior management supplemental undertakings or alternative undertakings to investors to protect their interest as much as possible; ④ the Company has the right to temporarily withhold the remuneration of the aforementioned relevant directors of the Company (excluding independent non-executive directors) and senior management. Meanwhile, controlling shareholders of the Company (and/or de facto controllers), relevant

- 34 -

APPENDIX II.C	PROPOSAL ON SHARE PRICE STABILISATION MEASURES
	UPON LISTING OF SHARES OF BEIJING CHUNLIZHENGDA
	MEDICAL INSTRUMENTS CO., LTD.

directors of the Company (excluding independent non-executive directors), senior management shall not directly or indirectly transfer shares of the Company they held until they perform the aforementioned undertakings; ⑤ the aforementioned controlling shareholders of the Company (and/or de facto controllers), directors of the Company (excluding independent non-executive directors), senior management shall compensate investors against the losses caused by the Company's violation of relevant undertakings according to law; ⑥ the abovementioned undertakings shall not change due to the adjustment of duties of the Company or resignation of controlling shareholders of the Company (and/or de facto controllers), directors of the Company (excluding independent non-executive directors), senior management.

Implementation and termination of the share price stabilisation measures
1. On the day the share price stabilisation measures are triggered, the Board of the Company should formulate the specific plan to stabilise the share price of the Company within five trading days and implement it upon performing the relevant internal decision-making procedures and external approval/filing procedures (if required) and announce it in accordance with the information disclosure requirement of listed companies. Under the circumstances that the share price of the Company reaches the level that triggers the share price stabilisation measures, the Company and the relevant responsible entities shall continue to perform relevant obligations based on the share price stabilisation measures until the conditions for terminating the share price stabilisation measures are satisfied.
2. During the period of implementing the share price stabilisation measures of the Company, if any of the following situations occur, it is deemed that the implementation of the share price stabilisation measures is completed and the undertaking is performed and the announced share price stabilisation measures are terminated:
3. 1. The closing price of the shares of the Company for 10 consecutive trading days is higher than the latest audited net assets per share of the Company (the net assets of the Company or the number of share has changed due to the distribution of profit, capital reserve capitalization, increase issuance, share allotment, etc, after the audit base date. The net assets per share should be adjusted accordingly);
  2. Continuation to repurchase shares of the Company or the increase of shareholding of the Company will cause the failure of the shareholding distribution of the Company to meet the listing requirements.

- 35 -

APPENDIX II.D	LETTER OF UNDERTAKING ON THE RESTRICTIVE MEASURES
	UPON NON-FULFILMENT OF SUCH UNDERTAKINGS BY BEIJING
	CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

The English version of this appendix is an unofficial translation of its Chinese version. In

case of any discrepancies, the Chinese version shall prevail.

LETTER OF UNDERTAKING ON THE RESTRICTIVE MEASURES UPON

NON-FULFILMENT OF SUCH UNDERTAKINGS BY BEIJING CHUNLIZHENGDA

MEDICAL INSTRUMENTS CO., LTD.

As Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter referred to as the "Company") proposed to apply for an initial public offering and listing of ordinary shares denominated in RMB (A Shares) in the PRC, upon listing, the Company undertakes to strictly perform each undertaking made before the listing. If the Company fails to perform the undertakings or confirms that it is unable to perform or fails to perform as scheduled, the Company will adopt the following measures:

undertake to disclose publicly the reason for its failure to fulfill the undertakings and apologise to the shareholders of the Company and public investors at the general meeting and on the media designated by the CSRC or stock exchange;
volunteer to be under monitor of the public and regulatory authorities, make timely corrections and continue to perform such public undertakings;
submit supplementary undertakings or alternative undertakings to investors to protect the interests of the investors; and
compensate investors against their losses caused by the violation of undertakings in accordance to the law.

We hereby make the above undertakings.

For identification purposes only

- 36 -

APPENDIX III ANALYSIS ON REMEDYING THE IMPACTS OF THE DILUTION OF CURRENT RETURN AS A RESULT OF THE A SHARE OFFERING AND PROPOSAL ON THE REMEDIAL MEASURES

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

1. The impact of the Issuance towards earnings per share of the Company

Beijing Chunlizhengda Medical Instruments Co., Ltd. (the "Company") applied for initial public offering and listing of A shares within the PRC (the "Issuance"). The proposed number of public offer shares would not exceed 10% of total issued share capital. The Company and the lead underwriter(s) can adopt an over-allotment option which cannot exceed 15% of the size of the A share offering. After the completion of the Issuance, the share capital and net asset value of the Company are expected to be significantly higher than that before the Issuance. Since it requires a certain cycle to raise funds and construct the investment projects and certain time to generate benefits, the current and future earnings per share and return on equity of the Company may face risk of decline if the net profit of the Company is unable to realize the corresponding extent of growth during the construction period of the investment projects. However, from the mid-to-long term perspective, the increase in capital size due to the proceeds from this fund raising will effectively improve the Company's capacity in research and development, expand its business scale and enhance its capacity in sustainable development. The Company will proactively take various measures to improve the utilization efficiency of net assets and capital, so as to achieve satisfactory efficiency.

2. Explanation of the necessity and rationality of the Issuance by the Board

The Company is currently developing very rapidly and investment of substantial amount of capital is needed for business development. On one hand, the Company requires a long term, stable and sizable capital source. On the other hand, the Company also requires a reasonable and effective valuation platform as a medium for external expansion to better realize the Company's value and growth. The necessity and rationality of financing through public offering of shares by the Company are mainly reflected in the followings:

1. Satisfying the capital need of investment projects of the Company

Financing through A share offering can fully satisfy the capital need of investment projects of the Company, which is also in line with current initiatives of the government on direct corporate financing. The raised proceeds are intended to be used for the integrated construction project of orthopedic implants and ancillary materials, the construction project of research and development centre, the construction project of marketing networks and supplementary liquidity. The fund raised will be used on investment projects that mainly focus on the core business of the Company and on the deployment of future development strategy, which reflects the continuous expansion of the Company's current business. It will further enhance the research and development capacity of the Company on medical devices, enrich the product structure of the Company and consolidate its leading market position.

- 37 -

APPENDIX III ANALYSIS ON REMEDYING THE IMPACTS OF THE DILUTION OF CURRENT RETURN AS A RESULT OF THE A SHARE OFFERING AND PROPOSAL ON THE REMEDIAL MEASURES

2. Obtaining stable capital sources

Financing through A share offering allows the Company to obtain stable capital source within a longer period of time. Public offering of shares can reduce the financial risk of the Company, allowing the Company to enhance the profitability of the Company by focusing on the implementation of its own development strategies and utilizing its operational revenue for expansion of the Company's scale of operation. Based on its own operation situation and development plan, the Company will actively provide continuous, stable and reasonable returns to its shareholders in various means such as cash dividend distribution.

3. Entering into A share market

After the completion of financing through A share offering, the Company's shares can enter into A share market. The healthy liquidity and rapid price transmission mechanism of A share market will better reflect the Company's operating result through indicators like share price. In addition, the launching of shares would better protect the Company's future development by refining the Company's internal governance and further enhancing the level of standardized operation.

In conclusion, it is necessary and reasonable to conduct financing through public offering of A shares as it meets the current development need of the Company.

3. Specific remedial measures and undertakings adopted by the Company

To reduce the impact of dilution of current returns due to the Issuance, the Company intends to supplement the returns by enhancing the quality of its products and services, increasing sales revenue, enlarging future revenue and realizing sustainable development through various measures like continuously enhancing R&D and innovation, strengthening the expansion of current product categories and service types, improving daily operational efficiency of the Company, strictly regulating investment projects, speeding up the construction progress of investment projects, refining profit distribution system and strengthening the mechanism for investors' returns. To achieve this, the details of the relevant measures to be adopted by the Company are as follows:

1. Strengthen R&D and innovation while refining products and services as well as enhancing sustainable profitability

The Company will continuously enhance its effort on R&D and innovation while keep enriching and refining its products and services, so as to enhance its core competitiveness. On the basis of fully utilizing the existing market, the Company enlarges its deployment for operational businesses while keeps exploring new

- 38 -

APPENDIX III ANALYSIS ON REMEDYING THE IMPACTS OF THE DILUTION OF CURRENT RETURN AS A RESULT OF THE A SHARE OFFERING AND PROPOSAL ON THE REMEDIAL MEASURES

customers and markets. Meanwhile, the Company controls various costs in a reasonable manner to improve sales revenue and net profit of the Company, with an aim to enhance the sustainable profitability of the Company.

2. Optimize corporate governance and internal control while enhancing operational efficiency

The Company will continue to refine the governance structure by strengthening internal control of the Company, optimizing corporate governance structure, ensuring the exercise of shareholders' rights and securing the adequate exercise of function by the Board of Directors, the Supervisory Committee and General Meeting in accordance with the requirements under the laws, regulations and the Articles of Association. Meanwhile, the Company will refine its daily operational management while enhancing the efficiency in cooperation between different departments of the Company by means of optimizing the allocation of human resources and improving business process. Through raising capital utilization efficiency, reasonably utilizing various financing tools and channels, controlling capital costs, enhancing fund utilization efficiency and saving various cost expenditures, the Company will improve its profitability while effectively control its entire operational risks and management risks.

3. Strengthen the management of raised proceeds

In order to regulate the use and management of raised proceeds of the Company and to ensure the specification, safety and effectiveness of use of proceeds, the Company formulated the "Management Measures for Use of Proceeds" in accordance with the requirements under laws and regulation including the Company Law of the People's Republic of China and the Securities Law of the People's Republic of China, normative instruments and the Articles of Association. Strictly adhering to the "Management Measures for Use of Proceeds" and other requirements on management of raised proceeds by stock exchange, the Company will treat raised proceeds as special deposit and be utilized for special purpose. In addition, the Company conducts regular internal audit on raised proceeds in accordance with relevant requirements while cooperating with governing banks and sponsors to monitor and inspect the deposit and use of proceeds, with an aim to regulate the use of proceeds and prevent risks associated with the use of proceeds.

4. Implement investment projects of the raised proceeds actively and steadily

The investment projects of the raised proceeds have been thoroughly studied and a higher investment return ratio will be generated as a whole from the mid-to-long term perspective. After the raised proceeds are in place, the Company will increase the efforts in market development in order to implement the raised proceeds investment projects as soon as possible and generate benefits. With the benefits generated progressively from the investment projects, it is expected that the operating income and profit levels of the Company will grow rapidly. As such, it is expected that the Company can significantly increase its future profitability and overall competitiveness.

- 39 -

APPENDIX III ANALYSIS ON REMEDYING THE IMPACTS OF THE DILUTION OF CURRENT RETURN AS A RESULT OF THE A SHARE OFFERING AND PROPOSAL ON THE REMEDIAL MEASURES

5. Optimize the profit distribution system and strengthen the investor return mechanism

For the purpose of forming a continuous and stable return mechanism for the investors, ensuring the continuity and stability of the profit distribution policy, increasing the transparency and operability of the distribution decision as well as ensuring the rights of the shareholders to monitor the profit distribution, the Company has formulated the "Articles of Association (Draft H + A)" which is applicable after the listing based on the relevant provisions of relevant laws and regulations to prescribe detailed requirements for the profit distribution policy. Moreover, a shareholder dividend return plan has been formulated to fully protect the rights of shareholders as entitled by law.

6. Other reasonable and feasible measures

In the future, the Company will follow the specific rules and requirements promulgated by the regulatory authorities such as the China Securities Regulatory Commission and the stock exchanges to actively implement the contents of "The State Council's Opinions on Further Promoting the Healthy Development of the Capital Market", " Opinions of the General Office of the State Council on Further Strengthening the Work of Protection of the Legitimate Rights and Interests of Minority Investors in the Capital Markets" and the "Guiding Opinions on Matters Relating to the Dilution of Current Returns in Initial Public Offering, Refinancing and Major Assets Restructuring". The Company will continue to supplement, revise, improve and implement various systems to protect the rights and interests of its investors.

4. The commitment of the Company's Directors and senior management to the reimbursement system of the Company

Pursuant to the relevant requirements of the China Securities Regulatory Commission and the stock exchanges, the Company's Directors and senior management make the following commitments to ensure the pragmatic implementation of the reimbursement system to remedy the dilution of current returns:

I undertake not to transfer benefits to other organizations or individuals at nil consideration or on unfair terms nor otherwise prejudice the interests of the Company;
I undertake to control my duty-related expenses (if any);
I undertake not to utilize the Company's assets for the purpose of investment and consumption activities that are irrelevant to my duties;

- 40 -

APPENDIX III ANALYSIS ON REMEDYING THE IMPACTS OF THE DILUTION OF CURRENT RETURN AS A RESULT OF THE A SHARE OFFERING AND PROPOSAL ON THE REMEDIAL MEASURES

I hereby undertake to actively facilitate the future remuneration system of the Company to be formulated and amended by the Board or the remuneration and assessment committee to be operated in line with the reimbursement system of current returns of the Company;
For any subsequent share incentive plan of the Company, I hereby undertake that the vesting terms of the share incentive plan of the Company to be announced shall be operated in line with the reimbursement system of current returns of the Company;
I undertake to properly fulfill the above undertakings and commit to indemnify the loss suffered by the Company or the investors for any loss caused to the Company or the investors as a result of any breach of these undertakings.

- 41 -

APPENDIX IV	THREE-YEAR SHAREHOLDER DIVIDEND
	RETURN PLAN AFTER THE A SHARE OFFERING OF
	BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

The English version of this appendix is an unofficial translation of its Chinese version. In

case of any discrepancies, the Chinese version shall prevail.

With the view of providing reasonable investment returns for investors, the Company focuses on long-term and sustainable development, comprehensively considering the actual situation and proactively exploring the establishment of a sustainable, stable and scientific returns plan and mechanism for investors. The institutional arrangements for profit distribution are as follows:

1. Factors to be considered by the Company when formulating the plan

From the perspective of sustainable development, the Company has set up a sustainable, stable, scientific and expectable returns plan and mechanism for investors after comprehensively considering factors regarding the actual situation of the Company's operation and development, costs of social capital and financing environment in order to facilitate proactive and clear institutional arrangements for profit distribution. Accordingly, it can ensure a continuity and stability for the profit distribution policy of the Company.

2. Principle of formulating the shareholder dividend returns plan

The formulation of this plan should comply with the relevant laws and regulations as well as the provisions of the "Articles of Association" relating to profit distribution. The formulation of this plan is based on the principles of commitments to offering reasonable investment returns for the shareholders and taking into account the Company's sustainable development while also properly managing the relationship between the short-term interests and long-term development of the Company in order to ensure the continuity and stability of the profit distribution policy.

3. Three-year (including the year of A Share Offering) Shareholder Dividend Returns Plan Immediately after Listing

Conditions for distribution of cash dividend

Except under special circumstances, in the event that there is profit and the accumulated undistributed profits are positive in the current year, the Company should give priority to distribute dividends in cash and paying cash dividends will not affect its ongoing and sustainable operations. At the same time, the auditing firm has furnished standard and unqualified opinion in the audit report of the Company's financial report in that current year. Special circumstances refer to:

1. Cash dividend will affect the capital needs of the Company for normal and continued operations in the future;

- 42 -

APPENDIX IV	THREE-YEAR SHAREHOLDER DIVIDEND
	RETURN PLAN AFTER THE A SHARE OFFERING OF
	BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

1. The Company will engage in significant investment plans or cash expenditure events within the next 12 months (except fund-raising projects). Significant investment plans or significant cash expenditure events refer to one of the following situations: ① The accumulated expenditure for the external investments, acquire assets or purchase equipment of the Company within the next 12 months will be up to or over 50% of the audited net assets of the Company in the latest period and the amount will exceed RMB50 million; ② The accumulated expenditure of the external investment, asset purchase or equipment purchase of the Company within the next 12 months will reach or exceed 30% of the audited total assets of the Company in the latest period;
2. Other situations that the Board considers unsuitable for cash dividends.
Form of distribution
The Company may distribute dividends by means of cash, securities, a

combination of cash and securities and other legal means, and give priority to adopt cash dividends as the form of profit distribution. However, profit distribution shall not exceed the range of the accumulated distributable profits.

Distribution cycle

In principle, the Company may conduct a cash dividend after every annual general meeting in the first three years after listing (including the year of A Share Offering) provided that the Company can satisfy the conditions required for cash dividend and ensure its normal operation and long-term development. In the event that no annual profit distribution budget has not been made by the Board of the Company, the reasons for the non-dividend payment shall be disclosed in the periodic report. Independent directors shall express their independent opinions on this matter. In the event that the Company's cash expenditure plan can be satisfied, the Board of the Company may propose that the Company can conduct an interim cash dividend based on the operating profit and cash flow of the Company in the current year.

Proportion of cash dividend

In the first three years after the listing of the Company (including the year of A Share Offering), the profit distributed in form of cash per annum shall not be less than 10% of the available distributable profit realized in that year, and the Company's cumulative profits distributed in form of cash for three consecutive years shall not be less than 30% of the annual average distributable profits realized in those three years.

- 43 -

APPENDIX IV	THREE-YEAR SHAREHOLDER DIVIDEND
	RETURN PLAN AFTER THE A SHARE OFFERING OF
	BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

Differentiated cash dividend policy

The Board of the Company shall comprehensively consider the factors including characteristics of the industry, the stage of development, its own business mode, the level of profitability, and whether there are major capital expenditure arrangements (except fund-raising projects); to distinguish the following situations and shall come up with a differentiated cash dividend policy in accordance with the procedures stipulated in the "Articles of Association" of the Company:

When the development of the Company is at a mature stage and there is no major capital expenditure arrangement, the cash dividend shall account for no less than 80% of the profit distribution when conducting profit distribution;
When the development of the Company is at a mature stage and there are major capital expenditure arrangements, the cash dividend shall account for no less than 40% of the profit distribution when conducting profit distribution;
When the development of the Company is at a growing stage and there are major capital expenditure arrangements, the cash dividend shall account for no less than 20% of the profit distribution when conducting profit distribution.

The specific profit distribution plan is determined by the Board of the Company in accordance with the relevant provisions promulgated by the China Securities Regulatory Commission; combined with specific operating data; fully considering the profit scale of the Company; the cash flow status; the development stage and the capital requirement of the current period, and to be combined with the opinions expressed by the shareholders (especially the public investors) and by the independent non-executive directors. The implementation of the plan must be approved by more than two-thirds of the voting rights held by the shareholders (including the proxies of shareholders) attending the general meeting of shareholders.

4. The formulation cycle of the plan and the relevant decision making mechanism

The Board of the Company should ensure that the shareholder dividend returns plan is reviewed every three years while timely and reasonable modifications shall be made in accordance with situation and policy changes in order to ensure that its content does not violate the relevant laws and regulations as well as the profit distribution policy determined by the Articles of Association.

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APPENDIX IV	THREE-YEAR SHAREHOLDER DIVIDEND
	RETURN PLAN AFTER THE A SHARE OFFERING OF
	BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

In the event that this plan is needed to be adjusted in the first three years after the listing (including the year of the listing) due to changes in the external business environment or our own operating conditions, the new shareholder return plan shall be in compliance with the relevant laws and regulations and the provisions of the Articles of Association.
When the Company adjusts the profit distribution policy in the "Articles of Association", the Board of Directors shall make a special discussion to detail the reasons for adjustment and make a written discussion report for submission to the general meeting of shareholders as a special resolution for approval upon reviewing by the independent non-executive directors (the report must be passed by more than two-thirds of the voting rights held by the shareholders (including the proxies of shareholders) attending the general meeting of shareholders).
The Company may adjust the profit distribution policy if there is the need to adjust the profit distribution policy due to major changes in the Company's external business environment or its own operating conditions. The adjusted profit distribution policy shall not violate the relevant provisions of the China Securities Regulatory Commission and the Stock Exchange.
1. The Strategic Committee of the Board of the Company will formulate the adjustment programme of the profit distribution policy, fully demonstrating the necessity to adjust the profit distribution policy and illustrating the purpose of profit retention. In the event that the Company's profitability strengthened, the Board of the Company will take account of the actual situation and implement the compensation plan for cash dividends in the previous years in order to ensure that the shareholders of the Company can continue to receive cash dividends.
2. The independent non-executive directors of the Company shall express explicit opinions on the adjustment programme of the profit distribution policy which should be approved by a majority vote of all independent non-executive directors. In case there is disagreement, the independent non-executive directors should present the facts and reasons for disagreement and require the Board to re-enact the adjustment programme of the profit distribution policy. A request can be made for convening a general meeting of shareholders if it is necessary.

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APPENDIX IV	THREE-YEAR SHAREHOLDER DIVIDEND
	RETURN PLAN AFTER THE A SHARE OFFERING OF
	BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.

The Board of Supervisors shall express explicit opinions on the adjustment programme of the profit distribution policy. In the event that a consent is obtained on the adjustment programme of the profit distribution policy, it shall be put into a resolution; in the event of disagreement, the Board of Supervisors shall present the facts and reasons for disagreement and propose that the Board shall re-enact the adjustment programme of the profit distribution. A request can be made for convening a general meeting of shareholders if it is necessary.
The adjustment programme of the profit distribution policy should be passed by more than two-thirds of the voting rights held by the shareholders (including the proxies of shareholders) attending the general meeting of shareholders. When issuing a notice of convening a general meeting of shareholders, the opinions of the independent non-executive directors and the Board of Supervisors should be published on the announcement. In reviewing the adjustment programme of the profit distribution policy at a general meeting, the Company should provide internet or other means for the public investors to conveniently participate in the general meeting in accordance with the relevant provisions of the stock exchange.

5. Solicitation for opinions on shareholder profit distribution

The Securities Department of the Company is mainly responsible for managing the

work of investor relations, answering day-to-day enquiries of investors, fully soliciting opinions and appeals from shareholders particularly the small and medium shareholders relating to the shareholder dividend return plan and profit distribution of the Company, and responding to the concerns of small and medium shareholders in a timely manner.

6. Supplementary Provisions

Any matters unspecified in the proposal shall be implemented in accordance with the relevant laws and regulations and the provisions of the Articles of Association.

The Board of the Company is responsible for interpreting this proposal which is subject to approval at the general meeting and class meeting of the Company and is effective from the date of the initial public offering and the listing of Renminbi ordinary shares within the territory of the PRC.

- 46 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The English version of this appendix is an unofficial translation of its Chinese version. In

case of any discrepancies, the Chinese version shall prevail.

Chapter 1 General Provisions

Original provisions	Amended provisions

Article 1	Article 1
The Articles of Association are formulated by Beijing	The Articles of Association are formulated by Beijing
Chunlizhengda Medical Instruments Co., Ltd.* (the	Chunlizhengda Medical Instruments Co., Ltd.* (the
"Company") pursuant to the Company Law of the	"Company") pursuant to the Company Law of the
People's Republic of China ("Company Law"),	People's Republic of China ("Company Law"),
Securities Law of the People's Republic of China	Securities Law of the People's Republic of China
("Securities Law"), Special Regulations on Overseas	("Securities Law"), Special Regulations on Overseas
Offerings and Listing of Shares by Joint Stock	Offerings and Listing of Shares by Joint Stock
Limited Companies ("Special Regulations"),	Limited Companies ("Special	Regulations"),
Mandatory Provisions for the Articles of Association	Mandatory Provisions for the Articles of Association
of Companies to be Listed Overseas, Letter of	of Companies to be Listed Overseas ("Mandatory
Opinions on Supplementary Amendment to Articles	Provisions"), Letter of Opinions on Supplementary
of Association of Companies to be Listed in Hong	Amendment to Articles of Association of Companies
Kong, Guidelines for Articles of Association of	to be Listed in Hong Kong ("Letter of Opinions on
Listed Companies (amended in 2014) and other	Supplementary Amendment"), Guidelines for
relevant regulations, in order to protect the	Articles of Association of Listed Companies
legitimate rights and interests of the Company and	(amended in 20149) ("Guidelines for Articles of
shareholders and creditors thereof and regulate the	Association"), Guidelines for the Establishment of
organisation and behaviour of the Company.	Independent Directors System by Listed
	Companies" ("Guidelines of	Independent
	Directors")and other relevant regulations, in order
	to protect the legitimate rights and interests of the
	Company and shareholders and creditors thereof
	and regulate the organisation and behaviour of the
	Company.

Article 2	Article 2
The Company is a joint stock company with limited	The Company is a joint stock company with limited
liability incorporated under the Company Law, the	liability incorporated under the Company Law, the
Special Regulations and the other relevant laws and	Special Regulations and the other relevant laws and
administrative regulations of the PRC.	administrative regulations of the PRC.
The Company obtained the corporate business	The Company was established by the way of
license upon registration with the Beijing	promotion andobtained the corporatebusiness
Administration for Industry and Commerce on 17	license upon registration with the Beijing
September 2010. Corporate business license number	Administration for Industry and Commerce on 17
of the Company is 110112004733973.	September 2010.
The Company's promoters were SHI Chunbao, YUE	Corporate business license numberUnified Social
Shujun, SUN Weiqi, Beijing Xin'an Caifu Venture	Credit Codeof Company is 91110000633737758W.is
Investment Co., Ltd., JIN Jie, LIN Yiming, GU	110112004733973.
Changyue, HUANG Dong, WANG Haiya, HE
Rongmei, NI Xuezhen, ZHANG Zhaohui and CHEN	The Company's promoters were SHI Chunbao, YUE
Xusheng.	Shujun, SUN Weiqi, Beijing Xin'an Caifu Venture
	Investment Co., Ltd., JIN Jie, LIN Yiming, GU
	Changyue, HUANG Dong, WANG Haiya, HE
	Rongmei, NI Xuezhen, ZHANG Zhaohui and CHEN
	Xusheng.

- 47 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 3	Article 3
Registered company name (Chinese): 北京市春立正	Registered company name
達醫療器械股份有限公司	(Chinese): 北京市春立正達醫療器械股份有限公司
Registered company name (English): Beijing	Registered company name(English): Beijing
Chunlizhengda Medical Instruments Co.,Ltd.	Chunlizhengda Medical Instruments Co., Ltd.

Article 7	Article 7
This Articles of Association have been adopted by	This Articles of Association have been adopted by
the general meeting of the Company through the	the general meeting of the Company through the
special resolution and approved by the relevant	special resolution, and shall take effect as of the date
authorities of the PRC, shall take effect as of the date	of A shares of the Company are listed on stock
on which the overseas listed foreign shares of the	exchange upon initial public offering within the PRC
Company are listed for trading at the Stock	and supersede the former Articles of Association
Exchange of Hong Kong Limited (hereafter referred	registered with the industry & commerce
to as the "SEHK"), and supersede the former Articles	administration authority.and approved by the
of Association registered with the industry &	relevant authorities of the PRC, shall take effect as of
commerce administration authority.	the date on which the overseas listed foreign shares
	of the Company are listed for trading at the Stock
From the date on which the Articles of Association	Exchange of Hong Kong Limited (hereafter referred
come into effect, the Articles of Association shall	to as the "SEHK"), and supersede the former Articles
constitute a legally binding document governing the	of Association registered with the industry &
Company's organisation and activities, and the	commerce administration authority.
rights and obligations between the Company and its
shareholders and among the shareholders.	From the date on which the Articles of Association
	come into effect, the Articles of Association shall
	constitute a legally binding document governing the
	Company's organisation and activities, and the
	rights and obligations between the Company and its
	shareholders and among the shareholders.

- 48 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 8	Article 8
This Articles of Association shall be binding upon	This Articles of Association shall be binding upon
the Company as well as its shareholders, directors,	the Company as well as its shareholders, directors,
supervisors, general manager and other senior	supervisors, general manager and other senior
executives, and the aforesaid persons may claim any	executives, and the aforesaid persons may claim any
right in relation to the affairs of the Company in	right in relation to the affairs of the Company in
accordance with the Articles of Association.	accordance with the Articles of Association.
Without violating the provisions in Article 210 of	Without violating the provisions in Article 210216of
this Articles of Association, the shareholders may	this Articles of Association, the shareholders may
pursue actions against the Company pursuant to the	pursue actions against the Company, other
Articles of Association; the Company may pursue	shareholders, the directors, supervisors, general
actions against its shareholders, directors,	manager and other senior management of the
supervisors, general manager and other senior	Companypursuant to the Articles of Association; the
management pursuant to the Articles of Association;	Company may pursue actions against its
the shareholders may pursue actions against the	shareholders, directors, supervisors, general
other shareholders pursuant to the Articles of	manager and other senior management pursuant to
Association; the shareholders may pursue actions	the Articles of Association; the shareholders may
against the directors, supervisors, general manager	pursue actions against the other shareholders
and other senior management of the Company	pursuant to the Articles of Association; the
pursuant to the Articles of Association.	shareholders may pursue actions against the
	directors, supervisors, general manager and other
The actions referred to in the preceding paragraphs	senior management of the Company pursuant to the
include filing an action to the court or submitting an	Articles of Association.
application to an arbitration institution for
arbitration.	The actions referred to in the preceding paragraphs
	include filing an action to the court or submitting an
Other senior management referred to in the	application to an arbitration institution for
preceding paragraphs include deputy general	arbitration.
managers, chief financial officer, secretary to the
Board and other personnel engaged by the Board.	Other senior management referred to in the
	preceding paragraphs include deputy general
	managers, chief financial officer, secretary to the
	Board and other personnel engaged by the Board.

- 49 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 2 Business Objectives and Scope

Original provisions	Amended provisions

Article 12	Article 12
The scope of business operations of the Company	The scope of business operations of the Company
shall fall within the scope authorised by the	shall fall within the scope authorised by the
company approving authorities and approved by the	company approving authorities and approved by the
relevant administrative authorities for industry and	relevant administrative authorities for industry and
commerce.	commerce.
The scope of business operations of the Company	The scope of business operations of the Company
includes: the production of Class III medical devices	includes: the production of Class III medical devices
such as III-6846-1 implants, III-6846-2 artificial organ	such as III-6846-1 implants, III-6846-2 artificial organ
implants, the sale of Class III medical devices such	implants (joint prosthesis, custom joint prosthesis
as implants materials and artificial organs, medical	and stabler in spine), the sale of Class III medical
knitwear and adhesive, sales of Class II medical	devices such as implants materials and artificial
devices such as physiotherapy and rehabilitation	organs, medical knitwear and adhesive; sales of
equipment and orthopedics surgery devices, as well	Class II medical devices such as physiotherapy and
as the sales of Class I medical devices such as basic	rehabilitation equipment and orthopedics surgery
surgery devices, and imports and exports and	devices, as well as the sales of Class I medical
technology promotion.	devices such as basic surgery devices, preparation
The Company may change its scope of business	system for producing platelet-rich plasma, medical
centrifuge, repairment and reconstruction of
operations according to the laws, in line with
ligament damaged from exercise and replacement of
domestic and international market demands, its
implants, medical endoscope system, production of
development capability and business requirements.
non-medical masks (strictly for the safeguard of

	lives during the epidemic), imports and exports and
	technology promotion and sales of non-medical
	masks. (The Company has the right to select the
	business scope and conduct operations according to
	laws. For projects which can only be operated under
	permission by laws, the Company conducts such
	business and operations with permission of relevant
	departments for permitted aspects and shall not
	engage in operations prohibited or restricted by the
	regional industrial policies.)the production of Class
	III medical devices such as III-6846-1 implants,
	III-6846-2 artificial organ implants, the sale of Class
	III medical devices such as implants materials and
	artificial organs, medical knitwear and adhesive,
	sales of Class II medical devices such as
	physiotherapy and rehabilitation equipment and
	orthopedics surgery devices, as well as the sales of
	Class I medical devices such as basic surgery
	devices, and imports and exports and technology
	promotion.
	The Company may change its scope of business
	operations according to the laws, in line with
	domestic and international market demands, its
	development capability and business requirements.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 3 Shares, Transfer of Shares and Registered Capital

Original provisions	Amended provisions

Article 16	Article 16
Subject to approval of the securities regulatory	Subject to approval of the securities regulatory
authorities of the State Council, the Company may	authorities of the State CouncilPRC securities
issue shares to domestic investors and overseas	regulatory authorities, the Company may issue
investors.	shares to domestic investors and overseas investors.
The term "overseas investors" referred to in the	The term "overseas investors" referred to in the
preceding paragraph means investors located in	preceding paragraph means investors located in
foreign countries, regions of Hong Kong, Macau and	foreign countries, regions of Hong Kong, Macau and
Taiwan who subscribe shares issued by the	Taiwan who subscribe shares issued by the
Company. The term "domestic investors" means	Company. The term "domestic investors" means
investors located in the PRC, excluding the regions	investors located in the PRC, excluding the regions
mentioned above, who subscribe shares issued by	mentioned above, who subscribe shares issued by
the Company.	the Company.

Article 17	Article 17
Shares issued by the Company to domestic investors	Shares issued by the Company to domestic investors
for subscription in RMB are referred to as domestic	for subscription in RMB are referred to as domestic
shares. Shares issued by the Company to overseas	shares. Shares issued by the Company to overseas
investors for subscription in foreign currencies are	investors for subscription in foreign currencies are
referred to as foreign shares. Foreign shares listed	referred to as foreign shares. Domestic shares listed
overseas are referred to as overseas listed foreign	on domestic stock exchange are referred to as
shares.	domestically-listeddomestic shares.Foreign shares
	listed overseas are referred to as overseas listed
The term "foreign currencies" referred to in the	foreign shares.
preceding paragraph means the lawful currencies	The term "foreign currencies" referred to in the
(other than RMB) of other countries or regions which
are recognized by the foreign exchange authorities	preceding paragraph means the freely convertible
of the PRC and which can be used to pay the	lawful currencies (other than RMB) of other
subscription money for shares of the Company.	countries or regions which are recognized by the
	foreign exchange authorities of the PRC and which
Foreign shares issued by the Company and listed in	can be used to pay the subscription money for shares
Hong Kong are referred to as "H shares". H shares	of the Company.
are shares which have been admitted for listing on	Foreign shares issued by the Company and listed in
SEHK with a par value denominated in RMB and are
subscribed and traded in Hong Kong dollars.	Hong Kong are referred to as "H shares". H shares
	are shares which have been admitted for listing on
Unless otherwise stated by the Articles of	SEHK with a par value denominated in RMB and are
Association, holders of domestic shares and holders	subscribed and traded in Hong Kong dollars.
of foreign shares are both ordinary shareholders,	Domestically-listed domestic shares of the Company
who are entitled to the same rights and obligations.
	are referred to as "A shares". A shares are the shares
	which have been approved for listing on domestic
	stock exchange by the PRC securities regulatory
	authorities with a par value denominated in RMB
	and are subscribed and traded in RMB.
	The A shares of the Company are under centralized
	management by the PRC securities registration and
	clearance institution.
	Unless otherwise stated by the Articles of
	Association, holders of domestic shares and holders
	of foreign shares are both ordinary shareholders,
	who are entitled to the same rights and obligations.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions		Amended provisions

Article 19		Article 19
The current share capital structure of the Company		Upon the establishment of the Company, with
is: the Company's issued ordinary shares is		approval from the PRC securities regulatory
345,852,000 shares with par value of RMB1.00 per		authorities and SEHK, the Company issued
share, among which 250,000,000 shares are domestic		19,170,400 ordinary shares by initial public offering,
shares (representing approximately 72.29% of total		with all ordinary shares being H shares.
issued ordinary shares of the Company); 95,852,000
shares are H shares (representing approximately		Upon the completion of the above issue of H shares,
27.71% of total issued ordinary shares of the		the share capital structure of the Company is: SHI
Company).		Chunbao, YUE Shujun, SUN Weiqi, JIN Jie, LIN
		Yiming, HUANG Dong, WANG Haiya, HE Rongmei,
		NI Xuezhen, ZHANG Zhaohui and CHEN Xusheng
		held 50,000,000 shares (being domestic shares) in
		total, representing approximately 72.29% of the total
		number of issued ordinary shares of the Company.
		Other H shareholders held 19,170,400 shares in total
		(being foreign shares), representing approximately
		27.71% of the total number of issued ordinary shares
		of the Company.
		The current share capital structure of the Company
		is: the Company's issued ordinary shares is
		345,852,000 shares with par value of RMB1.00 per
		share, among which 250,000,000 shares are domestic
		shares (representing approximately 72.29% of total
		issued ordinary shares of the Company); 95,852,000
		shares are H shares (representing approximately
		27.71% of total issued ordinary shares of the
		Company).
		The current share capital structure of the Company
		is:
		12 domestic shareholders including SHI Chunbao,
		YUE Shujun, 磐茂（上海）投資中心（有限合夥）, LIN
		Yiming, SUN Weiqi, JIN Jie, HUANG Dong, 磐信
	（上海）投資中心（有限合夥）, WANG Haiya, ZHANG
		Zhaohui and CHEN Xusheng held 250,000,000
		shares in total, representing approximately 72.29%
		of the total share capital of the Company. Other H
		shareholders held 95,852,000 shares in total,
		representing approximately 27.71% of the total share
		capital of the Company.
		On [●], with the approval of Document No. [●], the
		Company issued [●] shares of domestic shares by
		initial public offering and such issued domestic
		shares of the Company and domestic shares of the
		Company previously issued are listed on [●]. The
		share capital structure of the Company is: total share
		capital of [●], among which [●] shares are
		domestically-listed domestic shares, representing
		[●]% of total issued ordinary shares of the
		Company; [●] shares are overseas listed foreign
		shares, representing [●]% of ordinary share capital
		of the Company.

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APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

Article 20		Article 20
After the Company's plan for the issuance of	After the Company's plan for the issuance of
domestic shares and overseas listed foreign shares	domestic shares and overseas listed foreign shares
has been approved by the securities regulatory	has been approved by the securities regulatory
authorities of the State Council, the Board of	authorities of the State Councilthe PRC securities
Directors of the Company may arrange for	regulatory authorities, the Board of Directors of the
implementation of such plan by means of separate	Company may arrange for implementation of such
offerings.		plan by means of separate offerings.
		The Company may, according to the preceding
		paragraph, implement the plan for the issuance of
		overseas listed foreign shares and domestic shares
		within 15 months, respectively, from the date of
		approval by the PRC securities regulatory
		authorities.

Article 21		Article 21
Where the Company issues overseas listed foreign	Where the Company issues overseas listed foreign
shares and domestic shares separately within the	shares and domestic shares separately within the
total number of shares stated in the Company's	total number of shares stated in the Company's
proposal for the issuance of shares, such shares shall	proposal for the issuance of shares, such shares shall
be fully subscribed at one time respectively. If the	be fully subscribed at one time respectively. If the
shares cannot be fully subscribed at one time in	shares cannot be fully subscribed at one time in
special circumstances, the shares may be issued	special circumstances, the shares may be issued
through separate offerings subject to the approval of	through separate offerings subject to the approval of
the securities regulatory authorities of the State	the securities regulatory authorities of the State
Council.		Councilthe PRC securities regulatory authorities.

Article 22		Article 22
The Company's registered capital is RMB345,852,000.	The Company's registered capital is RMB[●]
		345,852,000.

- 53 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 26	Article 26
The Company's shares held by the sponsors shall not	The Company's shares held by the sponsors shall not
be transferred within one year from the date on	be transferred within one yearwithin 1 yearfrom the
which the Company is established.	date on which the Company is established. Shares of
	the Company issued prior to the public offering shall
The directors, supervisors and senior management	not be transferred within 1 year from the date the
of the Company shall report to the Company the	shares of the Company are listed and traded on stock
shares of the Company that they hold and the	exchange.
changes in their shareholdings, and during his or her
term of service, he or she shall not transfer more than	The directors, supervisors and senior management
25% of his or her total shareholding of the Company	of the Company shall report to the Company the
each year. The Company's shares held by these	shares of the Company that they hold and the
people shall not be transferred within one year after	changes in their shareholdings, and during his/her
the listing date of the Company's shares. The	term of service, he/she shall not transfer more than
aforesaid people shall not assign the Company's	25% of his/hertotal shareholding of the Company
shares that they hold within half a year after	each year. The Company's shares held by these
departure. If the transfer restriction under this	people shall not be transferred within one1year
article involves H shares, it shall be approved by the	after the listing date of the Company's shares. The
SEHK.	aforesaid people shall not assign the Company's
	shares that they hold within half a year after
	departure. If the transfer restriction under this
	aArticle involves H shares, it shall be approved by
	the SEHK.
	When the directors, supervisors and senior
	management of the Company and shareholders
	holding more than 5% of the Company's shares sell
	their shares within 6 months from the acquisition of
	such shares, or purchase shares within 6 months
	from the disposal of such shares, the resulting gains
	are owned by the Company and the Board of
	Directors of the Company shall recover its resulting
	gains. However, the disposal of such shares by
	securities companies holding more than 5% of the
	shares as a result of the outstanding shares
	(after-sale) acquired under underwriting is not
	subject to the time limit of 6 months.
	If the Board of Directors of the Company fails to
	comply with provisions in the preceding paragraph,
	shareholders have the right to request the Board of
	Directors to do so within 30 days. The shareholders
	have the right to initiate litigation in the court
	directly in their own names for the interest of the
	Company if the Board of Directors fails to comply
	with the provisions within the abovementioned
	period.
	If the Board of Directors of the Company fails to
	comply with the first paragraph of this Article, the
	responsible directors shall assume joint liabilities.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 4 Reduction of Capital and Repurchase of Shares

Original provisions	Amended provisions

Article 27	Article 27
The Company may reduce its registered capital. The	The Company may reduce its registered capital in
reduction in registered capital of the Company shall	accordance with the provisions of the Articles of
follow the procedures set forth in the Company Law,	Association. The reduction in registered capital of
other relevant regulations and the Articles of	the Company shall follow the procedures set forth in
Association.	the Company Law, other relevant regulations and
	the Articles of Association.

Article 29	Article 29
The Company may, in the following circumstances,	The Company may, in the following circumstances,
repurchase its own issued and outstanding shares	repurchase its own issued and outstanding shares
following the procedures provided under the laws	following the procedures provided under the laws
and this Articles of Association, and subject to	and this Articles of Association, and subject to
approval of the relevant state approval authority:	approval of the relevant state approval authority:
(I)	to cancel shares for reducing capital of the	(I)	to cancel shares for reducing capital of the
	Company;		Company;
(II)	to merge with other companies which own	(II)	to merge with other companies which own
	shares in the Company;		shares in the Company;
(III)	to apply shares for the employee stock	(III)	to apply shares for the employee stock
	ownership scheme or equity incentives;		ownership scheme or equity incentives;
(IV)	repurchase of shares held by the	(IV)	repurchase of shares held by the
	shareholders who voted against proposals		shareholders who voted against proposals
	for merger or division in the general meeting		for merger or division in the general meeting
	of the Company and subsequently request		of the Company and subsequently request
	the company to do so;		the company to do so;
(V)	to apply shares for conversion of convertible
	corporate bonds issued by the Company; and	(V)	to apply shares for conversion of convertible
			corporate bonds issued by the Company; and
(VI)	to be essential for the Company to maintain
	the corporate value and interests of	(VI)	to be essential for the Company to maintain
	shareholders.		the corporate value and interests of
			shareholders.; and
Save for the above circumstances, the Company shall
not repurchase the shares of the Company.	(VII)	other circumstances as permitted by the laws
			and administrative regulations.
		Save for the above circumstances, the Company shall
		not repurchase the shares of the Company.

- 55 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 32	Article 32
The Company shall, in the event of repurchase of the	The Company shall, in the event of repurchase of the
Company's shares under the circumstances required	Company's shares under the circumstances required
in the subparagraph (I), (II) of the first article of	in the subparagraph (I), (II) of the first article of
Article 29 of this Articles of Association, be subject to	Article 29 of this Articles of Association, be subject to
the resolution in the general meeting; the Company	the resolution in the general meeting; the Company
may, in the circumstances of repurchase of the	may, in the circumstances of repurchase of the
Company's shares under the circumstances required	Company's shares under the circumstances required
in the subparagraph (III), (V), (VI) of the first article	in the subparagraph (III), (V), (VI) of the first article
of Article 29 of this Articles of Association, comply	of Article 29 of this Articles of Association, comply
with the requirements of this Articles of Association	with the requirements of this Articles of Association
or authorization by the general meeting, subject to	or authorization by the general meeting, subject to
the resolution by more than two-thirds of the	the resolution by more than two-thirds of the
directors present in the Board meeting.	directors present in the Board meeting.
After the repurchase of the shares in accordance with	After the repurchase of the shares in accordance with
the first article of Article 29 of Articles of	the first article of Article 29 of Articles of
Association, if under the circumstance mentioned in	Association, if under the circumstance mentioned in
subparagraph (I), cancel them within 10 days after	subparagraph (I), cancel them within 10 days after
the purchase; or if under either circumstance	the purchase; or if under either circumstance
mentioned in subparagraph (II) or (IV), transfer	mentioned in subparagraph (II) or (IV), transfer
them or cancel them within 6 months; if under the	them or cancel them within 6 months; if under the
circumstances of subparagraph (III), (V), (VI), the	circumstances of subparagraph (III), (V), (VI), the
total number of shares of the Company held by the	total number of shares of the Company held by the
Company shall not exceed 10% of the total issued	Company shall not exceed 10% of the total issued
shares of the Company, and shall be transferred or	shares of the Company, and shall be transferred or
cancelled within three years.	cancelled within three3years.
Where the Company cancels its shares as a result of	Where a listed company acquires any of the
share repurchases, it shall make an application to its	Company's shares, the obligation of information
original registration authority to modify the	disclosure shall be performed in accordance with the
registration on its registered capital. The amount of	Securities Laws. Where a listed company purchases
the Company's registered capital shall be reduced by	the Company's shares in the circumstances set out in
the aggregate par value of those shares cancelled.	subparagraph (III), (V) and (VI) of the first article of
	Article 29, such purchase shall be conducted through
	public and centralized trading method.
	Where the Company cancels its shares as a result of
	share repurchases, it shall make an application to its
	original registration authority to modify the
	registration on its registered capital.
	The amount of the Company's registered capital
	shall be reduced by the aggregate par value of those
	shares cancelled.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 5 Financial Assistance for the Purchase of the Company's Shares

- 57 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 6 Share Certificates and Register of Members

Original provisions	Amended provisions

Article 39	Article 39
The Company shall keep a register of members,	The Company shall keep a register of members
which shall contain the following particulars:	based on the evidence furnished by share registries.
		Unless there is evidence to the contrary, the register
(I)	the surname and name, address (place of	of members shall be the sufficient evidence of the
	domicile), occupation or nature of business	shareholders' shareholding in the Company., which
	of each shareholder;	The register of membersshall contain the following
		particulars:

the class and number of shares held by each

	shareholder;	(I)	the surname and name, address (place of
			domicile), occupation or nature of business
(III) the amount paid-up or payable in respect of		of each shareholder;
	shares held by each shareholder;
		(II)	the class and number of shares held by each
(IV)	the share certificate numbers of the shares		shareholder;
	held by each shareholder;
		(III)	the amount paid-up or payable in respect of
(V)	the date on which each shareholder was		shares held by each shareholder;
	registered in the register as a shareholder;
	and	(IV)	the share certificate numbers of the shares
			held by each shareholder;
(VI)	the date on which any shareholder ceased to
	be a shareholder.	(V)	the date on which each shareholder was
			registered in the register as a shareholder;
Unless there is evidence to the contrary, the register		and
of members shall be the sufficient evidence of the
shareholders' shareholding in the Company.	(VI)	the date on which any shareholder ceased to
			be a shareholder.
All issues or transfers of overseas listed foreign
shares will be registered in the register of members	The Company shall sign a share custody agreement
of overseas listed foreign shares at the place of	with share registries for the purpose of consulting
listing in accordance with the requirements set out in	the information and shareholding change (including
the Articles of Association.	share pledge) of substantial shareholders on a
		regular basis, in order to be fully aware of the
		shareholding structure of the Company in a timely
		manner.
		Unless there is evidence to the contrary, the register
		of members shall be the sufficient evidence of the
		shareholders' shareholding in the Company.
		All issues or transfers of overseas listed foreign
		shares will be registered in the register of members
		of overseas listed foreign shares at the place of
		listing in accordance with the requirements set out in
		the Articles of Association.

- 58 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

- 59 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

Article 40		Article 40
The Company may keep overseas the register of	The Company may keep overseas the register of
holders of overseas listed foreign shares and entrust	holders of overseas listed foreign shares and entrust
it to the care of an overseas agency in accordance	it to the care of an overseas agency in accordance
with the understanding and agreement reached	with the understanding and agreement reached
between the securities regulatory authority under	between the securities regulatory authority under
the State Council and the overseas securities	the State Councilsecurities regulatory authority of
regulatory authority. For the overseas listed foreign	the PRCand the overseas securities regulatory
shares listed in Hong Kong, the original of the	authority. For the overseas listed foreign shares
register of members shall be kept in Hong Kong.	listed in Hong Kong, the original of the register of
			members shall be kept in Hong Kong.
The Company shall keep at its place of domicile a
copy of the register of holders of overseas listed	The Company shall keep at its place of domicile a
foreign shares; the entrusted overseas agency shall	copy of the register of holders of overseas listed
always ensure that the original and the copy of the	foreign shares; the entrusted overseas agency shall
register of holders of overseas listed foreign shares	always ensure that the original and the copy of the
are consistent.		register of holders of overseas listed foreign shares
			are consistent.
Where there is a discrepancy between the original
and the copy of the register of holders of overseas	Where there is a discrepancy between the original
listed foreign shares, the original shall prevail.	and the copy of the register of holders of overseas
			listed foreign shares, the original shall prevail.

Article 41		Article 41
The Company shall maintain a complete register of	The Company shall maintain a complete register of
members.		members.
The register of members shall include the following	The register of members shall include the following
parts:			parts:
(I)	the register of members which is maintained at	(I)	the register of members which is maintained
	the Company's place of domicile (other than		at the Company's place of domicile (other
	those share registers described in		than those share registers described in
	subparagraphs (II) and (III) of this Article);		subparagraphs (II) and (III) of this Article);
(II)	the register of members in respect of the	(II)	the register of members in respect of the
	holders of overseas listed foreign shares of		holders of overseas listed foreign shares of
	the Company which is maintained at the		the Company which is maintained at the
	place of the overseas stock exchange on		place of the overseas stock exchange on
	which the shares of the Company are listed;		which the shares of the Company are listed.
				In respect of the register of members of
(III) the register of members which is maintained		overseas-listed foreign shares for the shares
	in such other place as the Board may consider		that are listed in the Hong Kong Stock
	necessary for the purpose of listing of the		Exchange, the original register of members of
	Company's shares.		shares shall be maintained in Hong Kong;
			(III)	the register of members which is maintained
				in such other place as the Board may consider
				necessary for the purpose of listing of the
				Company's shares.

- 60 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 43	Article 43
All fully paid-up overseas listed foreign shares	All fully paid-up overseas listed foreign shares
listed in Hong Kong are freely transferable pursuant	listed in Hong Kong are freely transferable pursuant
to the Articles of Association. The Board may refuse	to the Articles of Association. The Board may refuse
to recognize any instrument of transfer without	to recognize any instrument of transfer without
explanation unless such transfer is in compliance	explanation unless such transfer is in compliance
with the following conditions:	with the following conditions:
(I)	payment of HK$2.50 (for each instrument of	(I)	instrument of transfer and any other
	transfer) or such higher fees as demanded by		documents related to the ownership of any
	the SEHK has been paid to the Company to		shares or likely to affect the ownership of any
	register the instrument of transfer of shares		shares shall be registered, and made
	and other documents relating to or which		payment to the Company for such
	may affect the ownership of such shares;		registration according to the expenses
			stipulated by the Hong Kong Listing Rules;
(II)	the instrument of transfer involves only the		payment of HK$2.50 (for each instrument of
	overseas listed foreign shares listed in Hong		transfer) or such higher fees as demanded by
	Kong;		the SEHK has been paid to the Company to
			register the instrument of transfer of shares
(III)	the stamp duty payable on the instrument of		and other documents relating to or which
	transfer has been paid;		may affect the ownership of such shares;
(IV)	the relevant share certificates and evidence	(II)	the instrument of transfer involves only the
	reasonably required by the Board showing		overseas listed foreign shares listed in Hong
	that the transferor has the right to transfer		Kong;
	such shares have been submitted;
		(III)	the stamp duty payable on the instrument of
(V)	if the shares are to be transferred to joint		transfer as required by the laws of Hong
	holders, the number of such joint holders		Konghas been paid;
	shall not exceed 4;
		(IV)	the relevant share certificates and evidence
(VI)	the relevant shares shall be free from any lien		reasonably required by the Board showing
	created by any company;		that the transferor has the right to transfer
			such shares shall be provided;the relevant
(VII)	no share shall be transferred to a minor or an		share certificates and evidence reasonably
	individual with unsound mind or a legally		required by the Board showing that the
	incapacitated individual.		transferor has the right to transfer such
			shares have been submitted;

If the Company refuses to register a share transfer, the Company shall send the transferor and the transferee a notice of refusal to register the said share transfer within 2 months after the application for transfer is submitted.

- 61 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

		(V)	if the shares are to be transferred to joint
			holders, the number of such joint holders
			shall not exceed 4;
		(VI)	the relevant shares shall be free from any lien
			created by any company;
		(VII)	no share shall be transferred to a minor or an
			individual with unsound mind or a legally
			incapacitated individual.
		If the BoardCompanyrefuses to register a share
		transfer, the Company shall send the transferor and
		the transferee a notice of refusal to register the said
		share transfer within 2 months after the application
		for transfer is submitted.

