the State-owned Assets Supervision and Administration Commission of the State Council

Order of the State-owned Assets Supervision and Administration Commission of the State Council

No. 12

The Interim Measures for the Administration of Assessment of State-owned Assets of Enterprises, which were adopted at the 31st meeting
of the director of the State-owned Assets Supervision and Administration Commission of the State Council, are hereby promulgated
and shall go into effect as of September 1, 2005.

Director of the State-owned Assets Supervision and Administration Commission Li Rongrong

August 25, 2005

Interim Measures for the Administration of Assessment of State-owned Assets of Enterprises

Chapter I General Provisions

Article 1

With a view to standardizing the assessment of state-owned assets of enterprises, protecting the legitimate rights and interests of
the investors of state-owned assets, promoting the orderly circulation of the state-owned property right of enterprises and preventing
the loss of state-owned assets, these Measures are formulated according to the Company Law of the People’s Republic of China, the
Interim Regulations on the Supervision and Administration of State-owned Assets in Enterprises (Guo Wu Yuan Ling No. 378), the Administrative
Measures for the Assessment of State-owned Assets (Guo Wu Yuan Ling No. 91) and other laws and regulations.

Article 2

These Measures shall apply to the assets assessment relating to the enterprises for which the state-owned assets supervision and administration
institutions at various levels perform the responsibilities of an investor (hereinafter referred to as the contributed enterprises)
and their subsidiary enterprises (hereinafter referred to as the enterprises).

Article 3

The state-owned assets supervision and administration institutions at various levels shall be responsible for the administration of
and supervision over the assessment of the state-owned assets of their contributed enterprises.

The state-owned assets supervision and administration institution under the State Council shall be responsible for offering guidance
for and supervising the supervision and administration of the assessment of the state-owned assets of enterprises throughout the
country.

Article 4

The assets assessment project of state-owned assets of enterprises shall be subject to the examination and approval system and archival
filing system.

The assets assessment project relating to the economic activities approved by the people’s governments at various levels shall be
subject to the examination and approval of the corresponding state-owned assets supervision and administration institutions.

As for assets assessment projects relating to the economic activities approved by the state-owned assets supervision and administration
institution of the State Council, the said state-owned assets supervision and administration institution of the State Council shall
be responsible for filing thereof As for the assets assessment projects relating to the economic activities approved by the contributed
enterprises of the state-owned assets supervision and administration institution of the State Council (hereinafter referred to as
the central enterprise) and their subsidiary enterprise at various levels, the central enterprises shall be responsible for filing
thereof.

The division of the functions and responsibilities in respect of archival filing of the assets assessment projects of local state-owned
assets supervision and administration institutions and their contributed enterprises shall be specified by the local state-owned
assets supervision and administration institutions in light of their respective conditions.

Article 5

The state-owned assets supervision and administration institutions at various levels and their contributed enterprises shall establish
a system for the administration of state-owned assets assessment, improve the management of the archives of the assets assessment
projects and properly make and report the statistical analysis of the aforesaid projects .

The state-owned assets supervision and administration institutions at the province level and the central enterprises shall, within
30 days as of the end of each year, report statistical analysis materials on the assets assessment projects to the state-owned assets
supervision and administration institution of the State Council.

Chapter II Assets Assessment

Article 6

In case an enterprise performs any of the following acts, the relevant assets shall be assessed:

(1)

Being entirely or partly restructured into a liability limited company or stock limited company;

(2)

Investing abroad with non-currency assets;

(3)

Merger, splitting-up, bankruptcy or dissolution;

(4)

Change in the proportion of state-owned shares in a non-listed company;

(5)

Transfer of the property right;

(6)

Transfer or replacement of assets;

(7)

Leasing entire assets or partial assets to a non-state-owned entity;

(8)

Discharging a debt with non-currency assets;

(9)

Asset-related litigation;

(10)

Purchasing assets of a non-state-owned entity;

(11)

Accepting the non-currency asset contribution of a non-state-owned entity;

(12)

Accepting a non-state-owned enterprise to offsetting the debts with non-currency assets; and

(13)

Other matters subject to assets assessment under the laws or administrative regulations.

