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ACCOUNTING STANDARDS FOR ENTERPRISES NO. 17 – BORROWING COSTS

the Ministry of Finance

Accounting Standards for Enterprises No. 17 – Borrowing Costs

Cai Kuai [2006] No. 3

February 15, 2006

Chapter I General Provisions

Article 1

With a view to regulating the recognition and measurement of borrowing costs, and the disclosure of relevant information, the present
Standards are formulated according to the Accounting Standards for Enterprises – Basic Standard.

Article 2

The term “borrowing costs” refers to the interest and other relevant costs, which are incurred by an enterprise in the borrowing of
loans.

The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings, ancillary expenses,
and exchange balance on foreign currency borrowings.

Article 3

The financing costs related to the financing leases shall be subject to the Accounting Standards for Enterprises No. 21 – Leases.

Chapter II Recognition and Measurement

Article 4

Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and construction or production
of assets eligible for capitalization, it shall be capitalized and recorded into the costs of relevant assets. Other borrowing costs
shall be recognized as expenses on the basis of the actual amount incurred, and shall be recorded into the current profits and losses.

The term “assets eligible for capitalization” shall refer to the fixed assets, investment real estate, inventories and other assets,
of which the acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.

Article 5

The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements:

(1)

The asset disbursements have already incurred, which shall include the cash, transferred non-cash assets or interest bearing debts
paid for the acquisition and construction or production activities for preparing assets eligible for capitalization;

(2)

The borrowing costs has already incurred; and

(3)

The acquisition and construction or production activities which are necessary to prepare the asset for its intended use or sale have
already started.

Article 6

During the period of capitalization, the to-be-capitalized amount of interests (including the amortization of discounts or premiums)
in each accounting period shall be determined according to the following provisions:

(1)

As for specifically borrowed loans for the acquisition and construction or production of assets eligible for capitalization, the to-be-capitalized
amount of interests shall be determined in light of the actual cost incurred of the specially borrowed loan at the present period
minus the income of interests earned on the unused borrowing loans as a deposit in the bank or as a temporary investment.

The term “specifically borrowed loan” shall refer to a fund which is borrowed specifically for the acquisition and construction or
production activities of assets eligible for capitalization.

(2)

Where a general borrowing is used for the acquisition and construction or production of assets eligible for capitalization, the enterprise
shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average
asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of
the general borrowing used. The capitalization rate shall be calculated and determined in light of the weighted average interest
rate of the general borrowing.

The capitalization period shall refer to the period from the commencement to the cessation of capitalization of the borrowing costs,
excluding the period of suspension of capitalization of the borrowing costs.

Article 7

Where there is any discount or premium, the amount of discounts or premiums that shall be amortized during each accounting period
shall be determined by the real interest rate method, and an adjustment shall be made to the amount of interests in each period.

Article 8

During the period of capitalization, the amount of interest capitalized during each accounting period shall not exceed the amount
of interest actually incurred to the relevant borrowings in the current period.

Article 9

During the period of capitalization, the exchange balance on foreign currency borrowings shall be capitalized, and shall be recorded
into the cost of assets eligible for capitalization.

Article 10

For the ancillary expense incurred to a specifically borrowed loan, those incurred before a qualified asset under acquisition, construction
or production is ready for the intended use or sale shall be capitalized at the incurred amount when they are incurred, and shall
be recorded into the costs of the asset eligible for capitalization; those incurred after a qualified asset under acquisition and
construction or production is ready for the intended use or sale shall be recognized as expenses on the basis of the incurred amount
when they are incurred, and shall be recorded into the profits and losses of the current period.

The ancillary expenses arising from a general borrowing shall be recognized as expenses at their incurred amount when they are incurred,
and shall be recorded into the profits and losses of the current period.

Article 11

Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts
for more than 3 months, the capitalization of the borrowing costs shall be suspended. The borrowing costs incurred during such period
shall be recognized as expenses, and shall be recorded into the profits and losses of the current period, till the acquisition and
construction or production of the asset restarts. If the interruption is a necessary step for making the qualified asset under acquisition
and construction or production ready for the intended use or sale, the capitalization of the borrowing costs shall continue.

Article 12

When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization
of the borrowing costs shall be ceased. The borrowing costs incurred after the qualified asset under acquisition and construction
or production is ready for the intended use or sale shall be recognized as expenses at the incurred amount when they are incurred,
and shall be recorded into the profits and losses of the current period.