- 62 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 7 Rights and Obligations of Shareholders

Original provisions

Amended provisions

Article 52

Holders of ordinary shares of the Company shall

Holders of ordinary shares of the Company shall have

have the following rights:

the following rights:

(I)

to claim dividends and distribution of profits

(I)

to claim dividends and distribution of profits in

in any other form in proportion to the

any other form in proportion to the number of

number of shares held;

shares held;

(II)

to attend general meetings either in person

(II)

to request, convene, preside over,attend general

or by proxy and exercise the voting right;

meetings either in person or by proxy and

(III)

supervise

and manage

the business

exercise the voting right in accordance with the

laws;

activities of the Company and to put forward

proposals and raise inquiries;

(III)

to supervise and manage the business activities

(IV)

to transfer the shares in accordance with the

of the Company and to put forward proposals

and raise inquiries;

laws, administrative regulations and the

Articles of Association;

(IV)

to transfer, give or pledgethe shares held by

(V)

receive

information as provided in

the

themin

accordance

with

the

laws,

administrative regulations and the Articles of

Articles of Association, including:

Association;

(1)

a copy of the Articles

of Association

(V)

to receive information as provided in the

upon payment of the costs thereof;

Articles of Association, including:

(2) the right to inspect and copy, subject to

(1) a copy of the Articles of Association upon

payment of reasonable charge:

payment of the costs thereof;

all

parts

of the register

(2) the right to inspect and copy, subject to

members;

payment of reasonable charge:

personal

particulars

the

all parts of the register of members;

directors,

supervisors,

general

manager

and

other

senior

personal

particulars

of the

management of

the Company,

directors,

supervisors,

general

including:

manager

and

other

senior

(a)

present

and

former

management

the

Company,

including:

forename and surnames

and any aliases;

(a)

present

and

former

(b)

principal address (domicile);

forename and surnames

and any aliases;

(c)

nationality;

(b)

principal address (domicile);

(c)

nationality;

- 63 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions				Amended provisions

	(d)	occupation and	all	other		(d)	occupation and	all	other
		part-time occupation and			part-time occupation and
		positions;					positions;
	(e)	identification documents		(e)	identification documents
		and its number.					and its number.
(3)	status of the share capital of the	(3)	status of the share capital of the
	Company;				Company;
(4)	the latest audited	financial	(4)	the latest audited	financial
	statements and reports of the Board		statements and reports of the Board
	of Directors, auditors and Board of		of Directors, auditors and Board of
	Supervisors of the Company;			Supervisors of the Company;
(5)	special resolutions of the Company;	(5)	special resolutions of the general
						meeting and/or board meeting of the
(6)	reports showing the aggregate par		Company;
	value,	number, maximum	and
	minimum prices paid in respect of	(6)	reports showing the aggregate par
	each class of shares repurchased by		value,	number, maximum	and
	the Company since the end of the		minimum prices paid in respect of
	previous accounting year and the		each class of shares repurchased by
	aggregate amount incurred by the		the Company since the end of the
	Company for this purpose;				previous accounting year and the
						aggregate amount incurred by the
(7)	copies of the latest annual inspection		Company for this purpose;
	report submitted to the Administration
	for Industry and Commerce of the PRC	(7)	copies of the latest annual inspection
	or other competent authorities for		report submitted to the Administration
	recordation; and				for Industry and Commerce of the PRC
						or other competent authorities for
(8)	minutes of the general meetings (for		recordation; and
	shareholders' inspection only).
					(8)	minutes of the general meetings (for
						shareholders' inspection only);.

- 64 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions		Amended provisions

	Documents of items (1) to (7) mentioned		Documents of items (1) to (8)(7)mentioned
	above and any other applicable documents		above, except for item (2),and any other
	shall be made available by the Company,		applicable documentsshall be made
	according to the requirements of the Listing		available by the Company, according to the
	Rules, at the Company's address in Hong		requirements of the Hong KongListing
	Kong, for the public and overseas listed		Rules, at the Company's address in Hong
	foreign shareholders to inspect at no charge.		Kong, for the public and overseas listed
				foreign shareholders to inspect at no charge,
	A shareholder intending to inspect aforesaid		except for item (8), which will only be
	relative information or request information		available for inspection by the shareholders.
	shall provide to the Company the written
	supporting documents in relation to the		A shareholder intending to inspect aforesaid
	types and numbers of its shares he/she hold,		relative information or request information
	and the Company will provide information		shall provide to the Company the written
	as per such shareholder's requirements upon		supporting documents in relation to the
	authentication of his/her identity as its		types and numbers of its shares he/she hold,
	Shareholder.			and the Company will provide information
				as per such shareholder's requirements upon
(VI)	to participate	in the distribution of the		authentication of his/her identity as its
	residual assets of the Company in proportion		Shareholder.
	to the number of shares held in the event of
	termination or liquidation of the Company;	(VI)	to participate in the distribution of the
	and			residual assets of the Company in proportion
				to the number of shares held in the event of
(VII)	other rights	conferred by the laws,		termination or liquidation of the Company;
	administrative regulations and the Articles		and
	of Association.
			(VII)	shareholders against the mergers or
				divisions of the Company tabled at
				shareholders' meeting, to request the
				Company to buy back its shares; and
			(VII)
			(VIII)	other rights conferred by the laws,
				administrative regulations and the Articles
				of Association.

- 65 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 56	Article 56
Holders of ordinary shares of the Company shall	Holders of ordinary shares of the Company shall
assume the following obligations:	assume the following obligations:
(I)	to comply with the Articles of Association;	(I)	to comply with laws, administrative
			regulations andthe Articles of Association;

to pay subscription money according to the

	number of shares subscribed and the method	(II)	to pay subscription money according to the
	of subscription;		number of shares subscribed and the method
(III) to take responsibility for the Company to the		of subscription;
(III)	to take responsibility for the Company to the
	extent of the shares subscribed;
(IV)	not to divest the shares except otherwise		extent of the shares subscribed;
(IV)	not to divest the shares except otherwise
	provided by the laws and regulations;
(V)	not to abuse their rights as shareholders to		provided by the laws and regulations;
(V)	not to abuse their rights as shareholders to
	damage the interests of the Company or
	other shareholders; and not to abuse the		damage the interests of the Company or
	Company's independent status of legal		other shareholders; and not to abuse the
	entity or shareholders' limited liability to		Company's independent status of legal
	damage the interests of the creditors of the		entity or shareholders' limited liability to
	Company;		damage the interests of the creditors of the
A shareholder who abuses shareholder's right shall		Company;
A shareholder who abuses shareholder's right shall
be liable for indemnification to any loss so caused to
the Company or other shareholders according to the	be liable for indemnification to any loss so caused to
laws.		the Company or other shareholders according to the
A shareholder who abuses the Company's	laws.
A shareholder who abuses the Company's
independent status of legal entity or shareholder's
limited liability to evade debts thereby causing	independent status of legal entity or shareholder's
serious damage to the interests of the creditors of the	limited liability to evade debts thereby causing
Company shall bear joint liability for the Company's	serious damage to the interests of the creditors of the
debts.		Company shall bear joint liability for the Company's
(VI)	other obligations imposed by the laws,	debts.
(VI)	substantial shareholders shall give a timely,
	administrative regulations and the Articles
	of Association.		true and complete report to the Board
			regarding a name list of their liaison persons
Shareholders are not liable to make any further		and the information about their connected
contribution to the share capital other than the terms		transactions;
as agreed by the subscriber of the Relevant Shares at	(VII)(VI)	other obligations imposed by the laws,
the time of subscription.
			administrative regulations and the Articles
			of Association.
		Shareholders are not liable to make any further
		contribution to the share capital other than the terms
		as agreed by the subscriber of the Relevant Shares at
		the time of subscription.
		Where a shareholder of A Share holding 5% or more
		voting shares of the Company pledges any shares in
		his/her possession, he/she shall report the pledge to
		the Company in writing on the day upon occurrence
		of the pledge. The pledge from shareholder of H
		share shall be in compliance with the relevant
		requirements stipulated by Hong Kong Stock
		Exchange.

- 66 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

- 67 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 8 General Meetings

Original provisions				Amended provisions

Article 60				Article 60
The general meeting shall exercise the following	The general meeting shall exercise the following
functions and powers:				functions and powers:
(I)	to decide on the Company's operational	(I)	to decide on the Company's operational
	policies and investment plans;			policies and investment plans;
(II)	to elect and replace directors who are not	(II)	to elect and replace directors who are not
	appointed	from	the	employees'		appointed	from	the	employees'
	representatives and decide on matters		representatives and decide on matters
	relating to their remuneration;			relating to their remuneration;
(III)	to elect and replace supervisors who are not	(III)	to elect and replace supervisors who are not
	appointed	from	the	employees'		appointed	from	the	employees'
	representatives and decide on matters		representatives and decide on matters
	relating to their remuneration;			relating to their remuneration;
(IV)	to consider and approve the reports of the	(IV)	to consider and approve the reports of the
	Board of Directors;				Board of Directors;
(V)	to consider and approve the reports of the	(V)	to consider and approve the reports of the
	Board of Supervisors;				Board of Supervisors;
(VI)	to consider and approve the Company's	(VI)	to consider and approve the Company's
	proposed annual budgets and final accounts;		proposed annual budgets and final accounts;
(VII)	to consider and approve the Company's	(VII)	to consider and approve the Company's
	profit distribution plans and loss recovery		profit distribution plans and loss recovery
	plans;					plans;
(VIII)	to resolve the increase or reduction of the	(VIII)	to resolve the increase or reduction of the
	Company's registered capital;			Company's registered capital and the
						acquisition of the Company's shares;
(IX)	to resolve the merger, division, dissolution,
	liquidation of the Company or change of	(IX)	to resolve the merger, division, dissolution,
	corporate form;				liquidation of the Company or change of
						corporate form;
(X)	to resolve the issue of corporate debentures
	or other securities and listing plans of the	(X)	to resolve the issue of corporate debentures
	Company;					or other securities and listing plans of the
						Company;

- 68 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

(XI)	to	resolve the appointment, dismissal or	(XI)	to resolve the appointment, dismissal or
	non-reappointment of accounting firms;		non-reappointment of accounting firms;
(XII)	to amend the Articles of Association;	(XII)	to amend the Articles of Association;
(XIII)	the following guarantees shall be considered	(XIII)	the following guarantees shall be considered
	and approved,		and approved,
	①	any provision of guarantee, where		①	any provision of guarantee, where
		the total amount of external			the total amount of external
		guarantees provided by the Company			guarantees provided by the Company
		or its subsidiaries reaches 50% or			or its subsidiaries reaches 50% or
		above of the latest audited net assets;			above of the latest audited net assets;
	②	any provision of guarantee, where		②	any provision of guarantee, where
		the total amount of external			the guarantee amount aggregated
		guarantees provided by the Company			over a period of 12 consecutive
		or its subsidiaries reaches 30% or			months exceedingthe total amount of
		above of the latest audited total			external guarantees provided by the
		assets;			Company or its subsidiaries reaches
					30% or aboveof the latest audited
	③	any provision of guarantee to anyone			total assets;
		whose gearing ratio exceeds 70%;
				③	the guarantee amount aggregated
	④	any provision of a single guarantee in			over a period of 12 consecutive
		the amount exceeding 10% of the			months exceeding 50% of the latest
		latest audited net assets;			audited net assets and with the
					absolute amount exceeding RMB30
	⑤	any provision of guarantee to			million;
		shareholders, de facto controller and
		other connected parties;		④③	any provision of guarantee to anyone
					whose gearing ratio exceeds 70%;
				⑤④	any provision of a single guarantee in
					the amount exceeding 10% of the
					latest audited net assets;
				⑥⑤	any provision of guarantee to
					shareholders, de facto controller and
					other connected parties;

- 69 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

	⑥	other external guarantees as defined		⑦⑥	other external guarantees as defined
		by the laws and regulations ,and			by the laws and regulations, and
		SEHK that are subject to the			SEHK that are subject to the
		consideration and approval at the			consideration and approval at the
		general meeting.			general meeting.
(XIV)	to consider and approve the purchase and	(XIV)	to consider and approve the purchase and
	disposal of material assets by the Company		disposal of material assets by the Company
	within a year which account for more than		within a year which account for more than
	30% of the latest audited total assets of the		30% of the latest audited total assets of the
	Company;		Company;
(XV)	to consider and approve share incentive	(XV)	to consider and approve share incentive
	plans;			plans;
(XVI)	to consider and approve proposals raised by	(XVI)	to consider and approve proposals raised by
	shareholders who represent 3% or above of		shareholders who represent 3% or above of
	the issued voting shares of the Company;		the issued voting shares of the Company;
(XVII)	to resolve other issues which require	(XVII)	to consider and approve the matters
	approvals by the general meeting as		regarding change in use of proceeds;
	stipulated by the laws, administrative
	regulations, the listing rules of the stock	(XVIII)	to consider the matters regarding connected
	exchange on which the Company's shares are		transactions that shall be approved by the
	listed and the Articles of Association.		general meeting as stipulated by the listing
				rules of the domicile country where the
The shareholders in a general meeting may		shares of the Company are listed;
authorize the board of directors to carry out matters
on their behalf or they may sub-delegate to the board	(XIX)(XVII)	to resolve other issues which require
of directors on such matters provided that such		approvals by the general meeting as
authorization does not violate the laws, regulations		stipulated by the laws, administrative
and mandatory requirements of the listing rules of		regulations, the listing rules of the stock
the place where the company is listed.		exchange on which the Company's shares are
				listed and the Articles of Association.
			When the general meeting is considering the
			guarantee proposal for shareholders, de facto
			controllers and their related parties, the said
			shareholder or the shareholders controlled by de
			facto controllers shall not participate in the vote. The
			vote shall be passed by more than half of the voting
			rights held by other shareholders at the general
			meeting.

- 70 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

		Matters which shall be determined by the general
		meeting according to the laws, administrative
		regulations and the Articles of Association shall be
		resolved at general meetings in order to protect the
		decision-making rights of shareholders of the
		Company on such matters. The board of directors
		may be authorized by the general meeting whenever
		necessary and reasonable to make decisions within
		its scope of authorization as delegated by the general
		meeting on specific matters which are relevant to the
		matters to be resolved and cannot be approved
		forthwith at the general meeting.
		An authorization to the board of directors by the
		general meeting in relation to matters to be decided
		by ordinary resolutions shall be passed by
		shareholders (including their proxies) representing
		more than half of the voting rights present at the
		general meeting; an authorization to the board of
		directors in relation to matters to be decided by
		special resolutions shall be passed by shareholders
		(including their proxies) representing more than
		two-thirds of the voting rights present at the general
		meeting. The contents of the authorization shall be
		clear and specific.
		The shareholders in a general meeting may
		authorize the board of directors to carry out matters
		on their behalf or they may sub-delegate to the board
		of directors on such matters provided that such
		authorization does not violate the laws, regulations
		and mandatory requirements of the listing rules of
		the place where the company is listed.

Article 62	Article 62
General meetings are divided into annual general	General meetings are divided into annual general
meetings and extraordinary general meetings.	meetings and extraordinary general meetings.
General meetings shall be convened by the Board.	General meetings shall be convened by the Board.
Annual general meetings are held once a year and	Annual general meetings are held once a year and
within 6 months from the end of the preceding fiscal	within 6 months from the end of the preceding fiscal
year.		year.
Under any of the following circumstances, the Board	Under any of the following circumstances, the Board
shall convene an extraordinary general meeting	shall convene an extraordinary general meeting
within 2 months:	within 2 months:
(I)	the number of directors is less than the	(I)	the number of directors is less than the
	quorum required by the Company Law or		quorum required by the Company Law or
	two-thirds of the number of directors		two-thirds of the number of directors
	specified in the Articles of Association;		specified in the Articles of Association;

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APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions				Amended provisions

(II)	the accrued losses of the Company amount to	(II)	the accrued losses of the Company amount to
	one-third of the total amount of its share		one-third of the total amount of its share
	capital;					paid-upcapital;
(III) shareholder(s)	severally	or	jointly holding	(III) shareholder(s) severally	or	jointly holding
	10% or more of the Company's outstanding		10% or more of the Company's outstanding
	issued shares carrying voting rights		issued shares carrying voting rights
	request(s) in writing the convening of an		request(s) in writing the convening of an
	extraordinary general meeting;		extraordinary general meeting;
(IV)	it is deemed necessary by the Board of	(IV)	it is deemed necessary by the Board of
	Directors or requested by the Board of		Directors or requested by the Board of
	Supervisors to convene an extraordinary		Supervisors to convene an extraordinary
	general meeting; or				general meeting; or
(V)	half or more of	the	independent	(V)	half or more of	the	independent
	non-executive directors propose to convene		non-executive directors propose to convene
	the meeting.					the meeting.

Article 63				Article 63
The venue of general meeting of the Company is the	The venue of general meeting of the Company is the
domicile of the Company or other place notified by	domicile of the Company or other place notified by
the convener of the general meeting.		the convener of the general meeting.
The general meeting shall be held onsite in a	The general meeting shall be held onsite in a
physical venue. The Company may also provide	physical venue. The Company maywillalso provide
internet or any other means for its shareholders to	internet or any other means for its shareholders to
conveniently participate in general meetings	conveniently participate in general meetings
provided that such act does not violate the laws,	provided that such act does not violate the laws,
regulations and mandatory requirements of the	regulations and mandatory requirements of the
listing rules of the place where the company is listed.	listing rules of the place where the company is listed.
Shareholders participating in the general meetings	Shareholders participating in the general meetings
by any aforesaid means shall be deemed as having	by any aforesaid means shall be deemed as having
attended the meetings.				attended the meetings.
					Online voting method shall not apply to the
					shareholders of H shares.

- 72 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

-		Article 64
		When the Company convenes a general meeting,
		lawyers will be appointed to issue legal opinions
		and make public announcement on the following
		matters:
		(I)	whether or not the procedures of convening
			and holding the meeting are in accordance
			with the relevant laws, administrative
			regulations and this Articles of Association;
		(II)	whether or not the qualifications of the
			personnel attending the meeting and the
			qualifications of the convener are legal and
			effective;
		(III) whether or not the voting procedure and
			voting results of the meeting are legal and
			effective;
		(IV)	legal opinions issued on the other related
			matters as requested by the Company.

Article 64		Article 6465
When the Company convenes an annual general	When the Company convenes an annual general
meeting, written notice (by electronic means or mail)	meeting, written notice (by electronic means or mail)
of the meeting shall be given at least 20 business	of the meeting shall be given at least 20 business
days before the date of the meeting (where the	days before the date of the meeting (where the
Company convenes an extraordinary general	Company convenes an extraordinary general
meeting, written notice (by electronic means or mail)	meeting, written notice (by electronic means or mail)
of the meeting shall be given at least 10 business	of the meeting shall be given at least 10 business
days or 15 days (whichever is longer) before the date	days or 15 days (whichever is longer) before the date
of the meeting) to notify, among other things, all	of the meeting) to notify, among other things, all
shareholders whose names appear in the register of	shareholders whose names appear in the register of
members of the matters to be considered and the	members of the matters to be considered and the
date and place of the meeting.	date and place of the meeting.
The period of the dispatching of the notice shall	The period of the dispatching of the notice shall
exclude the date convening the meeting and the date	exclude the date convening the meeting and the date
on which the notice is dispatched.	on which the notice is dispatched. The date on which
		the notice is issued to the shareholders of H shares in
		accordance with this Article (by electronic means or
		mail) is the date when the notice is served on the
		postal authority for posting by the Company or by
		the share registrar appointed by the Company.

- 73 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 65	Article 6566
When the Company convenes a general meeting,	When the Company convenes a general meeting,
meeting of the Board of Directors and Board of	meeting of the Board of Directors and Board of
Supervisors, shareholders severally or jointly	Supervisors, shareholders severally or jointly
holding more than 3% of the total number of shares	holding more than 3% of the total number of shares
shall have the right to propose resolutions.	shall have the right to propose resolutions.
When the Company convenes an annual general	When the Company convenes an annualageneral
meeting, shareholders severally or jointly more than	meeting, shareholders severally or jointly holding
3% of the total number of shares shall have the right	more than 3% of the total number of shares shall
to propose extraordinary resolutions in writing to	have the right to propose extraordinary resolutions
the Company and the Company shall include the	in writing to the Company. and tThe Company shall
matters therein falling within the scope of functions	include the matters therein falling within the scope
and powers of the general meeting into the agenda	of functions and powers of the general meeting into
of such meeting.	the agenda of such meeting, and issue a
		supplementary notice of general meeting within 2
An extraordinary resolution proposed by	days after receiving the resolutions and make public
shareholders shall be subject to and conditional	announcement to publish the content of the
upon:		extraordinary resolutions. If the listing rules of the
		stock exchange on which the shares of the Company
(I)	the substance of the resolution proposed	are listed provide otherwise, their requirements
	shall not be in conflict with the laws and	shall also be satisfied at the same time.
	regulations, and shall fall within the scope of
	operation of the Company and the functions	An extraordinary resolution proposed by
	and powers of general meetings;	shareholders shall be subject to and conditional
		upon:

there is a clear subject matter of discussion

	and specific matters to be resolved; and	(I)	the substance of the resolution proposed
			shall not be in conflict with the laws and
(III)	the resolution shall be submitted or served to		regulations, and shall fall within the scope of
	the Board in writing ten days before the date		operation of the Company and the functions
	of the general meeting.		and powers of general meetings;
		(II)	there is a clear subject matter of discussion
			and specific matters to be resolved; and
		(III)	the resolution shall be submitted or served to
			the Board in writing ten days before the date
			of the general meeting.

- 74 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions			Amended provisions

Article 67				Article 6768
A notice of a general meeting shall:			A notice of a general meeting shall:
(I)	be served in writing;			(I)	be served in writing;
(II)	specify the place, the date and time of the	(II)	specify the place, the date and time of the
	meeting;					meeting;
(III)	state the matters and proposals to be	(III)	state the matters and proposals to be
	considered at the meeting;				considered at the meeting;
(IV)	specify the record date for shareholders who	(IV)	specify the record date for shareholders who
	are entitled to attend the general meeting;		are entitled to attend the general meeting;
(V)	provide such information and explanation as	(V)	provide such information and explanation as
	are necessary for the shareholders to make an		are necessary for the shareholders to make an
	informed decision on the matters to be		informed decision on the matters to be
	considered. Without limiting the generality		considered. Without limiting the generality
	of the foregoing, where a proposal is made		of the foregoing, where a proposal is made
	(including but limited to) upon an merger of		(including but limited to) upon an merger of
	the Company, share repurchases, share		the Company, share repurchases, share
	capital	reorganisation	or	other		capital	reorganisation	or	other
	reconstruction of the Company in any other		reconstruction of the Company in any other
	way, the specific terms of the proposed		way, the specific terms of the proposed
	transaction shall be provided in details		transaction shall be provided in details
	together with copies of the proposed		together with copies of the proposed
	contracts (if any), and the cause and effect of		contracts (if any), and the cause and effect of
	such proposal shall be properly explained;		such proposal shall be properly explained;
(VI)	contain a disclosure of the nature and extent	(VI)	contain a disclosure of the nature and extent
	of the material interests of any director,		of the material interests of any director,
	supervisor, general manager and other senior		supervisor, general manager and other senior
	management if they are substantially		management if they are substantially
	interested in the proposed transaction; and		interested in the proposed transaction; and
	explain the effect of the proposed transaction		explain the effect of the proposed transaction
	on such director, supervisor, general		on such director, supervisor, general
	manager and other senior management in		manager and other senior management in
	their capacity as shareholders in so far as it is		their capacity as shareholders in so far as it is
	different from the effect on the interests of		different from the effect on the interests of
	other shareholders of the same class;			other shareholders of the same class;
(VII)	contain the full text of any special resolution	(VII)	contain the full text of any special resolution
	to be proposed at the meeting;				to be proposed at the meeting;
(VIII)	contain a conspicuous statement that a	(VIII)	contain a conspicuous statement that all
	shareholder entitled to attend and vote is		holders of ordinary shares are entitled to
	entitled to appoint more than one proxies to		attend general meetings;a shareholder
	attend and vote on his behalf and such proxy		entitled to attend and vote is entitled to
	is not necessarily be a shareholder; and		appoint more thanone or moreproxies to
(IX)	specify the time and place for service of		attend and vote on his/herbehalf and such
	proxy is not necessarily be a shareholder; and
	proxy forms for the relevant meeting;		(IX)	specify the time and place for service of
(X)	specify the name and telephone number of
	proxy forms for the relevant meeting; and
	the contact person for the meeting.		(X)	specify the name and telephone number of

						the contact person for the meeting.

- 75 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Notice of a general meeting shall be served on the	Notice of a general meeting and a supplementary
shareholders (whether or not entitled to vote at the	notice shall fully and completely disclose all the
meeting) by delivery in person or prepaid mail to	specific contents of all resolutions. In the event that
their addresses as shown in the register of members.	the matters intended to be discussed request the
For the holders of domestic shares or unlisted	independent directors to express their opinions, the
foreign shares, notice of a general meeting may be	opinions and reasons of the independent directors
issued by announcement; for holders of overseas	will be disclosed at the same time when the notice of
listed foreign shares, notice of a general meetings	the general meeting or the supplementary notice is
can also be delivered or made through the	issued.
Company's website or methods as stipulated by the
Listing Rules from time to time, provided that such	In the case where the internet or other means will be
act does not violate the laws, administrative	adopted at the general meeting, the voting time and
regulations and the listing rules of the stock	voting procedure of internet or other means shall be
exchange on which the Company's shares are listed.	clearly stated in the notice of the general meeting.
	The start time of the online voting or other means of
The "announcement" referred to in the preceding	voting of the general meeting shall not be earlier
article shall be published in one or more newspapers	than 3:00 p.m. on the day before the general meeting
designated by the securities governing authority of	to be held onsite in a physical venue, and shall not be
the State Council for a period of at least 20 business	later than 9:30 a.m. on the day before the holding of
days before convening an annual general meeting	the onsite general meeting in a physical venue, and
and at least 10 business days or 15 days (whichever	its end time shall not be earlier than 3:00 p.m. on the
is longer) before convening an extraordinary general	day before the end of general meeting held onsite in
meeting. After the publication of such	a physical venue.
announcement, the holders of domestic shares shall
be deemed to have received the notice of the relevant	The interval between the registration date of shares
general meeting.	and the meeting date should not be more than 7
	working days. The registration date of shares should
	not be changed upon confirmation.
	Notice of a general meeting shall be served on the
	shareholders (whether or not entitled to vote at the
	meeting) by delivery in person or prepaid mail to
	their addresses as shown in the register of members.
	For the holders of domestic shares or unlisted
	foreign shares, notice of a general meeting may be
	issued by announcement; for holders of overseas
	listed foreign shares, notice of a general meetings
	can also be delivered or made through the
	Company's website or methods as stipulated by the
	Listing Rules from time to time, provided that such
	act does not violate the laws, administrative
	regulations and the listing rules of the stock
	exchange on which the Company's shares are listed.
	The "announcement" referred to in the preceding
	aArticle shall be published in one or more
	newspapers designated by the securities governing
	authority of the State Councilthe securities
	regulatory authorities of the PRC, for a period of at
	least 20 business days before convening an annual
	general meeting and at least 10 business days or 15
	days (whichever is longer) before convening an
	extraordinary general meeting. After the publication
	of such announcement, the holders of domestic
	shares shall be deemed to have received the notice of
	the relevant general meeting.

- 76 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

-			Article 70
			After the notice of general meeting is issued, the
			general meeting shall not be delayed or cancelled
			without proper reasons, and the resolutions listed in
			the notice of general meeting shall not be cancelled.
			In case of delay or cancellation, the convener shall
			make public announcement and explain the reason
			at least 2 working days before the convening date
			originally scheduled.

-			Article 71
			The Board of the Company and other conveners will
			take necessary measures to ensure the normal order
			of the general meeting. In the case where there are
			acts that interfere with the general meeting, picking
			quarrels and provoking trouble and infringe upon
			the legitimate rights and interests of shareholders,
			measures will be taken to halt such acts and report
			will be made to relevant departments for
			investigation and handling in a timely manner.

Article 69		Article 6972
Any shareholder entitled to attend and vote at a	Any shareholder entitled to attend and vote at a
general meeting shall be entitled to appoint one or	general meeting shall be entitled to appoint one or
more persons (whether a shareholder or not) as his	more persons (whether a shareholder or not) as
proxy (proxies) to attend and vote on his behalf. A	his/herproxy (proxies) to attend and vote on
proxy so appointed shall be entitled to exercise the	his/herbehalf. A proxy so appointed shall be
following rights pursuant to the authorisation from	entitled to exercise the following rights pursuant to
that shareholder:		the authorisation from that shareholder:
(I)	the shareholder 's right to speak at the	(I)	the shareholder 's right to speak at the
	general meeting;		general meeting;
(II)	the right to severally demand or join in	(II)	the right to severally demand or join in
	demand for a poll; and		demand to vote on a poll; and
(III) the right to vote on a show of hands or on a	(III) the right to vote on a show of hands or on a
	poll, except otherwise stipulated by the		poll, except otherwise stipulated by the
	applicable securities listing rules or other		applicable securities listing rules or other
	securities laws and regulations, a		securities laws and regulations, a
	shareholder who has appointed more than		shareholder who has appointed more than
	one proxy, such proxies may only vote on a		one proxy, such proxies may only vote on a
	poll.			poll.

- 77 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

Where such shareholder is a recognised clearing	Where such shareholder is a recognised clearing
house defined from time to time in the relevant	house defined from time to time in the relevant
clauses of Hong Kong laws (or its nominees), the	clauses of Hong Kong laws (or its nominees), the
shareholder may authorize a person or persons as he	shareholder may authorize a person or persons as he
thinks fit to act as his representative (or	thinks fit to act as his/herrepresentative (or
representatives) at any general meeting or any	representatives) at any general meeting or any
meeting of any class of shareholders, provided that	meeting of any class of shareholders, provided that
if more than one person is so authorised, the	if more than one person is so authorised, the
authorisation signed by the recognized clearing	authorisation signed by the recognized clearing
house must specify the number and class of shares	house must specify the number and class of shares
that each such person is so authorised. Such duly	that each such person is so authorised. Such duly
authorized persons may represent the recognised	authorized persons may represent the recognized
clearing house (or its nominees) to attend the	clearing house (or its nominees) to attend the
meeting (without showing share certificates,	meeting (without showing share certificates,
notarized authorization and/or further evidence of	notarized authorization and/or further evidence of
duly authorization) exercise the same powers as if he	duly authorization) exercise the same powers as if he
is an individual shareholder of the Company.	is an individual shareholder of the Company.

Article 70		Article 7073
The instrument appointing a proxy shall be in	The instrument appointing a proxy shall be in
writing under the hand of the principal or his	writing under the hand of the principal or his/her
attorney duly authorised in writing, or if the	attorney duly authorised in writing, or if the
principal is a legal person, either under seal or under	principal is a legal person, either under seal or under
the hand of a director or attorney duly authorised.	the hand of a director or attorney duly authorised.
Such power of attorney shall contain the number of
shares represented by a proxy; if several persons are	The authorized instrument of proxy entrusting the
appointed as proxies, the number of shares	other person as the attorney issued by a shareholder
represented by each proxy shall be specified in the	to attend a general meeting shall contain following
power of attorney.		contents:
		(I)	the name of the proxy;
		(II)	whether or not having the right to vote;
		(III) the instructions to vote respectively in
			favour of, against or abstain from voting on
			each resolution on the agenda of a general
			meeting;
		(IV)	the issue date of the instrument of proxy and
			the validity period;
		(V)	to be signed (or sealed) by the proxy.
		Such power of attorney shall contain at the same
		timethe number of shares represented by a proxy; if
		several persons are appointed as proxies, the
		number of shares represented by each proxy shall be
		specified in the power of attorney.

- 78 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 72	Article 7275
Any instrument issued to a shareholder by the Board	Any instrument issued to a shareholder by the Board
of the Company for use in appointing a proxy shall	of the Company for use in appointing a proxy shall
be in such format as to enable the shareholder to	be in such format as to enable the shareholder to
instruct the proxy to vote in favour of or against the	instruct the proxy to vote in favour of or against the
resolutions according to his free will, and	resolutions according to his/herfree will, and
instructions shall be given in respect of each	instructions shall be given in respect of each
individual matter to be voted on at the meeting. The	individual matter to be voted on at the meeting. The
instrument of proxy shall contain a statement that, in	instrument of proxy shall contain a statement that, in
the absence of instructions by the shareholder, the	the absence of instructions by the shareholder, the
proxy may vote as it thinks fit.	proxy may vote as it thinks fit.
	Individual shareholders attending a meeting in
	person should present their identity cards or other
	valid documents or certificates that can identify
	themselves, and stock account cards; in the event
	that the proxies will attend a meeting on their behalf,
	they should present their valid identification
	documents and the instrument of proxy authorised
	by the shareholders.
	A legal person shareholder should have a legal
	representative or a proxy authorised by the legal
	representative to attend a meeting on its behalf. The
	legal representative who attend a meeting should
	present his identification and a valid document
	which can prove that he/she is qualified to act as a
	legal representative; in the event that a proxy
	authorised by the legal representative is to attend a
	meeting, the proxy shall present his/her identity
	card and the written power of attorney issued by the
	legal representative of the legal person shareholder
	unit according to law.

- 79 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

-		Article 77
		The Company is responsible for making the
		attendance register of the meeting for the personnel
		attending the meeting. The attendance register
		contains the names of the personnel attending the
		meeting (or name of the unit), identity card
		numbers, residential addresses, the number of
		shares with voting rights held by shareholders or
		represented by their proxies present at the meeting,
		the names of the persons represented by proxies (or
		name of the unit) and other matters.

-		Article 78
		The convener and the lawyer appointed by the
		Company will jointly verify the legality of the
		qualifications of shareholders in accordance with the
		register of members provided by the institutions of
		securities registration and settlement, and register
		the names (or titles) of the shareholders and the
		number of shares held by them. The meeting
		registration shall be terminated right before the
		chairman of the meeting announces the number of
		shareholders and proxies present at the venue of the
		meeting and the total number of shares with voting
		rights held by them.
		In the event that the chairman of the general meeting
		violates the rules of procedure in the course of the
		meeting, and the general meeting cannot continue,
		one person can be elected to act as the chairman of
		the meeting in order to continue the meeting upon
		consent of more than half of the voting rights held by
		the shareholders present at the general meeting.
		The convener shall ensure that the general meeting
		is held continuously until a final resolution is
		formed. In the event that the general meeting is
		adjourned or unable to make a resolution due to
		force majeure and other special reasons, necessary
		measures shall be taken to resume the convening of
		the general meeting as soon as possible or terminate
		this general meeting directly, and public
		announcement should be made in a timely manner.
		At the same time, the convener should report to the
		local institution of the CSRC in the region where the
		Company is located and the stock exchange.

- 80 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

Article 74		Article 7479
All directors and supervisors of the Company and	All directors and supervisors of the Company and
the secretary to the Board shall attend the general	the secretary to the Board shall attend the general
meeting, whereas the managers and other senior	meeting, whereas the managers and other senior
management shall be present at the meeting except	management shall be present at the meeting except
with proper reasons.		with proper reasons.

-		Article 80
		The Company shall formulate the Rules of
		Procedures of the general meeting, which specifies
		the procedures for the holding a general meeting
		and voting at a general meeting, including
		notification, registration, consideration and
		approval of resolutions, voting, counting of votes,
		announcement of voting results, formation of
		meeting resolutions, meeting minutes and
		signatures, announcements; and the principles in
		relation to making authorization by the general
		meeting to the Board of Directors, whereas the
		contents of authorization should be clear and
		specific. The Rules of Procedures of the general
		meeting shall be treated as annexes to the Articles of
		Association and shall be formulated by the Board,
		subject to approval by the general meeting.

-		Article 81
		The Board of Directors and the Board of Supervisors
		should, at the annual general meeting, report to the
		general meeting their work in the past year.
		Independent directors should also report on their
		work.

-		Article 82
		Directors, supervisors and senior management shall
		explain and address the enquiries and suggestions of
		the shareholders at the general meeting.

- 81 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 77	Article 7785
In voting at general meetings, shareholders	In voting at general meetings, shareholders
(including their proxies) shall exercise their voting	(including their proxies) shall exercise their voting
rights in accordance with the number of their voting	rights in accordance with the number of their voting
shares. Each share shall have one vote.	shares. Each share shall have one vote.
Shares held by the Company shall not have any	In the event that the material issues to be considered
voting rights and shall not be counted into the total	and approved at the general meeting will affect the
number of shares with voting rights present at the	interests of small and medium investors, the voting
general meeting.	of the small and medium investors shall be counted
	separately. The results of the separate counting of
In reviewing and considering matters relevant to	votes shall be publicly disclosed in a timely manner.
connected transactions at a general meeting, if
required by the listing rules of the stock exchange on	Shares held by the Company shall not have any
which the Company's shares are listed, the	voting rights and shall not be counted into the total
connected shareholders shall abstain from voting	number of shares with voting rights present at the
and the number of voting shares represented by	general meeting.
them shall be excluded from the total effective votes.
	The Board of the Company, independent directors
Where any shareholder is, under the applicable laws	and shareholders who meet the relevant regulations
and regulations and the listing rules of the stock	and conditions can make public solicitation of
exchange on which the shares of the Company are	voting rights held by shareholders. When soliciting
listed, required to abstain from voting on a	the voting rights of shareholders, the information in
particular resolution or restricted to voting only for	respect to specific voting intention should be fully
(or against) a particular resolution, any votes cast by	disclosed to the persons being solicited. To solicit the
or on behalf of such shareholder in contravention of	voting rights of shareholders at the expense of
such requirement or restriction shall not be counted.	payment or payment in disguise is forbidden. In
	respect of solicitation of voting rights, no restriction
	should be imposed by the Company on the
	minimum proportion of shareholding.
	In reviewing and considering matters relevant to
	connected transactions at a general meeting, if
	required by the listing rules of the stock exchange on
	which the Company's shares are listed, the
	connected shareholders shall abstain from voting
	and the number of voting shares represented by
	them shall be excluded from the total effective votes.
	The announcement of the resolution of the general
	meeting shall fully disclose the voting situation of
	the non-connected shareholders.
	Where any shareholder is, under the applicable laws
	and regulations and the listing rules of the stock
	exchange on which the shares of the Company are
	listed, required to abstain from voting on a
	particular resolution or restricted to voting only for
	(or against) a particular resolution, any votes cast by
	or on behalf of such shareholder in contravention of
	such requirement or restriction shall not be counted.

- 82 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

Article 80		Article 8088
On a poll taken at a meeting, a shareholder	On a poll taken at a meeting, a shareholder
(including his proxies) entitled to two or more votes	(including his/herproxies) entitled to two or more
need not cast all his votes in the same way.	votes need not cast all his/hervotes in the same way.
			The general meeting is voted by roll-call votes.

Article 83		Article 8391
The following matters shall be resolved by an	The following matters shall be resolved by an
ordinary resolution at a general meeting:	ordinary resolution at a general meeting:
(I)	work reports of the Board of Directors and	(I)	work reports of the Board of Directors and
	the Board of Supervisors;		the Board of Supervisors;
(II)	profit distribution plan and loss recovery	(II)	profit distribution plan and loss recovery
	plan formulated by the Board;		plan formulated by the Board;
(III)	election or removal of members of the Board	(III)	election or removal of members of the Board
	and the	shareholder representative		and the shareholder representative
	supervisors, their remuneration and manner		supervisors, their remuneration and manner
	of payment;			of payment;
(IV)	annual budget and final accounts report,	(IV)	annual budget and final accounts planreport,
	balance sheet, income statement, and other		balance sheet, income statement, and other
	financial statements of the Company; and		financial statements of the Company; and
(V)	such matters other than those required to be	(V)	annual report of the Company; and
	passed by special resolutions under the laws
	and administrative regulations and the	(VIV)	such matters other than those required to be
	listing rules of the stock exchange on which		passed by special resolutions under the laws
	the Company's shares are listed or the		and administrative regulations and the
	Articles of Association.		listing rules of the stock exchange on which
				the Company's shares are listed or the
				Articles of Association.

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APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

Article 84		Article 8492
The following matters shall be resolved by a special	The following matters shall be resolved by a special
resolution at a general meeting:	resolution at a general meeting:
(I)	increase or reduction in share capital,	(I)	increase or reduction in share capital,
	repurchase of shares, and issuance of shares		repurchase of shares, and issuance of shares
	of any class, stock warrants or other similar		of any class, stock warrants or other similar
	securities of the Company;		securities of the Company;
(II)	the issuance of debentures of the Company;	(II)	the issuance of debentures of the Company;
(III)	division, merger, dissolution, liquidation or	(III)	division, merger, dissolution, liquidation or
	change of corporate form of the Company;		change of corporate form of the Company;
(IV)	amendments to the Articles of Association;	(IV)	amendments to the Articles of Association;
	and			and
(V)	such other matters considered by the general	(V)	the purchase and disposal of material assets
	meeting, by way of an ordinary resolution, to		by the Company or the guaranteed amount
	be of a nature which may have a material		within a year which account for more than
	impact on the Company and shall be adopted		30% of the latest audited total assets of the
	by a special resolution.		Company;
			(VI)	share incentive plans; and
			(VIIV) such other matters considered by the general
				meeting, by way of an ordinary resolution, to
				be of a nature which may have a material
				impact on the Company and shall be adopted
				by a special resolution.

- 84 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 85	Article 8593
Shareholders or the Board of Supervisors	Shareholders or the Board of Supervisors
requisitioning an extraordinary general meeting or	requisitioning an extraordinary general meeting or
class meeting of shareholders shall abide by the	class meeting of shareholders shall abide by the
following procedures:	following procedures:
(I)	Two or more shareholders severally or jointly	(I)	Two or more shareholders severally or jointly
	holding 10% or more of the shares carrying		holding 10% or more of the shares carrying
	the right to vote at the meeting sought to be		the right to vote at the meeting sought to be
	held or the Board of Supervisors shall, by		held or the Board of Supervisors shall, by
	signing one or more counterpart requisition		signing one or more counterpart requisition
	in writing stating the object of the meeting,		in writing stating the object of the meeting,
	require the Board to convene an		require the Board to convene an
	extraordinary general meeting or a class		extraordinary general meeting or a class
	meeting. The Board shall as soon as possible		meeting. The Board shall as soon as possible
	proceed to convene the extraordinary		proceedgive the feedbacks in writing on
	general meeting or the class meeting after		whetherto convene the extraordinary
	receiving such requisition in writing. The		general meeting or the class meeting or not
	shareholdings referred to above shall be		within 10 daysafter receiving such
	calculated as of the date of the deposit of the		requisition in writing. The shareholdings
	requisition by the shareholders.		referred to above shall be calculated as of the
			date of the deposit of the requisition by the
			shareholders.
		(II)	If the Board of Directors agrees to convene
			the extraordinary general meeting or the
			class meeting, it shall serve a notice of
			general meeting or class meeting within 5
			days after the resolution is made by the
			Board of Directors. In the event of any
			change to the original proposal set forth in
			the notice, the consent of the original
			proposer shall be obtained.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

(II)	If the Board fails to issue a notice of	(II)(III)	If the Board does not agree to the proposals
	convening such a meeting within 30 days		to convene the extraordinary general
	from the date of the receipt of such		meeting or the class meeting, or serves no
	requisition in writing, the shareholders		feedback within 10 days upon receipt of such
	individually or jointly holding more than		proposals,fails to issue a notice of convening
	10% of shares carrying voting rights at the		such a meeting within 30 days from the date
	meeting intended to be held have the right to		of the receipt of such requisition in writing
	propose to the Board of Supervisors to		the shareholders individually or jointly
	convene an extraordinary general meeting or		holdingmore than10% or moreof shares
	class meeting and shall request the Board of		carrying voting rights at the meeting
	Supervisors in writing. If the Board of		intended to be held have the right to propose
	Supervisors fails to convene the meeting		to the Board of Supervisors to convene an
	within 10 days from the date of the receipt of		extraordinary general meeting or class
	such requisition in writing, the shareholders		meeting and shall request the Board of
	individually or jointly holding more than		Supervisors in writing. If the Board of
	10% of shares for over 90 consecutive days		Supervisors fails to convene the meeting
	may themselves convene such a meeting		within 10 days from the date of the receipt of
	with the procedures as similar as possible as		such requisition in writing, the shareholders
	that in which shareholders' meetings are to		individually or jointly holding more than
	be convened by the Board within 4 months		10% of shares for over 90 consecutive days
	from the date of the receipt of the requisition		may themselves convene such a meeting
	by the Board.		with the procedures as similar as possible as
			that in which shareholders' meetings are to
Any reasonable expenses incurred by shareholders		be convened by the Board within 4 months
or the Board of Supervisors in convening and		from the date of the receipt of the requisition
presiding over a meeting by reason of the failure of		by the Board.
the Board of Directors to duly convene a meeting as
requested above shall be borne by the Company and	(IV)	If the Board of Supervisors agrees to convene
shall be set off against sums owed by the Company		the extraordinary general meeting or class
to the directors in default.		meeting, it shall serve a notice of general
			meeting or class meeting within 5 days after
			receipt of the request. In the event of any
			change to the original proposal set forth in
			the notice, the consent of the original
			proposer shall be obtained.
		(V)	If the Board of Supervisors fails to convene
			the meeting within 10 days from the date of
			the receipt of such requisition in writing, the
			shareholders individually or jointly holding
			more than 10% of shares for over 90
			consecutive days may themselves convene
			such a meeting with the procedures as
			similar as possible as that in which
			shareholders' meetings are to be convened
			by the Board within 4 months from the date
			of the receipt of the requisition by the Board.

- 86 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Except for those matters in relation to commercial	The shareholding of the convening shareholder(s)
secrets of the Company which cannot be made	shall not below 10% before the announcement of the
public at the general meeting, the Board of Directors	resolutions of general meeting, and the convening
and the Board of Supervisors shall respond to and	shareholder(s) shall submit related certification
address the enquiries and suggestions of the	materials to the designated authorities of the CSRC
shareholders.	and the stock exchange of the Company's domicile
	country when serving the notice of general meeting
	or class meeting and the announcement of the
	resolutions of general meeting.
	With regard to the general meeting convened by the
	Board of Supervisors or shareholders on their own,
	the Board of Directors and its secretary shall offer
	cooperation. The Board of Directors shall provide a
	register as of the shareholding registration date.
	Where the general meeting is convened by
	shareholders themselves, the representative to
	preside over the meeting shall be elected by the
	convener.
	Any reasonable expenses incurred by shareholders
	or the Board of Supervisors in convening and
	presiding over a meeting by reason of the failure of
	the Board of Directors to duly convene a meeting as
	requested above shall be borne by the Company and
	shall be set off against sums owed by the Company
	to the directors in default.
	Except for those matters in relation to commercial
	secrets of the Company which cannot be made
	public at the general meeting, the Board ofDirectors,
	and the Board ofSupervisors and senior
	managementshall respond to and address the
	enquiries and suggestions of the shareholders.

Article 86	Article 8694
A general meeting shall be convened and presided	A general meeting shall be convened and presided
over by the chairman of the Board. If the chairman is	over by the chairman of the Board. If the chairman is
unable to attend the meeting, the meeting shall be	unable to attend the meeting, the meeting shall be
convened and presided over by the vice chairman. If	convened and presided over by the vice chairman. If
the chairman and vice chairman are unable to attend	the chairman and vice chairman are unable to attend
the meeting, the meeting shall be convened and	the meeting, the meeting shall be convened and
presided over by a director of the Company	presided over by a director of the Company
designated by and on behalf of the Board. If the	designatedjointly electedby and on behalf of the
chairman of the meeting is not designated, a person	Boardmore than half of the Directors. If the
may be elected to be the chairman by the	chairman of the meeting is not designated, a person
shareholders attending the meeting. If, for any	may be elected to be the chairman by the
reasons, the shareholders are unable to elect a	shareholders attending the meeting. If, for any
chairman, the meeting shall be presided over by the	reasons, the shareholders are unable to elect a
shareholder (including his proxy) present in person	chairman, the meeting shall be presided over by the
who holds the largest number of shares with voting	shareholder (including his/herproxy) present in
rights.	person who holds the largest number of shares with
	voting rights.

- 87 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 89	Article 8997
If vote counting is carried out at the general meeting,	Every general meeting shall have its minutes which
the vote counting result shall be recorded in the	shall be kept by the secretary to the Board of
minutes of the meeting.	Directors.
The minutes of the meeting together with the	The minutes shall state the following contents:
attendance register of the attending shareholders
and the proxy forms shall be kept at the address of	(I)	time, venue and agenda of the meeting and
the Company. The aforesaid minutes, attendance		names of the convener;
register and proxy forms shall not be destroyed for
10 years.	(II)	the presider's name and the names of the
		directors, supervisors, managers and other
		senior management attending or present at
		the meeting;
	(III)	the numbers of shareholders and proxies
		attending the meeting, number of voting
		shares they hold and the percentages of their
		voting shares to the total shares of the
		Company;
	(IV)	the process of consideration, summary of
		speeches and voting results of each proposal;
	(V)	shareholders' questions, opinions or
		suggestions and corresponding answers or
		explanations;
	(VI)	names of lawyers, vote counters and
		scrutinizers of the voting;
	(VII)	other contents to be included in the minutes
		as specified in this Articles of Association.
	If vote counting is carried out at the general meeting,
	the vote counting result shall be recorded in the
	minutes of the meeting.
	The directors, supervisors, the secretary to the Board
	of Directors, the convener or representative thereof,
	and the presider of the meeting present at the
	meeting shall sign on the minutes.The minutes of
	the meeting together with the attendance register of
	the attending shareholders and the proxy forms, as
	well as the valid information about online voting
	and voting via other methodsshall be kept
	collectivelyat the address of the Company. The
	aforesaid minutes, attendance register and proxy
	forms shall not be destroyed for 10 years.

- 88 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 9 Special Procedures for Voting by a Class of Shareholders

Original provisions	Amended provisions

Article 92	Article 92100
Rights conferred on any class shareholders may not	Rights conferred on any class shareholders may not
be varied or abrogated unless approved by a special	be varied or abrogated unless approved by a special
resolution at a general meeting and by the class	resolution at a general meeting and by the class
shareholders so affected at a separate meeting	shareholders so affected at a separate meeting
convened in accordance with Articles 96 to 100.	convened in accordance with Articles 96 to 100104 to
	106.

- 89 -

- 90 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 10 Board of Directors

Section 1	Directors

Original provisions	Amended provisions

Article 99	Article 99107
A director shall be a natural person and shall not	The Board of Directors is established in the
hold any shares of the Company. The directors of the	Company and comprises of Chairman,
Company include executive directors, non-executive	Vice-Chairman, independent non-executive
directors, independent non-executive directors and	Directors and employee Directors, of which 1
employee directors. Executive directors referred to	Chairman and 3 independent non-executive
the directors who hold the positions in the	Directors are included.A director shall be a natural
Company's internal operation and management.	person and shall not hold any shares of the
Non-executive directors refer to the directors who	Company. The directors of the Company include
do not hold the positions in the Company's internal	executivedirectors, non-executive directors,
operation and management and are not independent	independent non-executive directors and employee
in accordance with the laws. Independent	directors. Executive directors referred to the
non-executive directors refer to the directors who	directors who hold the positions in the Company's
satisfy the requirements of Section 2 of Chapter 10	internal operation and management. Non-executive
hereof. Employee directors refer to the employee	directors refer to the directors who do not hold the
representatives of the Company from the Board	positions in the Company's internal operation and
members. They are elected at employee	management and are not independent in accordance
representative meetings, employee meetings or	with the laws. Independent non-executive directors
other forms of democratic elections. Directors shall	refer to the directors who satisfy the requirements of
meet the qualifications required by the laws.	Section 2 of Chapter 10 hereof. Employee directors
	refer to the employee representatives of the
The directors may concurrently hold the positions of	Company from the Board members. They are elected
general manager or other senior management, but	at employee representative meetings, employee
the proportion of such directors shall not exceed one	meetings or other forms of democratic elections.
half of the total number of directors of the Company.	Directors shall meet the qualifications required by
	the laws.
The Company shall have a board of directors
consisting of 7 directors, with 3 independent	The directors may concurrently hold the positions of
non-executive directors, an employee director and a	general manager or other senior management, but
chairman.	the proportion of such directors shall not exceed one
	half of the total number of directors of the Company.
	The Company shall have a board of directors
	consisting of 7 directors, with 3 independent
	non-executive directors, an employee director and a
	chairman.

- 91 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

Article 100		Article 100108
Directors shall be elected at the general meetings for	Directors shall be elected at the general meetings,
a term of office of 3 years. Upon expiration of the	and they can be dismissed from their positions by
term of office, a director is eligible for re-election	the general meetings before the term expires.
and reappointment.		Directors shall servefor a term of office of 3 years.
		Upon expiration of the term of office, a director is
Chairman shall be elected and removed by a simple	eligible for re-election and reappointment. The
majority of votes of all directors. The term of office	general meetings shall not dismiss the directors from
of Chairman is 3 years, renewable upon re-election.	their positions before the expiration of the term of
		office without reasons.
		A written notice regarding the intention of
		nominating candidates for Directors and the
		willingness of the candidates to be nominated shall
		be dispatched to the Company 7 days before
		convening general meetings.
		Chairman shall be elected and removed by a simple
		majority of votes of all directors. The term of office
		of Chairman is 3 years, renewable upon re-election.
		Conditional on the requirements of related laws and
		administrative regulations are complied, the general
		meetings can remove any directors whose remaining
		term of office is not expired by ordinary resolutions
		(without prejudice to any claims to be lodged in
		accordance with any contracts).
		Directors are not required to hold any of the
		Company's shares.

-		Article 109
		The directors' term of office is from the date when
		they take office to the expiration of the current Board
		of Directors' term of office. Where re-election is
		pending upon the expiration of the directors' term of
		office, the original director shall still perform
		his/her duties as directors in accordance with the
		requirements in laws, administrative regulations,
		departmental rules and this Articles of Association
		before the re-elected director takes office.
		Managers or other senior management can serve as
		directors concurrently, but the total number of
		directors, who also serve as managers or other senior
		management and those who are staff
		representatives, shall not exceed half of the total
		number of directors in the Company.

- 92 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 101	Article101110
Procedures for nominating candidates for directors	Procedures for nominating candidates for directors
by shareholders who have nomination rights.	by shareholders who have nomination rights.
If a shareholder with nomination rights ("Such	If a shareholder with nomination rights ("Such
Shareholder") nominates a candidate for director	Shareholder") nominates a candidate for director
("Director Candidate") other than independent	("Director Candidate") other than independent
directors at a general meeting of the Company	directors at a general meeting of the Company
according to the laws, such shareholder shall seek	according to the laws, such shareholder shall seek
the consent of the Director Candidate and shall have	the consent of the Director Candidate and shall have
sufficient knowledge of the profession, academic	sufficient knowledge of the profession, academic
qualifications, titles and detailed information on	qualifications, titles and detailed information on
work experience including all part-time	work experience including all part-time
employments ("Such Information") of the Director	employments, whether there is any connected
Candidate. The Director Candidate shall provide	relationship with the Company or its controlling
written confirmation to the Company agreeing to be	shareholders and de facto controllers, disclosure on
nominated, and shall provide an undertaking in	the number of the Company's shares held, as well as
relation to the truthfulness and completeness of his	whether there is any punishment imposed by the
particulars disclosed and shall guarantee the	CSRC and other related departments and any
performance of a director's duties after being elected	penalty or warning from the stock exchange("Such
("Relevant Agreement and Undertaking"). In	Information") of the Director Candidate. The
addition, Such Shareholder shall deliver, or cause	Director Candidate shall provide written
the Director Candidate to deliver, the following	confirmation to the Company agreeing to be
document to the Company not less than 7 days	nominated, and shall provide an undertaking in
before the general meeting of the Company, and	relation to the truthfulness and completeness of
such period shall commence after the issue of the	his/herparticulars disclosed and shall guarantee
notice of the general meeting by the Company in	the performance of a director's duties after being
respect of such election:	elected ("Relevant Agreement and Undertaking"). In
		addition, Such Shareholder shall deliver, or cause
(I)	the intention of nominating the Director	the Director Candidate to deliver, the following
	Candidate;	document to the Company not less than 7 days
		before the general meeting of the Company, and
(II)	a written notice issued by the Director	such period shall commence after the issue of the
	Candidate in respect of Relevant Agreement	notice of the general meeting by the Company in
	and Undertaking; and	respect of such election:
(III)	the written proofs containing Such	(I)	the intention of nominating the Director
	Information of the Director Candidate.		Candidate;
If the Company receives the nomination of directors	(II)	a written notice issued by the Director
made by any shareholders before the convening of a		Candidate in respect of Relevant Agreement
meeting of the Board or the Board of Supervisors, the		and Undertaking; and
written proofs containing Such Information of the
Director Candidate shall be disclosed together with	(III)	the written proofs containing Such
the resolution of the Board or the Board of		Information of the Director Candidate.
Supervisors or the notice of the general meeting.
		If the Company receives the nomination of directors
		made by any shareholders before the convening of a
		meeting of the Board or the Board of Supervisors, the
		written proofs containing Such Information of the
		Director Candidate shall be disclosed together with
		the resolution of the Board or the Board of
		Supervisors or the notice of the general meeting.