Article 7

The relevant state-owned assets of an enterprise may not be subject to assets assessment under any of the following circumstances:

(1)

Upon approval of the people’s government at various level or its state-owned assets supervision and administration institutions, an
enterprise transfers all or some of its assets gratuitously; or

(2)

The merger, replacement of assets (property right) or gratuitous transfer of assets between a solely state-owned enterprise and its
subordinate solely-funded enterprise (public institution) or between its subordinate solely-funded enterprises is carried out.

Article 8

Where an enterprise performs any of the acts as mentioned in Article 6 , the entity as the holder of its property right shall authorize
a qualified assets assessment institution to conduct assessment.

Article 9

The assets assessment institution authorized by an entity as the holder of the enterprise property right shall satisfy the following
basic requirements:

(1)

Observing the relevant laws, rules, regulations and policies on the assessment of state-owned assets of enterprises, strictly performing
the statutory duties, and having no record of violation of laws or regulations within the recent 3 years;

(2)

Being qualified for the assessment object;

(3)

Having the professionals and special skills in conformity with the assessment object;

(4)

It has no economic interests with the person-in-charge of the enterprise; and

(5)

It has not provided any audit service for a same economic activity.

Article 10

An enterprise shall faithfully provide the relevant information and materials to the assets assessment institution, and shall be liable
for their authenticity, lawfulness and completeness. It may not conceal or overstate any assets.

Article 11

An enterprise shall actively cooperate with the assets assessment institution and may not interfere in the normal practice of the
assets assessment institution in any form.

Chapter III Examination and Approval and Archival Filing

Article 12

With respect to an assets assessment project that shall be subject to examination and approval, the enterprise shall report the following
information to the state-owned assets supervision and administration institution prior to the assets assessment:

(1)

The approval of the relevant economic activities;

(2)

The selection of the base date of assessment;

(3)

The determination of scope of assets assessment;

(4)

The conditions, scope, procedures for selecting an assets assessment institution, and the qualifications and special skills of the
candidate assets assessment institution; and

(5)

The schedule of assets assessment.

Article 13

An enterprise shall report the information about the progress of the assets assessment project in time to the state-owned assets supervision
and administration institution. The state-owned assets supervision and administration institution may, where necessary, carry out
follow-up guidance for and on-spot inspection on the project.

Article 14

The examination and approval of an assets assessment project shall be carried out as follows:

(1)

An enterprise shall, after receiving an assessment report as issued by an assets assessment institution, submit it to the superior
departments for preliminary examination level by level. Upon the approval of preliminary examination, it shall, within 8 months as
of the base date of assessment, file an application to the state-owned assets supervision and administration institution for examination
and approval;

(2)

After receiving the application for examination and approval, the state-owned asset supervision and administration institution shall,
if the application satisfies the relevant requirements for examination and approval, timely organize the relevant experts to examine
it and complete the examination and approval of the assets assessment report within 20 working days. If the application fails to
satisfy the requirements for examination and approval, it shall send back the report.

Article 15

When applying for examination and approval of an assets assessment project, an enterprise shall report the following documents and
materials to the state-owned assets supervision and administration institution:

(1)

The documents of application for examination and approval of an assets assessment project;

(2)

An application form for examination and approval of an assets assessment project (Annex 1);

(3)

The approval documents or valid materials about the economic activity corresponding to the assessment purpose;

(4)

The assets re-organization or restructuring plan, agreement of incorporators and other relevant materials;

(5)

The assets assessment report as presented by the assets assessment institution (including the assessment report, explanations on the
assessment, assessment details and their electronic texts);

(6)

The audit report corresponding to the economic activity;

(7)

The relevant commitment letters of all the parties to the assets assessment; and

(8)

Other relevant materials.