Article 13

The qualified assets under acquisition and construction or production, which have been ready for the intended use or sale, shall be
judged from the following aspects:

(1)

The substantial construction (including installation), or the production of the qualified assets has been finished completely or substantially;

(2)

The qualified assets under acquisition and construction or production meet or basically meet the design requirements, contractual
provisions or production requirements, even if there is any specific discrepancy between it and the design, contractual or production
requirements, its normal use or sale is not affected;

(3)

The amount of continuing disbursements for the qualified assets under acquisition and construction or production is very small, or
nearly no such disbursement incurs.

Where a qualified asset under acquisition and construction or production needs trial production or trial operation, it shall be deemed
to be ready for the intended use or sale, when the result of the trial production indicates that the asset is able to normally produce
qualified products, or when the trial operation result indicates that the asset is able to run or operate normally,.

Article 14

Where each part of a qualified asset under acquisition and construction or production is completed separately and is ready for use
or sale during the continuing construction of other parts, and if the acquisition and construction or production activities which
are necessary to prepare this part of the asset for the intended use or sale have already been completed substantially, the capitalization
of the borrowing costs in relation to this part of asset shall be ceased.

Where each part of a asset under acquisition and construction or production is completed separately and is ready for use or sale during
the continuing construction of other parts, but it can not be used or sold until the asset is entirely completed, the capitalization
of the borrowing costs shall be ceased when the asset is completed entirely.

Chapter III Disclosure

Article 15

An enterprise shall, in its notes, disclose the following information related to the borrowing costs:

(1)

the amount of the borrowing costs which is capitalized in the current period; and

(2)

the capitalization rate, which is used for calculating and determining the amount of the borrowing costs to be capitalized in the
current period.



 
the Ministry of Finance
2006-02-15

 






ACCOUNTING STANDARDS FOR ENTERPRISES NO. 31 – CASH FLOW STATEMENTS

Accounting Standards for Enterprises No. 31 – Cash Flow Statements

Cai Kuai [2006] No. 3
Chapter I General Provisions

Article 1

These Standards are formulated in accordance with the Accounting Standards for Enterprises – Basic Standards for the purpose of regulating
the preparation and presentation of cash flow statements.

Article 2

The term “cash flow statement” refers to a statement which reflects the inflows and outflows of cash and cash equivalents of an enterprise
in a certain accounting period.

The term “cash” refers to cash on hand and deposits that are available for payment at any time.

The term “cash equivalents” refers to short-term and highly liquid investments that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of change in value.

The cash as mentioned in these Standards shall include cash and cash equivalents unless the cash equivalents are mentioned simultaneously.

Article 3

The Accounting Standards for Enterprises No. 33 – Consolidated Financial Statements shall be applicable to the preparation and presentation
of consolidated cash flow statements.

Chapter II Basic Requirements

Article 4

Cash flows statements shall be reported for operating activities, investing activities and financing activities, respectively.

Article 5

Cash flows shall be presented respectively according to the total amounts of inflows and outflows of cash.

However, the following items shall be presented according to the net amounts:

(1)

Cash received or paid on behalf of customers;

(2)

Cash inflows and outflows on items which are quick in circulation, large in amounts, and short in maturity; and

(3)

Items relating to financial enterprises, including short-term loans granted and repayment of principal of such loans, the acceptance
of current deposits and the repayment of the principal of such deposits, financial institution deposits and deposits from or to other
financial institutions, funds borrowed from or lent to other financial institutions, purchase and sale of securities, etc.

Article 6

Some extraordinary items, such as a loss from a natural disaster or an insurance claim shall be classified into the cash flow of
operating activities, investing activities or financing activities respectively according to their features and shall be presented
separately.

Article 7

The exchange rate used for the translation of cash flows in a foreign currency and the cash flows of an overseas subsidiary shall
be the spot exchange rate on the date of the cash flows or shall be the rate which is determined through a systematic and reasonable
method and which is approximate to the spot exchange rate. The effect of a change in exchange rate on cash shall, as an adjustment
item, separately presented in the cash flow statement.

Chapter III Cash Flows Arising from Operating Activities

Article 8

An enterprise shall adopt the direct method to present the cash flows arising from operating activities.

The term “operating activities” refers to all transactions and events except the investing and financing activities of an enterprise.

The term “direct method” refers to a method whereby major classes of cash receipts and cash payments are presented for the cash flows
arising from operating activities.

Article 9

The relevant information about the cash flows arising from the operating activities may be acquired through either of the following
ways:

(1)

The accounting records of the enterprise.