- 93 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Statement of Independence and Such (III) Statement of Independence and Such

- 94 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

The general meeting may, by ordinary resolution,	The name list of candidates for directors and
remove any director before the expiration of his term	supervisors shall be submitted as proposals for
of office (but without prejudice to such director's	voting at the general meeting.
right to claim damages based on any contract) on the
condition that all the relevant laws, administrative	General meetings can adopt cumulative voting in
regulations and applicable securities listing rules are	accordance with the requirements of this Articles of
fully complied with.		Association and resolutions of general meetings
		when voting on the election of directors and
		supervisors.
		Cumulative voting as referred in the above
		paragraph means each share has the voting right
		representing the same number of directors or
		supervisors for election and voting rights of
		shareholders can be centralised in use during the
		election of directors or supervisors in general
		meetings.
		The general meeting may, by ordinary resolution,
		remove any director before the expiration of his term
		of office (but without prejudice to such director's
		right to claim damages based on any contract) on the
		condition that all the relevant laws, administrative
		regulations and applicable securities listing rules are
		fully complied with.

Article 102		Article 102111
A director may request to resign before his term of	A director may request to resign before his/herterm
office expires. The resigning director shall tender a	of office expires. The resigning director shall tender
resignation letter to the Board in writing.	a resignation letter to the Board in writing. The
		Board will disclose such circumstances within 2
If a director resigns within his term of office, or if an	days.
election is not conducted in time upon expiry of the
term of a director, which makes the number of the	If a director resigns within his/herterm of office, or
members of the Board fall short of the quorum, the	if an election is not conducted in time upon expiry of
original director shall assume the responsibilities in	the term of a director, which makes the number of
accordance with the requirements of the laws and	the members of the Board fall short of the quorum,
regulations and the Articles of Association before the	the original director shall assume the
new director is elected and holds office.	responsibilities in accordance with the requirements
		of the laws and regulations and the Articles of
In case that the number of directors falls short of the	Association before the new director is elected and
quorum for the Board as a result of the resignation of	holds office.
the director, the resignation letter of such director
shall not become effective until the vacancy	In case that the number of directors falls short of the
resulting from his resignation is filled up by	quorum for the Board as a result of the resignation of
succeeding director. The remaining directors shall	the director, the resignation letter of such director
convene an extraordinary general meeting as early	shall not become effective until the vacancy
as possible to elect director and fill up the vacancy	resulting from his/herresignation is filled up by
resulting from such resignation.	succeeding director. The remaining directors shall
		convene an extraordinary general meeting as early
Save for the circumstances referred to in the	as possible to elect director and fill up the vacancy
preceding paragraph, a director's resignation shall	resulting from such resignation.
become effective upon his resignation letter being
served to the Board.		Save for the circumstances referred to in the
		preceding paragraph, a director's resignation shall
		become effective upon his/herresignation letter
		being served to the Board.

- 95 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

Article 103		Article 103112
Upon submission of a resignation of a director or at	Upon submission of a resignation of a director or at
expiry of his term of office, his obligations of	expiry of his/herterm of office, he/she shall
confidentiality in respect of commercial secrets of	complete all handover procedures with the Board.
the Company shall survive the termination of his	Hhis/herobligations of confidentiality in respect of
term of office until the same has become public	commercial secrets of the Company shall survive the
available information.		termination of his/herterm of office until the same
		has become public available information.

Article 106		Article 106115
Any director who has left his office without	Any director who has left his office without
authorization before his term of office expires,	authorization before his term of office expires,
thereby causing the Company to incur a loss, shall be	thereby causing the Company to incur a loss, shall be
held liable and keep the Company indemnified	held liable and keep the Company indemnified
against such loss.		against such loss.
A non-independent director failing to attend the	A non-independent director failing to attend the
meetings of the Board either in person or by proxy	meetings of the Board either in person or by proxy
for two times in succession shall be deemed as	for two times in succession shall be deemed as
incapable of performing the duties, and shall be	incapable of performing the duties, and shall be
subject to replacement as recommended by the	subject to replacement as recommended by the
Board to the general meeting.	Board to the general meeting.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Section 2 Independent Non-executive Directors

Original provisions	Amended provisions

Article 107	Article 107116
The Company shall establish a system for	The Company shall establish a system for
independent non-executive directors. Independent	independent non-executive directors. Independent
non-executive directors of the Company refer to a	non-executive directors of the Company refer to a
director who holds no position other than as a	director who holds no position other than as a
director in the Company, has no connection with the	director in the Company, has no connection with the
Company and any of its substantial shareholders	Company and any of its substantial shareholders
which might hamper his independent and objective	which might hamper his/herindependent and
judgment.	objective judgment.
The term of office of independent non-executive	The members of the Board of the listed company
directors is 3 years, renewable upon re-election at its	shall comprise of at least one third of independent
expiry, provided that the renewed term shall not	directors, and at least one professional in accounting
exceed 9 years unless otherwise required by the	(a person with senior title or register qualification of
relevant laws and regulations and the listing rules of	accountant) and at least one of its independent
the stock exchange on which the shares of the	non-executive directors must be ordinarily resident
Company are listed.	in Hong Kong among them.
		The term of office of independent non-executive
		directors is 3 years, renewable upon re-election at its
		expiry, provided that the renewed term shall not
		exceed 69years unless otherwise required by the
		relevant laws and regulations and the listing rules of
		the stock exchange on which the shares of the
		Company are listed.

Article 108	Article 108117
An independent non-executive director shall meet	An independent non-executive director shall meet
the following basic conditions:	the following basic conditions:
(I)	qualifies as a director of a listed company	(I)	qualifies as a director of a listed company
	pursuant to the relevant laws, administrative		pursuant to the relevant laws, administrative
	regulations, the listing rules of the stock		regulations, the listing rules of the stock
	exchange on which the Company's shares are		exchange on which the Company's shares are
	listed and other relevant regulations;		listed and other relevant regulations;
(II)	being independent as specified in the listing	(II)	being independent as specified in the listing
	rules of the stock exchange on which the		rules of the stock exchange on which the
	Company's shares are listed;		Company's shares are listed;
(III)	having basic knowledge on operation of	(III)	having basic knowledge on operation of
	listed companies and proficiency in the		listed companies and proficiency in the
	relevant laws, administrative regulations		relevant laws, administrative regulations
	and rules;		and rules;
(IV)	having at least 5 years' experience in legal,	(IV)	having at least 5 years' experience in legal,
	economics or in other areas required for		economics or in other areas required for
	performing the duties as independent		performing the duties as independent
	non-executive director;		non-executive director;

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APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

(V)	other conditions specified herein.	(V)	should have obtained the certificates for
				qualification of independent directors
				already obtained in accordance with
				the requirements by Guidelines on
				Training of Senior Management of Listed
				Companies 《( 上市公司高級管理人員培訓工作
				指引》) issued by the CSRC and relevant
				requirements; candidates for independent
				directors who have not yet obtained
				certificates for qualification of independent
				directors at the nomination stage shall
				undertake in writing that they will
				participate in the qualification training for
				independent directors to be held most
				recently so as to obtain the certificates for
				qualification of independent directors;
			(V)(VI)	other conditions specified herein.

Article 109		Article 109118
In addition to the functions and powers provided by	In addition to the functions and powers provided by
the Company Law, the other relevant laws and	the Company Law, the other relevant laws and
regulations and the listing rules of the stock	regulations and the listing rules of the stock
exchange on which the Company's shares are listed,	exchange on which the Company's shares are listed,
and the Articles of Association, independent	and the Articles of Association, independent
non-executive directors shall have the following	non-executive directors shall have the following
special functions and powers:	special functions and powers:
(I)	to propose to the Board the appointment or	(I)	Major related party transaction (represents
	dismissal of accounting firms;		the proposed related party transaction
				between the listed company and the related
(II)	to propose to the Board the convening of		person, in amount more than $3,000,000 and
	extraordinary general meeting;		representing more than 5% of the latest
				audited net assets value of the listed
(III) to propose the convening of board meetings;		company) shall be submitted to the Board for
				discussion upon approval by the
(IV)	upon unanimous consent of all the		independent directors;
	independent non-executive directors, to
	independently appoint external auditors or		Before making any judgments, the
	consultants for auditing and consultancy of		Independent Directors can engage an
	specific matters at the expenses of the		intermediary institution for issuance of an
	Company.			independent financial advisor report as a
				basis of their judgments.
Save	for subparagraph (IV), independent
non-executive directors shall obtain the consent of	(I)(II)	to propose to the Board the appointment or
more than half of all the independent non-executive		dismissal of accounting firms;
directors in exercising any of the above functions
and powers. If any of the above proposals have not	(II)(III)	to propose to the Board the convening of
been adopted or if any of the above functions and		extraordinary general meeting;
powers could not be exercised properly, the
Company shall disclose the details thereof.	(III)(IV)	to propose the convening of board meetings;

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APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

		(IV)(V)	upon unanimous consent of all the
			independent non-executive directors, to
			independently appoint external auditors or
			consultants for auditing and consultancy of
			specific matters at the expenses of the
			Company.;
		(VI)	to be able to conduct public solicitation of
			voting rights from shareholders before
			convening the general meetings.
		Save	for	subparagraph (VIV), independent
		non-executive directors shall obtain the consent of
		more than half of all the independent non-executive
		directors in exercising any of the above functions
		and powers. If any of the above proposals have not
		been adopted or if any of the above functions and
		powers could not be exercised properly, the
		Company shall disclose the details thereof.

-		Article 119
		Independent directors shall express independent
		opinions for any of the material matters of the listed
		company
		(I)	In addition to performing the abovementioned
			duties, independent directors shall express
			independent opinions to the Board or the
			general meetings on the following matters:
			1.	nomination, appointment and removal
				of directors;
			2.	appointment or removal of senior
				management;
			3.	the remuneration of directors and
				senior management of the Company;
			4.	the existing or new borrowings or
				other fund transactions of the listed
				company the total amount of which is
				more than RMB3,000,000 or
				representing more than 5% of the latest
				audited net asset value of the listed
				company by shareholders of the
				Company, de facto controllers and its
				related enterprises, and whether the
				Company has taken effective measures
				to recover the outstanding payments;
			5.	any changes in the use of proceeds;

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APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

			6.	externally guaranteed matters to be
				considered in general meetings as
				required by this Articles of
				Association;
			7.	share option incentive scheme;
			8.	any matters that independent
				directors consider to be likely to
				infringe the interests of small and
				medium shareholders;
			9.	other matters as specified by this
				Articles of Association.
		(II)	Independent directors shall express one of
			the opinions as categorised below in respect
			of the aforesaid matters: consent opinion;
			qualified opinion and the reasons thereof;
			objection opinion and the reasons thereof;
			unable to express an opinion and the reasons
			thereof.
		(III)	If such matters are disclosable, the listed
			company shall make an announcement of the
			opinions of the independent directors.
			Should no consensus be reached by
			independent directors, the Board shall
			disclose the opinion of each independent
			director respectively.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Section 3 Board of Directors

- 101 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

Article 117		Article 117127
Meetings of the Board shall be held at least four	Meetings of the Board shall be held at least four
times a year and convened by the Chairman of the	times a year and convened by the Chairman of the
Board. Notice of the meeting shall be served on all of	Board. Notice of the meeting shall be served on all of
the directors 14 days before the date of the meeting.	the directors 14 days before the date of the meeting.
Extraordinary board meetings shall be held in any of	Extraordinary board meetings shall be held iIn any
the following circumstances:	of the following circumstances, the Chairman of the
			Board shall convene and preside an extraordinary
(I)	when proposed jointly by one-third or more	board meeting within 10 days after receipt of the
	of the directors;	proposal:
(II)	when proposed by the Board of Supervisors;	(I)	when proposed jointly by one-third or more
				of the directors;
(III) when jointly proposed by more than half of
	the independent non-executive directors;	(II)	when proposed by the Board of Supervisors;
(IV)	when deemed as necessary by the Chairman	(III) when jointly proposed by more than half of
	of the Board;			the independent non-executive directors;
(V)	when proposed by the shareholders	(IV)	when deemed as necessary by the Chairman
	representing more than one-tenth of voting		of the Board;
	rights;
			(V)	when proposed by the shareholders
(VI)	when proposed by the general manager.		representing more than one-tenth of voting
				rights;
			(VI)	when proposed by the general manager.

Article 123		Article 123133
In respect of any matter which needs to be resolved	In respect of any matter which needs to be resolved
by the Board of Directors at an extraordinary	by the Board of Directors at an extraordinary
meeting of the Board, where the Board of Directors	meeting of the Board, where the Board of Directors
has already distributed the content of the proposal to	has already distributed the content of the proposal to
be voted on to all directors in writing (including fax	be voted on to all directors in writing (including fax
and email) and guaranteed all directors can fully	and email) and guaranteed all directors can fully
express their opinions, votes may be held and	express their opinions, votes may be held and
resolutions may be adopted by means of circulation	resolutions may be adopted by means of circulation
and execution of written resolutions, and it is not	and execution of written resolutions, and it is not
necessary to hold a meeting of the Board of	necessary to hold a meeting of the Board of
Directors. Nevertheless, an effective resolution shall	Directors. Nevertheless, an effective resolution shall
be made only when the number of directors who	be made only when the number of directors who
have given their written consents thereto reaches the	have given their written consents thereto reaches the
number of directors specified in Article 119 of	number of directors specified in Article 119129of
Articles of Association to make a decision.	Articles of Association to make a decision.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 11 Secretary to the Board of the Company

Original provisions	Amended provisions

Article 127	Article 127137
The secretary to the Board shall be a natural person	The secretary to the Board shall be a natural person
who has the necessary professional knowledge and	who has the necessary professional knowledge and
experience and shall be appointed by the Board. The	experience and shall be appointed by the Board. The
primary duties of the secretary to the Board are:	secretary to the Board shall be responsible for
		organising the general meetings and Board meetings
(I)	to be responsible for the communication and	of the Company, keeping documents and managing
	liaison between the Company and the related	information regarding the shareholders of the
	parties and the stock exchange and other	Company, and dealing with information disclosure
	securities regulatory authorities, to ensure	and other matters.The primary duties of the
	that the Company prepares and submits	secretary to the Board are:
	required reports and documents to relevant
	authorities in accordance with the relevant	(I)	to ensure that the Company has maintained
	laws;		complete organisation documents and
			records;
(II)	to be responsible for dealing with the
	disclosure of corporate information, to urge	(II)	to ensure that the reports and documents of
	the Company to develop and implement a		the Company required by competent
	system of information disclosure and an		authorities are prepared and delivered
	internal reporting system of material		according to law;
	information in order to facilitate the Company
	and the related parties in carrying out their	(III)	to ensure that the registers of shareholders of
	information disclosure obligations according		the Company are properly maintained, and
	to the relevant laws, and handle disclosure of		to ensure that persons entitled to access the
	the regular reports and the extraordinary		records and documents of the Company are
	reports to the stock exchange in accordance		furnished with such records and documents
	with the relevant requirements;		promptly.
(III)	to coordinate and manage the relationship	The secretary to the Board shall comply with the
	between the Company and its investors, to	laws, administrative regulations, department rules
	play host to investors' visits, to answer	and relevant provisions of this Articles of
	investors' enquiries, and to provide investors	Association.
	with access to information disclosed by the
	Company;

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

(IV)	to prepare general meetings and board	(I)	to be responsible for the communication and
	meetings in accordance with the legal		liaison between the Company and the related
	procedures, and to prepare and submit the		parties and the stock exchange and other
	documents and materials for the relevant		securities regulatory authorities, to ensure
	meetings;		that the Company prepares and submits
			required reports and documents to relevant
(V)	to participate in board meetings and produce		authorities in accordance with the relevant
	signed minutes of meeting;		laws;
(VI)	to be responsible for the confidentiality of	(II)	to be responsible for dealing with the
	corporate information in relation to		disclosure of corporate information, to urge
	disclosure, to draw up relevant		the Company to develop and implement a
	confidentiality measures, to procure the		system of information disclosure and an
	directors, supervisors, general manager and		internal reporting system of material
	other senior management and other		information in order to facilitate the
	personnel in the know to keep information in		Company and the related parties in carrying
	confidentiality prior to its disclosure, and to		out their information disclosure obligations
	take timely remedial measures upon leaks of		according to the relevant laws, and handle
	insider information and to report the same to		disclosure of the regular reports and the
	the stock exchange(s);		extraordinary reports to the stock exchange
			in accordance with the relevant
(VII)	to be responsible for keeping the Company's		requirements;
	register of members and directors, as well as
	the information about the holding of shares	(III)	to coordinate and manage the relationship
	in the Company by the major shareholders,		between the Company and its investors, to
	directors, supervisors, general manager and		play host to investors' visits, to answer
	other senior management, and the		investors' enquiries, and to provide investors
	documents and minutes of general meetings		with access to information disclosed by the
	and board meetings and so on, to ensure that		Company;
	the Company has a complete set of
	documents and records, and to ensure that	(IV)	to prepare general meetings and board
	the relevant records and documents of the		meetings in accordance with the legal
	Company can be obtained in a timely manner		procedures, and to prepare and submit the
	by those with a right to access the same;		documents and materials for the relevant
			meetings;
		(V)	to participate in board meetings and produce
			signed minutes of meeting;

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

(VIII)	to assist the directors, supervisors, general	(VI)	to be responsible for the confidentiality of
	manager and other senior management to		corporate information in relation to
	understand the laws, regulations, rules, the		disclosure, to draw up relevant
	listing rules of the stock exchange(s) in		confidentiality measures, to procure the
	relation to information disclosure, as well as		directors, supervisors, general manager and
	other relevant provisions, and the Articles of		other senior management and other
	Association and their legal responsibilities		personnel in the know to keep information in
	under the listing agreement;		confidentiality prior to its disclosure, and to
			take timely remedial measures upon leaks of
(IX)	to procure the Board to exercise their duties		insider information and to report the same to
	and powers in accordance with the laws; to		the stock exchange(s);
	alert directors of any potential violation of
	the laws, regulations, rules, the listing rules	(VII)	to be responsible for keeping the Company's
	of the stock exchange and other provisions or		register of members and directors, as well as
	the Articles of Association that a board		the information about the holding of shares
	resolution intended to be made at a meeting		in the Company by the major shareholders,
	of the Board may cause, and to seek the views		directors, supervisors, general manager and
	of the attending supervisors in this respect; if		other senior management, and the
	the aforesaid resolution is insisted upon by		documents and minutes of general meetings
	the Board, the secretary to the Board shall		and board meetings and so on, to ensure that
	record the views of supervisors and		the Company has a complete set of
	individuals in the minutes, and report to the		documents and records, and to ensure that
	stock exchange(s) at the same time;		the relevant records and documents of the
			Company can be obtained in a timely manner
(X)	to discharge such other duties as provided by		by those with a right to access the same;
	the applicable laws, regulations, rules, the
	listing rules of the stock exchange, other	(VIII)	to assist the directors, supervisors, general
	relevant provisions and the Articles of		manager and other senior management to
	Association.		understand the laws, regulations, rules, the
			listing rules of the stock exchange(s) in
			relation to information disclosure, as well as
			other relevant provisions, and the Articles of
			Association and their legal responsibilities
			under the listing agreement;
		(IX)	to procure the Board to exercise their duties
			and powers in accordance with the laws; to
			alert directors of any potential violation of
			the laws, regulations, rules, the listing rules
			of the stock exchange and other provisions or
			the Articles of Association that a board
			resolution intended to be made at a meeting
			of the Board may cause, and to seek the views
			of the attending supervisors in this respect; if
			the aforesaid resolution is insisted upon by
			the Board, the secretary to the Board shall
			record the views of supervisors and
			individuals in the minutes, and report to the
			stock exchange(s) at the same time;
		(X)	to discharge such other duties as provided by
			the applicable laws, regulations, rules, the
			listing rules of the stock exchange, other
			relevant provisions and the Articles of
			Association.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 12 General Manager of the Company

Original provisions	Amended provisions

Article 131	Article 131141
The Company's general manager shall attend the	The Company's general manager shall attend the
board meetings.	board meetings. Manager shall have no voting right
	if he/she is not a director.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 15 Financial and Accounting System and Profit Distribution

Original provisions	Amended provisions

Article 166	Article 166176
The Company shall establish its financial and	The Company shall establish its financial and
accounting system in accordance with the laws,	accounting system in accordance with the laws,
administrative regulations and the PRC accounting	administrative regulations and the PRC accounting
standards promulgated by the relevant financial	standards promulgated by the relevant financial
authority of the State Council.	authority of the State Council.
	The Company implemented an internal audit system
	and hired professional auditors to supervise internal
	audit of the revenue and expenditure and business
	activities of the Company.
	The internal audit system of the Company and the
	duties of auditors shall be executed d upon the
	approval of the Board. The person in charge of audit
	is responsible for reporting its work to the Board.

Article 172	Article 172182
The Company shall publish two financial reports in	The Company shall publish two financial reports in
each fiscal year, meaning that an interim report shall	each fiscal year, meaning that an interim report shall
be published within 60 days after the end of the first	be published within 60 days after the end of the first
six months of a fiscal year and an annual report shall	six6months of a fiscal year and an annual report
be published within 120 days after the end of a fiscal	shall be published within 120 days after the end of a
year.	fiscal year.
	For shares listed domestically, the Company shall
	submit its annual financial reports to the CSRC and
	the stock exchange within 4 months from the end
	date of each fiscal year, its half-year financial reports
	to the local branch of the CSRC and the stock
	exchange within 2 months from the end date of the
	first 6 months of each fiscal year, and the quarterly
	financial reports to the local branch of the CSRC and
	the stock exchange within 1 month from the end date
	of the first 3 and first 9 months of each fiscal year
	respectively. These financial reports submitted to the
	local branch of the CSRC and the stock exchange are
	prepared in accordance with the relevant laws,
	administrative regulations and the requirements of
	department rules.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

Article 175	Article 175185
In distributing the current year's profit after tax, the	In distributing the current year's profit after tax, the
Company shall withdraw 10% of the profit as the	Company shall withdraw 10% of the profit as the
statutory surplus reserve. Such withdrawal may be	statutory surplus reserve. Such withdrawal may be
stopped when the statutory surplus reserve of the	stopped when the statutory surplus reserve of the
Company has accumulated to at least 50% of the	Company has accumulated to at least 50% of the
registered capital of the Company.	registered capital of the Company.
If the statutory surplus reserve is insufficient to	If the statutory surplus reserve is insufficient to
recover the losses in the previous years, the profit of	recover the losses in the previous years, the profit of
the current year shall first be used to recover such	the current year shall first be used to recover such
losses before any withdrawal is made to the	losses before any withdrawal is made to the
statutory surplus reserve in accordance with the	statutory surplus reserve in accordance with the
preceding paragraph.	preceding paragraph. The capital reserve shall not

	be used to recover the losses of the Company.
After the withdrawal is made to the statutory
surplus reserve out of the profit after tax, the	When the statutory surplus reserve is converted to
discretionary surplus reserve may also be	capital, the remaining surplus reserve after such
withdrawn out of the same as resolved by the	conversion shall be no less than 25% of the registered
general meeting.	capital of the Company.
The profit after tax remaining after recovering losses	After the withdrawal is made to the statutory
and withdrawal of reserves shall be distributed to	surplus reserve out of the profit after tax, the
the shareholders in proportion to their shareholding	discretionary surplus reserve may also be
unless otherwise specified in the Articles of	withdrawn out of the same as resolved by the
Association.	general meeting.
If the general meeting, in violation of the provision	The profit after tax remaining after recovering losses
in the preceding paragraph, distributes profit to	and withdrawal of reserves shall be distributed to
shareholders before recovering losses and	the shareholders in proportion to their shareholding
withdrawing from the statutory surplus reserve, the	unless otherwise specified in the Articles of
profit so distributed shall be returned to the	Association.
Company.
	If the general meeting, in violation of the provision
No profit shall be distributed in respect of the shares	in the preceding paragraph, distributes profit to
in the Company held by itself.	shareholders before recovering losses and
	withdrawing from the statutory surplus reserve, the
	profit so distributed shall be returned to the
	Company.
	No profit shall be distributed in respect of the shares
	in the Company held by itself.

- 108 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

- 109 -

APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

		Decision-making procedures and mechanism of
		profit distribution are as the follows:
		(1)	The annual profit distribution proposal of
			the Company shall be proposed and
			prepared by the Board of Directors in
			accordance with the requirements of this
			Articles of Association and in view of the
			profitability and capital supply and needs.
			Independent Directors shall issue their
			independent opinions on the profit
			distribution proposal, which is subject to the
			consideration and approval by the Board
			before submission to the general meeting for
			consideration and approval by the
			Shareholders. Independent Directors may
			seek opinions from minority Shareholders,
			prepare a distribution proposal and submit it
			directly to the Board of Directors for
			consideration.
		(2)	In considering the profit distribution
			proposal at the general meeting, the
			Shareholders shall be provided with the
			method of online voting. A number of
			channels shall be adopted to actively
			communicate and exchange information
			with the Shareholders, especially minority
			Shareholders, take into full account the
			opinions and requests of them and answer
			their questions in a timely manner.
		(3)	If the Company is profitable for any year and
			the conditions for cash dividends have been
			met, but the Board fails to submit a profit
			distribution proposal at the general meeting
			in accordance with the existing profit
			distribution policy, the Board shall give a
			special explanation on the reason for no cash
			dividend distribution, the use of the fund
			that has not been utilized for distribution but
			retained by the Company and the utilization
			plan, and shall disclose the same in regular
			reports, on which independent Shareholders
			shall express their independent opinions.

- 110 -

APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

	The policy of profit distribution is as follows:
	(1)	Conditions of cash dividend distribution
		Except under special circumstances, in the
		event that there is profit and the accumulated
		undistributed profits are positive in the
		current year, the Company should give
		priority to distribute dividends in cash and
		paying cash dividends will not affect its
		ongoing and sustainable operations. At the
		same time, the auditing firm has furnished
		standard and unqualified opinion in the
		audit report of the Company's financial
		report in that current year. Special
		circumstances refer to:
		1.	Cash dividend will affect the capital
			needs of the Company for normal and
			continued operations in the future;
		2.	The Company will engage in significant
			investment plans or cash expenditure
			events within the next 12 months
			(except	fund-raising	projects).
			Significant	investment	plans or
			significant cash expenditure events
			refer to one of the following situations:
			① The accumulated expenditure for the
			external investments, acquire assets or
			purchase equipment of the Company
			within the next 12 months will be up to
			or over 50% of the audited net assets of
			the Company in the latest period and
			the amount will exceed $50,000,000;
			② The accumulated expenditure of the
			external investment, asset purchase or
			equipment purchase of the Company
			within the next 12 months will reach or
			exceed 30% of the audited total assets of
			the Company in the latest period;
		3.	Other circumstances that the Board
			considers	unsuitable	for cash
			dividends.

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APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions		Amended provisions

		(2)	Form of distribution
			The Company may distribute dividends by
			means of cash, securities, a combination of
			cash and securities and other legal means,
			and give priority to adopt cash dividends as
			the form of profit distribution. However,
			profit distribution shall not exceed the range
			of the accumulated distributable profits.
		(3)	Distribution cycle
			In principle, the Company may conduct a
			cash dividend after every annual general
			meeting in the first three years after
			listing (including the year of A Share
			Offering) provided that the Company can
			satisfy the conditions required for cash
			dividend and ensure its normal operation
			and long-term development. In the event
			that annual profit distribution budget has
			not been made by the Board of the Company,
			the reasons for the non-dividend payment
			shall be disclosed in the periodic report.
			Independent directors shall express their
			independent opinions on this matter. In the
			event that the Company's cash expenditure
			plan can be satisfied, the Board of the
			Company may propose that the Company
			can conduct an interim cash dividend based
			on the operating profit and cash flow of the
			Company in the current year.
		(4)	Proportion of cash dividend distribution
			In the first three years after the listing of the
			Company (including the year of A Share
			Offering), the profit distributed in form of
			cash per annum shall not be less than 10% of
			the available distributable profit realized in
			that year, and the Company's cumulative
			profits distributed in form of cash for three
			consecutive years shall not be less than 30%
			of the annual average distributable profits
			realized in those three years.

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APPENDIX V	PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION


Original provisions	Amended provisions

	(5)	Differentiated cash dividend distribution
		policy
		The Board of the Company shall
		comprehensively consider the factors
		including characteristics of the industry, the
		stage of development, its own business
		mode, the level of profitability, and whether
		there are major capital expenditure
		arrangements (except fund-raising projects);
		to distinguish the following situations and
		shall come up with a differentiated cash
		dividend policy in accordance with the
		procedures stipulated in the "Articles of
		Association" of the Company:
		1.	When the development of the
			Company is at a mature stage and
			there is no major capital expenditure
			arrangement, the cash dividend shall
			account for no less than 80% of the
			profit distribution when conducting
			profit distribution;
		2.	When the development of the
			Company is at a mature stage and
			there are major capital expenditure
			arrangements,	the	cash	dividend
			shall account	for	no	less than
			40% of the profit distribution when
			conducting profit distribution;

3. When the development of the Company is at a growing stage and there are major capital expenditure arrangements, the cash dividend shall account for no less than 20% of the profit distribution when conducting profit distribution.

The specific profit distribution plan is determined by the Board of the Company in accordance with the relevant provisions promulgated by the CSRC; combined with specific operating data; fully considering the profit scale of the Company; the cash flow status; the development stage and the capital requirement of the current period, and to be combined with the opinions expressed by the shareholders (especially the public investors) and by the independent directors. The implementation of the plan must be approved by more than two-thirds of the voting rights held by the shareholders (including the proxies of shareholders) attending the general meeting of shareholders.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 16 Appointment of Accounting Firm

Original provisions	Amended provisions

Article 179	Article 179189
The Company shall appoint qualified independent	The Company shall appoint qualified independent
certified public accountants compliant to relevant	certified public accountants, which have obtained
regulations as the accounting firm to audit the	the "qualifications to carry out securities-related
annual financial reports and other financial reports	businesses" and arecompliant to relevant
of the Company.	regulations as the accounting firm to audit the
		annual financial reports and other financial reports
The first accounting firm of the Company may be	of the Company.
appointed at the founding meeting before the first
annual general meeting, and the term of the said	The first accounting firm of the Company may be
accounting firm shall end at conclusion of the first	appointed at the founding meeting before the first
annual general meeting.	annual general meeting, and the term of the said
		accounting firm shall end at conclusion of the first
If the founding meeting does not exercise its	annual general meeting.
authority specified in the preceding paragraph, such
authority shall be exercised by the Board of	If the founding meeting does not exercise its
Directors.	authority specified in the preceding paragraph, such
		authority shall be exercised by the Board of
		Directors.

Article 185	Article 185195
The Company's appointment, removal and	The Company's appointment, removal and
non-reappointment of an accounting firm shall be	non-reappointment of an accounting firm shall be
resolved upon by shareholders in general meeting.	resolved upon by shareholders in general meeting.
The resolution of the general meeting shall be filed	The resolution of the general meeting shall be filed
with the securities regulatory authorities of the State	with the securities regulatory authorities of the State
Council.	Councilthe PRC securities regulatory authorities.
Where it is proposed that any resolution be passed at	Where it is proposed that any resolution be passed at
a general meeting concerning the appointment of an	a general meeting concerning the appointment of an
accounting firm which is not an incumbent firm to	accounting firm which is not an incumbent firm to
fill a casual vacancy in the office of the accounting	fill a casual vacancy in the office of the accounting
firm, re-appointment of a retiring accounting firm	firm, re-appointment of a retiring accounting firm
which was appointed by the Board to fill a casual	which was appointed by the Board to fill a casual
vacancy, or removal of the accounting firm before	vacancy, or removal of the accounting firm before
the expiration of its term of office, the following	the expiration of its term of office, the following
provisions shall apply:	provisions shall apply:
(I)	A copy of the proposal shall be sent before	(I)	A copy of the proposal shall be sent before
	notice of meeting is given to the shareholders		notice of meeting is given to the shareholders
	to the accounting firm proposed to be		to the accounting firm proposed to be
	appointed or proposing to leave its post, or		appointed or proposing to leave its post, or
	the accounting firm which has left its post in		the accounting firm which has left its post in
	the relevant fiscal year.		the relevant fiscal year.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Original provisions	Amended provisions

"Leaving" includes leaving by removal, resignation	"Leaving" includes leaving by removal, resignation
and retirement.	and retirement.
(II)	If the accounting firm leaving its post makes	(II)	If the accounting firm leaving its post makes
	representations in writing and requests the		representations in writing and requests the
	Company to notify such representations to		Company to notify such representations to
	the shareholders, the Company shall (unless		the shareholders, the Company shall (unless
	the written representations are received too		the written representations are received too
	late):			late):
	(1)	state that representations have in fact		(1)	state that representations have in fact
		been made by the accounting firm			been made by the accounting firm
		leaving in the notice of the resolution			leaving in the notice of the resolution
		given to shareholders regarding said			given to shareholders regarding said
		matter; and			matter; and
	(2)	deliver as prescribed by the Articles		(2)	deliver as prescribed by the Articles
		of Association a copy of the			of Association a copy of the
		representations as attachment to the			representations as attachment to the
		notice to the shareholders.			notice to the shareholders.
(III)	The relevant accounting firm may (in	(III)	The relevant accounting firm may (in
	addition to its right to be heard) require that		addition to its right to be heard) require that
	the representations be read out at the		the representations be read out at the
	meeting if the representations of the relevant		meeting if the representations of the relevant
	accounting firm are not sent in accordance		accounting firm are not sent in accordance
	with this sub-clause (II).		with this sub-clause (II).
(IV)	An accounting firm which is leaving its post	(IV)	An accounting firm which is leaving its post
	shall be entitled to attend meetings as		shall be entitled to attend meetings as
	follows:		follows:
	(1)	the general meeting at which its term		(1)	the general meeting at which its term
		of office would otherwise have			of office would otherwise have
		expired;			expired;
	(2)	any general meeting at which it is		(2)	any general meeting at which it is
		proposed to fill the vacancy caused			proposed to fill the vacancy caused
		by its removal; and			by its removal; and
	(3)	any general meeting convened on its		(3)	any general meeting convened on its
		resignation.			resignation.
An accounting firm which is leaving its post shall be	An accounting firm which is leaving its post shall be
entitled to receive all notices of, and other	entitled to receive all notices of, and other
communications relating to, any such meetings, and	communications relating to, any such meetings, and
to speak at any such meetings in relation to matters	to speak at any such meetings in relation to matters
concerning its role as the former accounting firm of	concerning its role as the former accounting firm of
the Company.		the Company.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 18	Employment System

Original provisions		Amended provisions

Article 188		Article 188
The Company may, at its discretion, employ and	The Company may, at its discretion, employ and
dismiss employees according to its business	dismiss employees according to its business
development requirement and in accordance with	development requirement and in accordance with
the laws and regulations of the PRC, and implement	the laws and regulations of the PRC, and implement
an employment contract system thereunder.		an employment contract system thereunder.

Article 189		Article 189
The Company shall decide on its employment	The Company shall decide on its employment
payroll system and payment methods in accordance	payroll system and payment methods in accordance
with the relevant regulations of the PRC and the	with the relevant regulations of the PRC and the
Company's economic benefits.		Company's economic benefits.

Article 190		Article 190
The Company shall strive to improve the fringe	The Company shall strive to improve the fringe
benefits, and the working and living conditions of	benefits, and the working and living conditions of
the employees.		the employees.

Article 191		Article 191
The Company shall establish medical, pension and	The Company shall establish medical, pension and
unemployment insurance funds for its employees	unemployment insurance funds for its employees
and implement an occupational insurance system in	and implement an occupational insurance system in
accordance with the relevant laws and regulations of	accordance with the relevant laws and regulations of
the PRC.		the PRC.

Chapter 2221Procedures for Amendments to the Articles of Association

Original provisions		Amended provisions

Article 206		Article 206212
The amendments to the Articles of Association	The amendments to the Articles of Association
involving the Mandatory Provisions shall become	involving the Mandatory Provisions shall become
effective upon the approval by	the	effective upon the approval by the
company-approving authorities authorised by the	company-approving authorities authorised by the
State Council and the securities regulatory authority	State Council and	the securities regulatory authority
under the State Council. For any change relating to	under the State Councilthe PRC securities

the registered particulars of the Company,	regulatory authorities. For any change relating to the
application shall be made for change in registration	registered particulars of the Company, application
in accordance with the laws.		shall be made for change in registration in
		accordance with the laws.

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APPENDIX V PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Chapter 2322Notices

Original provisions	Amended provisions

Article 208	Article 208214
A notice shall be deemed issued when the envelope	A notice shall be deemed issued when the envelope
containing such notice was put into postbox and	containing such notice was put into postbox and
deemed duly received after 48 hours thereafter if it	deemed duly received after 48 hours thereafter if it
was delivered by post, provided that the address	was delivered by post, provided that the address
was clearly written, postage fee pre-paid and the	was clearly written, postage fee pre-paid and the
notice was put inside such envelope.	notice was put inside such envelope.
A notice made by the Company to holders of its	A notice made by the Company to holders of its
domestic shares shall be sent by personal delivery or	domestic shares shall be sent by personal delivery or
postage paid mail. It shall also be published by way	postage paid mail. It shall also be published by way
of announcement on one or more media designated	of announcement on one or more media designated
by the securities regulatory authority of the State	by	the securities regulatory authority under the
Council and on the Company's website; upon the	State Councilthe PRC securities regulatory
publication of such announcement, all holders of	authoritiesand	on the Company's website; upon the
domestic shares shall be deemed to have received	publication of such announcement, all holders of
the relevant notice.	domestic shares shall be deemed to have received
	the relevant notice.

Chapter 2524Supplementary Provisions

Original provisions	Amended provisions

Article 214	Article 214224
These Articles of Association are written in Chinese.	These Articles of Association are written in Chinese.
Where versions in other languages or different	Where versions in other languages or different
versions have different interpretations or meanings,	versions have different interpretations or meanings,
the latest verified Chinese version registered in the	the latest verified Chinese version registered in the
Company registration authority shall prevail.	Company registration authority shall prevail.
The Articles of Association shall be interpreted by	The Articles of Association shall be interpreted by
the Board of the Company. Any matters unspecified	the Board of the Company. Any matters unspecified
in the Articles of Association shall be decided by	in the Articles of Association shall be decided by
resolutions of the shareholders' general meetings	resolutions of the shareholders' general meetings
proposed by the board of directors.	proposed by the board of directors and will take

	effect since the date of the initial public offering and
This Articles of Association shall comply with the	listing of the Company in the PRC.
listing rules of the stock exchange on which the	This Articles of Association shall comply with the
Company's shares are listed, other laws and
regulations, as amended from time to time. In case of	listing rules of the stock exchange on which the
any inconsistencies, contraventions or conflicts	Company's shares are listed, other laws and
arising between any applicable laws, regulations,	regulations, as amended from time to time. In case of
the listing rules of the stock exchange on which the	any inconsistencies, contraventions or conflicts
Company's shares are listed and this Articles of	arising between any applicable laws, regulations,
Association, the relevant laws, regulations and the	the listing rules of the stock exchange on which the
listing rules of the stock exchange on which the	Company's shares are listed and this Articles of
Company's shares are listed shall prevail and this	Association, the relevant laws, regulations and the
Articles of Association shall be amended	listing rules of the stock exchange on which the
accordingly.	Company's shares are listed shall prevail and this
	Articles of Association shall be amended
	accordingly.

-	In view of the additions and deletions to the
	articles, the article numbers in the Articles of
	Association and the references to the articles shall
	be amended accordingly.

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

RULES OF PROCEDURES OF GENERAL MEETINGS

Chapter 1 General Rules

Rule 1 This Rule is formulated in accordance with the requirements specified in the Company Law of the People's Republic of China (hereinafter as the "Company Law") and the Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter as the "Company") (hereinafter as the "Articles of Association"), in order to regulate the acts of the Company, and ensure the lawful exercise of authorities by general meetings.

Rule 2 The Company shall strictly comply with the relevant requirements specified in laws, administrative regulations, this Rule and the Articles of Association when convening general meetings, and ensure that shareholders are able to lawfully exercise their rights.

The Board of Directors of the Company shall perform its duties practically, and duly organise general meetings as scheduled. All directors of the Company shall be diligent and dedicated, and ensure that general meetings are convened properly and can lawfully exercise its authorities.

Rule 3 General meetings shall exercise its authorities subject to the scopes designated in the Company Law and the Articles of Association.

Rule 4 General meetings are divided into annual general meetings and extraordinary general meetings. Annual general meetings will be convened once per year, and shall be held within 6 months after the conclusion of the previous accounting year. Extraordinary general meetings will be convened irregularly, except that extraordinary general meetings will be convened within 2 months upon the occurrence of any circumstances where such meetings shall be convened as stipulated in Article 100 of the Company Law.

Chapter 2 Convening of General Meetings

Rule 5 The Board of Directors shall convene such general meetings as scheduled within the term specified in Rule 4 of this Rule.

Rule 6 Independent non-executive Directors have the rights to propose to the Board of Directors for convening extraordinary general meetings subject to the consent by more than half of all Independent non-executive Directors. In accordance with the requirements specified in laws, administrative regulations and the Articles of Association, the Board of Directors shall give its feedbacks in writing on whether to convene extraordinary general meetings or not within 10 days upon receipt of proposals in connection with the convening of extraordinary general meetings at the request of Independent non-executive Directors.

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

The Board of Directors shall send out the notices for convening general meetings within 5 days upon the resolutions of the Board of Directors if it agrees with the convening of extraordinary general meetings; the Board of Directors shall explain the reasons if it objects to the convening of extraordinary general meetings.

Rule 7 The Board of Supervisors shall be entitled to propose to the Board of Directors to convene an extraordinary general meeting, and shall put forward its proposal to the Board of Directors in writing. The Board shall, pursuant to laws, administrative regulations and the Articles of Association, give its feedbacks in writing on whether to convene the extraordinary general meeting or not within 10 days upon receipt of the proposal.

If the Board of Directors agrees to convene the extraordinary general meeting, it shall serve a notice of such meeting within 5 days after the resolution is made by the Board of Directors. In the event of any change to the original proposal set forth in the notice, the consent of the Board of Supervisors shall be obtained.

If the Board of Directors does not agree to convene the extraordinary general meeting or fails to give its feedback within 10 days after receipt of the proposal, it is deemed to be unable to perform or fail to perform its duties for convening general meetings, such that the Board of Supervisors can convene and preside over the meeting by itself.

Rule 8 Shareholders severally or jointly holding 10% or above of the shares of the Company shall be entitled to request the Board of Directors to convene an extraordinary general meeting, and shall put forward such request to the Board of Directors in writing. The Board of Directors shall, pursuant to laws, administrative regulations and the Articles of Association, give its feedback in writing on whether to convene the extraordinary general meeting or not within 10 days upon receipt of the request.

If the Board of Directors agrees to convene the extraordinary general meeting, it shall serve a notice convening such meeting within 5 days after the resolution is made by the Board of Directors. In the event of any change to the original proposal set forth in the notice, the consent of relevant shareholders shall be obtained.

If the Board of Directors does not agree to convene the extraordinary general meeting or fails to give its feedbacks within 10 days after receipt of the request, shareholders severally or jointly holding 10% or above in shares of the Company shall be entitled to propose to the Board of Supervisors to convene an extraordinary general meeting, and shall put forward such request to the Board of Supervisors in writing.

If the Board of Supervisors agrees to convene the extraordinary general meeting, it shall serve a notice of such meeting within 5 days after receipt of the request. In the event of any change to the original proposal set forth in the notice, the consent of relevant shareholders shall be obtained.

In the case of failure to issue the notice for the general meeting within the term stipulated, the Board of Supervisors shall be deemed as failing to convene and preside

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

over the general meeting. The shareholders severally or jointly holding 10% or above in shares of the Company for 90 consecutive days or above may convene and preside over such meeting by themselves.

Rule 9 Where the Board of Supervisors or shareholders decide to convene a general meeting by themselves, they shall notify the Board of Directors in writing.

Rule 10 With regard to the general meeting convened by the Board of Supervisors or shareholders on their own, the Board of Directors and its secretary shall offer cooperation. The Board of Directors shall provide a register as of the shareholding registration date. Where the general meeting is convened by shareholders themselves, the representative to preside over the meeting shall be elected by the convener.

Rule 11 For the general meeting convened by the Board of Supervisors or shareholders on their own, those expenses necessary for the meeting shall be borne by the Company.

Chapter 3 Proposals and Notices of General Meetings

Rule 12 The contents of the proposals to be raised shall be within the scope of authorities of the general meetings, which shall have clear subjects and specific matters to be resolved, and shall be in compliance with relevant requirements of laws, administrative regulations and the Articles of Association.

Rule 13 Shareholders severally or jointly holding 3% or above of the shares of the Company may propose an extraordinary proposal and submit it in writing to the convener 10 days before convening the general meeting. The convener shall dispatch a supplemental notice of the general meeting to announce the contents of the extraordinary proposal within 2 days upon receipt of the proposal.

Except for circumstances provided in the above paragraph, the convener, after issuing the notice of the general meeting, shall neither modify the proposals stated in the notice of general meetings nor add new proposals.

The general meeting shall not vote and resolve on any proposals which are not contained in a notice of the general meeting or are not in compliance with Rule 12 herein.

Rule 14 Conveners shall notify each shareholder 20 days before convening the annual general meetings, and notify each shareholder 15 days before convening the extraordinary general meetings.

Rule 15 Any notice and supplementary notice of a general meeting shall sufficiently and completely disclose specific contents of all proposals and all such information or explanation as necessary for the shareholders to make any reasonable judgment on the matters to be discussed in full. If any matter to be discussed requires opinions of the Independent non-executive Directors, the opinions and reasons of the Independent non-executive Directors shall be disclosed together with the issuance of such notice or supplementary notice for general meetings.

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

Rule 16 Where the election of directors and supervisors are scheduled to be discussed at a general meeting, the notice of the general meeting shall sufficiently disclose the detailed information about the candidates for directors and supervisors, including at least the following contents:

personal profile including education background, working experiences and part-time engagements;
whether he/she is connected with the Company or its controlling shareholders and de facto controllers;
his/her shareholding in the Company;
whether he/she is subject to any punishments from the CSRC and other relevant authorities and any penalties and warnings from the stock exchange;

Except the election of directors and supervisors by means of cumulative voting, the election of each candidate for directors and supervisors shall be put forward by separate proposal.

Rule 17 The time and venue shall be stated in the notice of general meeting and the shareholding registration date shall be confirmed therein. The interval between the shareholding registration date and the date of the meeting shall not be more than 7 business days. The shareholding record date shall not be changed once confirmed.

Rule 18 After dispatching the notice of general meeting, the general meeting shall not be postponed or cancelled without proper reasons. The proposals stated in the notice of general meeting shall not be cancelled. In the event that the general meeting was postponed or cancelled, the convener shall make notification at least 2 business days prior to the date on which the meeting is originally scheduled and explain the reasons.

Chapter 4 Convening of General Meetings

Rule 19 A general meeting shall be held by the Company at the domicile of the Company or the location specified by the notice from the Board of Directors.

A venue shall be arranged for the general meeting, which will be held in the form of physical meeting, and the Company shall provide expediency to the shareholders attending the general meeting.

Shareholders shall attend the general meeting in person and exercise their voting rights, and they can also appoint others as proxy to attend the meeting and exercise the voting rights within the authorized scope.

Rule 20 The Board of Directors and other conveners shall take necessary measures to ensure the good order of the general meetings, and to deter any acts disturbing the general meetings, picking quarrels and provoking troubles or infringing the lawful interests of shareholders, and shall report in a timely manner such acts to the relevant authority for investigation and punishment.

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

Rule 21 All shareholders or their proxies whose names appeared in the register as of the shareholding record date are entitled to attend the general meeting. The Company and the convener shall not reject for any reason.

Rule 22 Shareholders shall attend the general meeting by producing the evidence of shareholding, identity cards or other valid identifications or certifications to make them identifiable. Proxies shall also submit the proxy instruments from shareholders and valid personal identifications.

Rule 23 The conveners shall verify the legality of shareholders' qualifications based on the register, and shall register names of shareholders and the number of voting shares they held. The registration for the meeting shall be terminated before the presider of the meeting announces the number of shareholders and proxies present at the meeting as well as the total number of voting shares they held.

Rule 24 Where the Company convenes a general meeting, all the directors, supervisors and the secretary to the Board of Directors shall attend the meeting, and managers and other senior management shall be present at the meeting as non-voting attendees.

Rule 25 A general meeting shall be presided over by the Chairman. Where the Chairman is unable or fails to perform his/her duties, the meeting shall be presided over by a director jointly elected by a simple majority of the directors.

A general meeting convened by the Board of Supervisors shall be presided over by the chairman of the Board of Supervisors. Where the chairman of the Board of Supervisors is unable or fails to perform his/her duties, the meeting shall be presided over by a supervisor jointly elected by a simple majority of the supervisors.

A general meeting convened by shareholders themselves shall be presided over by one representative elected by conveners.

In the event that the general meeting convened cannot proceed due to violation of this Rule of Procedures by the presider of the meeting, the general meeting may elect one person as the presider of the meeting upon consent of a simple majority of the voting shareholders present at the general meeting in order to proceed.

Rule 26 At an annual general meeting, the Board of Directors and the Board of Supervisors shall report to the general meeting on their works over the previous year, and each of the Independent non-executive Directors shall also submit his/her work report.

Rule 27 Directors, supervisors and senior management shall respond to and explain the enquiries raised by shareholders at the general meeting.

Rule 28 The presider of the meeting shall, prior to voting, announce the number of shareholders and proxies present at the meeting as well as the total number of voting shares they held, which shall be that as indicated in the meeting's registration.

Rule 29 Where the general meeting considers those connected transactions, the connected shareholders shall not participate in the voting. The number of his/her shares

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

held with voting rights will not be counted within the total number of valid votes (that means connected shareholders shall automatically abstain from voting and discard his/her voting rights in the voting at the general meeting). The Chairman presiding over the meeting shall require the connected shareholders to abstain; the non-connected shareholders and directors present at the meeting shall be entitled to request for the abstention by the Chairman and other connected shareholders where the Chairman is required to abstain.

Where any matter on a connected transaction is considered at the general meeting, the presider shall announce the list of relevant connected shareholders' names and make brief introduction on the connected matters. Before the consideration and voting, the presider shall announce the total number of the voting shares held or represented by non-connected shareholders present at the meeting and its percentage of the shares in total of the Company.

Any resolutions made on the matters of connected transactions at the general meeting shall be subject to the passing by the non-connected shareholders present at the general meeting with more than half of the voting rights. However, the resolutions of the general meeting shall be subject to the passing by the non-connected shareholders present at the general meeting with more than two-third of the voting rights where the matter of connected transactions is related to the matters subject to the passing by special resolutions at the general meeting as specified in the Articles of Association.

Rule 30 Proposals and Election Systems of Candidates for Directors and Supervisors

The name list of candidates for directors and supervisors shall be submitted as proposals for voting at the general meeting.

1. The approaches and procedures for proposals regarding candidates for directors are:

The Board of Directors and the Board of Supervisors of the Company, and shareholders who severally or jointly hold more than 3% of the total number of outstanding voting shares issued by the Company shall be entitled to nominate candidates for directors of the Company.
The nomination of candidates for directors by the Board of Directors to the general meeting shall be made by resolutions of the Board of Directors; the nomination of candidates for directors by the Board of Supervisors to the general meeting shall be made by resolutions of the Board of Supervisors, and the name list of candidates for directors shall be submitted to the Board of Directors; nominating shareholders can directly submit the name list of candidates for directors to the Board of Directors.

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

2. The approaches and procedures for proposals regarding candidates for supervisors are:

The Board of Supervisors of the Company, and shareholders who severally or jointly hold more than 3% of the total number of outstanding voting shares issued by the Company shall be entitled to nominate candidates for supervisors of the Company.
The staff representative supervisor shall be elected by the staff of the Company through democratic elections.

The nomination of candidates for supervisors by the Board of Supervisors to the general meeting shall be made by resolutions of the Board of Supervisors, and the name list of candidates for supervisors shall be submitted to the general meeting; nominating shareholders can directly submit the name list of candidates for supervisors to the general meeting.

The Board of Directors shall provide the general meeting with the brief biography and basic information of candidates for directors and supervisors. Voting shall be conducted only when the number of candidates for directors and supervisors can be met as specified in the Articles of Association.

Rule 31 All the proposals shall be voted at the general meeting item by item. In case of different proposals for the same matter, the proposals shall be voted chronologically with resolutions raised accordingly. Unless a general meeting is suspended or no resolution can be reached due to force majeure or other special reasons, no proposal shall be set aside or receive no voting at the general meeting.

Rule 32 When considering a proposal at the general meeting, no change shall be made thereto. Otherwise, the relevant change shall be treated as a new proposal which shall not be voted at the said general meeting.

Rule 33 The same voting right can only be exercised by only one voting approach. In the event that the same voting right has been exercised twice, the result of the first voting shall prevail.

Rule 34 For proposals submitted for voting, shareholders attending the general meeting shall express one of the following views: for, against or abstain.