Article 16

The state-owned assets supervision and administration institution shall examine the following matters:

(1)

Whether the economic activity involved in the assets assessment project has been approved or not;

(2)

Whether the assets assessment institution satisfies the corresponding assessment qualifications or not;

(3)

Whether or not the persons who carry out the assets assessment have the corresponding qualifications;

(4)

Whether the selection of the base date of assessment is appropriate or not, and whether the valid period for the use of assessment
result is clearly indicated or not;

(5)

Whether or not the scope of assets assessment is in line with the scope of the assets as specified in the approval document of the
economic activity;

(6)

Whether the basis for the assessment is proper or not;

(7)

Whether or not the enterprise has made a commitment on the authenticity, lawfulness and completeness of the certification document
of assets ownership, financial accounting materials and the materials on production and operation management;

(8)

Whether the assessment process complies with the relevant assessment rules or not; and

(9)

Whether the experts participating in the examination have reached a consensus or not.

Article 17

The archival filing of an assets assessment project shall be carried out as follows:

(1)

An enterprise shall, after receiving the assessment report as issued by the assets assessment institution, submit the materials for
archival filing to the state-owned assets supervision and administration institution level by level or to its contributed enterprise,
and shall file an application for archival filing within 9 months as of the base date of assessment;

(2)

After receiving the materials for archival filing, the state-owned assets supervision and administration institution or its contributed
enterprise shall, if the materials are complete, complete the archival filing formalities within 20 working days, and may, where
necessary, organize the relevant experts to participate in the review of archival filing.

Article 18

The following documents and materials shall be submitted for filing of an assets assessment project:

(1)

The archival-filing form for state-owned assets assessment project in triplicate (Annex 2)

(2)

The assets assessment report (assessment report, explanations on the assessment, assessment details and their electronic texts);

(3)

The approval document of the economic activity corresponding to the assets assessment project; and

(4)

Other relevant materials.

Article 19

The state-owned assets supervision and administration institution and its contributed enterprise shall, according to the following
circumstances, decide whether or not to complete the archival filing formalities for the assets assessment project:

(1)

Whether the economic activity involved in the assets assessment project has been approved or not;

(2)

Whether the assets assessment institution has obtained the corresponding assessment qualifications or not, and whether the persons
who carry out the assets assessment have the corresponding practicing qualifications or not;

(3)

Whether the selection of the base date of assessment is appropriate or not, and whether the valid period for the use of assessment
result is clearly indicated or not;

(4)

Whether or not the scope of assets assessment is in line with the scope of the assets as specified in the approval document of the
economic activity;

(5)

Whether or not the enterprise has made a commitment on the authenticity, lawfulness and completeness of the certification document
of assets ownership, financial accounting materials and materials on production and operation management; and

(6)

Whether the assessment procedures comply with the relevant assessment rules or not.

Article 20

The approval document as issued by the state-owned assets supervision and administration institution, and the archival filing form
for the assets assessment project that has gone through the archival filing formalities in the state-owned assets supervision and
administration institution or its contributed enterprise shall be the indispensable documents for an enterprise to go through the
formalities for registration of property right, shareholding establishment and transfer of property right.

Article 21

The valid period for the use of assets assessment result that has been approved or put on records shall be 1 year since the base date
of the assessment.

Article 22

When an enterprise conducts an economic activity corresponding to the assets assessment, the approved or archival assets assessment
result that has been approved or put on records shall be used as a frame of reference for pricing. In case the transaction price
is lower than 90% of the price in the assessment result, the tread shall be suspended. The tread may not be resumed before it is
approved by the original institution that has approved the economic activity.

Chapter IV Supervision and Inspection

Article 23

The state-owned assets supervision and administration institutions at various levels shall strengthen the supervision and inspection
on the assessment of state-owned assets of enterprises, and lay emphasis on the inspection of the establishment and implementation
of enterprise internal management system for the assessment of state-owned assets, as well as the staffing of assessment managerial
personnel. They shall regularly or irregularly make spot checks on the assets assessment projects.