(2)

Making adjustment on the business revenue, business costs and other items in the income statement according to the following items:

(a) The changes of inventory of current period and the changes of items of operating receivables and payables. ;

(b) The depreciation of fixed assets, amortization of intangible assets, provision for asset impairment, and other non-cash projects;
and

(c) Other non-cash items falling into the scope of cash flows arising from investing activities or financing activities.

Article 10

The items to reflect the following information for cash flows arising from operating activities shall be presented separately at
least. :

(1)

Cash received from the sale of goods and the rendering of services;

(2)

Tax refunds received;

(3)

Cash received relating to other operating activities;

(4)

Cash paid for goods purchased and labor services received;

(5)

Cash paid to employee and for employee.

(6)

Payments of all types of taxes; and

(7)

Cash payments relating to other operating activities.

Article 11

The financial enterprises may, according to the industrial features and the actual situation of cash flows, reasonably determine
the categories of cash flows arising from operating activities.

Chapter IV Cash Flows Arising from Investing Activities

Article 12

The term “investing activities” refers to those activities of an enterprise, such as the purchase and construction of long-term assets
and the investments and disposal activity that are not considered to be cash equivalents

Article 13

At least, the items reflecting the following information for the cash flows arising from investing activities shall be presented
separately :

(1)

Cash received from returns of investments;

(2)

Cash received from returns on investments;

(3)

Net cash received from the disposal of fixed assets, intangible assets and other long term assets;

(4)

Net cash received from the disposal of subsidiaries and other business entities;

(5)

Other cash received relating to investing activities;

(6)

Cash paid for the purchase and construction of fixed assets, intangible assets and other long term assets;

(7)

Cash paid for investments;

(8)

Net cash paid for the acquisition of subsidiaries and other business entities; and

(9)

Other cash payments relating to investing activities.

Chapter V Cash Flows Arising from Financing Activities

Article 14

The term “financing activities” refers to those activities that result in changes in the scale and composition of the capital and
debts of an enterprise.

Article 15

At least, the items reflecting the following information for the cash flows arising from financing activities shall be presented
separately:

(1)

Cash received by absorbing investments;

(2)

Cash received from debts;

(3)

Cash received relating to other financing activities.

(4)

Cash paid for repayments of debts;

(5)

Cash paid for distribution of dividends or profits, or cash payments for interests; and

(6)

Cash payments relating to other financing activities.

Chapter VI Disclosure

Article 16

An enterprise shall, in its notes, disclose the information about the reconciliation of net profits to cash flows arising from operating
activities. It shall at least disclose the following items separately for the reconciliation of net profits to cash flows arising
from operating activities:

(1)

The provision for impairment losses of assets;

(2)

The depreciation of fixed assets;

(3)

The amortization of intangible assets;

(4)

The amortization of long-term deferred expenses;

(5)

The deferred expenses;

(6)

The accrued expenses;

(7)

The profit or losses on the disposal of fixed assets, intangible assets and other long-term assets;

(8)

The losses on the discard of fixed assets;

(9)

The profit and losses on the changes in fair value;

(10)

The financial expenses;

(11)

The profit or losses arising from investments;

(12)

The deferred income tax assets and the deferred income tax liabilities;

(13)

The inventories;

(14)

The item of operating receivables; and

(15)

The item of operating payables;

Article 17

An enterprise shall, in its notes, disclose the following information about the total amounts of acquisition or disposal of subsidiaries
and other business entities in the current period:

(1)

The price for acquisition or disposal;

(2)

The portion of cash paid for the acquisition or disposal;

(3)

The portion of cash received for the acquisition or disposal of subsidiaries and other business entities; and

(4)

The non-cash assets and liabilities classified according to the major categories arising from the acquisition or disposal of subsidiaries
and other business entities.

Article 18

An enterprise shall, in its notes, disclose the significant activities on investment and financing, which do not concern the cash
receipts and payments of the current period but affect its financial status or will possibly affect its future cash flows.

Article 19

An enterprise shall, in its notes, disclose the following information related to cash and cash equivalents:

(1)

The composition of cash and cash equivalents and the corresponding amounts thereof in the balance sheets; and

(2)

The large sums of cash and cash equivalents held by an enterprise that are not available for use by the parent company or by any other
subsidiary within the group.