Ballot papers that are left in blank, unduly completed or illegible or that have not been cast, are deemed as void votes which means the voters have waived their rights, and the voting results corresponding to the shares in their possession shall be counted as "abstain".

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

Rule 35 Before a resolution is voted on at a general meeting, two representatives of the shareholders shall be elected to act as vote counters and scrutineers. Any shareholder who is interested in the matter under consideration and proxies of such shareholder shall not participate in the vote counting or scrutinizing.

For resolutions voted on at the general meeting, shareholder representatives and supervisor representatives shall count and scrutinize the votes jointly.

Rule 36 The conclusion of on-site general meeting shall not be earlier than the general meeting via internet or by other ways. The presider of the meeting shall announce the voting conditions and results of each proposal on-site, and announce whether the proposal is passed or not based on the voting results.

Rule 37 Resolutions of general meetings are divided into ordinary resolutions and special resolutions.

An ordinary resolution made in the general meeting shall be passed by more than half of the voting rights held by the shareholders (including their proxies) present at the meeting.

A special resolution made in the general meeting shall be passed by more than two-third of the voting rights held by the shareholders (including their proxies) present at the meeting.

Rule 38 The following matters shall be passed by way of ordinary resolutions at a general meeting:

work reports of the Board of Directors and the Board of Supervisors;
profit distribution plan and loss recovery plan formulated by the Board of Directors;
appointment or removal of members of the Board of Directors and the supervisors of shareholder representatives, their remuneration and method of payment;
reports of annual preliminary and final budgets, balance sheets, income statements and other financial reports of the Company;
the Company's annual report;
matters other than those to be passed by special resolutions as specified in the laws and administrative regulations or the Articles of Association.

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

Rule 39 The following matters shall be passed by special resolutions at a general meeting:

increase or reduction of the registered share capital of the Company, repurchase of the shares, issuer and class stocks, warrants or other similar securities of the Company;
the Company's demerger, merger, dissolution and liquidation, as well as change of mode of the Company;
amendments to the Articles of Association;
any purchase or disposal of substantial assets made by the Company within one year, or any guaranteed amount which exceeds 30% of the audited total asset of the Company in the latest phase;
share incentive scheme;
other matters as specified in the laws, administrative regulations or the Articles of Association and matters which, if affirmed by ordinary resolutions at general meetings, will have a material impact on the Company and need to be passed by special resolutions.

Rule 40 Shareholders (including their proxies) shall exercise their voting rights based on the number of voting shares represented by them, and each share has the right to cast one vote.

When material matters affecting the interests of small and medium investors are considered at a general meeting, the votes of small and medium investors shall be counted separately. The separate vote counting results shall be disclosed publicly in a timely manner.

The Company has no voting right for its shares, and such part of shares shall be excluded from the total number of voting shares of the shareholders attending the general meeting.

The Board of Directors, Independent non-executive Directors and shareholders who meet the relevant requirements may publicly solicit voting rights from shareholders. When soliciting voting rights from shareholders, information including the specific voting preference shall be fully disclosed to the shareholders from whom voting rights are solicited. Consideration or de facto consideration for soliciting shareholders' voting rights is prohibited. The Company shall not impose any minimum shareholding limit for soliciting voting rights.

Rule 41 Minutes of a general meeting shall be kept by the secretary to the Board of Directors. The minutes shall state the following contents:

time, venue and agenda of the meeting and names of the convener;

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

the presider 's name and the names of the directors, supervisors, the secretary to the Board of Directors, managers and other senior management attending or present at the meeting;
the numbers of shareholders and proxies attending the meeting, number of voting shares they hold and the percentages of their voting shares to the total shares of the Company;
the process of consideration, summary of speeches and voting results of each proposal;
shareholders' questions, opinions or suggestions and corresponding answers or explanations;
names of vote counters and scrutinizers of the voting;
other contents to be included in the minutes as specified in the Articles of Association.

The directors, the secretary to the Board of Directors, the convener or representative thereof, and the presider of the meeting present at the meeting shall sign on the minutes and ensure that the contents of the minutes are true, accurate and complete. The minutes, the signed register of attendance by those shareholders present and the power of attorney for attendance by proxy shall be kept together for at least 10 years.

Rule 42 The convener shall ensure the general meeting to be continuously held until the final resolution is reached. Where the general meeting is suspended or fails to reach a resolution because of force majeure or other special reasons, necessary measures shall be taken to restore the general meeting or directly terminate it as soon as possible.

Rule 43 Where a proposal in relation to election of directors or supervisors is passed at a general meeting, the term of office for the newly elected directors or supervisors shall come into effect as specified in the Articles of Association.

Rule 44 Where proposals regarding cash distribution, bonus issue or capitalization of capital reserve are passed in a general meeting, the specific plans shall be implemented by the Company within 2 months after the conclusion of the general meeting.

Rule 45 The resolutions passed at the general meeting of the Company are invalid should their contents be in violation of any laws and administrative regulations.

Should the procedures for convening a general meeting, or the way of voting, be in violation of any laws, administrative regulations or the Articles of Association, or a resolution be in violation of the Articles of Association, the shareholders may, within 60 days from the date when the resolution has been made, request the People's Court to revoke it.

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APPENDIX VI.A	RULES OF PROCEDURES OF THE GENERAL MEETINGS

Chapter 5 Supplementary Provisions

Rule 46 The expression "more than" and "within" used herein includes the number indicated, whereas "exceeding" used herein excludes the number indicated.

Rule 47 Matters not covered in this Rule of Procedures shall be implemented in accordance with the relevant national laws, regulations and the Articles of Association.

Rule 48 This Rule of Procedures is the appendix of the Articles of Association and is subject to consideration and approval at the general meeting and shall be effective and implemented from the date of the shares of the Company are listed upon initial public offering within the PRC.

Rule 49 Under an amendment to the laws and regulations or an amendment to this Rule of Procedures as a result of the changes of operation of the Company, the amendment proposed by the Board of Directors shall be reported to the general meeting for approval.

Rule 50 This Rule of Procedures shall be interpreted by the Board of Directors.

The Board of Directors

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

For identification purpose only

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APPENDIX VI.B	RULES OF PROCEDURES OF THE BOARD MEETINGS

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

THE RULES OF PROCEDURES OF THE BOARD MEETINGS

Rule 1 These Rules are formulated in accordance with the Company Law of the People's Republic of China 《( 中華人民共和國公司法》) (hereinafter as the "Company Law"), other laws and regulations and the requirements of the Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd.* 《( 北京市春立正達醫療器械股份有限公司章程》) (hereinafter as the "Articles of Association") with reference to the actual conditions of the Company, in order to standardize the procedures and proceedings of the meetings of the Board of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter as the "Company"), facilitate the Board to discharge their duties effectively and promote the level of standard operation and scientific decision-making of the Board.

Rule 2 The Board has established the Board Office to handle daily matters of the Board.

The secretary to the Board who is in charge of the Board Office shall be responsible for the custody of common seal of the Board and the Board Office.

Rule 3 The meetings of the Board include regular meetings and provisional meetings.

The Board should convene at least four regular meetings annually. Notice of the meeting shall be given to all directors 10 days before the date of the meeting by the chairman of the Board.

Rule 4 Before giving the notice on convening a regular Board meeting, the Board Office shall fully consult all Directors to form the initial proposal and then submit it to the Chairman for approval.

The Chairman shall consult the manager or other senior management staff before finalizing the proposal.

Rule 5 The Board shall convene a provisional meeting within 10 days after receiving the proposal under the following circumstances:

when proposed by shareholders holding more than one-tenth of the voting rights;
when jointly proposed by more than one-third of the directors;
when proposed by the Board of Supervisors;
when the Chairman considers it is necessary;

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APPENDIX VI.B	RULES OF PROCEDURES OF THE BOARD MEETINGS

when proposed by more than half of the independent non-executive directors;
other circumstances prescribed in the Articles of Association.

Rule 6 Where a provisional meeting of the Board is proposed in accordance with the preceding provisions, a written proposal signed under the hand (seal) of the proposer shall be submitted through the Board Office or directly to the Chairman . The following shall be indicated in the written proposal:

the name or designation of the proposer;
the reasons for the proposal or objective facts/causes on which the proposal is based;
the time or timeframe, venue and form of the proposed meeting;
the proposals in clear and specific terms;
the contact information of the proposer and the date of proposal, etc.

The proposals shall be concerning matters that fall within the scope of the authorities of the Board as prescribed in the Articles of Association, and be submitted together with the relevant materials.

After receiving the aforesaid written proposals and the relevant materials, the Board Office shall forward such to the Chairman on the same day. If the chairman considers the contents of the proposals not clear and not specific, or considers the relevant materials insufficient, he/she may request the proposer to revise or supplement the relevant contents.

The Chairman shall convene and chair the meeting of the Board within ten days after receiving the proposal.

Rule 7 The meetings of the Board shall be convened and chaired by the Chairman. If the Chairman is unable to or does not perform his/her duties, a director jointly elected by half or more of the directors shall convene and chair the meetings.

Rule 8 The Board Office shall send the written notice of meeting bearing the seal of the Board Office to all the directors, supervisors, mangers and secretary to the Board 10 days and 5 days before convening a regular and provisional meeting of the Board, respectively; by means of courier, express delivery, fax, email.

Where a provisional meeting of the Board needs to be convened in case of an emergency, the notice of meeting may be sent by telephone or by other verbal means, but the convener shall explain the reasons for holding the provisional meeting at the meeting.

Rule 9 A written notice of meeting shall at least include the following details:

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APPENDIX VI.B	RULES OF PROCEDURES OF THE BOARD MEETINGS

time and venue of the meeting;
means of convening the meeting;
matters to be considered (proposals of the meeting);
convener and chairman of the meeting, or proposer of the provisional meeting and its written proposal;
documents required for directors to cast their votes;
requirements for the directors to attend the meeting in person or by proxy;
contact person and the means of contact.

A verbal notice of meeting shall include at least the above items (1) and (2) the explanation for a provisional meeting of the board of directors in the event of an emergency.

Rule 10 If, after the written notice of a regular meeting of the Board has been dispatched, it is necessary to change the time, venue, or other details of the meeting or add, amend or cancel proposals of the meeting, a written notice of changes shall be dispatched three days before the original designated date for convening the meeting, to explain reasons for the change of proposals and provide contents and documents relating to the new proposals. Where the notice of change is sent in less than 3 days in advance, the date of meeting shall be postponed accordingly or approved by all the directors before a meeting can be held at an earlier date.

If, after the notice of a provisional meeting of the Board has been dispatched, it is necessary to change the time, place, or other details of the meeting or add, amend or cancel proposals to the meeting, the approval by all directors shall be made in advance and relevant records shall also be taken accordingly.

Rule 11 The meeting of the Board shall be held only when over half of the directors attend the meeting. If the quorum of the meeting cannot be met as a result of directors' refusal to attend or absence without reasons, the Chairman shall submit such proposals to the General Meeting of Shareholders for voting.

Supervisors may attend the meeting of the Board: the general manager, or the secretary to the Board who is not a director shall attend the meeting. If considered necessary, the chairman of the meeting may notify other relevant persons to attend the meeting.

Rule 12 In principle, directors shall attend the meeting of the Board in person. If they are not able to attend the meeting due to certain reasons, they shall read the meeting materials in advance, form clear opinions and appoint other directors in written to attend the meeting on their behalf.

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APPENDIX VI.B	RULES OF PROCEDURES OF THE BOARD MEETINGS

A letter of authorization shall set out:

name of the appointer and appointee;
brief comments of the appointer on each proposal;
appointer 's scope of authority and voting intention on the proposal;
appointer 's signature, date of the signature, etc.

In case a director authorizes any other director to sign a written confirmation for a regular report on his behalf, he/she shall make a special authorization in such written authority. The director so appointed shall submit a letter of authorization to the chairman of the meeting, stating the details of such appointment on the shareholders' attendance book of the meeting.

Rule 13 The appointer and appointee attending the meeting of the Board shall observe the following:

when a related-party transaction is being reviewed, a director who is not a related party shall not appoint a director who is a related party to attend the meeting, and a director who is a related party shall not accept the appointment of a director who is not a related party;
An independent director shall not appoint a non-independent director to attend the meeting on his/her behalf, nor shall a non-independent director accept the appointment from an independent director;
a director shall not appoint other director to attend the meeting to act on his/ her behalf with full discretion without having explained his/her opinions and voting intentions on the proposals, and the relevant directors shall not accept any appointment with full discretion or with unclear scope of appointment;
a director shall not accept the appointment from more than two directors, nor shall a director appoint any director that has accepted the appointment from other two directors to attend the meeting on his/her behalf.

Rule 14 In principle, a meeting of the Board shall be held on-site. The provisional meeting of the Board may also be held as voting via video, telephone, fax, or e-mail, etc. upon consent of the convener (the host) and the proposers so long as the directors are able to fully express their opinions. A meeting of the Board can also be held on-site in combination with other means.

Rule 15 The chairman of the meeting shall request all the directors attending the meeting of the Board to express clear opinions in respect of each proposal.

For any proposals requiring prior acknowledgements of independent non-executive directors, the presider of the meeting shall, before discussing the relevant proposal,

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APPENDIX VI.B RULES OF PROCEDURES OF THE BOARD MEETINGS

appoint one independent non-executive director to read out the written acknowledgements of independent directors.

The chairman of the meeting shall restrain in a timely manner any director who obstructs the normal conduct of the meeting or interrupts the speech of other directors.

Unless it is unanimously agreed by all attending directors, the meeting of the Board shall not vote on any proposal not included in the notice of the meeting. A director entrusted by other director to attend the meeting shall not vote on the proposal beyond the meeting notice on his/her behalf.

Rule 16 Directors shall carefully read relevant meeting materials, and independently and prudently express their opinions in a fully informed manner.

A director may inquire, prior to the meeting of the Board Office, the convener, the manager and other senior management, the accountant firm, the legal firm and other relevant persons and institutions to obtain necessary information for decision-making, and may also propose to the chairman of the meeting during the course of the meeting to request the aforesaid persons or representatives of the institutions to attend the meeting to give relevant explanations.

Rule 17 After each proposal has been fully discussed, the chairman of the meeting shall at an appropriate timing require the attending directors to vote on it.

Voting for the meeting shall be executed by way of an open and written ballot on the basis of one vote per person.

The voting intention of the directors shall be divided into the following categories: affirmative, negative or abstaining from voting. The attending directors shall choose any one of the aforesaid voting intentions. If any director does not choose any intention or simultaneously chooses two or more intentions, the chairman of the meeting shall require such director to make a new choice. If such director refuses to do so, he/she shall be deemed as abstaining from voting. If any director leaves the meeting venue halfway without indicating his/her voting intention, he/she shall be deemed as abstaining from voting.

Rule 18 After voting of the attending directors is completed, Board Office and relevant staff shall promptly collect and deliver to the secretary to the Board for counting of ballots cast by the directors under supervision of a supervisor or independent non-executive director.

For the meeting being held onsite, the chairman of the meeting shall announce the voting results forthwith. In other cases, the chairman of the meeting shall require the secretary to the Board to notify the directors of the voting results before the next business day after the close of the specified voting time.

If the directors vote after announcement of the voting results by the chairman of the meeting or after close of the specified voting time, their votes shall be disregarded.

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Rule 19 Except for the circumstances mentioned in Article 20 of these Rules, the Board shall examine the proposals submitted and the relevant resolutions formed shall be voted affirmative by more than half of all directors. Where laws, administrative rules or the Articles of Association provide that any board resolution shall be approved by more than half of the directors, such provisions shall prevail.

Where different resolutions conflict with each other in their contents and meanings, the resolutions formed later in time shall prevail.

Rule 20 Where the director shall abstain as a result of the connection with the party related to the proposal of the meeting under the Articles of Association of the Company and any director abstains from voting, meetings of the Board may be held when more than half of the non-connected directors attend the meeting. The resolution of meetings of the Board shall be passed by more than half of the non-connected directors. If the number of non-connected attending directors is less than 3, the relevant proposal shall not be voted on but shall be submitted to the shareholders' general meeting for consideration.

Rule 21 The Board shall act strictly as authorized by the general meetings and the Articles of Association, and shall not make any resolution beyond authority.

Rule 22 The Board meeting shall resolve on the matter of profit distribution of the Company. The profit distribution proposal to be submitted to the Board may first be submitted to the certified public accountants, who shall be required to produce a draft audit report (of all financial data except those involving profit distribution). After resolving on profit distribution, the Board shall require the certified public accountants to produce a formal audit report, according to which the Board shall resolve on other related matters which are reported regularly.

Rule 23 Where any proposal is not passed, any board meeting shall not within one month consider any proposal with the same contents if the relevant conditions and factors have not changed significantly.

Rule 24 Where more than half of the attending directors or more than two independent non-executive directors determine that they cannot make decisions with respect to a proposal because the relevant proposal is not clear nor specific or the meeting documents are inadequate, the host of the meeting shall require the meeting to suspend voting on the proposal.

The director proposing suspension of voting shall provide definite requirements for the conditions to be met for resubmitting the proposal for consideration.

Rule 25 The Board meeting held onsite or via video conference or telephone may be recorded where necessary.

Rule 26 Detailed minutes of the Board meeting shall be recorded by the Board office staff assigned by the secretary to the Board. Such minutes shall include the followings:

session, time, venue and form of the meeting;

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APPENDIX VI.B	RULES OF PROCEDURES OF THE BOARD MEETINGS

issue of the notice of meeting;
convener and chairman of the meeting;
attendance of directors in person and by appointee;
proposals considered at the meeting, the gist of every director 's speaking and main opinions in respect of relevant matters and voting intents for the proposals;
voting method and results of each proposal (including the specific number of votes "For", "Against" or "Abstain");
such other matters considered necessary by the Board.

Rule 27 Apart from the minutes of the meeting, the secretary to the Board may where necessary arrange the Board staff members to make a summary of the meeting, and make separate records of the resolutions according to the voting results.

Rule 28 The attending directors shall sign their names on the minutes and resolution of meeting for confirmation on behalf of themselves or the directors who appoint them to attend the meeting. If any director holds dissenting opinions to the minutes or resolution of meeting, he/she may make a written note when signing his/her name.

If any director refuses to give confirmation by signature in accordance with the preceding rule, nor does he/she express dissenting opinions with written explanation, such director shall be deemed to be in agreement with the contents of the minutes and records of resolutions.

Rule 29 The Chairman shall urge the relevant personnel to execute the resolutions of the Board, supervise such execution, and report the progress of such execution of the resolutions passed at future board meetings.

Rule 30 Archives of board meetings include notices of meeting, meeting documents, attendance book, letters of proxy for proxy directors, audio meeting recordings, videos, votes, minutes of meeting signed by the attending directors, meeting summaries, records of resolutions, etc, shall be kept by the secretary to the Board.

Archives of board meetings shall be kept on file for at least 10 years.

Rule 31 The expressions "more than", "within" used herein includes the number indicated, whereas "exceeding" used herein excludes the number indicated in these Rules.

Matters not covered by these Rules shall be implemented in accordance with the relevant laws, regulations and the Articles of Association of the Company.

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APPENDIX VI.B	RULES OF PROCEDURES OF THE BOARD MEETINGS

These Rules, being an appendix of the Articles of Association, shall be passed at the general meeting of shareholders and implemented with effect since the date of initial public offering and listing of the Company in the PRC. Under an amendment to the laws and regulations or an amendment to these rules as a result of the changes of operation of the Company, the amendment proposed by the Board shall be reported to the general meeting for approval.

These Rules are interpreted by the Board.

The Board of Directors

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

For identification purpose only

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APPENDIX VI.C	MANAGEMENT MEASURES FOR USE OF PROCEEDS

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

MANAGEMENT MEASURES FOR USE OF PROCEEDS

Chapter 1 General Rules

Rule 1 These Measures are formulated in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter referred to as the "Articles of Association") and other provisions, and taking into account the actual situation of the Company, in order to regulate the management and utilisation of proceeds of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter referred to as the "Company"), safeguard the security of proceeds, enhance the utilisation efficiency of proceeds and protect the interests of investors.

Rule 2 Proceeds as mentioned in these Measures refer to proceeds raised by issuing shares (including initial public offering, share allotment, issuance of additional shares and non-public offering), or by issuing of convertible bonds or otherwise by the Company (excluding proceeds raised by the share incentives scheme implemented by the Company) for specific purposes. The amount of proceeds raised, in principle, will not exceed the amount required for the projects and will be used for the investment projects financed by proceeds approved by the general meeting of the Company.

Rule 3 The Board of Directors of the Company shall be responsible for establishing a sound management system for proceeds of the Company and ensuring its effective implementation.

Chapter 2 The Deposit of Proceeds

Rule 4 The Company adheres to the principles of prudent selection, and easy supervision and management when selecting commercial banks, special account deposits to deposit the proceeds. After receiving and depositing the proceeds into the Company's special account for proceeds, the Company should go through the capital verification procedures in a timely manner. A report on capital verification shall be issued by an accounting firm with securities practitioner qualifications.

Rule 5 The opening of the special account by the Company shall be subject to approval by the Board of Directors of the Company.

Rule 6 Except for the special account for proceeds, the Company shall not deposit the proceeds in other bank accounts (including but not limited to basic accounts, other special accounts and temporary accounts); the Company shall not deposit other funds such as production and operation funds, bank borrowings, and other funds in the special account for proceeds.

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APPENDIX VI.C	MANAGEMENT MEASURES FOR USE OF PROCEEDS

Rule 7 In principle, the number of special accounts for proceeds shall not exceed the number of investment projects financed by proceeds. Where the Company conducts financing more than twice, the Company shall set up special accounts for proceeds separately.

Rule 8 The excess of net proceeds actually raised over the proceeds to be raised as planned (hereinafter referred to as the "Excess Proceeds") shall also be placed in the special account for management.

Rule 9 The Company shall, within one month after receiving the proceeds, sign a tripartite supervision and administration agreement (hereinafter referred to as the "Agreement") with the sponsor and the commercial bank in which the proceeds are deposited (hereinafter referred to as the "Commercial Bank"). The Agreement shall at least include the following:

the Company shall place the proceeds in the special account;
the special account number for proceeds, the project for proceeds related to the special account, and the amount and term of the proceeds;
where the cumulative amount drawn by the Company from the special amount at one time or in 12 months exceeds RMB10 million or 10% of the net proceeds, the Company and the Commercial Bank shall notify the sponsor in a timely manner;
the Commercial Bank shall issue a bank reconciliation statement to the Company on a monthly basis, and copy the same to the sponsor;
the sponsor may, at any time, visit the Commercial Bank to inquire the relevant information of the special account;
right, obligations and default liabilities of the Company, the Commercial Bank and the sponsor.

The Company, the sponsor and the Commercial Bank may stipulate in the Agreement more stringent supervision and administration requirements than the above clauses.

The Company shall report to the stock exchange for filing within 2 trading days after signing all Agreements and make an announcement on the main contents of the Agreements. Where the above Agreement is terminated prior to the expiration of the term of validity due to the change of sponsor or Commercial Bank, the Company shall sign a new Agreement with the party concerned within one month upon the date of the termination of the previous Agreement, and make an announcement after reporting to the stock exchange for filing within 2 trading days after signing the new Agreement.

Rule 10 The Company shall actively urge the Commercial Bank to fulfil the Agreement.

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APPENDIX VI.C	MANAGEMENT MEASURES FOR USE OF PROCEEDS

Where the Commercial Bank fails to issue reconciliation statements to, or notify the sponsor of large-amount withdrawals from the special account in a timely manner three consecutive times, or fails to coordinate with the sponsor in inquires and investigations of information of the special account, the Company may terminate the Agreement and cancel the special account for proceeds. The above-mentioned shall be included in the tripartite supervision and administration agreement as mentioned in the preceding rule.

Chapter 3 Use of Proceeds and Change in the Use of Proceeds

Rule 11 The Company shall use the proceeds in accordance with the investment plan of the proceeds as undertaken in the offering application documents and subject to the resolutions of the general meeting and the Board of Directors. In the event that there is any significant impact on the normal operation of the investment plan of the proceeds, the Company shall timely report to the stock exchange and make an announcement.

Rule 12 Use of proceeds shall adhere to the principles of careful planning, standardised operation, openness and transparency. No one shall have the right to change the use of proceeds as undertaken by the Company when raising funds without the resolution of the general meeting of the Company according to law.

Rule 13 Projects invested with proceeds shall comply with national industrial policies as well as laws and administrative regulations relating to environmental protection and land management, and shall not compete with controlling shareholders or de facto controllers within the industry or affect the independence of the production and operation of the Company.

Rule 14 The Company shall, within 6 months after receiving the proceeds, properly arrange plans for the use of Excess Proceeds in accordance with the development plans and practical production and operation needs of the Company, and timely make a disclosure after submitting to the Board of Directors for consideration and approval.

Independent non-executive directors and the sponsor shall express their independent opinions in respect of the reasonability and necessity of the plan for use of Excess Proceeds, and disclose together with the relevant announcement of the Company. Excess Proceeds shall be used for the principal businesses of the Company, and shall not be used to make any risky investment such as securities investment, entrusted financial management, derivatives investment or venture capital investment, or provide financial assistance to others.

Rule 15 The Excess Proceeds shall be subject to consideration by the Board of Directors or the general meeting before practically use by the Company, and shall be disclosed in a timely manner.

Rule 16 When the Company invests in the projects with proceeds, the use of proceeds shall stringently subject to the fund management of the Company and the provision under this System as well as approval procedures. For all use of proceeds for projects financed by proceeds, the department use the proceeds shall first propose a plan on the use of proceeds. After the department head signs on the plan, the plan shall be

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APPENDIX VI.C	MANAGEMENT MEASURES FOR USE OF PROCEEDS

submitted to the chief financial officer for review and to the general manager for signature before payment; in case it is beyond the extent of authority granted by the Board of Directors, the plan shall be submitted to the Board of Directors for approval.

Rule 17 In case the Company replaces any prior self-raised funds invested in the investment projects with proceeds, the replacement shall be subject to consideration and approval by the Board of Directors of the Company, and shall only be implemented after the issue of a verification report by a certified public accountant, the giving of consent by the independent non-executive directors, the board of supervisors and the sponsor, and the disclosure of the relevant information. The time of replacement shall not be more than 6 months from receipt of the proceeds.

In case the Company has already disclosed replacement of self-raised funds with the proceeds in the offering application documents and the prior investment amount has been determined, it shall report to the stock exchange within 2 trading days after the completion of the replacement and make an announcement.

Rule 18 In principle, the investment direction of proceeds shall not be changed. In case it is necessary to change the investment direction of proceeds due to reasonable factors such as market changes, the Company shall change the investment direction of proceeds subject to consideration and approval by the Board of Directors and the general meeting, and upon explicit concurring opinions are issued by the independent non-executive directors, the sponsor and the board of supervisors. In case of related party transactions, the related parties shall abstain from voting.

Rule 19 The Board of Directors of the Company shall prudently conduct the feasibility analysis of the proposed change of new investment projects financed by proceeds, and ensure that the investment projects have promising market prospects and profitability, and can effectively avoid investment risks and enhance the efficiency for utilisation of proceeds. The Company shall invest the proceeds in the principal businesses of the Company after the investment direction has been changed.

Rule 20 Where the Board of Directors of the Company plans to change the use of proceeds, it shall determine a new investment project and submit to the general meeting for consideration as soon as possible, and explain the reasons for the alteration of the use of proceeds, basic information of the new project, and the impacts on the Company in the notice of convening the general meeting.

Rule 21 Where the Company proposes to change the investment direction of proceeds, the Company shall, upon submission of the same to the Board of Directors for consideration, report to the stock exchange timely and make an announcement including the following:

basic information of the original project and the specific reasons for the change;
basic information of the new project, feasibility analysis and risk reminder;
the investment plan for the new project;

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APPENDIX VI.C	MANAGEMENT MEASURES FOR USE OF PROCEEDS

an explanation on the new project which has been approved by the relevant authorities or is pending approval, if applicable;
opinions on the change of investment direction of proceeds of the independent non-executive directors, the board of supervisors and the sponsor;
an explanation stating the change of the investment projects for proceeds needs to be submitted to the general meeting for consideration;
other information as required by the stock exchange.

New projects involving related transactions, asset acquisition or external investments shall also be disclosed according to the requirements of the relevant rules.

Rule 22 Change of place of implementation of the investment projects financed by proceeds by the Company shall be subject to consideration and approval by the Board of Directors of the Company, and shall report to the stock exchange within 2 trading days and make an announcement with the reasons for the alteration and the opinions of the sponsor.

In the event that the Company changes the implementation methods such as subject entity for implementing the investment projects for the proceeds, methods of major asset acquisition and others, it shall be deemed as a change in the investment direction of proceeds.

Rule 23 After the completion of a single or all investment projects financed by proceeds, the use by the Company of the residual proceeds for other purposes shall be subject to the following procedures:

independent non-executive directors have expressed their independent opinions with explicit consent;
the sponsor has expressed its opinions with explicit consent;
consideration and approval of the Board of Directors.

Rule 24 The proceeds of the Company shall not be appropriated or misappropriated by individuals, legal persons or other organisations and his/her/its related parties who have actual control over the Company, and effective measures shall be taken to prevent related parties from taking advantage of the investment projects for the proceeds to gain improper benefits.

Rule 25 In case the Company changes investment direction of the proceeds to acquire assets (including equity) from the controlling shareholders or the de facto controllers, the Company shall ensure to effectively avoid competition within the industry

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after the acquisition and reduce related transactions, and shall be implemented in accordance with the provisions under the Measures for Administration of Related Party Transactions of the Company.

Rule 26 The Company may temporarily use the idle proceeds to make up working capital under the following conditions:

use of proceeds shall not be changed covertly;
proper progress of the investment plan of proceeds shall not be affected;
the duration of each making up of working capital shall not exceed 6 months;
the proceeds previously used to temporarily make up working capital have been returned;
the sponsor, the independent non-executive directors, the board of supervisors shall express their opinion with explicit consents.

The aforesaid matters shall be subject to consideration and approval by the Board of Directors of the Company. In case the use of idle proceeds to make up working capital exceeds 10% or above of the amount of fund raised, it shall be subject to consideration and approval by the general meeting of the Company, and shall report to the stock exchange within 2 trading days and make an announcement.

The use of idle proceeds to make up working capital shall be limited to the production and operation activities relating to the principal businesses, and shall not be utilised directly or indirectly for placement and subscription of new shares or investments of shares and their derivatives as well as convertible corporate bonds. Prior to the expiring date of the supplementary working capital, the Company shall return such funds to the special account for proceeds and report to the stock exchange within 2 trading days after the funds are returned in full and make an announcement.

Rule 27 The use of idle proceeds by the Company to make up working capital shall make the following disclosure:

basic information of the fund-raising activity, including the time for the raising of the proceeds, the amount and the investment plan of thereof;
update on the usage of the proceeds;
amount and period in which idle proceeds are used to make up working capital;
amount of finance cost expected to be saved by making up working capital with idle proceeds, the reasons for the lack of liquidity whether there is any act of changing the investment direction of proceeds covertly and measures to ensure that the proper operation of fund-raising projects is not affected;

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opinions expressed by the independent non-executive directors, the board of supervisors and the sponsor;
other information as required by the stock exchange.

Excess Proceeds used to permanently make up working capital and repay bank loans shall not exceed 20% of the total Excess Proceeds cumulated in a period of twelve months.

Excess Proceeds temporarily used to make up working capital shall be deemed as idle proceeds temporarily used to make up working capital.

Rule 28 In case the Company plans to apply the Excess Proceeds on repayment of bank loans or making up working capital, it shall meet the following requirements and disclose them in an announcement:

No risky investment such as securities investment, entrusted financial management, derivatives investment and venture capital investment have been made by the Company in the past 12 months;
Excess Proceeds used to permanently make up working capital or repay bank loans shall be subject to the approval of more than two-thirds of all directors of the Board of Directors and all independent non-executive directors;
The sponsor shall conduct a review on whether the plan for use of Excess Proceeds meets the preceding conditions and express its explicit consent.

Rule 29 The directors, supervisors and senior management of the Company shall oversee the compliant use of proceeds by the Company with due diligence and care and consciously safeguard the security of the assets of the Company, and shall not engage in, assist in or allow any change to the use of proceeds in an unauthorised or covert manner.

Rule 30 Unless otherwise stipulated by the national laws, regulations and normative documents, the proceeds of the Company shall not be used in financial investment such as financial assets held for trading and financial assets held for sale, or loans to others or entrusted financial management. They shall not be invested, directly or indirectly, in companies with principal businesses in the purchase and sale of securities.

Rule 31 The Company shall not use the proceeds for pledged and entrusted loans, or any other investment purpose of which is changing the investment direction of proceeds covertly.

Rule 32 Where the investment projects financed by proceeds are carried out by the subsidiaries of the Company or other entities under the control of the Company, such subsidiaries or other entities under the control by the Company shall observe this Management Measures for Use of Proceeds.

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Chapter 4 Implementation and Management of Projects Financed by Proceeds

Rule 33 The investment projects financed by proceeds shall be organised and implemented according to the planned progress as undertaken by the Board of Directors. The general manager of the Company guarantees all work will proceed as planned and regularly report to the Board of Directors on the progress of the implementation of such investment projects.

Rule 34 The investment projects financed by proceeds is organised and implemented by the general manager.

Rule 35 In case of any one of the following circumstances arises during the implementation of investment projects financed by proceeds, the Company shall reassess the feasibility and projected revenue of the projects to decide whether to continue the implementation of the projects or not:

any material changes in market environment in which the investment projects financed by proceeds is involved;
where any investment projects financed by the proceeds have been left idled for more than one year;
failure to meet the deadline specified in the previous plan of the projects financed by proceeds and less than 50% of the proposed investment amount has been actually invested;
any other abnormalities in the investment projects financed by proceeds.

The Company shall disclose the progress, reasons for abnormity and the adjusted plan on investment with proceeds in the latest periodic report.

Rule 36 In case the Company decides to terminate any original investment project financed by proceeds, it shall scientifically select a new investment project as soon as possible.

Chapter 5 Inspection and Monitoring of the Use of Proceeds

Rule 37 The Company shall conduct a comprehensive review of the progress of investment projects financed by proceeds at the end of each accounting year.

When the difference between the annual actual amount of proceeds used in the investment projects financed by proceeds and the expected amount as previously disclosed when the investment plan was made in the then year exceeds 30%, the Company shall adjust the investment plan in respect of the use of proceeds, and disclose, in the explanatory note included in the special annual statement on the use of proceeds, details such as the previous annual investment plan of proceeds, the current status of actual progress in investment projects, adjusted annual investment plan as well as the reasons for changes in investment plan.

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Rule 38 The internal audit department of the Company shall conduct at least one inspection on the deposit and use of proceeds in each quarter and report the inspection result to the audit committee timely. Where the audit committee is of the view that irregularities exist in the management of proceeds by the Company, there exists material risk or internal audit department does not submit the inspection result in accordance with the preceding provision, the audit committee shall report such event to the Board of Directors in a timely manner. The Board of Directors shall report the same to the stock exchange within 2 trading days upon receipt of the report from the audit committee and make an announcement. Contents of the announcement shall include the irregularities that exists in the management of proceeds, material risks, consequences caused or may cause thereto, and measures taken or may take thereon.

Rule 39 In case the Company uses the proceeds in the then year, the Board of Directors shall issue a special report on the deposit and use of proceeds for the year, and engage a certified public accountant to issue a verification report on the same. The verification report shall be disclosed in the annual report. The certified public accountant shall provide reasonable verification and verification conclusion on whether the special report issued by the Board of Directors has truthfully reflected the actual deposit and use of proceeds in the year. Where the conclusion of the verification is "reserved conclusion", "negative conclusion" or "conclusion cannot be presented", the Board of Directors of the Company shall analyse the reasons for the conclusion put forward by the certified public accountant in the verification report, put forward the corrective measures and disclose them in the annual report. The sponsor shall conduct an on-site review on the deposit and use of proceeds in the year and issue a special review report within 10 trading days after the disclosure of the verification report. The review report shall carefully analyse the reason why the certified public accountant has made the above verification conclusion, and provide clear review opinions. The Company shall report to the stock exchange within 2 trading days after receiving the review report and make an announcement.

Rule 40 Independent directors shall pay attention to the practical use of proceeds and whether there is any significant discrepancy from the information disclosed by the Company. Independent directors may, with the consent of more than half of independent directors, engage a certified public accountant to issue a verification report on the use of proceeds. The Company shall provide full support and be responsible for the necessary expenses of the special audit.

Rule 41 The board of supervisors of the Company has the power to supervise the use of proceeds.

Chapter 6 Legal Liabilities

Rule 42 If the Board of Directors of the Company violates the provisions of these Measures and change the investment direction of proceeds without any authorisation, the board of supervisors shall order it to make rectification; if the above unauthorised changes to the investment direction of proceeds cause any loss to the Company, the relevant responsible directors shall compensate for the loss; if the circumstances are serious, the board of supervisors shall propose to the general meeting to remove the duties of relevant responsible directors. The Company shall pursue the legal liabilities of corresponding responsible directors as the case may be.

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Rule 43 If the senior management of the Company violates the provisions of these Measures and change the investment direction of proceeds without any authorisation, the Board of Directors and the board of supervisors shall order them to make rectification; if the above unauthorised changes to the investment direction of proceeds cause any loss to the Company, the relevant senior management shall compensate for the loss; if the circumstances are serious, the Board of Directors shall remove their duties. The Company shall pursue the legal liabilities of corresponding person as the case may be.

Rule 44 In case the directors, supervisors and senior management of the Company practice fraud or engage in malpractice for personal ends in the course of using the proceeds, they shall be subject to removal from their duties by the general meeting or the Board of Directors of the Company. In case of any loss of the Company, the Company shall pursue its corresponding legal liabilities.

Rule 45 In relation to investment projects financed by proceeds which are implemented through the subsidiaries of the Company or other entities under the control of the Company, the Company shall, through exercising its shareholder right, ensure such subsidiaries or other entities under control use the proceeds or change the use of proceeds according to these Measures, and supervise the actual conditions for the use of proceeds of such subsidiaries or other entities under control according to these Measures. For those who use the proceeds in violation of these Measures, the Company shall pursue the legal liabilities of the relevant responsible person by exercising its shareholder right.

Chapter 7 Supplementary Provisions

Rule 46 The expressions "more than", "or above" used herein include the number indicated, whereas "exceed", "exceeds" used herein exclude the number indicated in these Measures.

Rule 47 These Measures shall be implemented upon passing by the general meeting of the Company after consideration, and be interpreted by the Board of Directors of the Company.

Rule 48 In the event that these Measures are to be amended due to the amendment of laws and regulations or due to changes in the operating conditions of the Company, the Board of Directors shall propose amendments to the general meeting for approval, which will come into effect and be implemented from the date of the initial public offering and listing of shares of the Company in the PRC.

Rule 49 Matters not covered in these Measures shall be implemented in accordance with the relevant national laws, regulations and normative documents, the Articles of Association and the requirements of the Shenzhen Stock Exchange.

The Board of Directors of

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

For identification purpose only

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The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

Chapter 1 General Rules

Rule 1 This Measures is formulated in accordance with the laws, regulations, normative documents such as the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, Administrative Measures for the Disclosure of Information of Listed Companies issued by the CSRC and the relevant requirements of the stock exchange, the Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter as the "Company") (hereinafter as the "Articles of Association"), with reference to the actual conditions of the Company, in order to regulate the acts of information disclosure by the Company, enhance the management of affairs for information disclosure as well as protecting the lawful interests of investors.

Rule 2 This Measures applies to the matters such as information disclosure, confidentiality, etc, for the acts which are carried out by related information disclosure obligors such as the Company, its shareholders, de facto controllers, etc, and could materially affect the prices of the Company's shares and its derivatives or the occurrence of events which could materially affect the prices of the Company's shares and its derivatives.

Rule 3 Principles of the Company's information disclosure

Information which may materially affect the price of Company's shares and its derivatives shall be timely disclosed.
The Company shall disclose its information truthfully and accurately, completely. The information disclosed shall not contain any false representations, misleading statements or material omission.
The Company and obligor for related information disclosure shall simultaneously and publicly disclose its information to all investors and ensure the information is equally accessible for all shareholders.

Rule 4 The Company, directors, supervisors, and senior management of the Company shall perform their obligations of information disclosure pursuant to laws, administrative regulations, normative documents and relevant requirements of the stock exchange.

Rule 5 To disclose any information according to law, the Company shall submit the draft announcements and other documents for inspection to the stock exchange for examination and registration, and shall publish them on the media designated by the CSRC, and keep them in the domicile of the Company for access by the public in society.

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Rule 6 The Company shall not publish any information on the company's website or on any other medium earlier than it does so on the designated media, and shall not replace its obligation to issue reports and announcements by releasing news or answering questions of journalists, or replace the obligation of making temporary reports by periodical reports.

Rule 7 An information disclosure document shall be in Chinese. If it is simultaneously accompanied by a text in a foreign language, the information disclosure obligor shall ensure that both texts contain the same content. Where there is any discrepancy between them, the Chinese text shall prevail.

Rule 8 The Company and obligor for related information disclosure shall be attentive to the press coverage about the Company in public media (including major websites), and the transaction conditions of the Company's shares and its derivatives, and get to know the true situations from relevant parties timely. Replies to the enquiries raised by the stock exchange on the said matters in a true manner shall be made within the designated time, and announcements shall be made timely, truthfully, accurately and completely according to the relevant situations in accordance with the requirements and requests of the stock exchange.

Rule 9 The Company shall be equipped with the communication equipment necessary for information disclosure and ensure the smooth operation of external enquiry hotline.

Rule 10 The Company shall use factual and descriptive wordings when disclosing information, and ensure that the contents are concise, simple and understandable, substance-oriented. No expressions for purposes of publicity, advertisement, compliment or slander shall be contained.

Rule 11 Where the information to be disclosed by the Company bears uncertainty, provisional business secrets and other conditions acceptable to the stock exchange, and any timely disclosure may do harm to the Company's interests or mislead the investors, an application for postponed disclosure can be made to the stock exchange, together with the reasons and term for the postponed disclosure, provided the following conditions can be met:

Information to be disclosed is still not leaked;
Written undertakings of confidentiality has been made by related insiders;
No unusual fluctuation occurs in transactions of the Company's shares and its derivatives for the time being.

The Company can postpone its disclosure of relevant information with the consent of the stock exchange. The postponed period of disclosure is generally less than two months.

The Company shall make timely disclosure if, no consent is obtained from the stock exchange for postponing the disclosure, the reasons for postponing the disclosure is eliminated, or, the period of disclosure postponement expired.

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Rule 12 Where the information to be disclosed by the Company is a state secret or commercial secret or satisfies other conditions approved by the stock exchange, and the disclosure of which and performance of related obligations may lead to violation of relevant requirements in national laws and regulations on confidentiality or jeopardize the interest of the Company, the Company may apply to the stock exchange for an exemption of information disclosure or performance of related obligations.

Rule 13 Where an event of or related to the Company does not meet the disclosure criteria specified in the rules governing the listing of shares of relevant stock exchange or is not specified in the same, but the Board of Directors of the Company or the stock exchange considers that the event may have a more significant impact on the trading prices of the Company's stocks, the Company should timely disclose the information in accordance with these Measures.

Chapter 2 Contents of information disclosure and criteria for disclosure

Section 1 Prospectus and listing announcement

Rule 14 The Company shall prepare the prospectus according to applicable requirements issued by CSRC. Any information that may have a material effect on the decision making of investors on their investments shall be disclosed in the prospectus.

Upon approval by the CSRC on application for public issuance of securities, the Company shall publish of the prospectus prior to the issuance of securities.

Rule 15 The directors, supervisors and senior management of the Company shall sign and endorse the prospectus and ensure the authenticity, accuracy and completeness of information disclosed therein.

The prospectus shall have the company seal affixed.

Rule 16 Where an important matter occurs during the period after the CSRC approved the application for the issuance of securities but before issuance is complete, the Company shall submit a written explanation to the CSRC, and a revised prospectus or a corresponding supplementary announcement shall be made upon the consent of the CSRC.

Rule 17 Where an application is made by the Company for the listing of securities, a listing announcement shall be prepared pursuant to the provisions of the stock exchange which shall be published upon consideration and approval by the stock exchange.

The directors, supervisors and senior management of the Company shall sign and endorse the listing announcement and ensure the authenticity, accuracy and completeness of information disclosed therein.

The listing announcement shall have the company seal affixed.

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Rule 18 Where a professional opinion or report of sponsors or securities service institutions is cited in the prospectus and listing announcement, the relevant content shall be identical with that in documents issued by the sponsors or securities service institutions; and the Company shall ensure that the citation of opinion of the sponsors or securities service institutions is free from being misleading.

Rule 19 The provisions on prospectus set out in Rule 14 to Rule 18 of these Measures are applicable to the corporate bond prospectus.

Rule 20 The Company shall disclose an issuance status report according to law after the non-public issuance of new shares.

Section 2 Regular reports

Rule 21 The Company should disclose regular reports including annual reports, interim reports and quarterly reports. Any information that may have a material effect on the decision making of investors for their investments shall be disclosed.

Rule 22 Annual reports shall be prepared and disclosed within four months after the end of each accounting year; interim reports shall be prepared and disclosed within two months after the end of the first half of each accounting year; quarterly reports shall be prepared and disclosed within one month after the end of each accounting year 's third and ninth months.

The disclosure time of the first quarterly report shall not be earlier than the disclosure time of the annual report for the preceding year.

Rule 23 The directors and senior management of the Company shall sign and endorse regular reports as to express whether they agree with the contents of regular reports or not. The Board of Supervisors shall issue a written review opinion that sets out whether the preparation and review procedures of the Board of Directors comply with the laws, administrative regulations and the provisions of the CSRC and whether the contents of the reports are a true, accurate and complete reflection of the actual status of the Company by resolutions of the Board of Supervisors.

Where the directors, supervisors and senior management are unable to ensure the authenticity, accuracy and completeness of regular reports or differing views are held, their reasons and opinions shall be stated and disclosed.

Rule 24 Where the Company foresees a loss or any major change to its operating results, a timely result forecast shall be made.

Having disclosed the results forecast, the Company shall timely disclose a revised announcement thereof when it is anticipated that there will be a relatively big difference between the current results and the disclosed results forecast.

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Rule 25 Where the results are leaked before disclosure of the regular reports or where there are rumours on the results and unusual fluctuations in the Company's stock and derivative transactions, the Company shall timely disclose the relevant financial data for the current reporting period (no matter whether it is audited or not).

Rule 26 The contents, templates and preparation rules for annual reports, interim reports and quarterly reports shall comply with relevant provisions by the CSRC and the stock exchange.

Rule 27 Where a qualified audit report is issued in respect of the financial accounting report in a regular report, the Board of Directors of the Company shall provide a special explanation on the matters to which the audit opinion relates, and independent Directors shall express their independent opinions for matters related to the audit opinions. The Board of Supervisors shall express their opinions on the special explanation provided by the Board of Directors related to the qualified audit report, while the accounting firm and the certified public accountant responsible for audit shall provide a special explanation for the matters related to audit opinions.

Rule 28 The Company shall squarely deal with the subsequent audit opinions on its regular reports from the stock exchange, and give timely replies to the enquiries from the stock exchange, while making explanation and illustration for the relevant contents of regular reports upon request. The Company shall make an announcement after having performed the corresponding procedures where disclosed modifications or supplementary announcements with the modified regular reports are needed, and disclose the full text of the modified regular reports in the designated website.

Section 3 Provisional Reports

Rule 29 Provisional reports refer to announcements except regular reports published by the Company in accordance with laws, administrative regulations, departmental regulations and regulatory documents, including but not limited to announcements on major events, the Board of Directors resolutions, the Board of Supervisors resolutions, general meeting resolutions, disclosable transactions, related-party transactions and other material information that should be disclosed.

Provisional reports (except for the announcement of the Board of Supervisors) shall be issued by the Board of Directors of the Company and affixed with the seal of the Board of Directors.

Rule 30 Where the Company convenes a board meeting, the resolutions of the Board of Directors (including those disapproving all proposals) shall promptly report to the stock exchange for filing after the conclusion of the meeting.

For the resolutions of the Board that involve matters or material information which are subject to the voting of the general meeting, the Company shall disclose them in a timely manner. For other matters that the stock exchange deems to be necessary to disclose, the Company shall also disclose them in a timely manner.

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For the resolutions of the Board that involve major matters and need to be announced in accordance with the relevant provisions of the CSRC or the guidelines on the format of the announcement formulated by the stock exchange, the Company shall separately disclose the announcement of the resolution of the Board and the announcement of relevant major matters.

Rule 31 Where the Company convenes a meeting of Board of Supervisors, the resolutions of the Board of Supervisors shall promptly report to the stock exchange for filing after the conclusion of the meeting and make announcement after being registered by the stock exchange.

Rule 32 Where the Company convenes a general meeting, the notice of general meeting shall be issued to the shareholders by way of announcement 20 days before the annual general meeting or 15 days before the extraordinary general meeting. The draft of the resolution announcement, resolutions of the general meeting and legal opinions are submitted to the stock exchange as at the date of the conclusion of the general meeting. The resolution announcement of the general meeting is disclosed after being registered by the stock exchange.

If the general meeting is postponed or cancelled for any reason, the Company shall issue a notice at least two trading days prior to the original holding date to explain the specific reason for the postponement or cancellation. If the general meeting is postponed, the Company will announce the new date for the meeting in the notice of postponement.
If a shareholder proposes an interim proposal ten days before the general meeting, the Company shall issue a supplementary notice of the general meeting within two days after receiving the proposal, and disclose the name and shareholding ratio of the shareholder who proposed the interim proposal as well as the content of the new proposal.
Where the shareholders convene the general meeting on their own, the Board of Directors of the Company shall be notified in writing and send relevant documents to the stock exchange for filing before issuing the notice of the general meeting.
If an unexpected event occurs during the general meeting and the meeting cannot be held properly, the Company shall immediately report to the stock exchange to explain the reason and disclose the relevant situation.
The Company shall not disclose or leaked undisclosed material information at the general meeting.

Rule 33 With regard to any material information that may have a greater effect on the trading prices of the Company's shares and derivatives and the investors are not yet informed, the Company shall make a prompt disclosure to describe the causes, current status and potential impact of such event.

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The material information referred to in the previous paragraph include:

significant changes to the business strategy and scope of the Company;
the Company's decision on significant investment and significant acquisition of property;
entering into significant contracts that may have a significant impact on the assets, liabilities, interests and operating results of the Company;
incurrence of a major debt in the Company and default on an overdue major debt, or incurrence of a large-amount indemnity;
incurrence of a major deficit or a heavy loss in the Company;
significant changes to the external conditions of production and operation of the Company;
change of the Company's Directors, more than one third of supervisors or general manager; failure of chairman or general manager to fulfill their duties;
considerable changes to the shareholding or ownership in the Company of the shareholder or de facto controller holding more than 5% of the Company' s shares;
the Company's decision on capital reduction, merger, split-up, dissolution and application for bankruptcy; or commencing bankruptcy proceedings in accordance with the law, being ordered to shut off;
major litigation or arbitration involved by the Company and the resolution of the general meeting or the Board of Directors being revoked or declared invalid in accordance with the law;
the Company is being investigated by competent authorities for suspected violation of laws and regulations or given criminal penalties and major administrative penalties; or directors, supervisors and senior management of the Company are investigated by competent authorities for suspected violation of laws and regulations or subject to mandatory measures;
a newly promulgated law, regulation, rule or industrial policy might significantly affect the Company;
a resolution regarding the issuance of new shares or other refinancing plan or equity incentive plan is made by the Board of Directors;

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a court ruling that prohibits controlling shareholders from transferring their shares; more than 5% of the Company's shares held by any shareholder is pledged, frozen, judicially auctioned, kept in custody or in trust, or the voting rights of such shareholder are limited according to the law;
major assets are sealed up, detained, frozen, mortgaged or pledged;
the principal or all businesses have been suspended;
providing any important external guarantee;
obtaining additional revenue that may have a material impact on the Company's assets, liabilities, equity interest or operating results such as large-amount governmental subsidies;
changes in the accounting policies or accounting estimates;
the Company is ordered to make a correction by relevant authorities or the Board of Directors resolves to make a correction due to errors, failure to disclose as required or false records contained in the information disclosed previously;
other circumstances required by the CSRC and the stock exchange.

Rule 34 Standards for disclosure of the Company's material information

The standards for disclosure of material information listed in Rule 33 of these Measures shall be implemented in accordance with laws, regulations, regulatory documents and the relevant provisions of the stock exchange on information disclosure.

Rule 35 The Company should perform information disclosure obligations regarding material information in a timely manner at the earliest of any of the following points of time that occurred:

when a resolution regarding the material information is made by the Board of Directors or Board of Supervisors;
the parties concerned enter into a letter of intent or agreement regarding the material information;
directors, supervisors or senior management become aware of the material information and report on them.

Where the significant event is expected to occur, and any of the following circumstances occurs before the points of time of circumstances as mentioned in the preceding paragraph, the Company should disclose its status and the risk factors that may affect the progress of relevant event;

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it is difficult to keep the material information confidential;
the material information has been leaked or there has been rumor on the market;
abnormal situation occurs in the trading of the Company's shares and derivatives.

Rule 36 After disclosure of material information by the Company, the development or changes in such disclosed material information that might have greater effects on the trading prices of the shares and derivatives of the Company shall be disclosed promptly together with the possible effects once they appear.

Rule 37 Where material information specified in Rule 33 of these Measures occurred in holding subsidiaries of the Company and might have greater effects on the trading prices of the shares and derivatives of the Company, the Company shall fulfill its information disclosure obligation.

In case events occurred in the joint-stock companies of the Company might have greater effects on the trading prices of the Company's shares and derivatives, the Company shall perform its information disclosure obligation.

Rule 38 Where material changes occurred in total share capital, shareholders, ultimate controller of the Company due to the Company's actions of acquisition, merger, split-off, issuance of shares, repurchase of shares, the information disclosure obligors shall perform its reporting and announcement obligations according to the law, and disclose changes in equity.

Rule 39 The controlling shareholders, de facto controllers and parties acting in concert of the Company shall promptly and accurately report to the Company whether shareholding transfers, assets restructuring, or other material information is likely to occurred, and cooperate with the Company to perform the information disclosure work.

Rule 40 In the event that the transactions of the Company's shares and derivatives are identified by the CSRC or stock exchanges to have unusual trading patterns or news emerging in the media may have a material impact on the transactions of the Company's shares and derivatives, the Company shall promptly identify and disclose the factors causing such unusual fluctuations in the transactions of shares and derivatives to the Company's shareholders, various departments, subsidiaries (hereinafter referred to the Company's branches and subsidiaries that the Company directly or indirectly hold more than 50% of their shares or subsidiaries that it has actual control right) and other related parties.

