1. Chapter 5: solely state-owned company As the unique shareholder, state-owned assets supervision and administration institution runs the company; Several very important companies are identified, some important affairs they involved should be approved by the government at the same level as the entrusted institutions belonged to. Employee’s delegates should be in the board of directors; Employee’s delegates, elected by employees’ meeting; General Features

2. Directors appointed by the government, one of them will be chairman of the board The member of supervisory board shall be over 5 1/3 should be employee’s delegates, elected by employees’ meeting 2/3 should be appointed by the government, one of which will be chairman of the board General Features

3. The Structure of SOCs National People’s Congress Central Government Central SOASA Central SOCs Local Government Local SOASA Local SOCs

4. Solely State-owned Company 1. DefinitionDefinition 2. Preparation for Article of AssociationPreparation for Article of Association 3. Alternatives to Shareholders’ MeetingAlternatives to Shareholders’ Meeting 4. Board of DirectorsBoard of Directors 5. The ManagerThe Manager 6. Avoidance of Interests ConflictsAvoidance of Interests Conflicts 7. Supervisory BoardSupervisory Board

5. Definition Article 65 The term "solely state-owned company" as mentioned in this law refers to a limited liability company established through investment solely by the state, for which the State Council or the local people's government authorizes the state-owned assets supervision and administration institution of the people's government at the same level to perform the functions of the capital contributors. Explain the relations

6. Preparation for the Articles of Association Article 66 The articles of association of a solely state- owned company shall be formulated by the state-owned assets supervision and administration institution, or shall be drafted by the board of directors and then be reported to the state-owned assets supervision and administration institution for approval.

7. Alternatives to Shareholders’ Meeting Article 67 A solely state-owned company is not required to establish the shareholders' meeting, and the functions of the shareholders' meeting shall be exercised by the state-owned assets supervision and administration institution.

8. Board of Directors The state-owned assets supervision and administration institution may authorize the board of directors of the company to exercise some of the functions of the shareholders' meeting and decide on important matters of the company, excluding those that must be decided by the state-owned assets supervision and administration such as merger, division, dissolution of the company, increase or decrease of registered capital as well as the issuance of corporate bonds.

9. Decision Making Procedure The merger, division, dissolution or application for bankruptcy of an important solely state-owned company shall be subject to the examination of the state-owned assets supervision and administration institution, and then be reported to the people's government at the same level for approval. The term "important solely state-owned company" as mentioned in the preceding paragraph shall be determined according to the provisions of the State Council.

10. The Composition of Board of Directors Article 68 A solely state-owned company shall establish the board of directors, which shall exercise its functions according to Articles 47 and 67 of this Law. Every term of office of the directors shall not exceed 3 years. The board of directors shall comprise representatives of the employees.

11. The Designation of Directors And the members of the board of directors shall be designated by the state-owned assets supervision and administration institution, but of whom the representatives of the employees shall be elected through the meeting of the representatives of the employees of the company.

12. The Designation of Directors The board of directors shall have one chairman and may have a deputy chairman. The chairman and deputy chairman shall be designated by the state-owned assets supervision and administration institution from the members of the board of directors.

13. The Manager Article 69 A solely state-owned company shall have a manager, who shall be hired or dismissed by the board of directors and exercise his authorities according to Article 50 of this Law. Upon consent of the state- owned assets supervision and administration institution, the members of the board of directors may concurrently hold the post of manager.

14. Avoidance of Conflicting Interests Article 70 None of the chairman, deputy chairman, directors and senior managers of a solely state-owned company may concurrently hold a post in any other limited liability company, company limited by shares or any other economic organization, unless it is permitted by the state-owned assets supervision and administration institution.

15. The Composition of Supervisory Board Article 71 The board of supervisors of solely State- owned companies shall comprise not less than five members; the ratio of employees’ representatives shall not be less than one- third. The ratio shall be stipulated by the articles of association of the company.

16. The Composition of Supervisory Board The board of supervisors shall be appointed by the State-owned assets supervision and administration authorities; however, employees’ representatives sitting on the board of supervisors shall be elected by an employees’ representative congress.

17. The Composition of Supervisory Board The chairman of the board of supervisors shall be appointed by the State-owned assets supervision and administration authorities from members of the board of supervisors.