Article 24

A spot check made by a state-owned assets supervision and administration institution of the enterprise assets assessment project shall
cover:

(1)

Whether or not the economic activity of an enterprise complies with laws and regulations;

(2)

Whether or not the scope of assets assessment is line with the scope of the assets as specified in the approval document of the economic
activity;

(3)

Whether or not the enterprise has made a commitment on the authenticity, lawfulness and completeness of the certification document
of assets ownership, financial accounting materials and materials on production and operation management;

(4)

The qualifications of the assets assessment institution and the qualifications of the persons who carry out the assessment;

(5)

The difference between the book value of assets and the assessment result;

(6)

The difference between the transaction value in the economic activity and the assessment result;

(7)

The working paper of the assessment;

(8)

The reasonableness of the basis for the assessment;

(9)

The disclosure of important matters and their impact on the assessment results in the assessment report, as well as the discrepancy
between the aforesaid disclosed information and the facts; and

(10)

Other relevant information.

Article 25

A state-owned assets supervision and administration institution at the provincial level shall, within 30 working days as of the end
of each year, report to the state-owned assets supervision and administration institution of the State Council the information about
the inspections, spot checks and corresponding disposal.

Article 26

The state-owned assets supervision and administration institution shall notify the relevant departments of the spot check result of
an assets assessment project.

Chapter V Penalty Provisions

Article 27

Where an enterprise, in violation of these Measures, is under any of the following circumstances, the state-owned assets supervision
and administration institution shall criticize it by circulating a notice and order it to make corrections, and may, where necessary,
take a legal action in the people’s court for affirming the corresponding economic activity as null and void:

(1)

Failing to make an assessment that shall be made;

(2)

Hiring an unqualified assets assessment institution to carry out state-owned assets assessment activities;

(3)

Providing any false information and materials to the assets assessment institution, or conniving with the assets assessment institution
to cheat and cause the assessment result inconsistent with the facts; or

(4)

Failing to go through the formalities for examination and approval or archival filing which it shall go through.

Article 28

Where an enterprise, during the course of assessment of state-owned assets, violates laws or regulations or uses the assessment report
in a foul manner, the person-in-charge who is directly responsible and other personnel directly liable shall be imposed a sanction.
If a crime is constituted, the case shall be transferred to the judicial organ according to law.

Article 29

Where an entrusted assets assessment institution, during the process of assets assessment, violates the relevant regulations, the
state-owned assets supervision and administration institution shall notify the industrial administrative department of the relevant
information and propose that it punish the assets assessment institution. If the circumstances are serious, it may require the enterprises
not to entrust the assets assessment institution and its parties concerned to assess the state-owned assets any more. If the assets
assessment institution is suspected of committing a crime, it shall transfer the case to the judicial organ according to law.

Article 30

Where an assets assessment institution is not cooperative in the spot check of the assets assessment project, the state-owned assets
supervision and administration may require the relevant enterprise not to entrust the assets assessment institution and its parties
concerned to assess the state-owned assets any more.

Article 31

Any functionary of the state-owned assets supervision and administration institutions who violates these Measures and causes any loss
to the state-owned assets shall be given a sanction. If he is suspected of committing a crime, he shall be transferred to the judicial
organ according to law.

Chapter VI Supplementary Provisions

Article 32

The assets assessment of overseas state-owned assets shall be subject to the relevant regulations.

Article 33

These Measures shall be applicable to the state-owned assets assessment of enterprises or public institutions subordinate to entities
in which the government functions have not separated from enterprise management.

Article 34

The state-owned assets supervision and administration institutions at the provincial level may, according to these Measures, formulate
working rules for their respective region and shall file them for records with the state-owned assets supervision and administration
institution of the State Council.

Article 35

These Measures shall go into effect as of September 1, 2005.

Annex:

1.

Application Form for Examination and Approval of Assets Assessment Project (omitted)

2.

Archival Filing Form for State-owned Assets Assessment Project (omitted)