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Chapter 3 Delivery, Verification and Disclosure Procedure of Information

Rule 41 The procedures for internal reporting of material information are implemented in accordance with the Company's "Internal Reporting System for Material information".

Rule 42 General procedures for review and disclosure of regular report

after the end of the reporting period, senior management including general manager, responsible financial officers and the secretary to the Board should draft regular reports timely and submit it to the Board of Directors for review and approval. The regular reports include the financial report, financial notes and relevant financial information;
the secretary to the Board is responsible for delivering the drafted regular report to the directors, supervisors and senior management for review;
the chairman is responsible for organizing and hosting meetings of the Board of Directors to review the regular reports and issue approved regular reports. Directors and senior management shall provide written confirmation;
the Board of Supervisors is responsible for reviewing the regular reports prepared by the Board of Directors and issuing audit opinions;
the secretary to the Board is responsible for organizing the submission and disclosure of regular reports, which are issued by the chairman of the Board. The secretary to the Board shall organize to submit the report to the stock exchange within 2 working days for review and its disclosure subsequently;

Rule 43 General procedures for review and disclosure of provisional reports

The secretary to the Board analyzes and considers the material information reported by the information disclosure obligors or other insiders of information. If it is necessary to fulfill the information disclosure obligation as required, he/she shall immediately organize the securities department to prepare information disclosure documents;
For provisional reports that are not required to perform the consideration and approval procedures, the secretary to the Board conducts a compliance review on the content of the provisional report and signs for confirmation. The secretary to the Board submits the provisional report to the chairman of the Company for review. The report is submitted to the stock exchange for review and registration after the approval of the chairman;

The chairman may, as he/she deem necessary, authorize the secretary to the Board to decide whether to submit the provisional report to the chairman or other relevant personnel for review in accordance with the relevant content involved in the provisional report before submitting to the stock exchange;

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

For provisional reports that are required to go through the consideration and approval procedures, the secretary to the Board reviews the first draft of the information disclosure document and form a proposal before inviting the chairman of Board of Directors or the chairman of Board of Supervisors to convene the Board of Directors or the Board of Supervisors meeting and submit the significant matters contained in the provisional report timely to the Board of Directors, Board of Supervisors and/or general meeting for consideration as soon as possible;
All provisional reports shall be submitted by the secretary to the Board or the securities affairs representative within the prescribed time and in the manner prescribed by the stock exchange, and shall be announced on the media designated by the CSRC;
In accordance with the relevant requirements of the securities regulatory department, the Company's securities department shall file the provisional report and its related documents;
For the announcement of abnormal fluctuations in stock transactions, the secretary to the Board shall prepare and disclose relevant provisional reports in accordance with the provisions of the stock exchange;
The secretary to the Board shall promptly notify the directors, supervisors and senior management of the contents of the provisional announcement.

Rule 43 The report submitted by the Company to the securities regulatory department is drafted by the Company's securities department or other departments designated by the Board and reviewed by the secretary to the Board.

Upon the question or enquiry from the securities regulatory department, the secretary to the Board should inform the chairman of the Company promptly and verify relevant matters with departments or companies concerned. He/she shall organize the Company's securities department to draw up the draft of the provisional report and send them to the chairman for review. The secretary to the Board is responsible for replying and reporting to the securities regulatory department after the approval of the chairman.

Chapter 4 Management on Information Disclosure matters

Rule 44 The secretary to the Board is the direct responsible person of the Company's information disclosure and is responsible for the management of the Company's information disclosure. He/she is the designated liaison between the Company and the stock exchange, CSRC and the local office of the CSRC where the Company is located.

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Rule 45 The securities department of the Company is daily working department of the Company's information disclosure management and is responsible for specific information disclosure management of the Company under the supervision of the secretary to the Board.

Rule 46 The Board of the Company manages the Company's information disclosure matters and ensures that the content of the information disclosed is true, accurate and complete, does not contain any false statements, misleading representations or material omissions. The Company conducts quarterly evaluation on its information disclosure work, and corrects any problems identified in time.

Rule 47 The directors of the Company should keep informed of and pay continuous attention to the Company's production, operation and financial conditions as well as the material information that have occurred or are likely to occur in the Company and the effect of such information, and proactively investigate and obtain information needed for making information disclosure decisions. If the directors are aware of undisclosed material information of the Company, they should report to the Company's Board of Directors in a timely manner and also inform the secretary to the Board.

Rule 48 Supervisors should supervise the performance of duties of information disclosure by directors and senior management of the Company. Supervisors should pay attention to the information disclosure of the Company, and investigate any information disclosure which is found to be in violation of laws and regulations and propose rectification action correspondingly.

The written review opinion on the Company's regular reports issued by the Board of Supervisors must make it clear whether the preparation and review procedures comply with the laws, administrative regulations and the provisions of the CSRC, and whether the contents of the reports give an authentic, accurate and complete view on the actual conditions of the Company.

Rule 49 The Board of Supervisors and independent directors are responsible for the supervision of the management policy of information disclosure affairs of the Company and shall examine the Company's information disclosure affairs on a quarterly basis. They shall promptly propose rectification action for any major defects found and urge the Board of the Company to take remedial measures. If the Board fails to do so, they should promptly inform the stock exchange.

Rule 50 The directors and the Board of Directors, supervisors and Board of Supervisors, general managers, deputy general managers and responsible financial officer of the Company should perform their duties diligently, pay attention to the preparation of information disclosure documents and ensure that regular reports and provisional reports are disclosed within the prescribed time limit.

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

Rule 51 The directors and the Board of Directors, supervisors and Board of Supervisors, general managers, deputy general managers and responsible financial officer of the Company should cooperate with the secretary to the Board in work related to information disclosure, and create convenience for the secretary to the Board and the securities department to perform their duties, so as to ensure that the secretary to the Board can be informed of the Company's important information at the first time and ensure that the information disclosure of the Company shall be prompt, accurate, fair and complete.

Rule 52 Senior management of the Company should report in a timely manner to the Board of Directors the material information in relation to the operation or finance of the Company, the progress or development of the disclosed matters and other relevant information.

Rule 53 The secretary to the Board should be responsible for organizing and coordinating information disclosure affairs of the Company, aggregating the disclosable information of the Company and reporting the same to the Board of Directors, paying continuous attention to media coverage on the Company and actively ascertaining whether the coverage is true or not. The secretary to the Board should be entitled to attend the general meetings, the board meetings, the meetings of the Board of Supervisors and the meetings of senior management, look into financial and operating conditions of the Company and review all disclosure-related documents.

Apart from the announcement of the Board of Supervisors, the information disclosed by the Company should be published in the form of board announcement.

Rule 54 The obligors of material information reporting should provide or report various information required by the measure and the "internal report system for material information" of the Company in a timely manner, and be responsible for the authenticity, accuracy and completeness of the information and materials provided, and assist the secretary to the Board in completing the disclosure of related information.

Rule 55 Upon the occurrence of any of the following events, the shareholders or de facto controllers of the Company shall, on their own initiative, inform the Board of Directors of the Company and assist the Company to perform information disclosure obligation.

significant changes in the shares of the shareholders holding more than 5% of the Company's Shares, or in controlling of the Company by de facto controllers;
a court ruling that prohibits the controlling shareholder from transferring its shares; or more than 5% of the Company's shares held by any shareholder is pledged, frozen, judicially auctioned, kept in custody or in trust, or the voting rights of such shareholders are limited according to the law;
a plan on major restructuring of the assets or businesses of the Company;
other circumstances specified by the CSRC.

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

Prior to disclosing such disclosable information according to the law, if relevant information has been disseminated in the media or the transaction of the shares and derivatives of the Company showed any abnormality, shareholders or de facto controllers shall timely and accurately file a written report with the Company and offer assistance to the Company for making an announcement timely and accurately.

The shareholders and de facto controllers of the Company shall not abuse their shareholders' rights and dominant status, and shall not request for insider information from the Company.

Rule 56 During the Company's non-public offerings, its controlling shareholders, de facto controllers and the prospective buyers of shares shall promptly provide relevant information to the Company, and cooperate with the Company to perform information disclosure obligations.

Rule 57 The directors, supervisors, senior management, shareholders holding more than 5% of Company shares and their parties acting in concert, and the de facto controllers shall promptly submit the list of associates and the statement on the respective relationships with the Company to the Company's Board. The Company shall conduct the review process of related party transactions, and strictly implement the Related Party Transactions Vote Abstention Policy. Transaction participants shall not avoid the related party transactions review processes and information disclosure obligations of the Company through concealing related party relationships or by other means.

Rule 58 Shareholders or de facto controllers with more than 5% of the Company's shares by means of being commissioned or custody shall promptly notify the Company of the trustors' situation, and cooperate with the Company in performing information disclosure obligations.

Rule 59 The information disclosure obligors shall provide the sponsors and securities service institutions employed by the Company with all information related to their practice, and ensure that the information is true, accurate and complete without refusal, withholding or false information.

Rule 60 In the event that the Company decides to dismiss the accounting firm in office, the accounting firm shall be promptly informed upon passing of the relevant Board resolutions. The accounting firm shall be given the opportunity to state their opinion during the voting of the relevant resolutions at the general meeting of the Company. Following the passing of the relevant resolutions of dismissal or change of accounting firm at the general meeting, the Company shall disclose the specific reasons and the dismissed accounting firm's opinion.

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

Chapter 5 Confidentiality of Information

Rule 61 The secretary to the Board of Directors is responsible for the confidentiality of information and the formulation confidentiality measures. When inside information is leaked, remedial measures shall be taken in a timely manner to explain and clarify.

Rule 62 The Chairman and the general manager of the Company are the first responsible persons for the information confidentiality of the Company; the deputy general manager and other senior management are the first responsible persons for the confidentiality of the business; the responsible persons of each department and subsidiary are the first responsible persons for the confidentiality of respective departments and subsidiaries.

Rule 63 Prior to the disclosure of information by the Company's director, supervisors, senior management and other insiders, such information shall be controlled and the number of insiders should be confined to the minimum. Insiders shall be responsible for the confidentiality of what they know, and are not allowed to reveal the information to a third party before its public disclosure, nor use such inside information for trading of the Company's securities, or divulge such information or suggest others to deal in such securities.

Rule 64 The secretary to the Board of Directors is responsible for the public disclosure of the undisclosed material information of the Company, other directors, supervisors and senior management are not allowed to reveal any undisclosed material information of the Company without written authorization of the Board of Directors.

Rule 65 When the Company is carrying out business negotiations, and matters such as bank loans, the Company shall, due to special circumstances that is necessary to provide undisclosed material information to the other party, require the other party to sign an confidentiality agreement to ensure that relevant information will not be leaked, and undertake not to purchase or sell or recommend others to purchase or sell the shares and derivatives of the Company before the announcement of such information is made.

Rule 66 Before the announcement of the periodic report of the Company, relevant personnel of the Company shall consult the secretary to the Board of Directors of the Company and perform relevant procedures before answering the production and operation information requested by the Statistics Bureau and other government departments.

Rule 67 Prior to the disclosure of all material information that occurred in the Company, relevant insiders shall not release news to the press or publish information in internal publications.

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

The press releases provided by the relevant departments of the Company to the press and the press releases published on internal publications, websites, and promotional materials must be submitted to the secretary to the Board of Directors of the Company for review before publication to prevent leakage of the undisclosed material information of the Company. After relevant press release is published, it shall be sent to the securities department of the Company for registration and filing in a timely manner.

Rule 68 When communicating with investors, the Company shall not provide undisclosed information of the Company's operation conditions, financial conditions and other matters during performance briefings, analyst meetings, roadshows, etc.

Rule 69 When it is difficult to keep relevant undisclosed information confidential, or when such information has been leaked, or remarkable or unusual fluctuations have been seen in the trading prices of the Company's securities or their derivatives, the Company should immediately disclose such information.

Chapter 6 Internal Control and Monitoring Mechanism of

Financial Management and Accounting Procedure

Rule 70 The Company shall implement the internal control system for financial management and accounting procedure before the financial information is disclosed. The Board of Directors and management of the Company shall be responsible for checking the establishment and implementation of internal control, and to ensure the effective implementation of relevant scope of control.

Rule 71 The financial accounting reports in the annual reports shall be audited by the accounting firms possessing relevant business qualifications in securities and futures.

Rule 72 The Company has an internal audit system and professional auditing personnel to perform internal audits of and monitor its financial management and accounting treatment. The specific procedures and monitoring processes are conducted in accordance with the relevant requirements in Internal Audit of the Company.

Rule 73 The audit committee is established under the Board of Directors of the Company and is responsible for the communication between the Company and external auditors, as well as its monitoring and checking. It also oversees the internal audit, as well as the evaluation and enhancement of the internal control system of the Company.

Chapter 7 Fair Information Disclosure

Rule 74 The secretary to the Board of Directors is in charge of investor relationship activities of the Company, and no investor relationship activities shall be carried out without the consent of the Board of Directors or its secretary.

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

Rule 75 When publishing any undisclosed material information, the Company and obligor for related information disclosure shall publicly disclose the same to all investors to enable the identical information simultaneously accessible to them. No information shall be separately disclosed, revealed or leaked to the specific targets such as institutional investors, analysts, press media, etc, privately in advance. No optional disclosure shall be conducted by the Company during investor relationship activities such as external meetings, results presentations, online roadshows, etc, such that all investors shall be treated fairly.

Specific targets include but is not limited to:

institutions, individuals and their associates engaged in securities analysis, consultancy and other securities service businesses;
institutions, individuals and their associates engaged in securities investments;
press media, practitioners in press and their associates;
other institutions and individuals affirmed by the Company and the stock exchange.

Rule 76 The Company shall require the special targets to sign a letter of undertakings before directly communicate with them. The contents of the letter of undertakings shall include the followings at least:

to undertake not to intentionally seek for the material information not made public about the Company, and not to have any communication or enquiries with personnel other than those designated by the Company without the approval of the Company;
to undertake not to leak any material information not made public which is obtained accidentally, and not to deal with the Company's securities or suggest others to do so by using the obtained material information not made public;
to undertake to state the source of information for those related to earnings forecast and share price forecast in the documents such as analysis reports, press releases, etc, on investment value, and not to use the information bearing subjective speculation without basis of facts;
to undertake to notify the Company before publishing or using the documents such as analysis reports on investment value, press releases, etc;
the liability for definite violation of undertakings.

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

Rule 77 The Company shall duly examine the documents such as analysis reports on investment value, press releases, etc, which are notified by the specific targets. Corrections shall be requested on the contents found to be wrong or misleading. Where the requested corrections are declined, the Company shall timely issue a clarification announcement for explanation. The Company shall promptly report to the stock exchange and make an announcement if any material information not made public is involved therein.

Rule 78 The Company shall fairly provide the information related to the disclosed information already provided to specific targets such as institutional investors, analysts, or press media, etc, when other investors request for the same information.

Rule 79 The Company can expand the scope of information dissemination by convening press conferences, investor communication sessions, online presentations, etc, to enable more investors to timely note and understand the material information already made public.

Rule 80 The Company shall particularly note the fairness of information disclosure for activities such as price consultation, promotion, etc, with specific individuals or institutions when implementing refinancing plans (including non-public issuance), and shall not induce them to subscribe for the Company's securities by provide them with material information not made public.

Rule 81 The Company shall strictly perform its obligations for information disclosure in accordance with the relevant requirements by related laws, administrative regulations, departmental rules, normative documents and the stock exchange. The Company shall proactively carry out voluntary disclosures for the information potentially affecting the decision making of shareholders and other investors for their investments and fairly deal with all investors, and shall not carry out information disclosure optionally.

Rule 82 Directors, supervisors and senior management of the Company shall notify the secretary to the Board of Directors before accepting invitation from specific targets for interviews and survey researches, and the secretary to the Board of Directors shall properly arrange the procedures of and to be present throughout the interviews and survey researches. The personnel being invited to interviews or survey researches shall create written records regarding the procedures of survey researches and contents of interviews, and jointly sign the records with the hosts of interviews or survey researches for confirmation. The secretary to the Board of Directors shall also sign the records for confirmation.

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

Chapter 8 Files Management

Rule 83 The securities department is the functional department for managing information disclosure and information documents of the Company. The secretary to the Board takes primary responsibility while the representative of securities affairs is specifically responsible for files management affairs.

Rule 84 Directors, supervisors and senior management should keep a record when performing their duties in accordance with the relevant laws and regulations and the requirements of these Measures. The record should include but not limit to the following documents:

Information of the general meeting, resolutions of the meeting and the minutes;
Information of the meeting of the Board, resolutions of the meeting and the minutes;
Information of the meeting of the supervisors, resolutions of the meeting and the minutes;
Documents setting out statements or opinions of the independent directors;
Documents setting out statements or opinions of the senior management.

Rule 85 The securities department is responsible for the Company external information disclosure documents. Documents of the general meeting, documents of the Board meeting, documents of the supervisor meeting, documents of information disclosure should be archived separately.

The securities department should keep the relevant documents when issuing official documents to the CSRC and the stock exchange in the name of the Company.

The securities department should archive other documents of directors, supervisors, senior management performing their duties as the files of the Company.

The retention period of the aforementioned documents should not be less than 10

years.

Rule 86 The published information disclosure documents should be provided by the securities department for inspection upon approval by the secretary of the board of directors. The documents that are signed by directors, supervisors, senior management when performing their duties, minutes and other related documents and information of each department and subsidiary performing the duty of information disclosure should be provided by the securities department upon verification of identity by the secretary to the Board and approval from the Board (the secretary to the Board should provide it on demand in a timely manner if it is required by the securities regulatory authorities).

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

Chapter 9 Reporting mechanism of receiving relevant documents from the securities regulatory authorities

Rule 87 If the secretary to the Board and the securities department of the Company receive the following documents, the secretary to the Board should report to the chairman of the Board immediately. Except information involving special circumstances such as state secret, business secret or special circumstances, the chairman of the Board should urge the secretary to the Board to report the received document to all the directors, supervisors and senior management in a timely manner:

New regulations, normative documents issued by the regulatory authorities and relevant business rules, such as, regulations, articles, guidelines and notices;
The decision documents notifying penalty above criticism issued by the regulatory authorities;
Any letter to the Company issued by the regulatory department such as regulatory letters, concern letters and enquiry letters.

Rule 88 The secretary to the Board should respond to and report the letters, such as, enquiry letter and relevant questions from the regulatory authorities timely in accordance with the procedure as required in Rule 43 of these Measures.

Chapter 10 Division of responsibilities and

accountability mechanism of information disclosure affairs

Rule 89 Directors, supervisors, senior management of the Company are accountable for the truthfulness, accuracy, completeness, promptness and fairness of the disclosed information except that there is sufficient evidence to show that they have fulfilled their obligation diligently and conscientiously.

Rule 90 Chairman of the Board of the Company takes primary responsibility for information disclosure

The secretary to the Board takes the main responsibility for disclosing information of the Company.

The representative of securities affairs of the Company performs the duties authorized by the secretary to the Board and entitled by the stock exchange and bear corresponding liability.

Rule 91 Responsibilities of senior management

Senior management should report the related material information to the Board and the secretary to the Board in a timely manner and ensure that such report is true, prompt and complete and bear corresponding liability.

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

The senior management have the responsibility and obligation to reply to the enquiries from the Board of Directors in respect of the regular reports, provisional reports of the Company and other circumstances of the Company, and inquires of the Board of Directors on behalf of the shareholders and regulatory authorities, provide relevant information and assume corresponding responsibilities.
For report and materials submitted by the senior management personnel to the Board of Directors, corresponding handover procedures shall be performed and both parties shall sign to confirm the report and materials handed over and date and time of handover.

Rule 92 The responsibilities of directors

All members of the Board of Directors should guarantee all content of documents and materials provided for disclosure are real, accurate and complete without false, misleading statements or material omissions, and are severally and jointly responsible for the authenticity, accuracy and completeness of the content of information disclosed;
Directors as individuals shall not publish and disclose information of the Company that are not publicly disclosed to shareholders and media on behalf of the Company or the Board of Directors prior to resolutions of meeting of the Board of Directors or authorization from the Chairman.

Rule 93 The responsibilities of supervisors

Where the Board of Supervisors are required to disclose information, the resolution of the Board of Supervisors to be disclosed and the relevant appendix explaining the matters for disclosure shall be submitted to the secretary to the Board of Directors for carrying out specific matters for disclosure;
All members of the Board of Supervisors should guarantee all content of documents and materials provided for disclosure are real, accurate and complete without false, misleading statements or material omissions, and are severally and jointly responsible for the authenticity, accuracy and completeness of the content of information disclosed;
The Board of Supervisors and supervisors as individuals shall not publish and disclose information of the Company that are not publicly disclosed to shareholders and media on behalf of the Company;
When disclosing acts involving checking of the Company's finance and breach of laws, regulation and the Articles of Association by directors, senior management personnel performing duties of the Company, the Board of Supervisors shall give 10 days' written notice to the Board of Directors;

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

In the event of reporting directors' and senior management personnel's acts that impair the Company's interests to the general meeting or relevant state regulatory authorities, the Board of Supervisors shall report to the Board of Directors in a timely manner and provide relevant information.

Rule 94 The responsibilities of shareholders

Shareholders of the Company shall cooperate with the Company in performing the information disclosure obligations pursuant to relevant laws and regulations of the regulatory department and the relevant provisions of these Measures.

Rule 95 The responsibilities of secretary to the Board of Directors

The secretary to the Board of Directors is responsible for coordinating and organizing the specific matters of information disclosure of the Company. The representative of securities business shall be under the lead of secretary to the Board of Directors and shall assist the secretary in carrying out his/her work.
The secretary to the Board of Directors is responsible for organizing and coordinating matters in respect of information disclosure of the Company, gather all disclosable information of the Company and report to the Board of Directors and pay continuous attention to media coverage of the Company and proactively verify the truthfulness of the coverage.
The secretary shall urge the Company to formulate and implement the information disclosure system and the Internal reporting system for significant events, procure the Company and parties involved to perform the information disclosure obligations according to the law and disclosure matters to stock exchange as prescribed in regulations.
The secretary to the Board of Directors is entitled to participate in general meeting, meeting of the Board of Directors, meeting of the Board of Supervisors and relevant meeting of senior management personnel and is entitled to enquire the financial and operation conditions of the Company and review all documents involving information disclosure matters.
The secretary to the Board of Detectors of the Company is responsible for the information confidentiality work and formulation of measures on confidentiality. In the event of leakage of inside information, the secretary shall take remedial measures to explain and clarify in a timely manner and report to the stock exchange and the CSRC.
The secretary to the Board of Detectors of the Company is responsible for the management of documents in respect of the relevant files and information for information disclosure and establish dedicated text files and electronic files for relevant files and information for information disclosure, the retention period for documents should be more than 10 years.

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

The Company shall provide the secretary to the Board of Directors with conditions that facilitate their performance of duties and directors, supervisors, senior management personnel and relevant staff of the Company shall support and cooperate with the work of the secretary to the Board of Detectors.
For relevant meeting in respect of information disclosure of the Company, the secretary to the Board of Directors shall be guaranteed to have access to relevant files and minutes for the meeting in a timely manner and the secretary to the Board of Directors shall attend significant meetings of the Company involving information disclosure and the relevant department shall provide the secretary to the Board of Directors with necessary information and data for information disclosure.
In the event of the secretary to the Board of Directors of the Company is unable to perform such duties, the representative of securities business shall perform such duties on his/her behalf.
Other duties as requested by stock exchange.

Ruler 96 Where the information disclosure breached the regulations due to the dereliction of the directors, supervisors and senior management personnel of the Company and caused material effect or losses to the Company, the Company shall impose punishment such as criticism, warning, fines to the person(s) responsible or dismissal of their duties and the Company shall be entitled to request them to compensate any losses caused to the Company.

Rule 97 In the event of untimely disclosures or inaccuracies of report content or omission of significant information by departments, holding subsidiaries and invested companies of the Company where information disclosures are required, leading to untimely disclosure, omission and misleading of information by the Company which causes material losses or effect to the Company or investors, the Company shall investigate their responsibilities as prescribed in the "Internal reporting system for significant events".

Rule 98 In the event that the Company is publicly condemned, criticized or punished by the CSRC and the authorised institution of the CSRC, stock exchange in the location of the Company, the Board of Directors of the Company shall investigate the implementation of these Measures in a timely manner and take appropriate remedies and investigate the responsibilities of relevant responsible person(s) in a timely manner.

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APPENDIX VI.D MANAGEMENT MEASURES FOR INFORMATION DISCLOSURE MATTERS

Chapter 11 Supplementary provisions

Rule 99 The meaning of the following expressions used in these Measures:

"Timely" means within two trading days from the commencement date or the disclosure.
"Designated media" means newspapers and websites designated by the CSRC.

Rule 100 The expressions "more than" used herein include the number indicated, whereas "exceed" and "exceeding" used herein exclude the number indicated in these Measures.

Rule 101 Where any matters that are not covered in these Measures, the relevant national laws, regulations, normative documents and the relevant provisions of stock exchange and the Articles of Association shall prevail. Where these Measures is inconsistent with the relevant national laws, regulations, normative documents and relevant provisions of stock exchange and the Articles of Association, the latter shall prevail.

Rule 102 These Measures shall be interpreted by the Board of Directors of the Company.

Rule 103 These Measures are subject to consideration and approval by the Board of Directors of the Company and shall be effective and implemented from the date of the shares of the Company are listed upon initial public offering within the PRC.

The Board of Directors

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

For identification purposes only

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APPENDIX VI.E	MANAGEMENT MEASURES FOR PROVISION
	OF EXTERNAL GUARANTEES

The English version of this appendix is an unofficial translation of its Chinese version.

In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

MANAGEMENT MEASURES FOR PROVISION OF EXTERNAL GUARANTEES

Chapter 1 General Rules

Rule 1 These Measures are formulated in accordance with the requirements specified in the Company Law of the People's Republic of China 《( 中華人民共和國公司法》), the Guarantee Law of the People's Republic of China 《( 中華人民共和國公司法》), the rules governing the listing of shares of stock exchanges within the PRC and other laws and regulations, as well as the Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter as the "Company") 《( 北京市春立正達醫療器械股份有限公司章程》) (hereinafter as the "Articles of Association"), with reference to the actual conditions of the Company, in order to regulate the management of external guarantees of the Company, ensure the security of properties of the Company, and minimise the operational risks.

Rule 2 The guarantees referred to herein are the undertakings provided for others by the Company as third parties, or guarantees for securities or pledges provided for others with own assets of the Company. Specific categories include guarantees for borrowings, guarantees for bank acceptance of bills, guarantees for commercial acceptance of bills, and other guarantees specified in laws, regulations and normative documents.

Rule 3 The Company shall comply with the principles of legality, caution, reciprocity and security, and strictly control the risks for guarantees. The Company has the right to decline any acts forcing it to provide guarantees for others.

Rule 4 The Company exercises unified control for external guarantees by its subsidiaries, and no external guarantees shall be provided by the subsidiaries, and no mutual guarantees among the subsidiaries is allowed, without the approval by the Company according to the authority specified in these Measures. The Company shall exercise its authority as shareholder according to the law to procure the wholly-owned subsidiaries, controlling subsidiaries to regulate their external guarantees with reference to the relevant requirements of these Measures.

Those guarantees provided by the Company for its subsidiaries are considered external guarantees.

No branches of the Company is allowed to provide any guarantee externally.

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APPENDIX VI.E	MANAGEMENT MEASURES FOR PROVISION
	OF EXTERNAL GUARANTEES

Chapter 2 Procedures to be taken for Guarantees

Section 1 Conditions of Guarantees

Rule 5 The Company does not initiate any provision of external guarantee. If it is necessary to provide external guarantees, the enterprises seeking guarantees shall apply to the Company.

Enterprises applying for the provision of guarantee by the Company shall possess satisfactory operational conditions and corresponding solvency, together with one of the following conditions:

Being mutually guaranteed organisations due to business needs of the Company;
Being organisations having actual or potential business relationship with the Company.

Subject to the approval of the Board of the Company or general meetings, external guarantees can be provided to those guarantee applicants of lower risks with whom the Company considers necessary to develop business transactions and cooperations though they do not meet the above conditions.

Rule 6 The Company can provide external guarantees subject to the approval of the Board or general meetings. No external guarantees can be provided without the approval of the Board or general meetings.

Rule 7 When providing guarantees for others, the Company shall require its counterparts to provide counter-guarantees, if possible. Cautious judgment shall be made on the provider of counter-guarantees in terms of his/her actual guarantee capacity and the exercisability of counter-guarantees.

Rule 8 The Company shall observe the principle of equivalence when providing guarantees for mutually guaranteed organisations, and require for the provision of counter-guarantee from its counterparts for any excess.

Section 2 Investigations on the Guaranteed Parties

Rule 9 The Company shall ascertain the creditworthiness of the guaranteed parties before making any decision on guarantees, and conduct sufficient analysis on the benefits and risks of the guaranteed subjects, including but not limited to:

being a corporate legal person legally established and in effective existence thereafter, while being free from any circumstances where termination is needed;
having a good position in business operation and a sound financial status, together with a stable cash flow or favourable development prospects;

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APPENDIX VI.E	MANAGEMENT MEASURES FOR PROVISION
	OF EXTERNAL GUARANTEES

For a party that was provided with a guarantee, there should be no circumstances where a creditor requires the Company to assume the guarantee obligations or requires the Company to excise the mortgage or pledge of the guaranteed and pledged assets provided by the Company;
having guaranteed (pledged) assets and corresponding counter-guarantee capacity;
the financial information provided is true, complete and valid;
the Company can adopt risk prevention measures;
there are no other legal risks.

Rule 10 The applicant of guarantee should provide the following information to the Company:

basic information of the enterprise (including but not limited to the corporate business license, Articles of Association, identity document of legal representative of the enterprise, certificate of tax registration, etc.), and analysis report of the business operation;
the audit report of the latest period and the current financial statements;
the host contract and information relating to the host contract;
the use of the borrowings of this guarantee and the expected economic effect;
the repayment capacity analysis of the borrowings of this guarantee;
the illustration of not being involved in major litigations, arbitrations or administrative penalties;
the certification to prove that the counter-guarantee scheme and the counter-guarantee provider has the actual undertaking capacity;
other relevant information deemed necessary to be provided by the Company.

Rule 11 For the external guarantees provided by the Company, the Finance Department (hereinafter referred to as the "Responsible Person") will conduct investigation into the above-mentioned information provided by the applicant of the guarantee in order to ascertain the authenticity of the information.

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APPENDIX VI.E	MANAGEMENT MEASURES FOR PROVISION
	OF EXTERNAL GUARANTEES

Rule 12 The Responsible Person shall investigate the repayment capacity, state of operation, financial status and reputation of the guaranteed party through its account opening bank and business transaction parties. The Audit Department of the Company or an appointed intermediary institution may be required for auditing the guaranteed party if necessary.

Rule 13 Upon completion of the investigation, the Responsible Person shall analyze the feasibility, profits, possible risks and preventive measures of the guarantee and provide written opinions.

Rule 14 After matters concerning the guarantee is reviewed by relevant departments organized by the Company, the matter can then be submitted sequentially to the Board and then to the general meeting for consideration and approval based on the corresponding scope of authorisation.

Section 3 Approval of Guarantee

Rule 15 An external guarantee of the Company should be reviewed by the Board and should be approved by more than half of all members of the Board as well as obtaining more than two-thirds of the approval of directors present at the meeting of the Board and the approval by more than two-thirds of all independent directors.

When a resolution on an external guarantee is made by the Board, the directors who have a connected relationship with the guarantee matter shall abstain from voting and shall not exercise the voting right on behalf of all members of the Board. The resolutions made at the meeting of the Board should be passed by more than half of the directors who do not have connected relationship to the guarantee. In the event that number of directors (who do not have connected relationship to the guarantee) present at the meeting of the Board is less than 3, the Company shall submit the guarantee matter to the general meeting for consideration and approval.

Rule 16 The following guarantee matters shall be submitted to a general meeting for consideration upon being considered and approved at the meeting of the Board:

the provision of any guarantee, where the total amount of external guarantees provided by the Company and its controlling subsidiaries reaches 50% or above of the latest audited total assets;
the provision of guarantee to any party whose gearing ratio exceeds 70%;
the provision of a single guarantee in the amount exceeding 10% of the latest audited net assets;
the provision of a guarantee with guaranteed amount exceeding 50% of the Company's latest audited net assets for 12 consecutive months and its absolute amount exceeding RMB30 million;

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APPENDIX VI.E	MANAGEMENT MEASURES FOR PROVISION
	OF EXTERNAL GUARANTEES

the provision of a guarantee with guaranteed amount exceeding 30% of the Company's latest audited net assets for 12 consecutive months;
the provision of guarantee to shareholders, de facto controllers and other connected parties;
other situations as defined by the laws, regulations, normative documents and the Hong Kong Stock Exchange.

When a guarantee proposal for shareholders, de facto controllers and their connected parties are reviewed at the general meeting, the shareholder or shareholders controlled by the de facto controllers shall not participate in voting. Such voting shall be considered and approved by affirmative votes of more than half of the voting rights of shareholders present at the general meeting.

The external guarantees of this Rule should be considered and approved by the Board of Directors. In addition to the above-mentioned external guarantees matters that should be submitted to the general meeting for consideration and approval, other external guarantees are determined by the Board of Directors. Any guarantees of item (5) of this Rule shall be submitted to the meeting of the Board for consideration and approval and shall be passed by affirmative votes of more than two-thirds of the voting rights of shareholders present at the meeting. Other matters of guarantees shall be passed by affirmative votes of more than half of the voting rights of shareholders present at the meeting.

Rule 17 The external guarantee contract shall be signed by the chairman of the Board. Without the legal authorization of the chairman of the Board, no one can act ultra vires and sign on a guarantee contract or to act as a guarantor on behalf of the Company to sign or seal on the host contract.

Rule 18 In the event that there is a confirmed need for the subsidiaries of the Company to provide external guarantees or make guarantees with each other, the details of which shall be reported to the Company, and the said guarantee(s) can only be dealt with upon the consideration and approval of the Board or the general meeting in accordance with the relevant provisions of external guarantee.

The directors or representatives of shareholders recommended by the Company should express opinions on their related guarantee matters at the meeting of the Board or general meeting of their subsidiaries in accordance with the resolutions of the Board of the Company and the general meeting.

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APPENDIX VI.E	MANAGEMENT MEASURES FOR PROVISION
	OF EXTERNAL GUARANTEES

Section 4 Review and conclusion of guarantee contracts

Rule 19 Any guarantee should be concluded with a written guarantee contract. The guarantee contract should be made in compliance with the laws, regulations, and normative documents. The guarantee obligations should be clear and should be reviewed by the Responsible Person and the Legal Department of the Company.

The Responsible Person and the Legal Department of the Company have the obligations to ensure the authenticity of the host contract and prevent the contract parties from maliciously colludly or taking other fraudulent means to defraud the Company's guarantee.

Rule 20 In the case where there are mandatory clauses contained in the guarantee contract or clauses that are obviously unfavourable to the interests of the Company, and there may be clauses that will constitute unpredictable risks, the Company should require the related counterparty to make modification or to refuse to provide guarantee for that party.

Rule 21 During the guarantee period, if the guarantee liabilities of the guarantee contract are increased and its guarantee period is extended due to the need to modify the scope, liability and maturity of the guarantee contract caused by the changes in the provisions of the host contract of the guaranteed party and beneficiary, the Responsible Person shall re-sign the guarantee contract according to the approval authority and submit the guarantee contract for approval. At the same time, the Legal Department of the Company shall conduct a review on the changed contents.

In the event of any changes in the host debt contract of the Company's external guarantee, it shall be decided by the Board whether to continue to assume the guaranteed obligations, provided that it shall be subject to the consideration and approval by the Board as stipulated in this system; it shall be decided by the general meeting whether to continue to assume the guaranteed obligations provided that it shall be subject to the consideration and approval by the general meeting as stipulated in this system.

Rule 22 The guarantee contract and the related original information shall be properly kept in accordance with the provisions of the Company's internal management. In the event of circumstances of signing, modification, extension or termination of the guarantee contract, the Responsible Person should notify the Board of Supervisors, secretary to the Board and other related management departments of the Company as soon as possible.

The Responsible Person should conduct timely clearance and inspection on the guarantee contract; conduct regular verification with the bank and related institutions in order to ensure that the archived information is complete, accurate, and valid; and to pay attention to the expiration and maturity of the guarantee.

In the process of contract management, once an abnormal contract is found for being approved without going through the review process of the Board or the general meeting, a report should be made to the Board of Directors and Board of Supervisors in a timely manner.

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APPENDIX VI.E	MANAGEMENT MEASURES FOR PROVISION
	OF EXTERNAL GUARANTEES

Chapter 3 Risk Management for Guarantees

Rule 23 The Responsible Person shall designate a person to continuously monitor the guaranteed parties; collect the latest financial information and audit reports of the guaranteed parties; analyze its financial status and solvency on a regular basis; pay attention to any changes in its production and operation, assets and liabilities, external guarantees, spin-off, consolidation, legal representative or goodwill and prepare relevant financial files to report to the Board of Directors regularly.

In case the operation of the guaranteed parties is found to be deteriorating significantly or in case of dissolution, spin-off and other significant events, the Responsible Person shall report to the Board of Directors promptly. The Board of Directors shall take effective measures to minimize the losses.

The designated person appointed by the Responsible Person should also monitor the performance of the guaranteed parties in real time, pay attention to the expiration of the guarantee, make detailed statistics and timely update on the guarantee, and regularly report the implementation of the guarantee to the Company's Board of Directors.

Rule 24 The guaranteed parties shall regularly report to the Responsible Person the amount of loan obtained, used and to be returned as well as the actual repayment of borrowings.

Rule 25 If a debt under an external guarantee is due, the Responsible Person shall urge the guaranteed parties to perform its obligation of repayment within the time limit. If the guaranteed parties fail to perform its obligation on time, the Company shall take necessary remedial measures in a timely manner.

If a debt under an external guarantee need to be extended after its maturity and the guarantees need to continue, it shall be regarded as a new external guarantee, and the guarantee approval procedures and information disclosure obligations shall be resumed.

Rule 26 When the guaranteed parties actually return the funds of guaranteed debt, the relevant proof of payment should be faxed to the Responsible Person in time to confirm the release of the obligation under the guarantee.

Rule 27 When there is an indication that the guaranteed parties cannot return the loan in time, the Responsible Person shall immediately report the matter, and the Company shall organize relevant departments to analyze their operating conditions, propose corresponding measures for possible risks, and report to the Board of Directors.

Rule 28 If the guaranteed parties provide counter-guarantee, it shall correspond to the amount of guarantee provided by the Company. If the properties used for the provision of counter-guarantee assigned by the guaranteed parties are non-negotiable or non-transferrable according to the laws and regulations, the Company has the right to refuse to provide the guarantee.

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APPENDIX VI.E	MANAGEMENT MEASURES FOR PROVISION
	OF EXTERNAL GUARANTEES

Rule 29 When the Company is conducting the capital operation process such as acquisition and external investment, etc, the Company shall examine the external guarantees of intended acquirer or investee, which would form an important basis for the relevant decision-making department to make acquisition and investment decisions.

Rule 30 In the event that the host contract between the creditor and the debtor is changed without the written consent of the Company, no guarantee obligation shall be undertaken by the Company. If the guarantee contract stipulates otherwise, such agreement shall be followed.

Rule 31 During the guarantee period, where the guaranteed party agrees with the creditor to transfer the debt without the written consent of the Company, no guarantee obligation shall be undertaken by the Company.

Rule 32 During the guarantee period, where the principal liabilities are transferred by the creditor to the third party according to the law, the Company shall continue to undertake its guarantee obligation to the extent of the original guarantee unless otherwise stipulated in the guarantee contract.

Rule 33 The Company, as a general guarantor, shall not perform its guarantee obligation for the debtor prior to the judgment or arbitration of the disputes relating to the host contract with failure of the debtor to fulfill its debt repayment obligation even after compulsory legal enforcement of its property.

Rule 34 Where there are two or above guarantors in the guarantee contract, and it is agreed that the creditor shall take their respective guarantee obligations in proportion, the Company shall refuse to undertake any guarantee obligation beyond the agreed proportion.

Rules 35 For continuous credit guarantee without an agreed guarantee term, if the Responsible Person finds that there is a greater risk in continuing the guarantee, he shall report the same promptly, and the Company shall notify the creditor in writing to terminate the guarantee contract in a timely manner.

Rule 36 Upon fulfilment of the guarantee obligations for the creditor, the Company shall take effective measures to demand repayment from the debtor and disclose the repayment status promptly.

Rule 37 Following the acceptance of the debtor 's bankruptcy application by the People's Court but any creditor has not declared its claims, the Responsible Person shall propose the Company to participate in the property allocation for bankruptcy and exercise its right to claim in advance.

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APPENDIX VI.E	MANAGEMENT MEASURES FOR PROVISION
	OF EXTERNAL GUARANTEES

Chapter 4 Disclosure of Information on Guarantees

Rule 38 The Company shall prudently fulfil the information disclosure obligation of the guarantees in accordance with the requirements of relevant laws, regulations and normative documents.

Rule 39 The Company shall truthfully provide all external guarantees matters of the Company to the certified public accountant who is responsible for the Company's annual audit.

Chapter 5 Legal Liabilities

Rule 40 Any director, manager and other senior management of the Company who sign a guarantee contract beyond their authority without prior consent and without abiding by the provisions hereof and causing damage to the Company shall be held accountable.

Rule 41 Any Responsible Person who breaches the requirements of the laws, administrative regulations, the Articles of Association and these Measures, neglect the risks and provide guarantees without authorisation or fail to fulfil their duties, causing losses to the Company, shall assume liability for compensation. Where the Responsible Person violates the criminal law, the Company shall request judicial authorities to investigate criminal responsibilities according to law.

Chapter 6 Supplementary Provisions

Rule 42 Unless otherwise specified, the expression "more than" used herein includes the number indicated, whereas "exceeding" used herein excludes the number indicated in this System.

Rule 43 Matters not covered in these Measures shall be implemented in accordance with the relevant national laws, regulations, rules, Articles of Association and other normative documents.

Should these Measures be inconsistent with the newly promulgated laws, regulations, normative documents and the Articles of Association as amended, the latter shall prevail.

Rule 44 These Measures shall come into effect from the date of the initial public offering and listing of ordinary shares denominated in renminbi in the PRC.

Rule 45 These Measures shall be interpreted by the Board of Directors.

For identification purpose only

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APPENDIX VI.F WORKING SYSTEM FOR INDEPENDENT DIRECTORS

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

WORKING SYSTEM FOR INDEPENDENT DIRECTORS

Chapter 1 General Rules

Rule 1 This working system is formulated in accordance with the Company Law of the People's Republic of China 《( 中華人民共和國公司法》) (hereinafter as the "Company Law"), Code of Corporate Governance for Listed Companies 《( 上市公司治理準則》), Guidelines for Introducing Independent Directors to the Board of Directors of Listed Companies 《( 關於在上市公司建立獨立董事制度的指導意見》), the Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd. (hereinafter as the "Company") 《( 北京市春立正達醫療器械股份有限公司章程》) (hereinafter as the "Articles of Association"), other relevant requirements and other laws and regulations of stock exchange in the place of listing, with reference to the actual conditions of the Company, in order to further optimize the governance structure of the Company, while facilitating the regulatory operation of the Company and fully capitalizing on the effectiveness of Independent Directors.

Rule 2 Independent Directors refer to those directors who perform duties other than directorships out of the Company and are in no relationship with the Company and its substantial shareholders which may interfere with their exercise of independent and objective judgment.

Rule 3 Independent Directors shall assume their obligations of integrity and diligence towards the Company and all shareholders.

Independent Directors shall duly perform their duties, safeguard the overall interests of the Company, particularly to be attentive to prevent the legal interests of small and medium shareholders from being infringed, in accordance with relevant laws, regulations, regulatory documents, and the related requirements of stock exchange of the place of listing, as well as the requirements within the Articles of Association and this System.

Rule 4 In principle, Independent Directors can take their roles as Independent Directors in up to five listed companies concurrently, and shall ensure their effective performance of duties as Independent Directors with sufficient time and efforts devoted.

Rule 5 The Board shall comprise of at least one-third of Independent Directors, and at least one professional in accounting (a person with senior title of position or registered qualification of accountant)among them.

The Audit Committee, Remuneration Committee, Examination Committee and Nomination Committee are established and subordinated to the Board of the Company, more than half of the members of these committees shall be Independent Directors and the role of convener shall be taken by Independent Director.

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APPENDIX VI.F WORKING SYSTEM FOR INDEPENDENT DIRECTORS

Rule 6 Independent Directors and any persons as intended Independent Directors shall participate in the trainings organized by the China Securities Regulatory Commissions (hereinafter as "CSRC") and its authorized associations in accordance with the requirements by CSRC.

Chapter 2 Conditions for the Appointment of Independent Directors

Rule 7 Persons who act as Independent Directors shall meet the basic conditions as follows:

possessing the qualifications for acting as directors of the Company in accordance with the laws, administrative regulations and other related requirements;
independence as required by this System;
basic knowledge regarding the operation of listed companies, as well as familiarity with relevant laws, administrative regulations, charters and rules;
at least five years of working experiences in law and economics or those experiences necessary for performing the duties as Independent Directors;
should have obtained the certificates for qualification of Independent Directors already obtained in accordance with the requirements by Guidelines on Training of Senior Management of Listed Companies 《( 上市公司高級管理人員培訓工作指引》) issued by CSRC and relevant requirements; candidates for Independent Directors who have not yet obtained certificates for qualification of Independent Directors at the nomination stage shall undertake in writing that they will participate in the qualification training for Independent Directors to be held most recently so as to obtain the certificates for qualification of Independent Directors;
laws, regulations and other conditions as required by the Articles of Association.

Rule 8 Independent Directors must be independent, and the staff listed below shall not act as Independent Directors:

the staff employed by the Company or its subsidiary enterprises, and their close family members, primary social relationships (close family members refer to spouses, parents, children, etc; primary social relationships refer to siblings, fathers-in-law and mothers-in-law,daughters-in-law and sons-in-law, spouses of siblings and siblings of spouses, etc);

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APPENDIX VI.F WORKING SYSTEM FOR INDEPENDENT DIRECTORS

any shareholders being natural person and their close family members who are, directly or indirectly, interested in more than 1% of the shares in issue of the Company or among the top ten shareholders of the Company;
the staff and their close family members who are employed by the shareholder 's organisation which is, directly or indirectly, interested in more than 5% of the shares in issue of the Company or in the organisations owned by the top five shareholders of the Company;
the staff who encountered the three circumstances listed above in the past one year;
the staff who provide financial, legal and consultancy services to the Company or its subsidiary enterprises, including but not limited to all staff of project team from intermediaries for service provision, verifiers of various rankings, signatories for various reports, partners and principal persons-in-charge;
those who are employed in organisations which have material business transactions with the Company and its Controlling Shareholders, physical controllers or their respective subsidiary enterprises, or in an organisation with material business transactions which is owned by a Controlling shareholder(material business transactions refer to the matters to be proposed for consideration at the general meeting as required by the Articles of Association);
other staff as specified by the Articles of Association;
other staff affirmed by the CSRC.

Rule 9 Independent Directors shall perform his duties independently and fairly, while being free from any influence by substantial shareholders, physical controllers of the Company or other organisations or individuals with an interest in the Company.

Rule 10 In the event that any matter for consideration are found by Independent Directors to be likely to affect his independence, he shall duly declare the matter to the Company and abstain from that. Timely notification to the Company and resignation shall be made under any circumstances where his independence is significantly affected during his tenure.

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APPENDIX VI.F WORKING SYSTEM FOR INDEPENDENT DIRECTORS

Chapter 3 Nomination, election and replacement of Independent Directors

Rule 11 The Board and the Supervisory Committee of the Company, and shareholders who severally or jointly held more than 1% of the issued shares of the Company are entitled to nominate candidates for Independent Directors, subject to the determination by election at the general meetings.

Rule 12 The nominators of Independent Directors shall seek the consent of the nominees before any nomination to be made. Nominators shall have sufficient understanding of the profile of the nominees, such as occupation, academic background, title of position, detailed working experiences and all part-time engagements of the nominees, with expressed views related to the qualification and independence of nominees for acting as Independent Directors. Public declaration shall be made by nominees that there is no relationship between himself and the Company which would affect his independent and objective judgment.

The Board of the Company shall announce the abovementioned details as required by the rules and regulations before convening the general meetings for the purpose of election of Independent Directors.

Rule 13 The Company shall review the particulars of candidates for Independent Directors before convening the general meetings for considering the appointment of Independent Directors.

Rule 14 Nominators and candidates for Independent Directors shall undertake that the materials submitted to the Company about the candidates for Independent Directors are true, accurate and complete, without any misrepresentation, misstatement or material omission.

Rule 15 Nominators for Independent Directors shall verify whether any of the following circumstances apply to the candidates for Independent Directors, and provide explanations:

Being constantly absent from Board meetings or failure to attend the meetings in person during his/her past tenure as Independent Directors;
Failure to express any opinions of Independent Directors as required or the expressed independent opinions to be significantly untrue upon verification during his past tenure as Independent Directors;
Being subject to any administrative punishments imposed by CSRC in the past three years;
Being liable for any public condemnations or reported criticism lodged by any stock exchange in the past three years;
Being responsible for significant duties as directors (Independent Directors), supervisors or senior management for more than five companies simultaneously;

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APPENDIX VI.F WORKING SYSTEM FOR INDEPENDENT DIRECTORS

Being aged 70 or above, and simultaneously employed in various companies, institutions or social organisations;
Being inconsistent with the qualification requirements for the appointment of directors and Independent Directors as specified by other related departments;
The circumstances related as specified in Declaration by Nominators of Independent Directors 《( 獨立董事提名人聲明》) and Declaration by Candidates of Independent Directors 《( 獨立董事候選人聲明》);
Other circumstances which would affect the integrity, diligence and independent performance of duties as Independent Directors.

Rule 16 The length of each tenure of Independent Directors shall be the same as that of other directors of the Company, and subject to re-election upon the expiry of tenure, provided that the length of tenure upon re-election shall not be more than six years.

Rule 17 Replacement of Independent Director shall be proposed by the Board at the general meeting if there are three successive instances of failure to attend Board meetings in person by the Independent Director.

Save for the occurrence of the above, loss of independence as required by this System and the circumstances which prohibit the performance of directorship as stipulated in the Company Law and the Articles of Association, no removal of Independent Directors with no reasons is allowed before the expiry of tenure. Any early removal of Independent Directors shall be disclosed by the Company as special disclosures. Independent Directors so removed can make public declaration if he/she considers the reasons provided by the Company for his removal improper.

Rule 18 Shareholders who severally or jointly held more than 1% in aggregate of the shares of the Company may propose to the Board of the Company for any challenges or removals against Independent Directors who are unqualified or incompetent for his/her directorship, or failed to perform his/her duties independently or to safeguard the legal interests of the Company and small and medium investors. Independent Directors so challenged shall provide timely explanation to the challenged matters with disclosures to be made.

The Board of the Company shall convene a special-purpose meeting in a timely manner for discussion upon receipt of proposals for relevant challenges or removals, and disclose any results of discussion.

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APPENDIX VI.F WORKING SYSTEM FOR INDEPENDENT DIRECTORS

Rule 19 Independent Directors can resign before the expiry of his/her term of office.

Independent Directors shall submit a written resignation report to the Board upon resignation, together with explanation about any circumstances related to his/her resignation or those he/she considered necessary to be brought to the attention of shareholders and creditors of the Company.

The resignation report of the Independent Director should be put into effect after the vacated Independent Director has been filled by his/her successor if the proportion of Independent Directors is less than one-third of the Board as a result of the resignation of that Independent Director.

Rule 20 The number of Independent Directors shall be covered by the Company as required if the proportion of Independent Directors of the Company is less than one-third of the Board resulting from circumstances where such Independent Directors cannot meet the requirements of independence or he/she is deemed to be not fit for performing the duties as Independent Director.

Chapter 4 Duties of Independent Directors

Rule 21 Those requirements regarding the rights and obligations of directors as specified in laws, regulations, the Articles of Association, this System and other relevant requirements apply to Independent Directors.

Rule 22 In addition to the authorities conferred to directors by the Company Law and other relevant laws and regulations, Independent Directors shall fully exercise the special authorities as follows:

Material connected transactions shall be tabled in the Board upon approval by Independent Directors. Before making any judgments, Independent Directors can engage an intermediary for issuance of an independent financial advisor report;
to advise the Board to engage or dismiss the accounting firm;
to propose to the Board for convening extraordinary general meetings;
to propose the convening of Board meetings;
to separately engage external auditing institutions and consultancy institutions upon the agreement by all independent non-executive Directors;
to be able to conduct public solicitation of voting rights from shareholders before convening the general meetings.

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APPENDIX VI.F WORKING SYSTEM FOR INDEPENDENT DIRECTORS

Except for (5) above, the exercise of the abovementioned authorities by Independent Directors is subject to the agreement by more than half of all Independent Directors.

Rule 23 Independent Directors shall express independent opinions for any of the material matters of the Company as described below

Nomination and removal of directors;
engagement and dismissal of senior management;
the remuneration of directors and senior management of the Company;
connected transactions as specified by laws, regulations, regulatory documents and the Articles of Association (To determine any existing or new amount in total of borrowings or other capital transacted of the Company exceeding RMB3 million or exceeding 5% of the latest audited net asset value of the Company by shareholders of the Company, physical controllers and its related enterprises and whether the Company to taking effective collection measures for any outstanding payments);
any changes in the use of raised funds;
externally guaranteed matters to be considered in general meetings as required by the Articles of Association;
Share option incentive scheme;
Any matters that Independent Directors consider to be likely to infringe the legal interests of small and medium shareholders;
Other matters as specified by the Articles of Association.

The independent opinions expressed by Independent Directors are categorised as agreement and qualified opinions (with their grounds), objections (with their grounds) and inexpressible opinions (with their impediments). All opinions expressed shall be precise and explicit.

Rule 24 If those proposed matters for discussion required Independent Directors to express their opinions at general meetings, those opinions and their grounds by Independent Directors would be disclosed at the same time in the publication of notice of general meeting or supplementary notice.

Rule 25 The Independent Director shall appoint another Independent Director to attend the Board meeting on his/her behalf if he/she is certain that he/she is not able to attend the meeting in person.

Rule 26 Independent Directors can make public their correspondence addresses or email addresses for exchange of ideas with investors, acceptance of enquiries and

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APPENDIX VI.F WORKING SYSTEM FOR INDEPENDENT DIRECTORS

complaints from investors, conduct self-initiated investigations on circumstances where the legal interests of the Company and small and medium investors are infringed, as well as timely replies to investors for any results of investigations.

Rule 27 Independent Directors shall proactively take the initiative in performing his obligation on due diligence and engage intermediaries for specific investigations when necessary if he identified any of the following circumstances within the Company:

Failure to submit significant matters for consideration by the Board as required;
Non-performanceof obligation for timely disclosure of information;
Presence of misrepresentations, misstatements or material omissions in publicly available information;
Other circumstances for alleged non-compliance and violations or infringement on the legal interests of small and medium shareholders.

Rule 28 In addition to joining the Board meetings, Independent Directors shall undertake that at least 10 days are devoted annually to conduct on-site investigations and self-initiated investigations, obtain the backgrounds and information necessary for decision-making in connection with the production and operation of the Company, establishment and implementation of management and internal control systems, as well as the implementation of resolutions of the Board, in order to safeguard the interests of the Company and all investors in a practical manner.

Rule 29 Independent Directors shall report to the CSRC, stock exchange and the regional office of CSRC at the place where the Company is located upon occurrence of one of the following cases:

Being removed by the Company and the removed Director believes the reason for such removal is inappropriate;
Resignation of Independent Director due to a situation in the Company that hinders the discharging of duties of Independent Director as per law;
Insufficient material for the Board meeting and the written proposal by more than two Independent Directors to postpone the convening of the Board meeting or the examination of relevant matters is not adopted;
The Board fails to adopt effective measures after receiving report that the Company is suspected to have violated any law or regulation;
Other matters that constitute a material obstruction against the performance of duties by Independent Directors.

Rule 30 Independent Directors shall submit work report to the annual Shareholders' Meeting of the Company. The work report shall include:

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APPENDIX VI.F WORKING SYSTEM FOR INDEPENDENT DIRECTORS

Times for attending the Board Meeting and the Shareholders' Meeting in the previous year, as well as the voting;
Declaration of independent opinions;
Other work performed within the Independent Directors' duties, such as proposing board meetings, proposing engagement or dismissal of accounting firm, independently engaging external audit institutions and consultancy institutions and making field inspection.

Rule 31 The Company shall maintain an Independent Director Work Records and Independent Directors shall record their performance of authority in writing in the Independent Director Work Records.

Chapter 5 Working Conditions of Independent Directors

Rule 32 The Company shall ensure that the Independent Directors have the same right to information as other directors. Where a matter is subject to the decision of the Board of Directors, the Company shall inform the Independent Directors in advance according to the statutory time and provide sufficient information. The Independent Directors may require supplemental information if they consider the information provided is insufficient. Where more than two Independent Directors conclude that the information provided is insufficient or the reasoning is unclear, they may jointly request the Board of Directors in writing for postponement of the Board meeting or scrutiny of such resolution, which shall be accepted by the Board of Directors.

The information offered to the Independent Directors by the Company shall be kept for at least five years by the Company and the Independent Directors themselves.

Rule 33 The Company shall provide the working conditions necessary for Independent Directors to perform their duties. The secretary to the Board of Directors of the Company shall actively coordinate with and assist the Independent Directors in performing their duties by means of briefings and providing material, etc. The Company shall inform the Independent Directors of the operation conditions of the Company on a regular basis and organize on-site investigation for Independent Directors when necessary.

For independent opinions, proposals and written statements issued by Independent Directors that should be made public, the secretary to the Board of Directors shall promptly make announcements.

Rule 34 The relevant personnel of the Company shall actively assist the Independent Directors as to the fulfilment of their duties, and shall not refuse, hinder or conceal or interfere the exercise of their duties independently.

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APPENDIX VI.F WORKING SYSTEM FOR INDEPENDENT DIRECTORS

Rule 35 The Company shall pay all expenses for intermediaries engaged by Independent Directors and other necessary expenses they incur in the exercise of their rights.

Rule 36 The Company shall grant Independent Directors an appropriate amount of allowances.

Proposals on the level of allowances shall be prepared by the Board of Directors, approved by a Shareholders' General Meeting, and to be disclosed in the Company's annual report.

Apart from the above-mentioned allowances, the Independent Directors shall not obtain any additional, undisclosed benefits from the Company, its major shareholders or any organization or personnel in which it has an interest.

Chapter 6 Supplementary Provisions

Rule 37 The phrases "more than" and "at least" as mentioned in this System are inclusive while "exceeding" and "lower than" are exclusive.

Rule 38 This System will come into effect and be implemented from the date of the initial public offering and listing of A Shares of the Company within the PRC upon approval at a general meeting.

Rule 39 This System shall be subject to the interpretation of the Board of Directors of the Company.

Rule 40 Where any matters are not covered in this System or where this System is inconsistent with the laws, administrative rules, regulatory documents and relevant provisions of the stock exchange where the shares of the Company are listed or the Articles of Association, those national laws, administrative rules, regulatory documents, relevant provisions of the stock exchange where the shares of the Company are listed and the Articles of Association shall prevail.

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

MEASURES FOR ADMINISTRATION OF RELATED PARTY TRANSACTIONS

Chapter 1 General rules

Rule 1 In order to further regulate related party transactions of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter referred to as the "Company") and ensure the related party transactions of the Company does not impair the legal interests of the Company and non-related shareholders, these Measures are formulated based on the "Company Law of the People's Republic of China", "Code of Corporate Governance for Listed Companies", relevant regulations of stock exchange, other laws and regulations and the "Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd.*" (hereinafter referred to as the "Articles of Association"), together with actual circumstances of the Company.

Rule 2 Related party transactions of the Company shall comply with the following basic principles:

Good faith;
Equality, voluntariness, equivalence in value and compensatable;
Openness, fairness and impartiality;
Strict compliance with national laws, regulations and normative documents for regulation of necessary related party transactions;
For necessary related party transactions, related shareholder(s) and related director(s) shall abstain from voting;
The legal interests of the Company and non-related shareholders shall not be impaired as a result of related party transaction between the Company and the related person(s).

Rule 3 For transaction activities between the Company and its subsidiaries, the relevant responsible person(s) shall carefully determine whether they constitute related party transactions. If they constitute related party transactions, the consideration and approval procedures and information disclosure shall be conducted pursuant to these Measures.

Rule 4 The Company and the related person(s) shall enter into written contracts or agreements in respect of related party transactions, which shall base on the principle of equality, voluntariness, equivalence in value and compensatable and the particulars of contracts or agreements shall be specific and detailed.

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

Rule 5 Shareholders, directors, supervisors and senior management personnel of the Company shall not impair the interest of the Company with their related relationships. Shareholders, directors, supervisors and senior management personnel of the Company who breached the regulations and caused damages to the Company shall be liable for compensation.

Rule 6 The Board of Directors of the Company shall determine whether the related party transactions are beneficial to the Company and whether they would impair the interests of the Company and non-related shareholders based on objective criteria and shall respect the opinions published by independent directors and the Board of Supervisors and shall hire professional intermediary for assessment and audit, or hire independent financial advisors to publish opinion, if necessary.

Rule 7 Company assets are owned by the Company and the Company shall adopt effective steps to implement these Measures to prevent shareholders and their related parties from appropriating or transferring the Company's capital, assets and other resources through related party transactions illegally, in particular illegal appropriations of the Company's non-operating capitals by shareholders and their related parties.

The Company shall not provide borrowings not related to the Company's business to directors, supervisors and senior management personnel directly or through subsidiaries.

Chapter 2 Related person(s) and related party transactions

Rule 8 Related relations shall be determined based on the specific means, channels and level of control or influence that the related person(s) can exert on the Company.

Rule 9 Related person(s) of the Company include related legal person(s), related natural person(s) and potential related person(s).

Rule 10 Legal person(s) or other organisations under any of the following circumstances are related legal person(s) of the Company:

Legal person(s) or other organisations directly or indirectly controlling the Company;
Legal person(s) or other organisations, other than the Company and its holding subsidiaries, directly or indirectly controlled by legal person(s) stated above;
Legal person(s) or other organisations directly or indirectly controlled by related natural person(s) of the Company set out in Rule 11 hereof, other than the Company and its holding subsidiaries, where the related natural person(s) serve as directors or senior management personnel;
Legal person(s) and other organisations and person(s) acting in concert holding more than 5% of the Company's shares;

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

The CSRC, stock exchange, or legal person(s) or other organisations considered by the Company, based on the principle of substance over form, to have special relations with the Company or may cause the Company's interest to prejudice in favour of them.

Rule 11 Natural person(s) under any of the following circumstances are related natural person(s) of the Company:

Natural person(s) directly or indirectly holding more than 5% of the Company's shares;
The directors, supervisors and senior management personnel of the Company;
Directors or senior management personnel of legal person(s) or other organisations as set out in Rule 10 Item (1);
Family members that have close relations with person(s) stated in items (1) and (2) of this Rule, including spouse, parents and parents of spouse, siblings and their spouse, children who are over 18 years old and their spouse, siblings and parents of children's spouse;
The CSRC, stock exchange or natural person(s) considered by the Company, based on the principle of substance over form, to have special relations with the Company or cause the Company's interest to prejudice in favour of them.

Rule 12 Legal person(s) or natural person(s) under any of the following circumstances are deemed to be related person(s) of the Company:

Agreements or arrangements entered into or made by the Company or its related person(s) will result in any of the circumstances as mentioned in Rule 10 or Rule 11 after such agreements or arrangements become effective or within the next 12 months;
Circumstances as mentioned in Rule 10 or Rule 11 arose within the past 12 months.

Rule 13 Directors, supervisors, senior management personnel of the Company or shareholders holding more than 5% of the shares and person(s) acting in concert, de facto controllers and person(s) acting in concert shall promptly notify the Company in respect of the related relations with related person(s) while ensuring the truthfulness, accuracy and completeness. Updates shall be provided in a timely manner in the event of changes in respect of related person(s).

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

Rule 14 Related party transactions as mentioned in these Measures are matters of transfer of resources or obligations between the Company or its controlled subsidiaries and the related person(s) of the Company, including but not limited to:

Purchase or sale of assets;
External investments (including entrusted financing and entrusted loans, etc.);
Provision of financial assistance;
Provision of guarantees;
Lease of assets;
Entering into contracts in respect of management (including entrusted operations, operations being entrusted with);
Donation of assets or acceptance of donated assets;
Reorganisation of creditors' rights or debts;
Transfer of research and development projects;
Entering into licensing contracts;
Purchases of raw materials, fuel and power;
Sales of products and goods;
Provision or acceptance of labour services;
Entrusted sales or sales being entrusted with;
Joint investments with the related party;
Other matters that may result in transfer of resources or obligations through agreements.

Rule 15 The prices or principles of charges of related party transactions shall not deviate from the price or principle of charges of independent third parties of the market. For related party transactions that are unable to be compared with market price or where the price is restricted, the relevant standard of cost and profit shall be stated in contracts or determined through negotiation between both parties based on results of audit and assessment. The Company shall give adequate disclosure on the basis of pricing of the related party transactions.

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

Rule 16 The Company shall take effective measures to avoid related person(s) from interfering with the Company's operations and impairing the interests of the Company and non-related shareholders by monopolising the procurement and sales channels.

Rule 17 The transfer of capital between the Company and controlling shareholders and other related person(s) shall comply with the following provisions:

For transfers of operating capital between the controlling shareholders and other related person(s) and the Company, the appropriations of the Company's capital shall be strictly restricted. Controlling shareholders and other related person(s) shall not request the Company to advance periodic expenses such as salaries, benefits, insurances and advertisement fees for them and shall not mutually bear cost and other expenses for each other;
The Company shall not provide capital to the controlling shareholders and other related person(s) in the following methods:
1. Lend capitals of the Company to the controlling shareholders and other related person(s) with or without compensations;
2. Entrust the controlling shareholders and other related person(s)in conducting investment activities;
3. Provide entrusted loans to related parties through banks or non-bank financial institutions;
4. Issue acceptance bills without a real transaction background for its controlling shareholders and other related person(s);
5. Repay debts for its controlling shareholders and other related person(s);
6. Other methods recognized by the CSRC.

Rule 18 The directors, supervisors and senior management personnel of the Company have the obligation of focusing on the issue of misappropriation of the Company's interest as a result of the appropriation of the Company's capital by related parties. The financial department, auditing department, independent directors and supervisors of the Company shall review the transfer of operating capital between the Company and the related parties at least once every quarter and have understanding on whether the Company's capital, assets and other resources are appropriated or transferred by the controlling shareholders and its related parties. Anything abnormal found shall be reported to the Board of Directors of the Company to take relevant measures.

Rule 19 For any loss or possible losses caused by the appropriation or transfer of the Company's capital, assets or other resources by the related parties, the Board of

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

Directors of the Company shall promptly take protective measures such as litigations,

property preservations to avoid or reduce losses.

Chapter 3 Determination and management of the prices of related party transactions

Rule 20 Related party transactions mentioned in these Measures shall comply with the following principles and methods of pricing:

The principles of pricing using the state price, market price and negotiated price shall apply to the order of pricing for related party transaction; the prices shall be determined by the method of cost plus a reasonable profit margin if such state price or market price is not available. The prices shall be determined through negotiation between both parties if they cannot be determined by the above prices.
The methods of pricing shall be determined basing on the particulars of the related matters by both parties with confirmation in the relevant related party transaction agreements.
Market price: the prices and rates of assets, goods or services are determined basing on the market price.
Cost-plusprice: the prices and rates are determined with reference to the costs of assets, goods or services plus a reasonable profit margin.
Negotiated price: The prices and rates are negotiated basing on the principle of fairness and impartiality.

Rule 21 Management of the prices of related party transactions

The parties shall calculate the price and amount of transaction pursuant to the price agreed in the related party transaction agreements and the actual amount of transaction, which shall be settled monthly or quarterly and paid with payment method and timing as agreed in the related party transaction agreements.
The financial department shall track the changes in market price and cost of the related party transactions of the Company and report the changes to the Board of Directors for record-keeping.

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

Chapter 4 Decision-making procedures of the related party transactions

Rule 22 If related person(s) of the Company enter into any agreement involving related party transactions with the Company, necessary abstention measures shall be taken:

Any person shall only sign the agreement on behalf of one party thereof;
Any related person shall not interfere with the Company's decision in any manner;
Directors with related relations shall abstain from voting at the Board of Directors in respect of related party transactions, provided the abovementioned Directors with related relations shall be entitled to participate in the consideration and discussion of such related matter and give their opinions.

Rule 23 If Directors have related relations with enterprises, other organisations or individuals involved in matters to be resolved at the meeting of the Board of Directors, he/she shall not vote on such resolution in person or on behalf of other directors. Such meeting of the Board of Directors may be held with more than half of the non-related directors attending and the resolutions made at the meeting of the Board of Directors shall be adopted with approval of more than half of the non-related directors. If the number of non-related directors attending the meeting of the Board of Directors is less than 3, such matter shall be submitted to the general meeting for consideration.

Rule 24 The related directors referred to in Rule 23 of these Measures include the following directors or the directors with one of the following conditions:

the counterparty;
the ones who take office in counterparty, or the legal person(s) that can directly or indirectly control the counterparty, or the legal person(s) that can be directly or indirectly controlled by the counterparty;
the ones who own the direct or indirect control of the counterparty;
close family member(s) of the counterparty or its direct or indirect controller (please see the provisions under Rule 11(4) of these Measures for the specific scope);
close family member(s) of the counterparty or the Directors, supervisors and senior management of its direct or indirect controller (please see the provisions under Rule 11(4) in these Measures for the specific scope);
Directors whose independent business judgement might be affected due to other reasons as determined by the CSRC, the stock exchange or the Company.

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

Rule 25 When the Company convenes a board meeting to consider the related party transactions matters, the convener and the presider of the meeting shall request the related directors to avoid from taking part in voting before the voting takes place. When the related Directors do not take the initiative to make a declaration and abstain from voting, Directors who have knowledge of the situation shall request the related directors to avoid from voting.

Rule 26 In the course of considering the related party transactions matters at a general meeting, the related shareholders shall not take part in voting. The voting right represented by the number of shares of such shareholders shall be excluded from the total number of valid votes, that is, the related shareholders shall avoid and abstain from voting when the voting takes place in the general meeting. The voting result of the non-related shareholders shall be fully disclosed in the announcement of the resolution of the general meeting.

In the course of considering the related party transactions matters at a general meeting, the presider shall announce the list of relevant related shareholders and briefly introduce the related relations, and request the related shareholders to abstain from voting. The presider shall announce the total number of shares with voting rights held or represented by the non-related shareholders and the percentage of shares held by the non-related shareholders to the total number of shares of the Company upon consideration and vote.

If the presider needs to abstain from voting or the presider does not require the related shareholders to abstain from voting according to the requirements of the preceding provisions, the unrelated shareholders, Directors and the witnessing attorney engaged by the Company present at the meeting are entitled to request the related shareholders to abstain from voting.

Rule 27 The related shareholders referred to in Rule 26 of these Measures include the following shareholders or the shareholders with one of the following conditions:

the counterparty;
the ones who own the direct or indirect control of the counterparty;
the ones who are directly or indirectly controlled by the counterparty;
the ones who are directly or indirectly controlled by the same legal person or natural person with the counterparty;
close family member(s) of the counterparty or its direct or indirect controller (please see Rule 11(4) in these Measures for specific scope);
the ones who take office in counterparty, or the legal person(s) that can directly or indirectly control the counterparty, or the legal person(s) that can be directly or indirectly controlled by the counterparty (applicable to shareholders who are natural person(s);

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

the ones whose voting right is restricted or affected because of the equity transfer agreement or other agreements which have not already finished the performance with the counterparty or its related person(s);
legal person or natural person who is considered by the CSRC or the stock exchange that may cause the Company to incline to its interests.

Rule 28 The approval authority of related party transactions

If the related party transactions between the Company and the related person(s) meet the following standards, such related party transactions shall be submitted to the Board of Directors for consideration and approval:
1. The proposed related party transaction between the Company and the related legal person, amounting to more than RMB1 million and representing more than 0.5% of the latest audited net assets value.
2. The proposed related party transaction between the Company and the related natural person, amounting to more than RMB300,000.
If the proposed related party transactions (other than the provision of guarantees by the Company, receipt of cash as gift and exempting the indebtedness of the Company only) between the Company and its related person(s) amounting to more than RMB10 million in aggregate and representing more than 5% of net assets of the latest audited combined financial statement, in addition to timely disclosure, an intermediary with relevant qualification in conducting securities and futures business shall be engaged to valuate or audit the subject of the transactions. Such related party transactions shall be submitted to the general meeting of the Company for consideration after resolutions have been made by the Board of Directors, and be implemented upon approval by the general meeting of the Company.
The related party transactions relating to daily operations as mentioned in Rule 14 of this System are exempt from audit or valuation.
The related party transactions occurred between the directors, supervisors, senior management of the Company and their spouses and the Company shall be submitted to the general meeting of the Company for consideration after public disclosure.
Other related party transactions matters shall be approved by the Chairman. If the Chairman is a related party to the related party transaction and is required to avoid from voting, such related party transaction shall be submitted to the Board of Directors for consideration.

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

If the laws, regulations, normative documents, the stock exchange and the Articles of Association provide otherwise for the scope and the approval authority of the aforesaid matters, such provisions shall be followed.

Rule 29 For related party transactions matters relating to daily operations such as purchases of raw materials, fuel and power, sales of products and goods, provision or acceptance of labour services, and entrusted or being entrusted with that are carried out by the Company and the related person(s), corresponding consideration procedures shall be carried out in accordance with the following provisions:

as for daily related party transaction that occurs for the first time, the Company shall enter into a written agreement with related person(s). According to the transaction amount involved in agreement and the approval authority provided in Rule 28 of these Measures, it shall be submitted for approval. If agreement does not prescribe specific transaction amount, it shall be submitted to the general meeting for consideration.
for daily related party transaction agreement that is considered and approved by the Board of Directors or the general meeting of the Company and that is in the process of execution, if substantial changes occur in main clauses or it is required to be renewed after expiration of agreement during execution process of agreement, the Company shall submit the newly revised or renewed daily related party transaction agreement for approval according to the transaction amount involved in agreement and the approval authority provided in Rule 28 of these Measures. If agreement does not prescribe specific transaction amount, it shall be submitted to the general meeting for consideration.
for the considerable amount of related party transactions occurring daily each year, it is necessary to frequently enter into new daily related party transaction agreements, therefore it is difficult to submit each agreement to the Board of Directors or the general meeting for consideration according to the provisions of item (1) of this Rule. The Company can carry out reasonable estimation for the total amount of daily related party transactions of the current year of the Company prior to the disclosure of the previous annual report. According to the estimated amount and the approval authority provided in Rule 28 of these Measures, it shall be submitted for approval. If in practical implementation, the amount of related party transactions exceeds estimated total amount, the Company shall submit for consideration according to the exceeded amount and the approval authority provided in Rule 28 of these Measures.

Rule 30 Daily related party transaction agreement shall at least include transaction price, pricing principle and basis, total transaction volume or its determination method, payment method and other main clauses.

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

If the agreement does not determine the specific transaction price and only specifies the reference market price, the Company shall disclose the actual transaction price, market price and its determination method, and the reason for the difference between the two prices when performing the relevant consideration and approval procedures in accordance with the provisions of Rule 28.

Rule 31 If the term of the daily related party transaction agreement signed between the Company and the related person(s) exceeds 3 years, it shall re-perform the consideration procedures and disclosure obligations in accordance with the provisions of this Chapter every 3 years.

Rule 32 The Company and the related person(s) may be exempted from the consideration and approval procedures according to the procedures of related party transactions when conducting the following transactions:

one party subscribes to shares, corporate bonds, convertible corporate bonds or other derivatives in cash publicly issued by the other party;
one party, as a member of the underwriting syndicate, underwrites the shares, corporate bonds, convertible corporate bonds or other derivatives publicly issued by the other party;
one party shall receive dividend, bonus or remuneration according to the resolution of the general meeting of the other party;
other conditions affirmed by the stock exchange.

Rule 33 When the Company conducts the related party transactions with the related person(s) as a result of activities such as public bidding, public auction and so on, the Company may apply to the stock exchange for exemption on the relevant obligations stipulated in this Chapter.

Rule 34 When considering related party transactions matters, the Company shall:

gain a detailed understanding of the actual conditions of the subject of the transaction, including its operating condition and profitability, whether any defect in rights such as mortgage or freeze on the subject exists; or whether legal disputes such as litigation or arbitration exists;
gain a detailed understanding of the credit history of the counterparty, its credit status and ability to perform etc., and to select counterparty of transaction prudently;
ascertain the transaction price based on an adequate basis for price fixing;

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

comply with the laws, regulations, normative documents and requirements of the stock exchange and when the Company considers it necessary, intermediary shall be engaged to carry out audit or valuation of the subject of the transaction;

The Company shall not consider and make decision on related party transactions matters for which the condition of the subject is not clear, the transaction price has not yet been confirmed, or where the conditions of the counterparty to the transaction is uncertain.

Rule 35 The independent non-executive directors of the Company shall, in accordance with the requirements of the Articles of Association and the stock exchange, provide prior approval for the related party transactions and express their independent opinions.

Rule 36 When the Company considers related party transactions matters that require prior approval by independent directors, relevant personnel shall promptly submit through the secretary to the Board of Directors relevant materials to the independent directors for prior approval. Prior to judgement by the independent directors, he/she can engage an intermediary to issue special report as the basis for judgement.

Rule 37 In case of substantial related party transactions requiring the approval from the general meeting, the Company shall engage an intermediary with relevant qualification of executing securities and futures to valuate or audit the subject of the transactions. Other than the purchases and sales or services related party transactions relating to the daily operations of the Company, where the laws, regulations or normative documents have any other provisions, such provisions shall prevail.

Rule 38 The Company may engage an independent financial advisor to express its opinion on whether the related party transactions matters that require the approval from the general meeting are fair and reasonable to all shareholders, and issue an independent financial advisory report.

Rule 39 Where the Company provides guarantees for shareholders, de facto controllers and his/her/its related parties, such guarantees, irrespective of the amount involved, shall be submitted to the general meeting for consideration after they are considered and approved in the board meeting.

Chapter 5 Information Disclosure of the Related party transactions

Rule 40 The related party transaction between the Company and the related natural person, in amount more than RMB300,000, shall be disclosed timely.

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

Rule 41 The related party transaction between the Company and the related legal person, in amount more than RMB1 million and representing more than 0.5% of the latest audited absolute net assets value, shall be disclosed timely.

Rule 42 When related party transactions involve matters such as "provision of financial assistance", "provision of guarantees" and "entrust financing", amount occurred shall be taken as calculation standards for disclosure; accumulative calculation shall be carried out within twelve consecutive months according to the types of transaction matters. In case relevant obligations for approval and disclosure are performed according to the provisions, these obligations will not be incorporated to accumulative calculation scope.

Rule 43 In case the following related party transactions occur in the Company within twelve consecutive months, it shall be carried out according to accumulative calculation:

transaction that is carried out with the same related person;
transaction that is carried out with different related persons and is related to the same subject of transaction.

The aforesaid same related person includes other related person who is controlled by the same subject with the related person or other related person who has equity control relationship with each other.

In case relevant obligations for approval and disclosure are performed according to the provisions, these obligations will not be incorporated to accumulative calculation scope.

Rule 44 When the Company and the related person(s) are conducting related party transactions relating to daily operations such as purchases of raw materials, fuel and power, sales of products and goods, provision or acceptance of labour services, and entrusted or being entrusted with, they shall make disclosure in accordance with the following provisions:

as for daily related party transactions that occurs for the first time, the Company shall enter into written agreement with related person(s) and disclose immediately. According to the transaction amount involved in agreement and the provision of this Rule, it shall be submitted to the Board of Directors or the general meeting for consideration. If agreement does not prescribe specific transaction amount, it shall be submitted to the general meeting for consideration.
for daily related party transactions agreement that are considered and approved by the Board of Directors or the general meeting of the Company and that is in the process of execution, if main clauses are not substantially changed in the execution process, the Company shall disclose actual

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

performance condition of relevant agreement in periodic report according to requirements and explain whether it conforms to provisions of agreement.

for the considerable amount of related party transactions occurring daily each year, it is necessary to frequently enter into new daily related party transaction agreements, therefore it is difficult to submit each agreement to the Board of Directors or the general meeting for consideration. The Company can carry out reasonable estimation for total amount of daily related party transactions of the current year of the Company prior to the disclosure of the previous annual report. According to the estimated amount, submit to the Board of Directors or the general meeting for consideration and disclosure. Daily related party transactions within the estimation shall be disclosed by the Company in its annual report and interim report. If in practical implementation, amount of daily related party transactions exceeds estimated total amount, the Company shall resubmit to the Board of Directors and the general meeting for consideration and disclosure according to the exceeded amount.

Rule 45 The related party transactions between the Company and related person(s) reached according to Rule 32 of these Measures can be exempted from disclosure in accordance with the form of related party transactions.

Chapter 6 Legal Liabilities

Rule 46 If the Board of Directors of the Company violates the provisions of these Measures and implements related party transactions, the Board of Supervisors shall order it to make rectification; if the aforesaid related party transactions cause any loss to the Company, the relevant responsible directors shall compensate for the loss; if the circumstances are serious, the Board of Supervisors shall propose to the general meeting to remove the duties of relevant responsible directors.

Rule 47 If the senior management of the Company violates the provisions of these Measures and implements related party transactions, the Board of Directors and the Board of Supervisors shall order them to make rectification; if the aforesaid related party transactions cause any loss to the Company, the relevant senior management shall compensate for the loss; if the circumstances are serious, the Board of Directors shall remove their duties.

Rule 48 In case the directors, supervisors and senior management of the Company practice fraud or engage in malpractice for personal ends in the course of related party transactions, the general meeting or the Board of Directors of the Company shall remove them from their duties. In case of any loss of the Company, the Company shall pursue their corresponding legal liabilities.

Chapter 7 Supplementary Provisions

Rule 49 The expressions "more than", "or above" used herein include the number indicated, whereas "exceed", "exceeds" used herein exclude the number indicated in these Measures.

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APPENDIX VI.G	MEASURES FOR ADMINISTRATION OF
	RELATED PARTY TRANSACTIONS

Rule 50 The expressions "timely", "in a timely manner" referred to in these Measures mean within two trading days from the commencement date or the disclosure of the stock listing rules of stock exchange.

Rule 51 Matters not covered in these Measures shall be implemented in accordance with the relevant national laws, regulations, normative document, relevant requirements of the stock exchange, and relevant provisions of the Articles of Association. Should these Measures be inconsistent with relevant laws, regulations, normative documents, relevant requirements of the stock exchange, and relevant provisions of the Articles of Association, the latter shall prevail.

Rule 52 These Measures shall, upon consideration by the Board of Directors of the Company and approval by the general meeting, come into effect and be implemented from the date of the initial public offering and listing of shares in the PRC.

Rule 53 These Measures shall be interpreted by the Board of Directors of the Company.

For identification purpose only

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APPENDIX VI.H	MANAGEMENT SYSTEM FOR REGULATING FUND
	TRANSACTIONS BETWEEN RELATED PARTIES

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

MANAGEMENT SYSTEM FOR REGULATING FUND

TRANSACTIONS BETWEEN RELATED PARTIES

Chapter 1 General Rules

Rule 1 This System is formulated in accordance with the Company Law of the People's Republic of China 《( 中華人民共和國公司法》), the Securities Law of the People's Republic of China 《( 中華人民共和國證券法》) and other relevant laws, administrative regulations, department rules and requirements of other normative documents, and taking into account of the Articles of Association, in order to regulate the fund transactions between Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter referred as to the "Company") and the controlling shareholders, de facto controllers and other related parties of the Company, and with an aim to avoid the Company funds being illegally appropriated by the controlling shareholders, de facto controllers and other related parties of the Company.

Rule 2 This System is applicable to all fund transactions between the Company and the subsidiaries included in the Company's consolidated accounting statements and related parties.

Rule 3 Related parties of the Company include related legal person and related natural person.

Rule 4 The appropriation of funds referred to in this System includes appropriation of operating funds and appropriation of non-operating funds.

Appropriation of operating funds refers to the appropriation of Company funds generated through the related transactions in production and operation activities such as procurement and sales by related parties of the Company.

Appropriation of non-operating funds refers to the advance of fees and other expenses such as wages, benefits, insurance premiums and advertising fees by the Company for related parties of the Company, the repayment of debts for related parties of the Company, the funds directly or indirectly lent to related parties of the Company at cost or at no cost, indebtedness derived from assuming guarantee liability for related parties of the Company, and other funds made available to related parties of the Company not at a consideration of goods and services.

Rule 5 Related parties of the Company shall not utilise their related relationship to prejudice the interests of the Company. If losses are caused to the Company due to a violation of the requirements, such related parties shall bear the liability for compensation. Directors, supervisors and senior management of the Company shall perform duties in accordance with the requirements under the laws, regulations and the Articles of Association to safeguard the security of Company funds.

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APPENDIX VI.H	MANAGEMENT SYSTEM FOR REGULATING FUND
	TRANSACTIONS BETWEEN RELATED PARTIES

Chapter 2 Principles of Preventing the Appropriation of Funds

and Regulations on the Company's Fund Transactions between Related Parties

Rule 6 The secretary to the Board of Directors of the Company and securities affairs representatives shall, in accordance with the relevant laws, regulations and requirements of normative documents relating to the stock listing rules of stock exchange, inquire and verify the names of related parties of the Company from shareholders, directors, supervisors and senior management of the Company, and prepare a detailed list and a copy of which is kept by the securities department and a copy is kept by the finance department for the financial personnel to inspect and refer to when settling funds. Shareholders, directors, supervisors and senior management of the Company shall truthfully disclose the situation of related parties to the secretary to the Board of Directors.

If there are any changes in the related parties of the Company, the corresponding shareholders, directors, supervisors or senior management shall promptly inform the secretary to the Board of Directors or securities affairs representatives. The secretary to the Board of Directors or securities affairs representatives shall promptly revise the list of related parties after verification, and submit a copy to finance department for filing.

Rule 7 In the course of operating fund transactions between the Company and the controlling shareholders and other related parties, the appropriation of Company funds shall be stringently limited. The Company shall not pay in advance of expenses such as wages, benefits, insurance premiums and advertising fees for related parties. The Company and its related parties shall not bear the costs and other expenses on behalf of one another.

Rule 8 The Company shall, in accordance with relevant stock listing rules of domestic stock exchange, the Articles of Association and other provisions, settle the transactions in a timely manner after the Company and its related parties have conducted the related transactions in respect of production and operation including procurement, sales and mutual provision of services. No abnormal appropriation of operating funds shall be formed.

Rule 9 The Company shall not directly or indirectly provide funds for related parties of the Company in the following manners:

lending the Company funds to controlling shareholders and other related parties at cost or at no cost;

providing entrusted loans for controlling shareholders and other related parties through banks or non-bank financial institutions;

entrusting controlling shareholders and other related parties to carry out investment activities;

(IV) issuing commercial acceptance bills without real transactions for controlling shareholders and other related parties;

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APPENDIX VI.H	MANAGEMENT SYSTEM FOR REGULATING FUND
	TRANSACTIONS BETWEEN RELATED PARTIES

repaying debts for controlling shareholders and other related parties;

(VI) by other means recognised by the CSRC and stock exchange.

Certified public accountant who is conducting the audit of the Company's annual financial and accounting report, shall issue a specific explanation on whether appropriation of funds by controlling shareholders and other related parties exists in the Company. An announcement shall be made by the Company regarding the specific explanation.

Rule 10 The Company shall not provide guarantees or securities by any means for businesses including financing of the controlling shareholders, de facto controllers and other related parties.

Rule 11 The Company, when conducting transactions with related parties of the Company shall follow the decision-making procedures stipulated in the Articles of Association, in addition to complying with the national laws, administrative regulations, department rules and other normative documents, and shall comply with the Information Disclosure Management System 《( 信息披露管理制度》) and the Material Information Internal Reporting System 《( 重大信息內部報告制度》) of the Company to perform the corresponding reporting and information disclosure obligations.

Rule 12 The funds of the Company appropriated by related parties shall, in principle, be paid off by cash.

Rule 13 Stringently control the paying off of the appropriated Company funds by related parties with non-cash assets. In the event that related parties intend to pay off the appropriated Company funds with non-cash assets, the following provisions shall be observed:

the assets used for compensation shall belong to the same business system of the Company and could help enhance the Company's independence and core competitiveness and minimise related transactions. They shall not be assets which have not yet been put into operation or have no objective and clear net carrying amounts.

the Company shall engage intermediaries with relevant securities and futures business qualifications to conduct a valuation on the assets which can be used to pay off liabilities. The value of assets or the audited net carrying amounts of the assets to be used for paying off liabilities shall be used to determine the basis of pricing. However, the final pricing shall not prejudice the interests of the Company, and shall be discounted after full consideration is given to the present value of the funds appropriated. Audit report and valuation report shall be announced to the public.

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APPENDIX VI.H	MANAGEMENT SYSTEM FOR REGULATING FUND
	TRANSACTIONS BETWEEN RELATED PARTIES

independent directors shall express independent opinions on the proposal of paying off of liabilities using assets by related parties of the Company. They may engage intermediaries with relevant securities and futures business qualifications to issue an independent financial advisor report.

(IV) the proposal of paying off of liabilities using assets by related parties of the Company shall be submitted to the CSRC for approval.

the proposal of paying off of liabilities using assets by related parties of the Company shall be subject to consideration and approval at a general meeting in which the related shareholders shall abstain from voting.

Chapter 3 Payment Procedures of Fund Transactions

Rule 14 Directors, supervisors, senior management of the Company and the chairman and general manager of each subsidiaries shall have legal obligation and responsibility for safeguarding the security of funds and properties of the Company. They shall diligently perform their duties in accordance with the provisions of relevant laws, regulations and the Articles of Association.

Rule 15 Once the Board of Directors of the Company finds that the appropriation of funds by related parties exist in the Company, it shall take various measures to ensure related parties to settle the non-operating funds appropriated historically formed. The general manager of the Company is the direct responsible person. The financial controller is the business responsible person of this.

Rule 16 When a transaction between the Company and a related party occurs and payment settlement is required, the finance department of the Company shall not only use the relevant agreements, contracts and other documents as the basis of payment, but also review whether the matters that constitute the basis of payment comply with the decision and approval procedures stipulated by the Articles of Association and other corporate governance standards, and file the relevant decision documents.

Rule 17 The finance department of the Company shall submit the basis of payment to the financial controller of the Company before any payment is made. The finance department of the Company can handle specific payment matters only after the financial controller approves and reports to the chairman for approval.

Rule 18 The finance department of the Company shall strictly abide by the Company's rules and systems and financial specifications when handling payment matters with related parties of the Company. The finance department of the Company shall regularly conduct inspection on the Company and its subsidiaries and report to the Board of Directors the review of non-operating funds transactions with related parties of the Company, to prevent related parties of the Company from appropriating the non-operating funds.

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APPENDIX VI.H	MANAGEMENT SYSTEM FOR REGULATING FUND
	TRANSACTIONS BETWEEN RELATED PARTIES

Rule 19 General manager of the Company is responsible for the daily fund management of the Company. Financial controller assists the general manager to strengthen the control over the Company's financial process and monitors the fund and business transactions between related parties of the Company and the Company. Financial controller regularly reports the appropriation of non-operating funds with related parties of the Company to the general manager.

Rule 20 In the event that related parties of the Company misappropriate the assets of the Company and prejudice the interests of the Company and the general public shareholders, the Board of Directors of the Company shall take effective measures to require related parties to cease infringement and compensate for the losses.

Rule 21 Directors, supervisors and senior management of the Company are obliged to pay attention to whether the Company has misappropriated funds by related parties and other issues that encroach on the Company's interests. Independent directors and supervisors of the Company shall at least conduct an inspection on the fund transactions between the Company and related parties quarterly to understand whether the controlling shareholders and other related parties have appropriated, transferred Company funds, assets and other resources of the Company. If abnormal conditions are found, the independent directors and supervisors of the Company will make timely requests to the Board of the Company to take corresponding measures.

Chapter 4 Audit and File Management

Rule 22 The finance department of the Company shall calculate and count the fund transactions between the Company and related parties of the Company and establish a specific financial file.

Rule 23 The Company and its subsidiaries shall regularly prepare summary statements of the appropriation of funds by related parties of the Company and the related transactions.

Rule 24 The audit department of the Company conducts regular internal audit on the appropriation of Company funds by related parties of the Company, and oversees, inspects and evaluates the implementation of relevant internal control, and proposes suggestions for improvement and handling to ensure the security of the Company funds and normal operation.

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APPENDIX VI.H	MANAGEMENT SYSTEM FOR REGULATING FUND
	TRANSACTIONS BETWEEN RELATED PARTIES

Chapter 5 Accountability

Rule 25 When directors and senior management of the Company assist and condone the misappropriation of the assets of the Company by controlling shareholders and related parties, the Board of Directors of the Company, based on the severity of the case, impose punishment on the direct responsible person and propose the removal of directors assuming severe responsibility at the general meeting.

Rule 26 All directors of the Company shall strictly control the debt risks arising from the guarantees provided to the controlling shareholders and other related parties in a cautious manner, and bear joint and several liabilities for the losses arising from violation of or improper external guarantees according to the law.

Rule 27 If the appropriation of non-operating funds in the Company or its controlling subsidiaries by the controlling shareholders and other related parties adversely affects the Company, the Company will impose punishment on the relevant responsible persons.

Rule 28 If the Company or its controlling subsidiaries violates the measures herein resulting in the appropriation of non-operating funds, illegal guarantees or otherwise by the controlling shareholders and other related parties causing losses to investors, the Company will impose administrative and economic penalties on the relevant responsible person who will also face investigation for legal responsibility according to the law.

Chapter 6 Supplementary Provisions

Rule 29 This System shall be formulated, interpreted and revised by the Board of Directors of the Company.

Rule 30 This System will come into effect and be implemented from the date of the initial public offering and listing of Shares of the Company in the PRC upon passing by the Board of Directors of the Company after consideration.

The Board of Directors

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

For identification purpose only

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APPENDIX VI.I INVESTOR RELATIONS MANAGEMENT SYSTEM

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

INVESTOR RELATIONS MANAGEMENT SYSTEM

This System is formulated in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), Work Guidance for Relations between Listed Companies and Investors, other relevant requirements of the Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter referred to as the "Company") (hereinafter referred to as the "Articles of Association") with reference to the actual conditions of the Company, in order to strengthen information communication between Beijing Chunlizhengda Medical Instruments Co., Ltd.*, existing investors and potential investors (hereinafter referred to as the "investors"), enhance the investors' understanding and recognition towards the Company, practically protect the investors, particularly the legal rights of the general public investors, promote the establishment of a long-term and stable relationship between the Company and the investors, improve the corporate governance structure of the Company, achieve integrity and self-discipline of the Company, standardise operation and reinforce the intrinsic value of the Company.

Chapter 1 Purposes and principles of investor relations management

Rule 1 Investor relations management refers to an important work that the Company strengthens its communication between the investors and the potential investors, enhances the investors' understanding and recognition towards the Company, improves the governance level of the Company to maximise the overall benefits of the Company and protects the legal rights of the investors through disclosing and exchanging information.

Rule 2 Purposes of commencing investor relations management by the Company:

Promote good relations between the Company and the investors and further enhance the investors' understanding and familiarity with the Company;
Establish a stable and high-quality investor base and obtain long-term support from the market;
Develop a corporate culture that serves the investors with respect;
Promote investment concepts of maximising the value of the Company and the interests of the investors;
Increase transparency of information disclosure of the Company and continue to improve governance of the Company.

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Rule 3 Basic principles of investor relation management:

Full information disclosure principle. In addition to mandatory information disclosure, the Company may proactively disclose other relevant information that the investors are concerned about.
Compliance information disclosure principle. The Company should comply with the national laws and regulations, the requirements of the securities regulatory authorities and the stock exchange on information disclosure of listed companies to ensure the truthfulness, accuracy, completeness, promptness of the disclosed information. Attention should be given to confidentiality of the unpublished information and other internal information when conducting the investor relations management work. Should leakage of information occur, the Company should disclose it in a timely manner in accordance with relevant regulations.
Equal opportunities for the investors principle. The Company should treat all shareholders and potential investors of the Company fairly and avoid selective information disclosure.
Integrity and trustworthiness principle. Investor relations management work of the Company should be objective, genuine and accurate and avoid excessive and misleading publicity.
Efficient and low consumption principle. The Company should consider improving communication efficiency and reducing communication cost when deciding methods of investor relations work.
Interactive communication principle. The Company should receive opinions, suggestions from the investors to achieve two-way communication between the Company and the investors to create positive interaction.

Chapter 2 Voluntary Disclosure of Information

Rule 4 The Company can voluntarily disclose information other than those required by the current laws, regulations and rules through various investor relations management activities and methods.

Rule 5 The Company should follow the fairness principle when disclosing information voluntarily and disclose information to all shareholders and potential investors of the Company so that institutional, professional and individual investors can carry out investment activities under equal conditions and avoid selective disclosure.

Rule 6 The Company should follow the integrity and trustworthiness principle to voluntarily disclose information about its operation conditions, operation plan and operation environment, strategic planning and development prospects during investor relations activities and help the investors to make rational investment judgement and decisions.

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APPENDIX VI.I INVESTOR RELATIONS MANAGEMENT SYSTEM

Rule 7 The Company should list relevant risk factors in clear warning texts to remind the investors about possible uncertainties and risks when disclosing certain predictive information voluntarily.

Rule 8 During the process of voluntary information disclosure, if there are major changes causing disclosed information to be unreal, inaccurate and incomplete, or the disclosed prediction cannot be realised, the Company should update the disclosed information in time. As for matters that have been disclosed but are yet to be concluded, it is the obligation of the Company to continue to disclose the full information on such matters till such matters conclude.

Rule 9 Once the Company publishes major information which is required to be disclosed according to the laws and regulations by any means during investor relations activities, it should be reported to the stock exchange in time and formally disclose such information before the next trading day.

Chapter 3 Target and Content of Investor Relations Management Work

Rule 10 Service target of investor relations management is including but not limited to:

Investors, including institutional investors, medium and small investors, registered investors and potential investors;
Financial media, industry medial and other relevant media;
Securities analysts, fund managers and industry analysts;
Other relevant institutions required by the rules governing the listing of shares on the stock exchange of the listing place.

Rule 11 Communication content between the Company and the investors of investor relations management work mainly included:

Development strategies of the Company, including development directions, development planning, competition strategies and operation orientations of the Company;
Statutory information disclosure and its instructions, including regular reports and provisional announcement;
Business management information disclosed by the Company according to the law, including production and operation conditions, financial position, products or research and development of new technology, operation results, dividend distribution;
Major matters disclosed by the Company according to the law, including major investments of the Company and its changes, asset restructuring,

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APPENDIX VI.I INVESTOR RELATIONS MANAGEMENT SYSTEM

mergers and acquisitions, external cooperation, external guarantees, major contracts, connected transactions, major litigation or arbitration, changes in management and shareholders, etc.;

Cultivation of corporate culture;
Other relevant information of the Company.

Chapter 4 Investor Relations Activities

The Company can communicate with the investors through various channels and levels. Ways of communication should be as convenient and efficient as possible for the investors to participate. Ways of activities are including but not limited to publishing announcement, convening the general meetings, the Company website, etc.

Rule 12 Publishing announcement, including regular reports and provisional reports

Information that the Company should disclose in accordance with laws, regulatory authorities and stock exchange regulations must be published in designated newspapers and designated websites immediately.
The Company should not disclose information in other public media before the designated newspapers and designated website and should not replace the Company announcement with other forms such as press released or answering questions from reporters. The Company pays close attention to the media publicity and may give appropriate responses when necessary.
The Company may deliver the regular and provisional reports included in the Company announcement to the relevant institutions and personnel such as the investors or analysts.

Rule 13 General meetings

The Company should conscientiously arrange and organise the general meetings in accordance with the requirements of the laws and regulations.
The Company should strive to facilitate the general meetings for medium and small shareholders to participate in terms of the time and place of the meetings, etc. Where conditions permit, the general meetings can be broadcasted live on the Internet.
To improve the transparency of the general meetings, the Company may, depending on the situation, invite the press to report the general meetings.

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APPENDIX VI.I INVESTOR RELATIONS MANAGEMENT SYSTEM

Rule 14 The Company website

The Company should set up an investor relations column on the Company website (http://www.clzd.com/) to publish announcement with respect to information of the Company and for the investors to make inquiries.
The Company should update the content of the Company website in a timely manner and historical information and current information should be marked distinctively. Inaccurate Information should be corrected in a timely manner to avoid misleading the investors and satisfy the investors' need for the Company information.
The Company should not reproduce the media coverage of the Company and the Company analysis reports from analysts on the Company website to avoid and prevent the influence on the investors' decisions and the relevant responsibility that may be claimed or pursued against the Company.

Rule 15 Meetings of analysts, performance seminars and roadshows

The Company may organise meetings of analysts, performance seminars and roadshows after regular reports, implementation of financing plans or any time the Company considers necessary.
The Company should determine the scope of questions that can be answered in advance before performance seminars, meetings of analysts and roadshows. If the question involved the undisclosed material information or the answer can infer the undisclosed material information, the Company should refuse to answer and should not leak out the undisclosed material information.
The main content should be available on the Company website or disclosed by way of announcement in a timely manner after meetings of analysts, performance seminars and roadshows.

Rule 16 One-to-one communication

The company may carry out one-to-one communication with the investors, fund managers, analysts about the operation conditions, financial position and other matters of the Company when necessary.
The Company should treat the investors equally in one-to-one communication and create opportunities for medium and small investors.
In order to avoid the possibility of disclosing selective information, the Company may publish the images and text record of one-to-one communication on the Company website and invite the press to report it if appropriate.

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Rule 17 On-site visit

The Company should actively arrange an on-site visit of the Company and the place where the proceeds financing project is located for the investors, analysts and fund managers.
A reservation system is adopted for the on-site visit, which is organised and arranged by the Company. The Company should formulate a reasonable visiting route and properly arrange the visit process. Video recording and photo taking are prohibited without permission.
It is necessary for the Company to provide the relevant reception staff with compulsory training and guidance about the investor relations and information disclosure to avoid leaking undisclosed material information to the visitors during the visit.

Rule 18 Enquiry hotlines

The Company should set up a specialised enquiry hotline for the investors. The investors can make inquiries and address their concern through the hotlines.
Enquiry hotlines should be handled by a specially assigned person to ensure that every call is answered and the hotlines run smoothly during business hours. When material events occur or when necessary, the Company should set up multiple hotlines to answer inquiries from the investors.
The Company should disclose the telephone number of the hotlines in the regular reports and on the Company website. If there are any changes, it should be disclosed in a formal announcement and updated on the Company website in a timely manner.

Rule 19 E-mail communication

The Company should set up a specialised enquiry email for the investors. The investors can make inquiries and address their concern through email and the Company can reply or answer related questions through e-mail.
For questions and answers involving important information and those frequently asked in the forum and e-mail, the Company should organise and publish such information in the investor column on the website.
The Company should disclose the e-mail address in the regular reports and on the Company website. If there are any changes, it should be disclosed in a formal announcement and updated on the Company website in a timely manner.

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Rule 20 Filing systems

The Company should establish a comprehensive filing system for investor relations activities. The filing of investor relations activities should at least include the following:

Staff who has participated, time and venue of investor relations activities;
Content that has been discussed in investor relations activities;
The handling procedures and accountability of the leaking of undisclosed material information (if any);
Other content.

Rule 21 The Company should avoid investor relations activities within thirty days before disclosure of the regular reports to prevent the leaking of the undisclosed material information.

Rule 22 If the analysts and other independent institutions who issue the investment value analysis reports are appointed by the Company, the published report should be marked with texts saying "this is a delegated report" at a conspicuous position.

Rule 23 Undertaking letters should be signed before direct communication with a specific person and kept by the securities department. The undertaking letter should at least include the following:

Undertake not to deliberately probe into the undisclosed material information of the Company. No communication or inquiry with the person other than the specific person of the Company is allowed without the permission of the Company;
Undertake not to leak the undisclosed material information that is inadvertently received and not to trade securities of the Company or suggest others to trade securities of the Company based on the undisclosed material information;
Undertake not to use the undisclosed material information in the documents, such as, the investment value analysis reports or the press release unless the Company discloses such information at the same time;
Undertake to quote the source of the documents, such as, the investment value analysis reports or the press release which involves forecast of profit and share price and not to make judgement based on subjective assumptions and information not supported by the facts;
Undertake to inform the Company before publishing or using documents, such as, the investment value analysis reports or the press release;
the consequences of its failure to perform the undertakings.

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Chapter 5 Investor relations management department and responsibilities

Rule 24 The secretary to the Board is in charge of the Company investor relations management affairs. The securities department of the Company is the functional department of investor relations management, led by the secretary to the Board, and responsible for organising and coordinating the daily affairs of the Company investor relations management.

Other directors, supervisors, senior management and staff of the Company should not make a speech on behalf of the Company in the investor relations management activities unless they have received explicit authorisation and training.

Rule 25 The duties of investor relations work are mainly:

Analysis and research. Statically analysing the number, composition and changes of investors and potential investors; continuing to pay attention to various kinds of information, such as opinions, suggestions and reports of the investors and the media and conveying their opinions to the Board and management.
Communication and liaison. Publishing the integrated information required by the investors; holding meetings, such as, analyst seminars and roadshow activities, responding to inquiries from the analysts, the investors and the media; receiving visitors, maintaining communication with institutional investors, medium and small investors, enhancing the investors participation in the Company.
Public relations. Establishing and maintaining good public relations with the stock exchange, industry associations, media, other listing companies and relevant institutions; cooperating with relevant departments of the Company to implement effective measures to maintain the public image of the Company after litigation, major reorganisation, changes in key personnel, changes in stock transaction, and changes in operating environment.
Other work that can improve the investor relations.

Rule 26 The Company should establish a good internal coordination mechanism and information collection system. Each department and subsidiary should actively cooperate with the department or staff who is responsible for the investor relations work to collect information such as production operation, finances, litigation.

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APPENDIX VI.I INVESTOR RELATIONS MANAGEMENT SYSTEM

Rule 27 Staff engaged in the investor relations work should have the following qualities and skills:

Understanding all aspects of the Company.
A good knowledge structure and familiar with laws and regulations relating to corporate governance, financial accounting as well as operating mechanism of the securities market.
Good communication and coordination skills.
Good conduct, integrity and credibility.

Rule 28 The secretary to the Board of the Company should provide, in a appropriate manner, relevant training on investors relations management to all employees of the Company, especially directors, supervisors, senior management and other related staff and should organise specialised training when conducting a large-scale investor relations activities, such as, institution promotion events and analyst seminars.

Rule 29 The Company should establish a comprehensive filing system for the investor relations work and the filing documents of the investor relations activities should at least include the following:

Staff who has participated, time and venue of investor relations activities;
Content that has been discussed in investor relations activities;
The handling procedures and accountability of the leaking of undisclosed material information;
other content.

Rule 30 The Company and relevant persons should make a public apology to the investors timely under the following situations:

The Company or its de facto controllers, directors, supervisors and senior management are subject to administrative punishment by the CSRC or publicly condemned by the stock exchange;
The Stock Exchange examined and determined that the information disclosure is substandard;
Other situations.

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APPENDIX VI.I INVESTOR RELATIONS MANAGEMENT SYSTEM

Chapter 6 Supplementary provisions

Rule 31 Matters not covered in this System should be implemented in accordance with relevant laws, administrative regulations and relevant provisions of the CSRC and the stock exchange.

Rule 32 This System is subject to consideration and approval by the Board of the Company. This System becomes effective and implemented since the date of the initial public offering of the Company in the PRC and listing.

Rule 33 This System is interpreted by the Board of the Company.

The Board of Directors

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

For identification purpose only

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APPENDIX VI.J EXTERNAL INVESTMENT MANAGEMENT SYSTEM

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

EXTERNAL INVESTMENT MANAGEMENT SYSTEM

Chapter 1 General rules

Rule 1 In order to strengthen the decision-making and management of investments of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter referred to as the "Company"), enhance the Company's efficiency in investments, regulate and avoid risks arising from investments, utilise capital effectively and reasonably to safeguard the interests of the Company, this System is formulated based on laws, regulations and normative documents including the "Company Law of the People's Republic of China", "Code of Corporate Governance for Listed Companies", relevant regulations of stock exchange in relation to listing of shares and the "Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd.*" (hereinafter referred to as the "Articles of Association").

Rule 2 Investments as mentioned in this System are economic behavior of investments of the Company making capital contribution by currencies, or by capitalising the value of assets such as interests, equity, technologies, liabilities, plants, equipment and land use rights or intangible assets pursuant to national laws and regulations and as prescribed in Rule 3 of these Measures.

This System shall also apply to the actions taken by the Company to increase or reduce the Company's assets in external investments through acquisition, replacement, disposal or other methods.

Rule 3 Methods of investments include: investments in subsidiaries, joint ventures and associates, investments in financial assets held for trading, financial assets available for trading, real estate investments, entrusted financial management, entrusted loans, equity investments, held-to-maturity investments and long-term or short-term investments in other forms.

Rule 4 Investments of the Company shall comply with the following principles:

To be legal, prudent, safe and effective;
Conform to the development strategies of the Company;
Investment should be of moderate scale matching the capacity of the Company which will not prejudice the development of the main operation of the Company;
Control the risk of investments and give priority to investments efficiency.

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APPENDIX VI.J EXTERNAL INVESTMENT MANAGEMENT SYSTEM

Rule 5 The organisation for the Company's external investments:

the general meeting, the Board of Directors and the Chairman of the Company are the decision-making bodies which make decision for the Company's external investments within each of its scope of authorization.
The General Manager of the Company is the main responsible person for the implementation of external investments and is responsible for planning, organizing and monitoring people and matters in relation to the implementation of new projects, reporting the progress of investments to the Board of Directors in a timely manner and give recommendations for adjustment to facilitate the Board of Directors and general meeting in amending the investments in a timely manner;
The department specifically responsible for investment projects (hereinafter referred to as the "department responsible for investments") is responsible for conducting feasibility studies on investment projects and leading the preparation of project proposals and feasibility study reports on external investment projects;
The financial department of the Company is responsible for raising funds, performing capital contributions procedures, managing the Company's income from external investments and crediting income from external investments to the Company's account in a timely manner. The financial department are required to grasp the financial conditions and operating results of each investment projects in a timely manner, review and assess risks and returns of investments and provide opinions on improving operating management to the decision-making body of the Company;
The internal audit department of the Company is responsible for the internal audit and monitor of external investment projects.

For matters in regard to information disclosure during planning, resolution and signing of agreement of investment projects, the internal audit department shall perform in accordance with relevant provisions of the relevant law, regulations, normative documents of the PRC and stock exchange and the Company's policy for information disclosure.

Chapter 2 Proposal and approval of investment projects

Rule 6 The management or relevant functional department of the Company shall propose, after preliminary discussion, potential investments opportunities feasible for investment to the Office meeting of General Manager.

The Office of General Manager shall appoint the department responsible for investments to conduct feasibility studies based on the requirements of the feasibility assessment of projects, which generally include general information of the proposed investment projects, feasibility analysis of the investment and suggestions on the

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APPENDIX VI.J EXTERNAL INVESTMENT MANAGEMENT SYSTEM

feasibility of projects, and submit the project proposals and feasibility study reports to the Office of General Manager of the Company.

Upon discussion and approval from the Office of General Manager, the project proposals and feasibility study reports are submitted to the Chairman, the Board of Directors or the general meeting for approval pursuant to their corresponding decision-making authorizations and decision-making procedures.

Rule 7 External investments that should be approved by the Board of Directors:

any transaction involving a total amount of assets (whichever is higher if there exist both book value and appraised value) that accounts for more than 10% of the latest audited total assets of the Company;
any transaction with a subject (such as equity interest) whose relevant operating revenue in the latest financial year accounts for more than 10% of the audited operating revenue of the Company in the latest financial year and with absolute amount exceeding RMB5 million;
any transaction with a subject (such as equity interest) whose relevant net profit in the latest financial year accounts for more than 10% of the audited net profit of the Company in the latest financial year and with absolute amount exceeding RMB1 million;
any transaction amount (including assumed liabilities and expenses) that accounts for more than 10% of the latest audited net assets of the Company and with absolute amount exceeding RMB5 million;
any transaction with a profit that accounts for more than 10% of the audited net profits of the Company in the latest financial year and with absolute amount exceeding RMB1 million.

Any of the negative data involved in the calculation of indicators above shall be calculated using its absolute value.

Rule 8 External investments of the Company meeting any of the following criteria shall be submitted to the Board of Directors for consideration and approval:

any transaction involving a total amount of assets (whichever is higher if there exist both book value and appraised value) that accounts for more than 50% of the latest audited total assets of the Company in the latest period;
any transaction with a subject (such as equity interest) whose relevant operating revenue in the latest financial year accounts for more than 50% of the audited main business revenue of the Company in the latest financial year and with absolute amount exceeding RMB30 million;

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APPENDIX VI.J EXTERNAL INVESTMENT MANAGEMENT SYSTEM

any transaction with a subject (such as equity interest) whose relevant net profit in the latest financial year accounts for more than 50% of the audited net profit of the Company in the latest financial year and with absolute amount exceeding RMB3 million;
any transaction amount (including assumed liabilities and expenses) that accounts for more than 50% of the audited net assets of the Company in the latest period and with an absolute amount exceeding RMB30 million;
any transaction with a profit that accounts for more than 50% of the audited net profits of the Company in the latest financial year and with absolute amount exceeding RMB3 million.

Any of the negative data involved in the calculation of indicators above shall be calculated using its absolute value.

Rule 9 External investments not prescribed in Rule 7 and 8 of this System shall be approved by the Chairman, provided that the total amount of transaction outside of daily operations, include external investments, approved by the Chairman shall not account for more than 15% (inclusive) of the latest audited net assets of the Company for each accounting year. Amounts exceeding 15% shall be submitted to the Board of Directors for consideration.

Transactions outside of daily operations approved by the Chairman exclude securities investments, entrusted financial management, risk investments and other matters that shall not be approved by Directors as individual as prescribed in law, regulations, normative documents and stock exchange.

Rule 10 Investments of the Company shall avoid related party transactions. Unavoidable related party investments due to business shall comply with decision-making procedures and decision-making authorizations as prescribed in the "Articles of Association" and the "Measures for Administration of Related Party Transactions".

Rule 11 The external investments by subsidiaries of the Company shall be deemed as an act of the Company and relevant regulations of this System shall apply.

Chapter 3 Signing and implementation of investments agreements

Rule 12 Upon the consideration and approval of investment matters, the Chairman, the General Manager or other authorised representatives shall handle matters relating to investments.

Rule 13 The investments agreements can be signed in advance subject to specific situation, provided such investments agreement shall be considered and approved by the relevant organisations including the general meeting, the Board of Directors or the Chairman of the Company before they are effective and implementable.

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APPENDIX VI.J EXTERNAL INVESTMENT MANAGEMENT SYSTEM

Investments agreements shall be signed by the Chairman and unless authorised by the law, any other persons shall not sign the investments agreement without permission

Rule 14 The department responsible for investments shall urge the relevant functional department of the Company to implement the particulars to the agreement as prescribed in the agreement in a timely manner.

Chapter 4 Supervision and management of investment projects

Rule 15 Other functional department assigned by the department responsible for investments or the Office of General Manager shall follow-up on, supervise and manage the implementation of investment projects. Significant investment projects shall be assigned to specific department responsible for dedicated research and analysis on matters including their feasibility, investments risks and returns and supervise the implementation of significant investment projects and shall place a written record and report to the General Manager of the Company in a timely manner if anything abnormal is found. The later shall respond in a timely manner and report to the Board of Directors of the Company in case of significant event.

Rule 16 During the performance of investments agreement, relevant functional departments of the Company shall assume their own responsibilities, assist and communicate with each other. Any department or staff of the Company shall communicate with other departments and report relevant case level by level in case event of default or potential event of default of the counterparty to the investment agreement is found. The same shall be applied if event of default or potential event of default of the Company is found.

Rule 17 During the performance of investment agreement, the relevant functional department be very careful when communicating with the counterparty of the agreement, especially when producing written documents. The relevant functional department shall come to a consensus with other functional departments and the consent of the division head shall be obtained prior to producing the written documents.

Rule 18 The Company shall review and assess the results of investment projects. The review and assessment shall be conducted by the financial department and relevant functional departments organised by General Manager of the Company. The method of review can be in the form of verbal reports, on site random inspection, inspection of accounting information and financial reports or other methods. Assessments focus mainly on matters such as the results of operation, financial indicators and standardised operations. For one-off investments, reviews and assessments shall be conducted within 30 days after the completion of the project. As for long-term investment projects, reviews and assessments shall be conducted annually within the 45 days after the end of the previous year.

Rule 19 The Board of the Directors shall regularly be informed of the implementation of significant investment projects and the effectiveness of investments. The Board of Directors shall investigate the reasons and hold related personnel accountable in case of events such as investments not in accordance with the plan, the expected incomes from the project are not realised and losses arising from investments.

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APPENDIX VI.J EXTERNAL INVESTMENT MANAGEMENT SYSTEM

Chapter 5 Management of invested companies

Rule 20 Invested companies of the Company are limited companies where the Company's capital contribution occupies less than 50% of the total capital, or limited companies which the Company held less than 50% of the total share capital and the Company does not have actual control over the limited company or joint stock company.

Rule 21 The Company is involved in the management of invested companies in accordance to the law through the exercise of the shareholders' rights or through directors, supervisors, senior management personnel appointed or nominated by the Company.

Rule 22 The directors or supervisors appointed or nominated by the Company shall exercise their functions and fulfill their responsibilities with caution, seriousness and diligence. They shall report accurate and complete significant information of the invested companies they acquired to the Company in a timely manner without misrepresentation or omission.

When meetings of the Board of Directors or Board of Supervisors are convened by invested companies, the directors or supervisors appointed or nominated by the Company shall not participate in voting of the Board of Directors or the Board of Supervisors of invested companies without permissions of the Company.

Rule 23 In the event of occurrence of "significant events" of invested companies as prescribed in the "Significant events reporting system" of the Company that may have significant influences on the trading price of the Company's securities and its derivatives, the directors or supervisors appointed or nominated by the Company shall perform their reporting obligations as prescribed in the "Significant event reporting system".

Chapter 6 Securities investments

Rule 24 The decision-making procedures for securities investments, entrusted financial management or derivative products investments made by the Company:

The relevant department of the Company is responsible for preparing investments plans, conducting feasibility studies and publishing the feasibility study reports;
The financial department is responsible for providing the Company with the capital flow conditions of the Company;
The investment plans are submitted to the Office of the General Manager for consideration;
The investment plans are submitted to the Board of Directors or general meeting of the Company for consideration and approval in accordance to their scope of authorisations.

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APPENDIX VI.J EXTERNAL INVESTMENT MANAGEMENT SYSTEM

The Company shall not grant authorization for reviewing and approving investment matters such as securities investments, entrusted financial management or derivative products investments to the directors or operational management of the Company.

Rule 25 The total amount of the entrusted financial management or derivative products investments of the Company shall not exceed 15% of the latest audited net assets.

Rule 26 When the Company performs entrusted financial management, it shall select qualified professional wealth management institutions with good credit status and financial standing, no negative records of integrity and strong profitability as the entrusted party. The Company shall enter into a written contract specifying the amount, duration, type of investments of entrusted financial management and the rights, obligations and legal liabilities of both parties.

Rule 27 If securities investments and derivative products investments are involved, a stringent joint control system is required to be implemented, which requires at least more than two staff to perform joint operation and the trading personnel for securities and derivatives products shall be separated from the funding and financial management personnel for the function of checks and balances. No individual alone shall have access to investments assets, and credit or debit of any investment assets shall be signed by the two persons performing the function of checks and balances.

Rule 28 The financial department of the Company shall be responsible for registrating the invested securities and derivative products on the account and conduct of relevant accounting procedures.

The financial department of the Company shall regularly check the use and balances of investment capitals for securities or derivatives products. The interest and dividends received shall be credited in a timely manner.

Rule 29 The Board of Directors shall assign dedicated persons to track the progress and safety conditions of the entrusted financial management, securities and derivative products investments. Anything abnormal shall be reported in a timely manner, so that the Board of Directors can take effective measures promptly to recover capital and avoid or reduce losses of the Company.

Chapter 7 Legal liabilities

Rule 30 Directors or supervisors who breached this System for administration of external investments shall correct his/her act proactively and directors and supervisors who caused damage to the Company shall be liable for compensation. For directors or supervisors who caused material damages to the Company, the Board of Directors and the Board of Supervisors shall propose the dismissal of such directors or supervisors to the general meeting and request them to assume the corresponding legal responsibilities as appropriate.

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APPENDIX VI.J EXTERNAL INVESTMENT MANAGEMENT SYSTEM

Senior management personnel who breached this System for administration of external investments shall correct his/her act proactively and senior management personnel who caused damage to the Company shall be liable for compensation. For senior management personnel who caused material damages to the Company, the Board of Directors shall propose the dismissal of such senior management personnel to the general meeting and request them to assume the corresponding legal responsibilities as appropriate.

Rule 31 In the process of external investments, directors, supervisors, senior management personnel and personnel responsible for investments that harmed the interests of the Company with acts of fraud, malicious collaboration, malpractice and other acts shall compensate the damages caused to the Company as a result thereof. The general meeting or the Board of Directors of the Company shall discharge the relevant personnel from his/her duties and request them to assume the corresponding legal responsibilities as appropriate.

Rule 32 The directors or supervisors appointed or nominated to the invested companies by the Company who breached this System shall correct his/her act proactively and directors and supervisors who caused damages to the Company shall be liable for compensation. For directors or supervisors who caused material damages to the Company, the Company shall propose appropriate punishments, sanctions and dismissals to parties concerned through subsidiaries and invested companies pursuant to relevant procedures.

Chapter 8 Supplementary Provisions

Rule 33 Unless otherwise specified, the expressions "more than" used therein includes the number indicated, whereas "exceed", "exceeding" used therein excludes the number indicated in this System.

Rule 34 Where this System is inconsistent with laws, regulations, normative documents and relevant provisions of stock exchange and the Articles of Association, the latter shall prevail.

Rule 35 This System is subject to consideration and approval by the Board of Directors and shall be effective and implemented from the date of the shares of the Company are listed upon initial public offering within the PRC.

Rule 36 This System shall be interpreted by the Board of Directors of the Company.

The Board of Directors

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

For identification purposes only

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APPENDIX VI.K IMPLEMENTING RULES OF THE CUMULATIVE VOTING SYSTEM

The English version of this appendix is an unofficial translation of its Chinese version. In

case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

IMPLEMENTING RULES OF THE CUMULATIVE VOTING SYSTEM

Chapter 1 General rules

Rule 1 In order to safeguard the interest of medium and small shareholders, optimize the Company's corporate governance structure and regulate the Company's election of directors and supervisors, these Implementing Rules have been formulated based on the relevant provisions under the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"), the Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (hereinafter referred to as the "Articles of Association"), relevant regulations of stock exchange and other laws and regulation, together with the actual situation of the Company.

Rule 2 Cumulative voting referred to in these Implementing Rules means when there is an election of two or more, including two, directors or supervisors at the general meeting, the voting right of each share held by the shareholders is equal to the same number of directors or supervisors to be elected, i.e. the number of votes entitled by a shareholder is equal to the number of shares held multiplied by the number of directors or supervisors to be elected. Shareholder may cast all of his voting rights entirely to one candidate for director or supervisor or separately to certain candidates for directors or supervisors, the directors or supervisors will be elected according to the final number of votes they obtained at the general meeting.

Rule 3 "Directors" referred to in these Implementing Rules include independent directors and non-independent director. "Supervisors" referred to in these Implementing Rules mean supervisors not representatives of employees. Employee representatives of the Board of Supervisors shall be elected democratically at the employee representatives' meeting, employees' meetings or in other forms and the relevant regulation of these Implementing Rules are not applicable.

Rule 4 If more than two directors or supervisors are proposed to be elected by the Company, the method of cumulative voting shall be adopted.

Rule 5 Staggering terms of office shall not be implemented for directors or supervisors of the Company, that is, the term of office of directors and supervisors elected due to vacancy during the current session of the Board of Directors shall be the remaining of the current session of the Board of Directors and shall not extend to the next term of office.

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APPENDIX VI.K IMPLEMENTING RULES OF THE CUMULATIVE VOTING SYSTEM

Chapter 2 Nomination of Candidates for directors or supervisors

Rule 6 The list of candidates for directors or supervisors shall be proposed for voting by the general meeting. The Board of Directors of the Company, shareholders severally or jointly holding more than 3% of the total number of shares with voting rights outstanding shall be entitled to nominate candidates for directors of the Company. Nomination of candidates for directors of the Company by the Board of Directors at general meeting shall be made through Board resolution; nomination of candidates for directors of the Company by shareholders can be made directly by submitting the list of candidates for directors to the Board of Directors.

The Board of Supervisors, shareholders severally or jointly holding more than 3% of the total number of shares with voting rights outstanding shall be entitled to nominate candidates for supervisors of the Company. Nomination of candidates for supervisors of the Company by the Board of Supervisors at general meeting shall be made through resolution by submitting the list of candidates for supervisors to the general meeting; nomination of candidates for supervisors of the Company by shareholders can be made directly by submitting the list of candidates for supervisors to the general meeting.

The proposer of the proposal shall provide brief biography of and basic information about the candidates and relevant proof to the Board of Directors and the Board of Directors shall review the proposal. Proposals complying with provisions prescribed under law and regulations and the Articles of Association shall be submitted to the general meeting for discussion; proposals not complying with the aforementioned provisions shall not be submitted to the general meeting for discussion but explanation shall be given at the general meeting. The Board of Directors shall provide shareholders with brief biography of and basic information about the candidates for directors and supervisors.

Rule 7 The procedures for nomination of candidates for independent directors are as follows: The Board of Directors, shareholders severally or jointly holding more than 1% issued shares of the Company may nominate candidates for independent directors. The nominators of independent directors shall seek the consent of the nominees before any nomination to be made. Nominators shall have sufficient understanding of the profile of the nominees, such as occupation, academic background, title of position, detailed working experiences and all part-time engagements of the nominees, with expressed views related to the qualification and independence of nominees for acting as independent directors. Public declaration shall be made by nominees that there is no relationship between himself and the Company which would affect his independent and objective judgment.

The Board of the Company shall announce the abovementioned details as required by the rules and regulations before convening the general meetings for the purpose of election of independent directors. The Company shall submit relevant information of all nominees to stock exchange for record keeping and review on the qualification and independence of the independent directors. The Board of Directors shall also submit

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APPENDIX VI.K IMPLEMENTING RULES OF THE CUMULATIVE VOTING SYSTEM

written opinions in case it has any objection to the particulars of the nominee. If stock exchange has no objection to the candidate for independent directors, the Company may convene general meeting according to plan and elect independent directors. During the general meeting for election of independent directors, the Board of Directors of the Company shall make a statement as to whether stock exchange has concerns over candidates for independent directors.

Rule 8 If the number of candidates nominated in aggregate exceed the number of persons to be elected, candidates are elected on a competitive basis.

Rule 9 If the Board of Directors decide not to list the candidates proposed by the shareholders on the agenda of the general meeting, explanation shall be given at the general meeting and the content of the proposal and explanation of the Board shall be announced together with the resolutions of the general meeting after the conclusion of the general meeting.

Chapter 3 Principles for voting of the cumulative voting system

Rule 10 Prior to the election of directors or supervisors at the general meeting, the chairman of the meeting shall specifically notify the shareholders present at the meeting that the cumulative voting system is to be adopted.

During the election of directors or supervisors at the general meeting, the voting right of each share held by the shareholders is equal to the number of shares multiplied by the number of director and supervisor to be elected.

Rule 11 During the election of directors or supervisors at the general meeting, shareholders have complete autonomy during voting to concentrate their voting rights to one candidate or allocate their voting rights to a number of candidates. Shareholders may use all of or part of his voting rights in voting.

If shareholder concentrates all of his voting rights on one or some candidates for directors or supervisors, he will have no voting rights to cast on other candidates for directors or supervisors.

Rule 12 The number of candidates voted by voters shall not exceed the number of directors or supervisors to be elected.

Rule 13 If the total number of voting rights casted by a shareholder to one or some candidates for directors or supervisors exceeds the total number of voting rights entitled by such shareholder, the votes casted by the such shareholder shall be invalid; if the total number of voting rights casted by a shareholder to one or some candidates for directors or supervisors is less than the total voting rights entitled by such shareholders, the votes are valid and the remaining votes will be regarded as abstained voting rights.

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APPENDIX VI.K IMPLEMENTING RULES OF THE CUMULATIVE VOTING SYSTEM

Rule 14 In order to ensure the number of elected independent directors complies with the provision of the "Articles of Association", the election for independent directors and non-independent directors are conducted separately with the following procedures:

During the election of independent directors, the number of votes casted by shareholders attending the meeting equals to the total number of shares held by the shareholders multiplied by the number of independent directors to be elected at the general meeting and such number of votes shall only be casted on the candidates for independent directors at the general meeting;
During the election of non-independent directors, the number of votes casted by shareholders attending the meeting equals to the total number of shares held by the shareholders multiplied by the number of non-independent director to be elected at the general meeting and such number of votes shall only be casted on the candidates for non-independent directors at the general meeting;
During the election of supervisors, the number of votes casted by shareholders attending the meeting equals to the total number of shares held by the shareholders multiplied by the number of supervisor to be elected at the general meeting and such number of votes shall only be casted on the candidates for supervisors at the general meeting.

Chapter 4 Principles for the election of directors or supervisors

Rule 15 The election of candidates for directors and supervisors shall be determined based on the number of votes in favor obtained, provided that the number of votes in favor obtained by each elected directors or supervisors shall not be less than the lowest number of votes obtained (inclusive) calculated with the following formula:

The lowest number of votes obtained = the total number of shares held and represented by all shareholders and proxies attending the meeting *50%

Rule 16 If two or more than two candidates obtained same number of votes, and the number of votes of obtained is the lowest among candidates to be elected, if all of them are elected, the number of elected candidates will exceed the number of directors or supervisors to be elected, a second round of election shall be conducted at the general meeting among the aforementioned candidates for directors or supervisors obtaining same number of votes in accordance with prescribed procedures. The cumulative voting system shall be adopted for the second round of election basing on the actual vacancies.

If no elected candidate can be determined at the second round of election, a separate election shall be conducted at the next general meeting. If the members of the Board of Directors are less than two-thirds as prescribed in the Articles of Association as a result thereof, another general meeting shall be convened within 2 months after the conclusion of the current general meeting to elect the vacant director.

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Rule 17 If the number of elected candidates is less than the number of directors or supervisors to be elected but the number of members of the Board of Directors exceed two-thirds as prescribed in the Articles of Association, the vacancies shall be elected at the next general meeting. If number of elected candidates is less than the number of directors or supervisors to be elected and the number of members of the Board of Directors or the Board of Supervisors is less than two-thirds as prescribed in the Articles of Association, a second round of election shall be conducted for the outstanding candidates for directors or supervisors. If the number of directors or supervisors to be elected and the number of members of the Board of Directors or the Board of Supervisors is less than two-thirds as prescribed in the Articles of Association after the second round of election, another general meeting shall be convened within two months after the conclusion of the current general meeting to elect the vacant director or supervisor.

Chapter 5 Special procedures for cumulative voting system

Rule 18 The cumulative voting system is adopted by the Company for election of directors or supervisors and specific explanation shall be given in the notice of general meeting.

Rule 19 The "Implementing Rules of the Cumulative Voting System" formulated by the Company shall be distributed or announced to shareholders prior to the election of directors or supervisors at the general meeting.

Rule 20 The convener of the general meeting shall prepare ballot paper, without "against" and "abstain", for the adoption of the cumulative voting system. The secretary to the Board of Directors shall provide instruction and explanation for the cumulative voting system, the method of filling in the ballots, and the method of counting votes and the principle of election.

Rule 21 In the event of the Company adopting cumulative voting system for election of directors or supervisors, shareholders may vote in person or may appoint others to vote for him on his behalf.

Chapter 6 Supplementary Provisions

Rule 22 Where any matters that are not covered in these Implementing Rules, those national laws, administrative rules, normative documents and relevant provisions of the Articles of Association shall prevail. Where these Implementing Rules are inconsistent with new or revised laws, administrative rules, normative documents issued by the PRC in the future and the Articles of Association as modified by legal procedures, the latter shall prevail and these Implementing Rules shall be modified accordingly in a prompt manner and proposed for approval by the general meeting after consideration.

Rule 23 These Implementing Rules shall be interpreted by the Board of Directors of the Company.

Rule 24 These Implementing Rules are subject to consideration and approval at the general meeting and shall be effective and implemented from the date of the shares of the Company are listed upon initial public offering within the PRC.

The Board of Directors

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

For identification purposes only

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APPENDIX VI.L	INTERNAL CONTROL SYSTEM

The English version of this appendix is an unofficial translation of its Chinese version. In

case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

INTERNAL CONTROL SYSTEM

Chapter 1 General Provisions

Rule 1 In order to strengthen the internal control of Beijing Chunlizhengda Medical Instruments Co., Ltd. (hereinafter "the Company"), facilitate the standard operation and healthy development of the Company and protect the legal rights of shareholders, the Company, based on its actual situation, has formulated this System in accordance with the requirement of Company Law of the PRC, Securities Law of the PRC, the relevant rules of the stock exchange governing the listing of shares and other laws, administrative regulations, departmental rules and the Articles of Association.

Rule 2 The objectives of the Company's internal control:

To control risks faced by the Company;
To improve the operational effectiveness and efficiency of the Company;
To enhance the reliability of information of the Company;
To ensure that the Company's actions are in compliance with laws and regulations so as to achieve the Company's strategic goals.

Rule 3 The Board of Directors of the Company is responsible for the formulation and effective implementation of the Company's internal control system.

Chapter 2 Framework and Implementation of Internal Control System

Rule 4 The company's internal control mainly includes: environmental control, business control, accounting system control, electronic information system control, information transmission control, internal audit control.

The Company's internal control system covers the following levels:

Company level;
The Company's subordinate departments or subsidiaries level (including holding subsidiaries, branches and associates with significant influence);
The Company's different business units or business processes level.

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Rule 5 The Company's internal control system includes the following basic elements:

Internal environment: refers to the Company's organizational culture and comprehensive factors that affect employees 'risk awareness, including employees' perception of risk, management's risk management philosophy and risk appetite, professional ethics and business environment, the attention and guidance of the Board of Directors and Board of Supervisors, etc.;
Goal setting: refers to the setting of strategic goals according to the Company's risk appetite by the management;
Identification of factors: refers to the management's identification of internal and external factors that affect the achievement of the Company's goals;
Risk assessment: refers to the management's determination of the method for risk management based on the probability and impact of risk factors;
Risk response: refers to the management's choice of risk based on the Company's risk tolerance capability and risk appetite;
Control activities: refer to the systems and procedures formulated to ensure effective risk response, including approval, authorization, verification, adjustment, review, periodic inventory check, record verification, division of labor, asset preservation, performance comparison and corporate management of subsidiary, etc.;
Information communication: refers to the generation of information required for planning, execution and supervision as well as providing information to those in need in a timely manner. Relevant information should be able to be identified, obtained and transmitted in accordance with the prescribed format and requirements for the timeliness, while effectively transmitting within the Company;
Supervision: refers to the process by which the Company autonomously examines the operation of the internal control system. The supervision can be divided into continuous supervision and individual evaluation. The former is the routine supervision in the operation process, while the latter is the independent evaluation conducted by internal auditors, the Board of Supervisors or the Board of Directors and other personnel.

Rule 6 The Company continuously improves its governance structure to ensure the legal operation and scientific decision-making of the general meeting, the Board of Directors, the Board of Supervisors and other institutions. The Company gradually develops an effective incentive and restraint mechanism, establishes risk prevention awareness, cultivates a good corporate spirit and corporate culture, motivates the enthusiasm of numerous employees and creates an environment in which all employees fully understand and perform their duties.

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Rule 7 The Company's human resources department clearly defines the objectives, responsibilities and authorities of each department and position while establishing corresponding authorization, inspection and level-by-level accountability systems to ensure the performance of functions are within the scope of authorization. The Company continuously refines and establishes control structure while setting control procedures among various levels to ensure the instructions given by the Board of Directors and senior management can be carefully executed.

Rule 8 The Company's internal control system covers the following business cycles in business activities:

Sales and receivable cycle: policies and procedures that include sales and booking, issuing after-sale invoices, confirming revenue and accounts receivable, and implementing and recording cash income;
Purchasing and payment cycle: Policies and procedures that include making purchase requisitions, purchasing or procuring raw materials and services, processing purchase orders, accepting goods, filling in acceptance reports or handling returns, recording supplier accounts, approving payments, executing and recording cash payments;
Production cycle: policies and procedures that include formulation of development plans, calculating inventory and development costs;
Fixed asset cycle: policies and procedures that include the budget, acquiring, recording, depreciation, maintenance, inventory, and disposal of fixed assets;
Monetary fund cycle: policies and procedures that include the entry, transfer, recording and reporting of monetary fund as well as the authorization and execution of cashiers and financial personnel;
Related party transaction cycle: policies and procedures that include the definition and confirmation of related parties as well as the pricing, authorization, execution, reporting and recording of related party transaction;
Financing cycle: policies and procedures that include the authorization, execution and recording of borrowings, guarantees, acceptances, leases, issuance of new shares, issuance of convertible corporate bonds and other financing matters;
Investment cycle: policies and procedures that include the decisions, execution, custody and disposal of investments in marketable securities, equity, real estate, operating assets, derivatives and other long-term and short-term investment;
Research and development cycle: policies and procedures that include basic research, product design, technical research and development, product testing, record of research and development and document storage;

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Personnel management cycle: policies and procedures that include hiring, signing employment contracts, training, leave, overtime, absence, dismissal, retirement, timing, decision and calculation of salary, calculation of personal income tax and various deductions, salary records, salary payment, attendance and assessment.

Rule 9 In addition to the control over all sections of business activities, the Company's internal control system should also include various management systems such as systems for use of seal management, bill collection management, budget management, asset management, guarantee management, job authorization and agency system, information management system, internal reporting system for significant information and management system for subsidiaries.

Rule 10 The Company shall establish internal accounting control regulations in accordance with the relevant regulations of the national financial department.

Rule 11 In the event that the Company uses a computer information system, its internal control system should also include security management system for information system. In addition to clearly dividing the responsibilities of the processing department and the user department of information system, the following control activities should also be included:

Division of functions and responsibilities of the information processing department;
Control over system development and program modification;
Control over access to programs and data and data processing;
Security control on files, equipment and information.

Rule 12 The Company fully implements internal control and conducts inspection at any time to respond to changes in the Company's internal and external environment and ensure the effective operation of the internal control system.

The Company requires all employees of the Company to carefully implement the internal control system by adopting measures like training, publicity, supervision, and auditing.

Rule 13 The Company focuses on strengthening the management and control of holding subsidiaries, strengthening the control over activities like related party transactions, external guarantees, use of proceeds and significant investments as well as establishing corresponding control policies and procedures.

Rule 14 The Company establishes a complete risk assessment system to continuously monitor operational risks, financial risks, market risks, risks related to

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policies and regulations and moral risks. Various types of risks faced by the Company would promptly be discovered and evaluated, and necessary control measures would be adopted.

Rule 15 The Company formulates its internal and external information management policies to ensure the accurate transmissions of information, keep the Board of Directors, Board of Supervisors, senior management and internal audit department abreast with the operation and risk status of the Company and its subsidiaries and properly handling various kinds of risks and internal control deficiencies.

Rule 16 The Company improves the balances and supervision mechanism between relevant departments and positions, and the Company's audit and supervision department is responsible for supervision and inspection.

Chapter 3 Main Control Activities

Session I Management Control on Wholly-Owned Subsidiaries and Holding Subsidiaries

Rule 17 In accordance with the relevant regulations of the Company, the Company implements control policies and procedures for wholly-owned subsidiaries and holding subsidiaries, and urges each holding subsidiary to establish an internal control system.

Rule 18 The Company's management and control over wholly-owned subsidiaries and holding subsidiaries includes the following control activities:

Establish a control system for wholly-owned subsidiaries and holding subsidiaries, and clarify the selection methods and terms of reference of the directors, supervisors and senior management appointed to the wholly-owned subsidiaries and holding subsidiaries;
According to its unified planning, the Company coordinates the operating strategies, risk management policies and guiding principles of the holding subsidiaries, and supervises all wholly-owned subsidiaries and holding subsidiaries to establish corresponding business plans and risk management procedures;
Formulate policies and procedures for the supervision and management of major financial and operating matters of branches and subsidiaries, including development plans and budgets, significant investments, acquisition and sales of assets, providing financial assistance, providing guarantees to other parties, engaging in the investment of securities and financial derivatives as well as signing major contracts;
Each branch and subsidiary of the Company should promptly report major business matters, major financial matters and other information that may have a significant impact on the trading price of the Company's stocks and derivatives to the person in charge of the Company in accordance with the

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requirements under relevant system of the Company, and report major matters to the Company's Board of Directors or general meeting for review strictly in accordance with the authorization regulations;

Each branch and subsidiary shall promptly submit important documents such as the resolutions of the board meeting and general meeting to the Company, notifying the matters that may have a significant impact on the trading price of the Company's stocks and derivatives;
The financial officer of the Company should regularly obtain and analyze the monthly reports of each branch and subsidiary, including operational report, production and sales report, balance sheet, statement of profit or loss, cash flow statement and statement on providing funds and guarantees to other parties;
The Company's human resources department should establish and improve the performance evaluation system for each branch and subsidiary in accordance with the Company's actual situation.

Rule 19 If the Company's holding subsidiaries hold other companies at the same time, it should establish a management control system for its subsidiaries at various levels in accordance with the requirements of the system.

Rule 20 The Company supervises and manages the audit work of the holding subsidiaries in accordance with the requirements under the Articles of Association of holding subsidiaries.

Rule 21 The Company supervises and manages the associates with significant influence, in accordance with the system of supervision and management of the holding subsidiaries.

Session II Internal Control on Related Party Transaction

Rule 22 The internal control of the Company's related party transactions follows the principles of integrity, good faith, equality, voluntariness, fairness, openness and fairness, which shall not infringe the interests of the Company and other shareholders.

Rule 23 According to the requirement under the Articles of Association, Rules of Procedure for the General Meeting and Rules of Procedure for the Board of Directors, the Company clearly divides the approval authority of general meeting and Board of Directors on related party transactions, and stipulates the procedures for the consideration of related party transactions and the requirement for abstention from voting.

Rule 24 According to the Company Law and other relevant regulations, the list of related parties of the Company are determined and updated in a timely manner to ensure the truthfulness, accuracy and completeness of the list of related parties.

In the event that the Company and its holding subsidiaries conduct transaction activities, the relevant responsible person should carefully check the list of related parties

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APPENDIX VI.L	INTERNAL CONTROL SYSTEM

and make prudent judgments on whether the transaction involved constitutes a related party transaction. If so, such person shall perform the review, approval and reporting obligations within his/her respective scope of authority.

Rule 25 When the Company considers related party transactions that require prior approval of independent directors, the relevant personnel mentioned in the preceding rule shall promptly submit the relevant materials to the independent directors for prior approval through the Company. Before making their judgments, independent directors may hire intermediaries to issue special reports as the basis for their judgments.

Rule 26 When the Company convenes board meeting to consider related party transactions, related directors shall abstain from voting in accordance with the requirement under Articles of Association and Rules of Procedure for the Board of Directors. The convener of the meeting shall remind the related directors to abstain from voting before the voting takes place. When the general meeting of the Company considers the related party transactions, the Company's Board of Directors and witnessing lawyers should remind related shareholders to abstain from voting before the shareholders cast their votes.

Rule 27 When considering the related party transactions, the Company shall:

gain a detailed understanding on the actual conditions of the object of the transaction, including its operating condition and profitability as well as whether any defect in rights such as mortgage or freeze and any legal disputes such as litigation or arbitration exists;
gain a detailed understanding on the credit history, credit status and compliance capacity of the counter-party to select the counter-party of transaction prudently;
ascertain a fair transaction price based on an adequate basis for price fixing.

The Company shall not deliberate and make decision on related party transactions for which the condition of the object is unclear, the transaction price has not yet been confirmed, or where the conditions of the counter-party to the transaction is unclear.

Rule 28 A written agreement shall be signed for the transaction between the Company and the related parties, specifying the rights, obligations and legal responsibilities of both parties.

Rule 29 Directors, supervisors and senior management of the Company have the obligations to pay attention to see whether any problems which infringe the Company's interests exist, such as appropriation of funds and misappropriation of interests of the Company by any related parties. The independent directors and supervisors of the Company shall have access to records of money transactions between the Company and related parties at any time to see whether there exists any appropriation and transfer of funds, assets and other resources of the Company by the controlling shareholder and its related parties, and shall notify the Board of the Company promptly to adopt corresponding measures in case of any abnormal situations.

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APPENDIX VI.L	INTERNAL CONTROL SYSTEM

Rule 30 If any appropriation or transfer of any funds, assets or other resources of the Company by any related parties has caused or may cause losses to the Company, the Board of the Company shall promptly take such protective measures as litigation or property preservation to prevent or minimize losses.

Session III Internal Control on External Guarantees

Rule 31 The internal control over the external guarantees of the Company is conducted under the principles of legality, cautiousness, mutual benefit and safety to strictly control the risks in providing guarantees.

Rule 32 The general meeting and the Board of Directors of the Company shall exercise the authority of approval in accordance with the explicit provisions on external guarantee matters in the Articles of Association. If any violation of the authority of approval and the consideration procedure occurs, they shall be held accountable according to relevant regulations.

Rule 33 The Company shall investigate the operation and credit condition of the guaranteed party. The Board of Directors should carefully consider and analyze the financial situation, operating conditions, industry prospects and credit situation of the guaranteed party, and make prudent decisions in accordance with the laws. When necessary, the Company may engage an external professional institution to assess the risk of providing external guarantee as a basis for decision-making of the Board of Directors or the general meeting.

Rule 34 Strictly in accordance with the requirement under the Articles of Association, the assets of the Company shall not be used as security for the debts of shareholders of the Company or any other person.

Rule 35 To provide an external guarantee, the Company shall require the counter party to provide a counter guarantee and decide in a prudent manner the actual capacity of the counter guarantee provider and the enforceability of such counter guarantee.

Rule 36 The independent non-executive directors of the Company shall furnish independent opinions upon considering the external guarantee at Board meetings and, where necessary, may engage an accounting firm to review the Company's accumulated and current external guarantees. Anything abnormal identified shall be reported to the Board of Directors and the regulatory authority in a timely manner.

Rule 37 The guarantee contract and relevant original documents shall be properly kept and shall be sorted out and checked in a timely manner, and the Company shall also check with banks and other relevant institutions on a regular basis to make sure the filed documents are complete, accurate and valid. The Company shall pay attention to the validity period of guarantees.

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APPENDIX VI.L	INTERNAL CONTROL SYSTEM

In case any abnormal contract that is not approved through the consideration procedures of Board of Directors or the general meeting is identified in the course of the contract management process, timely report shall be submitted to the Board of Directors and the Board of Supervisors.

Rule 38 The financial department of the Company shall designate a person to continuously monitor the guaranteed entity, collect the latest financial information and audit reports of the guaranteed entity, analyze its financial status and solvency on a regular basis, pay attention to any changes in its production and operation, assets and liabilities, external guarantees, spin-off, consolidation or legal representative and prepare relevant financial files to report to the Board of Directors regularly.

In case the operation of the guaranteed entity is found deteriorating significantly or in case of dissolution, spin-off or other significant events of the Company occurs, the responsible person shall report to the Board of Directors promptly. The Board of Directors is obligated to take effective measures to minimize the losses.

Rule 39 If a debt under an external guarantee is due, the Company shall urge the guaranteed party to perform its obligation of repayment within the time limit. If the guaranteed party fails to perform its obligation on time, the Company shall take necessary remedial measures in a timely manner.

Rule 40 If the guaranteed debts need to be extended after maturity and continue to be guaranteed by the Company, they shall be regarded as new external guarantees and re-perform the consideration and approval procedures for guarantees.

Rule 41 The external guarantee of the holding subsidiaries of the Company shall be implemented in accordance with the above regulations. The holding subsidiaries of the Company shall inform the Company in a timely manner after resolutions made in its Board of Directors or general meeting.

Session IV Internal Control on Significant Investment

Rule 42 The internal control on significant investment of the Company is conducted under the principles of legality, cautiousness, safety and effectiveness to control investment risk and emphasize investment returns.

Rule 43 According to the terms of reference and procedures prescribed in the Articles of Association, Rules of Procedure for the General Meeting and Rules of Procedure for the Board of Directors, the Company fulfils its obligation in considering and approving significant investment.

Rule 44 The Company shall appoint specific institution to conduct special researches and evaluations for the feasibility, investment risks, investment returns and other related matters of the significant investment projects of the Company, and supervises the progress of significant investment projects. If an abnormal situation occurs in an investment project, the institution should report to the Board of the Company in time.

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APPENDIX VI.L	INTERNAL CONTROL SYSTEM

Rule 45 In the event that the Company invests in derivatives such as futures, options and warrants which are based on stocks, interest rates, exchange rates and commodities, strict decision-making procedures, reporting system and monitoring measures should be formulated to limit the investment scale of its derivative product investment according to the risk tolerance capacity of the Company.

Rule 46 If the Company engages in entrust financing, it should choose a qualified professional financial institution with good credit status and financial status, no bad credit record and strong profitability as the trustee, and enter into a written contract with the trustee to clarify the amount, duration, investment varieties, rights and obligations as well as legal responsibilities of both parties of the entrust financing.

Rule 47 The Board of Directors of the Company shall assign personnel to track the progress and the security status of its funds under entrust financing. If an abnormal situation occurs, such person is required to report in time so that the Board of Directors can immediately take effective measures to recover the funds and avoid or reduce the losses suffered by the Company.

Rule 48 The Board of Directors of the Company should examine the progress of significant investment projects and the investment returns on a regular basis. If there are failures to invest as planned or to achieve expected return in the project or losses occurring in the investment, the Board of Directors of the Company shall identify the causes and investigate the responsibilities of the relevant personnel.

Chapter 4 Internal Control on Information

Rule 49 When a situation or event that may have a relatively high impact on the trading price of the Company's stocks and derivatives appears, occurs or will occur, the person responsible for reporting should promptly report the relevant information to the Company's Board of Directors and the secretary to the Board. When the secretary to the Board needs to understand the status and progress of major issues, the relevant departments (including the Company's holding subsidiaries) and personnel shall cooperate and assist actively and reply in a timely, accurate and complete manner and provide relevant information as required.

Rule 50 The internal confidentiality system of the Company is strictly implemented. Personnel who have access to relevant information in their works shall keep the information confidential before it is made public.

Rule 51 For matters that the Company, its controlling shareholders and the de facto controller have committed, the Company shall appoint a dedicated person to track the implementation of the commitments, pay attention to changes in the conditions for fulfilling the commitments, and report the update information of the event to the Company's Board in a timely manner.

Chapter 5 Evaluation for Internal Control

Rule 52 The Company's audit department regularly inspects the Company's internal control deficiencies, evaluates the effectiveness and efficiency of its implementation and promptly proposes suggestion for improvements.

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Rule 53 The audit department of the Company inspects and supervises the operation of the Company's internal control, and forms internal audit report based on internal control deficiencies and abnormalities, suggestion for improvements and resolutions found during the inspection to report to the Board and the attended supervisors. If the Company is found to have substantial abnormal conditions and may or has suffered significant losses, the Board of the Company shall be informed immediately so as to propose practical solutions.

Rule 54 Based on the Company's internal audit report, the Company's Board of Directors considers and evaluates the Company's internal control and forms a self-assessment report on internal control. The Company's Board of Supervisors and independent directors expressed their opinions on this report. The self- assessment report should at least include the following:

Explain whether the Company's internal control system has been soundly established and effectively operated, and whether there are any defects in according with the system and relevant regulations;
Explain the status of the self-examination and evaluation on the control activities which the system focuses upon;
Explain the progress of the improvement measures on deficiencies in internal control and abnormalities.

Rule 55 When conducting an annual audit of the Company, the certified public accountant should issue evaluation opinions on the internal control of the Company's financial reports according to the relevant regulations.

Rule 56 If the certified public accountant disagrees with the effectiveness of the Company's internal control, the Company's Board of Directors and Board of Supervisors shall make a special explanation on the matters mentioned in the audit opinion. The special explanation should at least include the following:

Basic situation of the objections;
The degree of influence of the matter on the effectiveness of the Company's internal control;
The opinions of the Company's Board of Directors and Board of Supervisors on the matter;
The possibility of eliminating the matters and their impact;
Specific measures to eliminate the matters and their impact.

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APPENDIX VI.L	INTERNAL CONTROL SYSTEM

Rule 57 The Company regards the complete and effective implementation of the internal control system as one of the important indicators for the performance evaluation of various departments (including branches) and holding subsidiaries of the Company, and has established a mechanism for accountability. The responsible persons who violate the internal control system and affect the implementation of the internal control system shall be investigated and punished.

Rule 58 The working papers, audit reports and related materials of the audit department of the Company shall be kept for a time period in compliance with the relevant file management regulations.

Chapter 6 Supplemental Provisions

Rule 59 The Company formulates various specific management systems in accordance with the system, and continuously adjusts and revises those systems based on the changes in environment, time, production and operation as well as the internal control deficiencies found by audit department and accounting firms.

Rule 60 The system is subject to the consideration and approval of the Board and shall come into effect and implement from the date of the initial public offering and listing of the Company's shares in the PRC. The Board of Directors of the Company is responsible for the interpretation and modification of the system.

For identification purposes only

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APPENDIX VI.M	INTERNAL AUDIT SYSTEM

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

INTERNAL AUDIT SYSTEM

Chapter 1 General Rules

Rule 1 The Internal Audit System is formulated pursuant to the Audit Law of the People's Republic of China, Internal Audit Provisions of the National Audit Office, the Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd. (hereinafter as the "Articles of Association"), the relevant provisions and other laws, regulations and normative documents of the stock exchange, combined with the actual situation of the Company in order to regulate the internal audit work of Beijing Chunlizhengda Medical Instruments Co., Ltd. (hereinafter as the "Company"), independently evaluate the authenticity, legality and effectiveness of the financial incomes and expenses as well as economic activities of the Company and its subsidiaries.

Rule 2 The audited objects referred to in this System are the Company's internal institutions or functional departments, subsidiaries, branches as well as participating share companies with significant influence and their relevant responsible persons.

Rule 3 The internal audit referred to in this System refers to an evaluation activity conducted by the Company's internal audit institution and personnel to assess the effectiveness of the Company's internal control and risk management, the authenticity and integrity of financial information as well as the efficiency and effectiveness of business activities.

Chapter 2 Audit institution and auditors

Rule 4 The Company established an Audit Committee under the Board. All members of the Audit Committee come from members of the Board, in which more than half of the members should be independent directors who also act as conveners and at least one independent director should be an accounting professional. The independent director who acts as the convener of the Audit Committee shall be an accounting professional.

Rule 5 The Company's internal audit institution is the Audit Department which is responsible for the internal audit work of the Company. The Audit Department of the Company is accountable to the Audit Committee of the Board and reports to the Audit Committee of the Board.

Rule 6 The Audit Department is composed of no less than 3 full-time auditors and has a Director of Audit Department nominated by the Audit Committee of the Board and be subject to appointment and removal by the Board. The audit department director should be performed by a full-time staff.

Rule 7 The Audit Department should maintain its independence and should not be placed under the leadership of the Finance Department or be co-located at same office with the Finance Department.

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APPENDIX VI.M	INTERNAL AUDIT SYSTEM

Rule 8 The Company's internal institutions, subsidiaries, and participating share companies with significant influence should cooperate with the internal audit department, perform their duties in accordance with the laws and should not hamper the work of the internal audit department.

Rule 9 The internal auditors should have the relevant professional knowledge and business capacities eligible for auditing, accounting and economic management.

Rule 10 The internal auditors should firmly adhere to the principle of pragmatism, capable of upholding loyalty, objectivity, fairness, honesty and integrity as well as maintaining confidentiality; abstaining from abuse of power, malpractice for selfish ends and wilful negligence.

Rule 11 The internal auditors should avoid from handling those audit cases where conflict of interests with the audited objects or audited matters will be involved.

Rule 12 The internal auditors shall participate in training regularly or irregularly to constantly improve their professional capacity in order to guarantee the quality of internal audit work.

Chapter 3 The functions and responsibilities of the audit institution

Rule 13 When guiding and supervising the work of the internal audit department, the Audit Committee shall perform the following primary duties:

to guide and supervise the establishment and implementation of the internal audit system;
to convene meeting at least once in each quarter to consider and approve the work plan and report submitted by the internal audit department;
to report to the Board at least once in each quarter and the content of the report shall include but not limited to the progress of internal audit work, quality and significant issues being found;
to coordinate and manage the relationships between the internal audit department and external audit units such as the accounting agencies and national audit institutions.

Rule 14 The internal audit department should perform the following primary duties:

to check and evaluate the integrity, rationality and validity of implementation of the internal control system of the Company's internal institutions, subsidiaries and participating share companies with significant influence;
to audit the legality, compliance, authenticity and completeness of the accounting information and other relevant economic information, the

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APPENDIX VI.M	INTERNAL AUDIT SYSTEM

financial incomes and expense being reflected as well as the relevant economic activities of the Company's internal institutions, subsidiaries and participating stock companies that have significant influence, including but not limited to financial reports, performance bulletins, and voluntary disclosure of predictive financial information;

to assist in establishing an effective anti-fraud mechanism; determine the key areas, key sections and main contents to be included in carrying out anti-fraud measures; and pay reasonable attention to check whether or not there is possible fraudulency existing in the course of internal audit;
to report to the Audit Committee at least once in each quarter, including but not limited to the implementation of the internal audit plan and the problems found during the internal audit work.

Rule 15 The internal audit department shall submit the internal audit working plan for the next year to the Audit Committee within two months before the end of each fiscal year, and submit the annual internal audit working report to the Audit Committee within two months after the end of each fiscal year.

The internal audit department should treat the important audit issues which include foreign investments, purchase and sale of assets, external guarantees, connected transactions, use of proceeds and matters of information disclosure as the necessary contents to be included in the annual working plan.

The internal audit department should check the internal control system of monetary funds at least once in each quarter. When checking the internal control system of monetary funds, the internal audit department should focus on whether the authorization and approval procedures for large amount of non-operating money funds expenditure are sound; whether there are unauthorized approvals; and whether there are drawbacks in some sections of the internal control of monetary funds. If any abnormality is found, it shall report to the Audit Committee in a timely manner.

Rule 16 The internal audit department should enact the audit work based on the business aspects, and evaluate the rationality and effectiveness of the implementation of internal control design related to financial reports and information disclosure affairs in accordance with the actual situations.

Rule 17 Internal audit should cover all business aspects of the Company's business activities relating to financial reports and information disclosure in general, including but not limited to: sales and collection of payments, procurement and expenses and payments, fixed asset management, inventory management, capital management (including investment management and financing management), financial reports, information disclosure, human resource management and information system management.

In the case where the above-mentioned control activities involve connected transactions, the control policies and procedures of the connected transactions should also be included.

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APPENDIX VI.M	INTERNAL AUDIT SYSTEM

The internal audit department can adjust the above-mentioned business aspects that should be audited according to the nature of the Company's industry and features of production and operation.

Rule 18 The audit evidences obtained by the internal auditors should be sufficient, relevant and reliable. The internal auditors should record the name, source, content, time of the audit evidence clearly and completely in the working papers.

Rule 19 The internal auditors should prepare and review the audit working papers in accordance with the relevant regulations during the auditing, and categorise and archive the audit working papers in a timely manner upon completing the audit project.

The internal audit department shall set up a system of confidentiality of working papers and establish a corresponding file management system in accordance with the provisions of relevant laws and regulations in order to clearly ascertain the retention time of the work reports, working papers and relevant information of internal audit.

Chapter 4 Practical Implementation

Rule 20 The internal audit department should implement appropriate review procedures in accordance with relevant regulations, evaluate the effectiveness of the internal control of the Company, and submit an internal control evaluation report to the Audit Committee at least once per annum.

The evaluation report should explain the purpose and scope of review and evaluation of internal control, the conclusion of the review and recommendations for improving internal control.

Rule 21 The scope of review and evaluation of internal control should include the establishment and implementation of the internal control system related to the financial reports and information disclosure issues.

The internal audit department shall focus on checking and evaluating the integrity, rationality and implementation effectiveness of the matters related to transaction of large-scalenon-operating capital, external investments, purchase and sale of assets, external guarantees, connected transactions, use of proceeds, and information disclosure issues in the internal control system.

Rule 22 The internal audit department shall urge relevant responsible departments to formulate rectification measures and rectification schedules for the internal control defects discovered during the process of review and to conduct a review on the internal control subsequently in order to supervise the implementation of the rectification measures.

The responsible person of the internal audit department should arrange a subsequent review on the internal control in a timely manner and include it into the working plan of the annual internal audit.

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APPENDIX VI.M	INTERNAL AUDIT SYSTEM

Rule 23 The internal audit department shall report to the Audit Committee in a timely manner if major defects or significant risks were found in internal control during the review process.

In the case where the Audit Committee regarded that there are major defects or significant risks prevailing in the Company's internal control, the Board should report the details to the stock exchange in a timely manner and disclose them thereof. The announcement to be published by the Company should disclose the major defects or significant risks prevailing in internal control, the consequences having been caused or to be incurred, and the measures having been adopted or to be taken. in the announcement,

Rule 24 The internal audit department should conduct an audit in a timely manner upon making an important external investment. While auditing external investment issues, it should pay great attention to the followings:

whether or not the external investment has performed the consideration and approval stipulated in relevant regulations;
whether or not the contract was concluded in accordance with the contents of consideration and approval; whether or not the contract is performed in a normal manner;
whether or not a designated person shall be appointed or a special institution shall be established to study and evaluate the feasibility, investment risks and investment returns of major investment projects, and track and supervise the progress of major investment projects;
in the case issues involving trust financing, attention should be paid to whether or not the Company has performed the consideration and approval in accordance with the relevant requirements; whether or not the trustee's integrity records, business conditions and financial conditions are good; and whether or not a designated person is appointed to track and supervise the progress of the trust financing;
in case of issues involving securities investment, attention should be paid to whether or not the Company will establish a special internal control system tailored for securities investment; whether or not the investment scale will affect the ordinary course of business of the Company; whether or not the funding source is self-owned funds; whether or not the investment risk exceeds the Company's scope of tolerance; whether or not the Company uses other people's accounts or provide funding to other people to conduct the securities investment; whether or not the independent directors and sponsors (including sponsors and sponsor representatives, same below) have expressed their opinions (if applicable).

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APPENDIX VI.M	INTERNAL AUDIT SYSTEM

Rule 25 The internal audit department should conduct an audit in a timely manner upon making important purchase and sale of assets, and should pay great attention to the followings while auditing the issues of purchase and sale of assets:

whether or not the purchase and sale of assets has performed the consideration and approval in accordance with the relevant requirements;
whether or not the contract was concluded in accordance with the conditions of consideration and approval; and whether or not the contract was performed in a normal manner;
whether or not the operation conditions of the purchased assets is consistent with expectations;
whether or not the purchased assets have any guarantees, mortgages, pledges and other restrictions on transfers; and whether or not the purchased assets are involved in litigations, arbitrations and other major disputes.

Rule 26 The internal audit department should conduct an audit in a timely manner upon making important external guarantees, and should pay great attention to the followings while auditing external guarantee issues:

whether or not the external guarantee has performed the consideration and approval in accordance with the relevant requirements;
whether or not the guarantee risk exceeds the scope of the Company's tolerance; whether or not the integrity record, business and financial conditions of the guaranteed party are good;
whether or not the guaranteed party can provide a counter-guarantee; and whether or not the counter-guarantee is enforceable;
whether or not the independent directors and sponsors express their opinions (if applicable);
whether or not a special person is designated to pay continuous attention to the business conditions and financial conditions of the guaranteed party.

Rule 27 The internal audit department should conduct an audit in a timely manner upon making important connected transaction, and should pay great attention to the followings while auditing the matters concerning connected transactions:

whether or not the list of the connected parties are confirmed and updated in a timely manner;
whether or not the connected transaction has gone through the consideration and approval in accordance with the relevant requirements; whether or not the connected shareholders or connected directors have abstained from voting in the consideration and approval of the connected transaction;

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APPENDIX VI.M	INTERNAL AUDIT SYSTEM

whether or not the independent directors have given their prior approval and independent opinions; whether of not the sponsors have expressed their opinions (if applicable);
whether or not a written agreement has been concluded for the connected transactions; whether or not the rights, obligations and legal responsibilities of both parties of the transaction have been clearly confirmed;
whether or not the subject matter of the transaction has any guarantees, mortgages, pledges and other restrictions on transfers; and whether or not the purchased assets are involved in litigations, arbitrations and other major disputes;
whether or not the integrity record, business conditions and financial conditions of the counterparty of the transaction are good;
whether or not the pricing of connected transaction is fair; whether or not the subject matter of the transaction has been audited or evaluated in accordance with the relevant regulations; and whether or not the connected transaction will expropriate the interests of the Company.

Rule 28 The internal audit department shall conduct an audit of the deposit and use of proceeds at least once every quarter, and express opinions on the authenticity and compliance of the use of proceeds. When auditing the conditions of the use of proceeds, it should focus on the followings:

whether or not the proceeds are deposited in a special account determined by the Board for centralized management; whether or not the Company, the commercial bank where the proceeds are deposited and the sponsor has entered into a tripartite supervision agreement;
whether or not the proceeds are used in accordance with the proceeds investment plan promised in the document of application for issuance; whether or not the investment progress of the fund raising project is in line with the progress of the plan; and whether or not the investment returns are in line with expectations;
whether or not the proceeds are used for pledges, entrusted loans or other investments that will change the purpose of the proceeds; and whether the proceeds are being appropriated or misappropriated;
whether or not the proceeds are used to replace the self-owned funds that have previously been invested in the fund raising project, use idle proceeds to make up liquidity temporarily, or change the investment direction of the proceeds; whether or not the consideration and approval and the obligations of information disclosure have been performed in accordance with relevant regulations; whether or not the independent directors, the Board of

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APPENDIX VI.M	INTERNAL AUDIT SYSTEM

Supervisors and the sponsors have expressed their opinions in accordance with the relevant regulations (if applicable).

Rule 29 The internal audit department shall conduct an audit of the preliminary results before its disclosure to the public. Greater attention should be paid to the followings while auditing the preliminary results:

whether or not it is in accordance with the "Accounting Standards for Enterprises" and the relevant regulations;
whether or not the accounting policies and accounting estimates are reasonable; whether or not there have been changes;
whether or not there have been significant abnormalities;
whether or not the assumption of continuity of operations is satisfied;
whether or not the internal control of the relevant financial report has significant defects or significant risks.

Rule 30 When reviewing and evaluating the establishment and implementation of the information disclosure management system, the internal audit department should focus on the followings:

whether or not the Company has formulated the information disclosure management system and related systems in accordance with the relevant regulations, including the information disclosure management and reporting system of various internal institutions, subsidiaries and participating share companies with significant influence;
whether or not the scope and content of major information as well as its communication, review and disclosure have been clearly stipulated;
whether or not the confidentiality measures for undisclosed major information have been formulated to clearly confirm the scope and confidentiality responsibilities of the insiders of inside information;
whether or not the rights and obligations of the relevant obligated parties for dealing with the affairs of disclosure of corporate information, including the Company and its directors, supervisors, senior management, shareholders, de facto controllers, are clearly stipulated;
whether or not the Company have designated a specific person to track the conditions of performing the obligations of the commitments promised publicly by the Company, controlling shareholders and the de facto controllers;
whether or not the management system of information disclosure and the relevant system have been implemented effectively.

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APPENDIX VI.M	INTERNAL AUDIT SYSTEM

Chapter 5 Evaluation and verification of internal control

Rule 31 The Audit Committee should issue an annual report on self-evaluation of internal control for the establishment and implementation of the internal control system related to financial reports and information disclosure issues in accordance with the evaluation report and related materials issued by the internal audit department. The report on self-evaluation of internal control should at least include the followings:

whether or not the internal control system is set up appropriately and implemented effectively;
the defects and abnormalities existing in the internal control and the progress of handling (if applicable);
the relevant measures to improve and optimize the establishment and implementation of the internal control system;
the progress of rectifying the defects and abnormalities existing in internal control of the previous year (if applicable);
the presentation of the completion of review on the internal control and evaluation work of the current year.

The Board of the Company should form a resolution on the report on self-evaluation of internal control while considering and approving the annual report. The Board of Supervisors and independent directors should express their opinions on the self-evaluation report on internal control.

Rule 32 While appointing an accounting firm for annual auditing, the Company shall request the accounting firm to issue an internal control verification report to prescribe the effectiveness of the internal control of the Company and its relevant financial reports at least once every two years.

Rule 33 In the case where an accounting firm issues a modified conclusion verification report on the effectiveness of the Company's internal control, the Board of the Company and Board of Supervisors shall make a special presentation of the issues prescribed in the verification conclusion. The special presentation should at least include the followings:

the basic conditions of the issue(s) involved in the verification conclusion and;
the degree of influence of such issue on the effectiveness of the internal control of the Company;
the opinions of the Board of the Company and Board of Supervisors on such issue;
the specific measures to eliminate such issue and its impact.

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APPENDIX VI.M	INTERNAL AUDIT SYSTEM

Chapter 6 Reward and Punishment

Rule 34 The Company commends or rewards relevant departments and individuals for their outstanding achievement in enacting this System.

Rule 35 In the event that relevant department(s) or individual(s) have committed one of the following acts, the Company shall impose administrative sanctions, economic penalties or refer the issue to relevant departments according to the severity of the case:

to refuse to provide account books, accounting statements, information and supporting materials;
to hinder the audit staff to exercise their function and power; resist or undermine supervision and inspection;
to falsify or conceal the truth;
to refuse to execute the audit opinions or audit conclusions and decisions;
to retaliate against the audit staff and whistleblowers.

Rule 36 In the case where there is violation of this System by auditors in one of the following acts, an investigation for criminal responsibility will be conducted for those whose act can constitute a crime in accordance with the law; administrative sanctions will be imposed on those whose act does not constitute a crime:

to exploit their function and power for private gain;
to engage in fraudulent act or malpractice for selfish ends;
to be blamed for negligence and cause damage to the Company;
to leak the Company's trade secrets.

Chapter 7 Supplemental Provisions

Rule 37 Any matters not covered in this System shall be implemented in accordance with the requirements under relevant national laws, regulations, and the Articles of Association; if this System is in conflict with the laws, regulations issued by the state in the future, or the Articles of Association modified by legal procedures, it shall be implemented in accordance with the requirements under relevant national laws, regulations, and Articles of Association, and shall be amended immediately and submitted to the meeting of the Board for consideration and approval.

Rule 38 This System should be considered and approved by the meeting of the Board of the Company, and shall come into effect from the date of the initial public offering and the listing of the shares in the PRC.

Rule 39 This System shall be interpreted by the Board of Directors of the Company.

For identification purposes only

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APPENDIX VI.N RULES OF PROCEDURES OF THE MEETING OF SUPERVISORY COMMITTEE

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.*

RULES OF PROCEDURES OF THE MEETING OF SUPERVISORY COMMITTEE

Rule 1 The Rules of Procedures of the Meeting of Supervisory Committee are formulated by Beijing Chunlizhengda Medical Instruments Co., Ltd.* (the "Company") pursuant to the Company Law of the People's Republic of China ("Company Law") and other laws and regulations, and the requirements of the Articles of Association of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (the "Articles of Association"), combined with the actual situation of the Company in order to regulate the resolution methods and resolution procedures of the Supervisory Committee, procure the Board of Supervisors to perform its duties effectively as well as enhancing the regulatory operation and level of scientific decision-making of the Supervisory Committee.

Rule 2 The Supervisory Committee shall have an Office of the Supervisory Committee to deal with the day-to-day affairs of the Board of Supervisors.

The chairman of the Supervisory Committee serves concurrently as the person in charge of the Office of the Supervisory Committee and keeps the seal of the Supervisory Committee.

Rule 3 Meetings of the Supervisory Committee are divided into regular meetings and extraordinary meetings.

Regular meetings of the Supervisory Committee should be held at least once every six months. The Supervisory Committee shall convene an extraordinary meeting within ten days should any one of the following circumstances occurs:

when a meeting is proposed for convening by any supervisor;
when the general meeting and meeting of the Board have passed a resolution that is in violation of the laws, regulations, rules, various regulations and requirements of the regulatory authorities, the Articles of Association, the resolution(s) of the general meeting and other relevant requirements;
when the misconduct of directors and senior management may cause significant damages to the Company or have adverse impacts on the market;
when legal proceedings are instituted against the Company, directors, supervisors, senior management by shareholders;
when the Company, directors, supervisors, and senior management are penalised by government departments;
such other conditions stipulated by the Articles of Association.

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APPENDIX VI.N RULES OF PROCEDURES OF THE MEETING OF SUPERVISORY COMMITTEE

Rule 4 Before issuing a notice for convening a regular meeting of the Board of Supervisors, the Office of the Board of Supervisors should solicit meeting proposals from all supervisors and take at least two days to solicit opinions from employees of the Company. When soliciting proposals and soliciting opinions, the Office of the Board of Supervisors should explain that the Board of Supervisors focuses on supervising the Company's regulatory operations and the behaviour of directors and senior management instead of business management decisions of the Company.

Rule 5 In the event that a supervisor proposes to convene an extraordinary meeting of the Board of Supervisors, a written proposal signed by the supervisor shall be submitted through the Office of the Board of Supervisors or directly submitted to the chairman of the Board of Supervisors. The following matters shall be specified in the written proposal:

the name of the supervisor who makes the proposal;
the reasons for the proposal or the objective reasons on which the proposal is based;
the proposed time or time limit, venue and way of convening the meeting;
a clear and specified proposal;
the way of contacting the supervisor who makes the proposal and the date being proposed.

The Office of the Board of Supervisors shall issue a notice of convening an extraordinary meeting of the Board of Supervisors within three days after the Office of the Board of Supervisors or the chairman of the Board of Supervisors receives a written proposal from the supervisor.

Rule 6 Meetings of the Board of Supervisors are convened and presided by the chairman of the Board of Supervisors; in the case where the chairman of the Board of Supervisors is unable or fails to exercise his duties, a supervisor jointly elected by more than half of the supervisors shall perform such duties.

Rule 7 Prior to convening a regular meeting and an extraordinary meeting of the Board of Supervisors, the Office of the Board of Supervisors shall submit ten days and five days in advance respectively a written notice of the meeting that is stamped with the seal of the Board of Supervisors to all supervisors directly, by fax, e-mail, or other ways of delivery. In the event that the notice is not delivered directly, a telephone confirmation should also be made and recorded accordingly.

In case of emergency where an extraordinary meeting of the Board of Supervisors is needed to be convened as soon as possible, the meeting notice can be issued at any time either verbally or by telephone provided that the convener of the meeting should make an explanation at the meeting.

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APPENDIX VI.N RULES OF PROCEDURES OF THE MEETING OF SUPERVISORY COMMITTEE

Rule 8 The written notice of the meeting shall at least contain the following information:

the time and venue of the meeting;
the matters to be considered (proposals of the meeting);
the convener and the chairman of the meeting, the person who proposed the extraordinary meeting and his written proposal;
the meeting materials needed for the voting of the Board of Supervisors;
the supervisors should attend the meeting in person as requested;
the contact person and contact information.

A verbal meeting notice shall include at least the contents of items (1) and (2) above as well as an explanation of the need to convene an extraordinary meeting of the Board of Supervisors as soon as possible in case of emergency.

Rule 9 The meeting of the Board of Supervisors shall be held onsite in a physical venue.

In case of emergency, an extraordinary meeting of the Board of Supervisors can be convened via video, telephone, fax or email voting. The convening of an extraordinary meeting of the Board of Supervisors may also adopt the form of simultaneously on-site in a physical venue combined with the other means.

Rule 10 The meeting of the Board of Supervisors should be conducted by more than half of the supervisors.

The secretary to the Board shall attend the meeting of the Board of Supervisors.

Rule 11 The chairman of the meeting shall invite the supervisors present at the meeting to express explicit opinions on each proposal.

The chairman of the meeting shall require the directors, senior management, other employees of the Company or representatives of relevant intermediary institutions to attend the meeting and respond to enquiries in accordance with the proposals of supervisors.

Rule 12 Voting at the meeting of the Board of Supervisors is based on one-person-one-vote and shall be conducted in a registered form and written form.

The voting intentions of supervisors are divided into affirmative vote, dissenting vote and abstaining vote. Supervisors attending the meeting shall elect one of the above intentions. In the event that no election is made or more than two intentions are elected at

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APPENDIX VI.N RULES OF PROCEDURES OF THE MEETING OF SUPERVISORY COMMITTEE

the same time by a supervisor, the presider of the meeting should request that supervisor to re-elect and in case the supervisor refused to elect, it will be regarded as abstaining vote; leaving the venue in the mid of the meeting without making an election is regarded as abstaining vote.

A resolution made by the Board of Supervisors shall be approved by more than half of all the supervisors.

Rule 13 Sound recording and video recording of the entire process of a meeting convened by the Board of Supervisors may be made as needed.

Rule 14 The staff of the Office of the Board of Supervisors shall make minutes onsite at the venue of the meeting. The minutes of the meeting shall contain the following information:

the session, time, venue and manner of the meeting;
the issuance of the notice of meeting;
the convener of the meeting and the presider of the meeting;
the attendance of the meeting;
the proposals to be considered at the meeting, highlights and main opinions of each supervisor 's speech on related matters, and the voting intention on the proposals;
the voting system and results of each proposal (set out the specific number of affirmative, dissenting and abstaining votes);
other matters deemed to be recorded by the supervisors present at the meeting.

For a meeting of the Board of Supervisors convened by means of communications, the Office of the Board of Supervisors should tidy up the meeting minutes in accordance with the above-mentioned provisions.

Rule 15 Supervisors present at the meeting shall sign on the minutes of the meeting for confirmation. In the event that a supervisor(s) has different opinions on the minutes of the meeting, a written explanation can be made when signing the minutes.

In the event that a supervisor who neither signs and confirms in accordance with the provisions of the preceding paragraph nor gives written explanations for his different opinions shall be deemed to fully agree with the contents of the meeting minutes.

Rule 16 The chairman of the Board of Supervisors shall urge relevant personnel to implement the resolutions of the Board of Supervisors. The chairman of the Board of Supervisors shall report on the implementation of the resolutions having been formed at the subsequent meetings of the Supervisory Committee.

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APPENDIX VI.N RULES OF PROCEDURES OF THE MEETING OF SUPERVISORY COMMITTEE

Rule 17 The meeting files of the Supervisory Committee, including the meeting notices and meeting materials, registration book of the meeting, audio recordings of the meeting, information of visual recordings, number of votes casted, and the minutes signed and confirmed by the supervisors attending the meeting, shall be kept by the person designated by the chairman of the Supervisory Committee.

The information of the meeting of Supervisory Committee shall be kept for a period of ten years.

Rule 18 The term "not less than" in these Rules includes the number itself, and the term "than" does not include the number itself.

Any matters unspecified in these Rules shall be referred to the relevant requirements of the Rules of Procedures of the Board Meetings; for implementation.

These Rules are an attachment to the Articles of Association and should be considered and passed at the general meeting, and it shall be effective and implemented from the Company's initial public offering and the date of the listing of its securities within the territory of the PRC. In the case these Rules are to be amended due to where the amendment of laws and regulations or there due to changes in the Company's operating conditions, the Board of Supervisors shall propose amendments to the general meeting for consideration and approval.

These Rules shall be interpreted by the Supervisory Committee.

The Board of Directors

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

For identification purpose only

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NOTICE OF THE EXTRAORDINARY GENERAL MEETING

北京市春立正達醫療器械股份有限公司

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1858)

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

Notice is hereby given that the extraordinary general meeting (the "EGM") of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (the "Company") will be held at 9:30 a.m. on Monday, 10 August 2020 at No. 10 Xinmi Xi Er Road, Southern District of Tongzhou Economic Development Zone, Tongzhou District, Beijing, the PRC to consider and, if thought fit, to pass the following resolutions:

SPECIAL RESOLUTIONS

proposal of the A Share Offering;
1. Class of Shares to be issued;
2. Nominal value of Shares;
3. Number of Shares to be issued;
4. Pricing methodology;
5. Method of issue;
6. Target of subscribers;
7. Form of underwriting;
8. Place of listing; and
9. Valid period of the resolution;
proposal on the use of proceeds from the Company's A Share Offering and feasibility analysis;
proposal on distribution of accumulated profits before the A Share Offering;

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NOTICE OF THE EXTRAORDINARY GENERAL MEETING

proposal on granting authorization to the Board and its authorized representatives to fully handle the specific matters in relation to the A Share Offering;
proposed amendments to the Articles of Association;

ORDINARY RESOLUTIONS

proposal on undertakings in connection with the matters about the A Share Offering and corresponding restrictive measures;
proposal on the analysis on remedying the impacts of the dilution of current return as a result of the A Share Offering and the responsive measures;
proposal on the three-year shareholder dividend return plan after the A Share Offering;
rules of procedures of the general meetings;
rules of procedures of the Board meetings;
management measures for use of proceeds;
management measures for information disclosure matters;
management measures for provision of external guarantees;
working systems for independent directors;
measures for administration of related party transactions;
management system for regulating fund transactions between related parties;
investor relations management system;
external investment management system;
implementing rules of the cumulative voting system;
internal control system;

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NOTICE OF THE EXTRAORDINARY GENERAL MEETING

internal audit system; and
rules of procedures of the meeting of Supervisory Committee.

By Order of the Board

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

Shi Chunbao

Chairman

Beijing, the PRC

24 July 2020

For identification purpose only

Unless otherwise stated, the capitalized terms used herein shall have the same meanings as those defined in the circular of the Company dated 24 July 2020.

As at the date of this notice, the executive Directors of the Company are Mr. Shi Chunbao, Ms. Yue Shujun and Mr. Xie Feng Bao; the non-executive Director of the Company is Mr. Wang Xin; and the independent non-executive Directors of the Company are Mr. Ge Changyin, Mr. Ho Wai Ip and Mr. Weng Jie.

Notes:

REGISTRATION OF MEMBERS
In order to be qualified to attend and vote at the EGM, holders of H Shares whose transfers have not been registered must deposit the transfer documents together with the relevant share certificates at the office of the H Share registrar of the Company, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong by no later than 4:30 p.m. on Tuesday, 4 August 2020.
Shareholders whose names appear on the Company's register of members at the close of business on Tuesday, 4 August 2020 are entitled to attend and vote at the EGM.
APPOINTMENT OF PROXY
Any Shareholder entitled to attend and vote at the EGM is entitled to appoint one or more proxies to attend and vote at the meeting instead of him/her. A proxy need not be a Shareholder of the Company.
The instrument to appoint a proxy shall be in writing and signed by the Shareholder or of his/her attorney duly authorised in writing or, if the Shareholder is a corporate body, either executed under its common seal or signed by its legal representative, director or duly authorised attorney. If the proxy form is signed by the attorney of the Shareholder, the power of attorney or other authorisation document authorising the attorney to sign the proxy form must be notarised.
To be valid, the proxy form, together with the power of attorney or other authority (if any), shall be lodged by hand or post, to the Company's H Share registrar in Hong Kong, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong (for holders of H Shares) or the registered office of the Company at No. 10 Xinmi Xi Er Road, Southern District of Tongzhou, Economic Development Zone, Tongzhou District, Beijing, the PRC (for holders of Domestic Shares), not less than 24 hours before the time appointed for holding the EGM or its adjourned meeting (as the case may be). Completion and return of the proxy form shall not preclude Shareholders from attending and voting in person at the EGM.

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NOTICE OF THE EXTRAORDINARY GENERAL MEETING

REPLY SLIP
Shareholders who intend to attend in person or by proxy the EGM shall deliver the reply slip to the Company's H Share registrar in Hong Kong, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong (for holders of H Shares) or the registered office of the Company at No. 10 Xinmi Xi Er Road, Southern District of Tongzhou, Economic Development Zone, Tongzhou District, Beijing, the PRC (for holders of Domestic Shares), on or before Wednesday, 5 August 2020.
CONTACT PERSON OF THE COMPANY

Contact Person:	Mr. Zhao Guodao
Contact Tel:	(8610) 5861	1761/62/63
Contact Fax:	(8610) 5861	1751

PROCEDURES OF VOTING AT THE EGM
Pursuant to Rule 13.39(4) of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited, any vote of Shareholders at the EGM must be taken by poll.
OTHERS
The EGM is expected to take half a day. Shareholders attending the EGM (in person or by proxy) are responsible for their own transportation and accommodation fees. Identification documents must be shown by shareholder(s) or proxies to attend the EGM.

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NOTICE OF THE DOMESTIC SHAREHOLDERS' CLASS MEETING

北京市春立正達醫療器械股份有限公司

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1858)

NOTICE OF THE DOMESTIC SHAREHOLDERS' CLASS MEETING

Notice is hereby given that a class meeting of the holders of domestic shares (the

Domestic Shareholders' Class Meeting") of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (the "Company") will be held at 10:30 a.m. (or the time immediately after the conclusion of the EGM) on Monday, 10 August 2020 or any adjournment thereof at No. 10 Xinmi Xi Er Road, Southern District of Tongzhou Economic Development Zone, Tongzhou District, Beijing, the PRC, to consider and, if thought fit, to pass the following resolutions:

SPECIAL RESOLUTIONS

proposal of the A Share Offering;
1. Class of Shares to be issued;
2. Nominal value of Shares;
3. Number of Shares to be issued;
4. Pricing methodology;
5. Method of issue;
6. Target of subscribers;
7. Form of underwriting;
8. Place of listing; and
9. Valid period of the resolution;
proposal on the use of proceeds from the Company's A Share Offering and feasibility analysis;
proposal on distribution of accumulated profits before the A Share Offering;
proposal on granting authorization to the Board and its authorized representatives to fully handle the specific matters in relation to the A Share Offering;

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NOTICE OF THE DOMESTIC SHAREHOLDERS' CLASS MEETING

proposed amendments to the Articles of Association;
ORDINARY RESOLUTIONS
proposal on undertakings in connection with the matters about the A Share Offering and corresponding restrictive measures;
proposal on the analysis on remedying the impacts of the dilution of current return as a result of the A Share Offering and the responsive measures; and
proposal on the three-year shareholder dividend return plan after the A Share Offering.

By Order of the Board

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

Shi Chunbao

Chairman

Beijing, the PRC

24 July 2020

For identification purpose only

Unless otherwise stated, the capitalized terms used herein shall have the same meanings as those defined in the circular of the Company dated 24 July 2020.

Notes:

REGISTRATION OF MEMBERS
Domestic Shareholders whose names appear on the Company's register of members at the close of business on Tuesday, 4 August 2020 are entitled to attend and vote at the Domestic Shareholders' Class Meeting.
APPOINTMENT OF PROXY
Any Domestic Shareholder entitled to attend and vote at the Domestic Shareholders' Class Meeting is entitled to appoint one or more proxies to attend and vote at the meeting instead of him/her. A proxy need not be a Domestic Shareholder of the Company.
The instrument to appoint a proxy shall be in writing and signed by the Domestic Shareholder or of his/her attorney duly authorised in writing or, if the Domestic Shareholder is a corporate body, either executed under its common seal or signed by its legal representative, director or duly authorised attorney. If the proxy form is signed by the attorney of the Domestic Shareholder, the power of attorney or other authorisation document authorising the attorney to sign the proxy form must be notarised.

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NOTICE OF THE DOMESTIC SHAREHOLDERS' CLASS MEETING

To be valid, the proxy form, together with the power of attorney or other authority (if any), shall be lodged by hand or post, to registered office of the Company at No. 10 Xinmi Xi Er Road, Southern District of Tongzhou, Economic Development Zone, Tongzhou District, Beijing, the PRC, not less than 24 hours before the time appointed for holding the Domestic Shareholders' Class Meeting or its adjourned meeting (as the case may be). Completion and return of the proxy form shall not preclude Domestic Shareholders from attending and voting in person at the Domestic Shareholders' Class Meeting.

REPLY SLIP
Domestic Shareholders who intend to attend in person or by proxy the Domestic Shareholders' Class Meeting shall deliver the reply slip to the registered office of the Company at No. 10 Xinmi Xi Er Road, Southern District of Tongzhou, Economic Development Zone, Tongzhou District, Beijing, the PRC, on or before Wednesday, 5 August 2020.
CONTACT PERSON OF THE COMPANY

Contact Person:	Mr. Zhao Guodao
Contact Tel:	(8610) 5861	1761/62/63
Contact Fax:	(8610) 5861	1751

PROCEDURES OF VOTING AT THE DOMESTIC SHAREHOLDERS' CLASS MEETING
A Domestic Shareholder or his/her/its proxy may exercise the right to vote by poll.
OTHERS
The Domestic Shareholders' Class Meeting is expected to take place immediately after the EGM. Domestic Shareholders attending the Domestic Shareholders' Class Meeting (in person or by proxy) are responsible for their own transportation and accommodation fees.
Identification documents must be shown by shareholder(s) or proxies to attend the Domestic Shareholders' Class Meeting.

- 267 -

NOTICE OF THE H SHAREHOLDERS' CLASS MEETING

北京市春立正達醫療器械股份有限公司

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1858)

NOTICE OF THE H SHAREHOLDERS' CLASS MEETING

Notice is hereby given that a class meeting of the holders of H shares (the "H Shareholders' Class Meeting") of Beijing Chunlizhengda Medical Instruments Co., Ltd.* (the "Company") will be held at 11:00 a.m. (or the time immediately after the conclusion of the Domestic Shareholders' Class Meeting) on Monday, 10 August 2020 or any adjournment thereof at No. 10 Xinmi Xi Er Road, Southern District of Tongzhou Economic Development Zone, Tongzhou District, Beijing, the PRC, to consider and, if thought fit, to pass the following resolutions:

SPECIAL RESOLUTIONS

proposal of the A Share Offering;
1. Class of Shares to be issued;
2. Nominal value of Shares;
3. Number of Shares to be issued;
4. Pricing methodology;
5. Method of issue;
6. Target of subscribers;
7. Form of underwriting;
8. Place of listing; and
9. Valid period of the resolution;
proposal on the use of proceeds from the Company's A Share Offering and feasibility analysis;
proposal on distribution of accumulated profits before the A Share Offering;
proposal on granting authorization to the Board and its authorized representatives to fully handle the specific matters in relation to the A Share Offering;

- 268 -

NOTICE OF THE H SHAREHOLDERS' CLASS MEETING

proposed amendments to the Articles of Association;
ORDINARY RESOLUTIONS
proposal on undertakings in connection with the matters about the A Share Offering and corresponding restrictive measures;
proposal on the analysis on remedying the impacts of the dilution of current return as a result of the A Share Offering and the responsive measures; and
proposal on the three-year shareholder dividend return plan after the A Share Offering.

By Order of the Board

Beijing Chunlizhengda Medical Instruments Co., Ltd.*

Shi Chunbao

Chairman

Beijing, the PRC

24 July 2020

For identification purpose only

Unless otherwise stated, the capitalized terms used herein shall have the same meanings as those defined in the circular of the Company dated 24 July 2020.

Notes:

REGISTRATION OF MEMBERS
In order to be qualified to attend and vote at the H Shareholders' Class Meeting, holders of H Shares whose transfers have not been registered must deposit the transfer documents together with the relevant share certificates at the office of the H Share registrar of the Company, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong by no later than 4:30 p.m. on Tuesday, 4 August 2020.
H Shareholders whose names appear on the Company's register of members at the close of business on Tuesday, 4 August 2020 are entitled to attend and vote at the H Shareholders' Class Meeting.
APPOINTMENT OF PROXY
Any H Shareholder entitled to attend and vote at the H Shareholders' Class Meeting is entitled to appoint one or more proxies to attend and vote at the meeting instead of him/her. A proxy need not be a H Shareholder of the Company.

- 269 -

NOTICE OF THE H SHAREHOLDERS' CLASS MEETING

The instrument to appoint a proxy shall be in writing and signed by the H Shareholder or of his/her attorney duly authorised in writing or, if the H Shareholder is a corporate body, either executed under its common seal or signed by its legal representative, director or duly authorised attorney. If the proxy form is signed by the attorney of the H Shareholder, the power of attorney or other authorisation document authorising the attorney to sign the proxy form must be notarised.

To be valid, the proxy form, together with the power of attorney or other authority (if any), shall be lodged by hand or post, to the Company's H Share registrar in Hong Kong, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong, not less than 24 hours before the time appointed for holding the H Shareholders' Class Meeting or its adjourned meeting (as the case may be). Completion and return of the proxy form shall not preclude H Shareholders from attending and voting in person at the H Shareholders' Class Meeting.

REPLY SLIP
H Shareholders who intend to attend in person or by proxy the H Shareholders' Class Meeting shall deliver the reply slip to the Company's H Share registrar in Hong Kong, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong, on or before Wednesday, 5 August 2020.
CONTACT PERSON OF THE COMPANY

Contact Person:	Mr. Zhao Guodao
Contact Tel:	(8610) 5861	1761/62/63
Contact Fax:	(8610) 5861	1751

PROCEDURES OF VOTING AT THE H SHAREHOLDERS' CLASS MEETING
An H Shareholder or his/her/its proxy may exercise the right to vote by poll.
OTHERS
The H Shareholders' Class Meeting is expected to take place immediately after the Domestic Shareholders' Class Meeting. H Shareholders attending the H Shareholders' Class Meeting (in person or by proxy) are responsible for their own transportation and accommodation fees.
Identification documents must be shown by shareholder(s) or proxies to attend the H Shareholders' Class Meeting.

- 270 -

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Beijing Chunlizhengda Medical Instruments Co. Ltd. published this content on 24 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 July 2020 14:05:00 UTC

Latest news about Beijing Chunlizhengda Medical Instruments Co., Ltd.

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Chunlizhengda Medical Avails of 215 Million Yuan Structured Deposit Program frm Bank of Beijing	23-06-20	MT
Chunlizhengda Medical Instruments Subscribes to 605 Million Yuan of Structured Deposit Products	23-05-29	MT
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Beijing Chunlizhengda Medical Instruments Co., Ltd. Reports Earnings Results for the First Quarter Ended March 31, 2023	23-04-27	CI
Beijing Chunlizhengda Medical Instruments Co., Ltd. Proposes Final Ordinary Dividend for the Year Ended 31 December 2022, Payable on 31 July 2023	23-03-31	CI
Ge Changyin to Step Down as Independent Non-Executive Director from the Board of Beijing Chunlizhengda Medical Instruments Co., Ltd	23-03-30	CI
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Beijing Chunlizhengda Medical Instruments Co., Ltd. completed the acquisition of 60.25% stake in Shujie Medical Technology Co., Ltd. from Xu Linfeng and Chen Xie.	23-03-30	CI
Beijing Chunlizhengda Medical Instruments Co., Ltd. Reports Earnings Results for the Full Year Ended December 31, 2022	23-02-27	CI
Beijing Chunlizhengda Medical Instruments Co., Ltd. entered into equity transfer agreement to acquire 60.25% stake in Shujie Medical Technology Co., Ltd. from Xu Linfeng and Chen Xie for CNY 11 million.	23-02-17	CI
Shujie Medical Technology Co., Ltd. announced that it expects to receive CNY 6.5 million in funding from Beijing Chunlizhengda Medical Instruments Co., Ltd.	23-02-17	CI
Chunlizhengda Medical Invests 234 Million Yuan in Structured Deposit	23-02-14	MT
Chunlizhengda Medical Avails of Bank of Beijing's Structured Deposit Products	23-01-18	MT

Chart Beijing Chunlizhengda Medical Instruments Co., Ltd.

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Chart Beijing Chunlizhengda Medical Instruments Co., Ltd.

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Company Profile

Beijing Chunlizhengda Medical Instruments Co Ltd is a China-based company mainly engaged in the research and development (R&D), production and sales of implantable orthopedic medical devices. The Company's main products are joint prosthesis products and spine implant products. The joint prosthesis products cover four human joints: hip, knee, shoulder and elbow. The spine implant products are a full range of product combinations of spinal internal fixation systems. The Company's products are exported to Asia, South America, Africa, Oceania, Europe and other countries and regions.

Sector

Medical Equipment, Supplies & Distribution

Calendar

2024-08-26 - Q2 2024 Earnings Release (Projected)

More about the company

Income Statement Evolution

More financial data

Ratings for Beijing Chunlizhengda Medical Instruments Co., Ltd.

Trading Rating

Investor Rating

ESG Refinitiv

More Ratings

Analysts' Consensus

Sell

Buy

Mean consensus

BUY

Number of Analysts

Last Close Price

10.45 CNY

Average target price

21.23 CNY

Spread / Average Target

+103.25%

Consensus

EPS Revisions

Estimates Revisions

Annual profits - Rate of surprise

Company calendar

Sector Medical Devices & Implants

	1st Jan change	Capi.
BEIJING CHUNLIZHENGDA MEDICAL INSTRUMENTS CO., LTD.	-9.63%	986M
STRYKER CORPORATION	+10.11%	127B
SMITH & NEPHEW PLC	-5.15%	11.34B
IMEIK TECHNOLOGY DEVELOPMENT CO.,LTD.	+6.07%	9.11B
GLAUKOS CORPORATION	+37.46%	5.53B
AXONICS, INC.	+8.53%	3.45B
ENOVIS CORPORATION	-8.69%	2.87B
SHANGHAI MICROPORT ENDOVASCULAR MEDTECH CO., LTD.	-6.38%	2.1B
BEIJING BALANCE MEDICAL TECHNOLOGY CO.,LTD.	-10.91%	2.08B
DOUBLE MEDICAL TECHNOLOGY INC.	-23.21%	1.78B

Medical Devices & Implants

Original provisions	Amended provisions

Article 36	Article 36
The following activities shall not be deemed to be	The following activities shall not be deemed to be
prohibited by Article 35 of this Chapter:	prohibited by Article 3435of this Chapter:
(I)	the provision of financial assistance is given	(I)	the provision of financial assistance is given
	in good faith in the interests of the Company		in good faith in the interests of the Company
	and the principal purpose in giving such		and the principal purpose in giving such
	assistance is not for acquisition of shares in		assistance is not for acquisition of shares in
	the Company, or the giving of the assistance		the Company, or the giving of the assistance
	is an incidental part of an overall plan of the		is an incidental part of an overall plan of the
	Company;		Company;
(II)	the distribution of the assets of the Company	(II)	the distribution of the assets of the Company
	by way of dividends in accordance with the		by way of dividends in accordance with the
	laws;		laws;
(III)	distribution of dividends in the form of	(III)	distribution of dividends in the form of
	shares;		shares;
(IV)	reduction of registered capital, repurchase of	(IV)	reduction of registered capital, repurchase of
	shares, adjustment of shareholding structure		shares, adjustment of shareholding structure
	in accordance with the Articles of		in accordance with the Articles of
	Association;		Association;
(V)	provision of a loan by the Company within	(V)	provision of a loan by the Company within
	its scope of business and in the ordinary		its scope of business and in the ordinary
	course of its business (provided that the		course of its business (provided that the
	same does not lead to a reduction in the net		same does not lead to a reduction in the net
	assets of the Company or that if the same		assets of the Company or that if the same
	constitutes a reduction, the financial		constitutes a reduction, the financial
	assistance is deducted from the Company's		assistance is deducted from the Company's
	distributable profit); and		distributable profit); and
(VI)	the provision of money by the Company for	(VI)	the provision of money by the Company for
	an employee shareholding scheme (provided		an employee shareholding scheme (provided
	that the same does not lead to a reduction in		that the same does not lead to a reduction in
	the net assets of the Company or that if the		the net assets of the Company or that if the
	same constitutes a reduction, the financial		same constitutes a reduction, the financial
	assistance is deducted from the Company's		assistance is deducted from the Company's
	distributable profit).		distributable profit).

Original provisions	Amended provisions

When two or more persons are registered as joint	When two2or more persons are registered as joint
holders of any shares, they shall be deemed to be	holders of any shares, they shall be deemed to be
joint owners of such shares and subject to constraints	joint owners of such shares and subject to constraints
of the following terms:	of the following terms:
(I)	the Company does not need to register more	(I)	the Company does not need to register more
	than 4 persons as joint holders for any shares;		than 4 persons as joint holders for any shares;
(II)	the joint holders of any shares shall jointly or	(II)	the joint holders of any shares shall jointly or
	severally assume the liability to pay for all		severally assume the liability to pay for all
	amounts of fee payable for the relevant		amounts of fee payable for the relevant
	shares;		shares;
(III)	in case one of the joint holders has deceased,	(III)	in case one of the joint holders has deceased,
	only the surviving joint holders shall be		only the surviving joint holders shall be
	deemed by the Company to be such persons		deemed by the Company to be such persons
	as having the ownership of the relevant		as having the ownership of the relevant
	shares, provided that the Board shall have		shares, provided that the Board shall have
	the right, for the purpose of making		the right, for the purpose of making
	amendments to the register of members, to		amendments to the register of members, to
	demand a death certificate of such		demand a death certificate of such
	shareholder where it deems appropriate to		shareholder where it deems appropriate to
	do so;		do so; and
(IV)	for joint holding of any shares, only the joint	(IV)	for joint holding of any shares, only the joint
	holder whose name appears first in the		holder whose name appears first in the
	register of members is entitled to receive the		register of members is entitled to receive the
	certificate for the relevant shares and receive		certificate for the relevant shares and receive
	the Company's notices. Any notice serviced to		the Company's notices. Any notice serviced to
	the above persons shall be deemed to be		the above persons shall be deemed to be
	serviced to all joint holders of the relevant		serviced to all joint holders of the relevant
	shares. Any of the joint holders may sign the		shares. Any of the joint holders may sign the
	proxy form. Where more than one joint		proxy form. Where more than one joint
	holders attend the meeting, whether in person		holders attend the meeting, whether in person
	or by proxy, the vote of the senior joint holder		or by proxy, the vote of the senior joint holder
	who tenders a vote, whether in person or by		who tenders a vote, whether in person or by
	proxy, will be accepted to the exclusion of the		proxy, will be accepted to the exclusion of the
	votes of the other joint holder(s) and for this		votes of the other joint holder(s) and for this
	purpose seniority will be determined by the		purpose seniority will be determined by the
	order in which the names stand in the register		order in which the names stand in the register
	of members of the Company in respect of the		of members of the Company in respect of the
	joint shareholding.		joint shareholding.

Original provisions	Amended provisions

Article 57	Article 57
In addition to obligations imposed by the laws,	In addition to obligations imposed by the laws,
administrative regulations or required by the listing	administrative regulations or required by the listing
rules of the stock exchange on which the shares of	rules of the stock exchange on which the shares of
the Company are listed, a controlling shareholder (as	the Company are listed, a controlling shareholder (as
defined in Article 59 in the Articles of Association)	defined in Article 5859in the Articles of Association)
shall not exercise his voting rights in respect of the	shall not exercise his/hervoting rights in respect of
following matters in a manner prejudicial to the	the following matters in a manner prejudicial to the
interests of all or part of the shareholders of the	interests of all or part of the shareholders of the
Company:	Company:
(I)	to waive a director or supervisor of his	(I)	to waive a director or supervisor of his/her
	responsibility to act honestly in the best		responsibility to act honestly in the best
	interests of the Company;		interests of the Company;
(II)	to approve the expropriation by a director or	(II)	to approve the expropriation by a director or
	supervisor (for his own benefits or for the		supervisor (for his/herown benefits or for
	benefits of another person), in any way, of		the benefits of another person), in any way,
	the Company's properties, including (but not		of the Company's properties, including (but
	limited to) any opportunities beneficial to		not limited to) any opportunities beneficial
	the Company;		to the Company;
(III)	to approve the expropriation by a director or	(III)	to approve the expropriation by a director or
	supervisor (for his own benefits or for the		supervisor (for his/herown benefits or for
	benefits of another person) of personal rights		the benefits of another person) of personal
	of other shareholders, including (but not		rights of other shareholders, including (but
	limited to) any rights to distributions and		not limited to) any rights to distributions and
	voting rights save for pursuant to a		voting rights save for pursuant to a
	restructuring of the Company submitted to		restructuring of the Company submitted to
	shareholders for approval at a general		shareholders for approval at a general
	meeting in accordance with the Articles of		meeting in accordance with the Articles of
	Association.		Association.
The controlling shareholder(s) or de facto	The controlling shareholder(s) or de facto
controller(s) of the Company shall not take	controller(s) of the Company shall not take
advantage of their connected relationship to	advantage of their connected relationship to
prejudice the interests of the Company, or they shall	prejudice the interests of the Company, or they shall
be liable to indemnify the Company for any of its	be liable to indemnify the Company for any of its
loss incurred arising from the violation of such	loss incurred arising from the violation of such
requirement.	requirement.
The controlling shareholder(s) and de facto	The controlling shareholder(s) and de facto
controller(s) of the Company have a duty of fidelity	controller(s) of the Company have a duty of fidelity
to the Company and other public shareholders. The	to the Company and other public shareholders. The
controlling shareholder shall exercise the rights of	controlling shareholder shall exercise the rights of
contributors in strict compliance with the laws, shall	contributors in strict compliance with the laws, shall
not jeopardize legitimate rights and interests of the	not jeopardize legitimate rights and interests of the
Company and other public shareholders by profit	Company and other public shareholders by profit
distribution, assets reorganization, external	distribution, assets reorganization, external
investments, capital occupation or loan guarantee or	investments, capital occupation or loan guarantee or
by taking advantage of its controlling status.	by taking advantage of its controlling status.

Article 94	Article 94102
Shareholders of the affected class, whether having	Shareholders of the affected class, whether having
the right to vote at a general meeting, shall be	the right to vote at a general meeting, shall be
entitled to vote in class meetings in respect of	entitled to vote in class meetings in respect of
matters concerning subparagraphs (II) to (VIII),(XI)	matters concerning subparagraphs (II) to (VIII),(XI)
and (XII) of Article 93. However, interested	and (XII) of Article 93101. However, interested
shareholders shall have no voting right at such class	shareholders shall have no voting right at such class
meetings.	meetings.
The aforementioned term "interested shareholders"	The aforementioned term "interested shareholders"
means:		means:
(I)	in the event that the Company makes a	(I)	in the event that the Company makes a
	repurchase offer to all shareholders in the		repurchase offer to all shareholders in the
	same proportion or the Company		same proportion or the Company
	repurchases its own shares by way of public		repurchases its own shares by way of public
	dealings on a stock exchange pursuant to		dealings on a stock exchange pursuant to
	Article 30 hereof, a "controlling shareholder"		Article 30 hereof, a "controlling shareholder"
	within the meaning of Article 58 hereof;		within the meaning of Article 58 hereof;
(II)	in the event that the Company repurchases	(II)	in the event that the Company repurchases
	its own shares by an off-market agreement		its own shares by an off-market agreement
	pursuant to Article 31 hereof, a holder of the		pursuant to Article 31 hereof, a holder of the
	shares to which the proposed agreement		shares to which the proposed agreement
	relates;		relates;
(III)	in the event of a restructuring of the	(III)	in the event of a restructuring of the
	Company, a shareholder within a class who		Company, a shareholder within a class who
	assumes a relatively smaller proportion of		assumes a relatively smaller proportion of
	obligations than the obligations imposed on		obligations than the obligations imposed on
	shareholders of that class or who has an		shareholders of that class or who has an
	interest in the proposed restructuring		interest in the proposed restructuring
	different from the general interests of the		different from the general interests of the
	shareholders of that class.		shareholders of that class.

Original provisions	Amended provisions

If Such Shareholder nominates a candidate for	If Such Shareholder nominates a candidate for
independent director ("Independent Director	independent director ("Independent Director
Candidate") at a general meeting of the Company	Candidate") at a general meeting of the Company
according to the laws, such shareholder shall seek	according to the laws, such shareholder shall seek
the consent of the Independent Director Candidate	the consent of the Independent Director Candidate
and shall have sufficient knowledge of Such	and shall have sufficient knowledge of Such
Information of the Independent Director Candidate.	Information of the Independent Director Candidate.
The Independent Director Candidate shall make	The Independent Director Candidate shall make
Relevant Agreement and Undertaking to the	Relevant Agreement and Undertaking to the
Company and shall make an open statement as to the	Company and shall make an open statement as to the
absence of any relation between the Company and	absence of any relation between the Company and
him which would affect his independent and	him which would affect his/herindependent and
objective judgment ("Statement of Independence"),	objective judgment ("Statement of Independence"),
while Such Shareholder shall give an opinion in	while Such Shareholder shall give an opinion in
respect of the qualifications and independence of the	respect of the qualifications and independence of the
Independent Director Candidate to act as an	Independent Director Candidate to act as an
independent director ("Such Opinion"). In addition,	independent director ("Such Opinion"). In addition,
Such Shareholder shall deliver, or cause the	Such Shareholder shall deliver, or cause the
Independent Director Candidate to deliver, the	Independent Director Candidate to deliver, the
following document to the Company not less than 7	following document to the Company not less than 7
days before the general meeting of the Company,	days before the general meeting of the Company,
and such period shall commence after the issue of	and such period shall commence after the issue of
the notice of the general meeting by the Company in	the notice of the general meeting by the Company in
respect of such election:	respect of such election:
(I)	the intention of nominating the Independent	(I)	the intention of nominating the Independent
	Director Candidate;		Director Candidate;
(II)	a written notice issued by the Independent	(II)	a written notice issued by the Independent
	Director Candidate in respect of Relevant		Director Candidate in respect of Relevant
	Agreement and Undertaking;		Agreement and Undertaking;

Opinion; and	Opinion; and
(IV) the written proofs containing Such	(IV) the written proofs containing Such
Information of the Independent Director	Information of the Independent Director
Candidate.	Candidate.
If the Company receives the nomination of	If the Company receives the nomination of
independent directors made by any shareholders	independent directors made by any shareholders
before the convening of a meeting of the Board or the	before the convening of a meeting of the Board or the
Board of Supervisors, the written proofs containing	Board of Supervisors, the written proofs containing
Such Information of the Independent Director	Such Information of the Independent Director
Candidate, Statement of Independence and Such	Candidate, Statement of Independence and Such
Opinion shall be disclosed together with the	Opinion shall be disclosed together with the
resolution of the Board or the Board of Supervisors	resolution of the Board or the Board of Supervisors
or the notice of the general meeting.	or the notice of the general meeting.
Any person appointed as directors by the Board to	Any person appointed as directors by the Board to
fill the temporary vacancy of the Board or to increase	fill the temporary vacancy of the Board or to increase
the number of member in the Board may hold the	the number of member in the Board may hold the
position until the next annual general meeting of the	position until the next annual general meeting of the
Company is convened, and may be eligible for	Company is convened, and may be eligible for
re-election and reappointment at that time.	re-election and reappointment at that time.

Original provisions	Amended provisions

Article 116	Article 116126
The Chairman of the Board shall perform the	The Chairman of the Board shall perform the
following duties and powers:	following duties and powers:
(I)	to preside over general meetings and to	(I)	to preside over general meetings and to
	convene and preside over board meetings;		convene and preside over board meetings;
(II)	to supervise and check the implementation	(II)	to supervise and check the implementation
	of resolutions of board meetings and debrief		of resolutions of board meetings and debrief
	relevant reports;		relevant reports;
(III)	to supervise and organize formulation of	(III)	to supervise and organize formulation of
	rules and regulations on the operation of the		rules and regulations on the operation of the
	board of directors, and to coordinate the		board of directors, and to coordinate the
	operation of the board of directors;		operation of the board of directors;
(IV)	to sign securities certificates issued by the	(IV)	to sign securities certificates issued by the
	Company;		Company;
(V)	to sign important documents of the Board;	(V)	to sign important documents of the Board;
(VI)	to sign important legally binding documents	(VI)	to sign important legally binding documents
	on behalf of the Company;		on behalf of the Company;
(VII)	to exercise special rights of disposal over the	(VII)	to exercise special rights of disposal over the
	Company's affairs that are in line with the		Company's affairs that are in line with the
	requirements under the laws and the		requirements under the laws and the
	interests of the Company in the event of force		interests of the Company in the event of force
	majeure such as natural disasters in massive		majeure such as natural disasters in massive
	scale and under the critical situation where a		scale and under the critical situation where a
	board meeting cannot be held timely, and to		board meeting cannot be held timely, and to
	report at board meetings afterwards;		report at board meetings afterwards;
(VIII)	to exercise other powers prescribed by the	(VIII)	to exercise other powers prescribed by the
	laws and regulations or the Articles of		laws and regulations or the Articles of
	Association and conferred by the board of		Association and conferred by the board of
	directors.		directors.
In the event that the Chairman is unable to exercise	In the event that the Chairman is unable to exercise
his duties and powers, a director jointly elected by	his duties and powers, a director jointly elected by
more than half of the directors shall perform such	more than half of the directors shall perform such
duties.		duties.

Article 160	Article 160170
A loan guarantee provided by the Company in	A loan guarantee provided by the Company in
breach of subparagraph (I) of Article 158 shall not be	breach of subparagraph (I) of Article 158168shall not
enforceable against the Company, unless:	be enforceable against the Company, unless:
(I)	the guarantee was provided in connection	(I)	the guarantee was provided in connection
	with a loan to an associate of any of directors,		with a loan to an associate of any of directors,
	supervisors, general manager and other		supervisors, general manager and other
	senior management of the Company or its		senior management of the Company or its
	parent and the lender were not aware of the		parent and the lender were not aware of the
	relevant circumstances at the time the loan		relevant circumstances at the time the loan
	was advanced; or		was advanced; or
(II)	the collateral provided by the Company has	(II)	the collateral provided by the Company has
	been lawfully disposed of by the lender to a		been lawfully disposed of by the lender to a
	bona fide purchaser.		bona fide purchaser.

Article 163	Article 163173
The Company shall conclude written contracts with	The Company shall conclude written contracts with
each director, supervisor and senior management,	each director, supervisor and senior management,
and such contracts shall include at least the	and such contracts shall include at least the
following provisions:	following provisions:
(I)	the director, supervisor or senior	(I)	the director, supervisor or senior
	management warrants to the Company that		management warrants to the Company that
	he will observe the Company Law, the		he will observe the Company Law, the
	Special Regulations, the Articles of		Special Regulations, the Articles of
	Association and other provisions established		Association and other provisions established
	by the SEHK, and agrees that the Company		by the SEHK, and agrees that the Company
	will enjoy the remedial actions set forth		will enjoy the remedial actions set forth
	under the Articles of Association, and that		under the Articles of Association, and that
	such contract and its position shall not be		such contract and its position shall not be
	transferred;		transferred;
(II)	the director, supervisor or senior	(II)	the director, supervisor or senior
	management warrants to the Company that		management warrants to the Company that
	he will observe and perform his		he will observe and perform his
	responsibilities owed to the shareholders		responsibilities owed to the shareholders
	specified in the Articles of Association; and		specified in the Articles of Association; and
(III) the arbitration article contained in Article	(III) the arbitration article contained in Article
	210 of the Articles of Association.		210216of the Articles of Association.

Original provisions	Amended provisions

Article 176	Article 176186
The Company may take either or both of the	The Company may take either or both of the
following ways to distribute the dividend:	following ways to distribute the dividend:
(I)	Cash;	(I)	Cash;
(II)	Shares.	(II)	Shares.
Dividend and other payments by the Company to	Dividend and other payments by the Company to
holders of the domestic shares shall be denominated	holders of the domestic shares shall be denominated
and declared in RMB and paid in RMB within 3	and declared in RMB and paid in RMB within 3
months after the declaration of the dividend,	months after the declaration of the dividend,
whereas those to holders of the overseas listed	whereas those to holders of the overseas listed
foreign shares shall be denominated and declared in	foreign shares shall be denominated and declared in
RMB and paid in the local currency of the place	RMB and paid in the local currency of the place
where such overseas listed foreign shares are listed	where such overseas listed foreign shares are listed
within 3 months after the declaration of the	within 3 months after the declaration of the
dividend. The dividend and other payments by the	dividend. The dividend and other payments by the
Company to holders of the overseas listed foreign	Company to holders of the overseas listed foreign
shares shall be handled in accordance with relevant	shares shall be handled in accordance with relevant
state regulations on foreign exchange control. In the	state regulations on foreign exchange control. In the
absence of such regulations, the applicable	absence of such regulations, the applicable
conversion rate shall be the average closing rate of	conversion rate shall be the average closing rate of
the relevant foreign currency as published by	the relevant foreign currency as published by
website of the People's Bank of China for the 7	website of the People's Bank of China for the 7
business days immediately prior to the date of	business days immediately prior to the date of
declaration of such dividend and other payments.	declaration of such dividend and other payments.
The dividend distribution of the Company shall be	The dividend distribution of the Company shall be
approved by the general meeting by way of an	approved by the general meeting by way of an
ordinary resolution and implemented by the Board	ordinary resolution and implemented by the Board
of Directors.	of Directors. After the resolution of the profit
		distribution plan has been passed at the Company
		general meeting, the Board must complete the
		dividend (or shares) distribution within two months
		after the general meeting.