 
Ministry of Finance
2006-02-15

 






INTERIM REGULATIONS ON GIVING PUNISHMENTS FOR ILLEGAL ACTS AND DISCIPLINARY OFFENCES IN ENVIRONMENTAL PROTECTION

Ministry of Supervision, State Environmental Protection Administration

Ministry of Supervision and State Environmental Protection Administration

No.10

The Interim Regulations on Giving Punishments for Illegal Acts and Disciplinary Offences in Environmental Protection, adopted at the
14th ministerial meeting of the Ministry of Supervision on December 31, 2005 and at the 20th executive meeting of the State Environmental
Protection Administration on October 27, is hereby promulgated and shall go into effect as of the date of promulgation.

Li Zhilun, Minister of the Ministry of Supervision

Zhou Shengxian, Director of the State Environmental Protection Administration

February 20, 2006

Interim Regulations on Giving Punishments for Illegal Acts and Disciplinary Offences in Environmental Protection

Article 1

These Regulations are formulated so as to strengthen the environmental protection, punish illegal acts and disciplinary offences in
environmental protection and promote the implementation of laws and regulations on environmental protection, subject to the Environmental
Protection Law of the People’s Republic of China, the Law of the People’s Republic of China on Administrative supervision, and other
relevant laws and regulations.

Article 2

These Regulations shall be applicable to State administrative organs and their personnel, as well as personnel appointed by State
administrative organs to work in enterprises that commit illegal acts and disciplinary offences in environmental protection, and
shall be given punishments as a result.

Where having specified provisions on giving punishments for illegal acts and disciplinary offences in environmental protection, laws
as well as administrative rules and regulations shall be observed.

Article 3

Where State administrative organs have committed illegal acts and disciplinary offences in environmental protection, the appointing
and dismissing organs or supervisory organs shall, within their limits of administrative authority, give administrative sanctions
to persons in charge who have direct responsibility and other persons with direct responsibility, and to personnel of State administrative
organs who commit illegal acts and disciplinary offences in environmental protection (hereinafter collectively referred to as persons
with direct responsibility).

Where the enterprises have committed illegal acts and disciplinary offences in environmental protection, the appointing and dismissing
organs or supervisory organs shall, within their limits of administrative authority, give disciplinary actions to personnel which
are appointed by State administrative organs to work in enterprises committing illegal acts and disciplinary offences in environmental
protection, among persons in charge of such enterprises who have direct responsibility and other persons with direct responsibility,
according to law.

Article 4

Where State administrative organs and their personnel commit any of the following acts, persons with direct responsibility shall be
given warnings, have demerits or serious demerits on their record; if circumstances are comparatively serious, they shall be degraded;
in serious cases, they shall be removed from their office:

(1)

refusing to comply with environmental protection laws and regulations, as well as decisions and orders made by people’s governments
on environmental protection;

(2)

formulating provisions or taking actions which conflict with environmental protection, laws, regulations and rules, as well as national
environmental protection policies, and still failing to make corrections after such conflicts are pointed out to be remedied;

(3)

violating pertinent State industrial policies, thus polluting the environment or disrupting ecological balance;

(4)

failing to eliminate through competition the backward production technology, processes, equipment or products, all of which seriously
pollute the environment, in accordance with provisions stipulated by the State;

(5)

failing to order enterprises and institutions, which cause serious environmental pollution, to prevent and control such pollution
within a stipulated period, or failing to outlaw the said enterprises and institutions, order the said enterprises and institutions
to close down or suspend their production, in accordance with provisions concerned; and

(6)

failing to prepare emergency plans for environmental pollution and disruption of ecological balance, pursuant to State provisions.

Article 5

Where State administrative organs and their personnel commit any of the following acts, persons with direct responsibility shall be
given warnings, have demerits or serious demerits on their record; if circumstances are comparatively serious, they shall be degraded;
in serious cases, they shall be removed from their office:

(1)

practicing frauds or conducting dereliction of duty upon organizing environmental impact assessments, thus causing serious inconformity
of such assessments to facts, or giving no explanations to the compilation of environmental impact chapters not according to law,
or failing to legally submit the planning scheme of an environmental impact report for approval;

(2)

failing to conduct the examination or approval of environmental impact assessment documents for construction projects subject to legal
requirements or conducting the same examination and approval in violation of legal procedures, or collecting charges in serious cases,
upon the said examination and approval;

(3)

approving discretionarily the construction of a certain project or discretionarily and in person applying for permits of land requisition,
construction and registration, business license, production (use) permit for such project, if no due environmental impact assessment
is conducted according to law or no environmental impact assessment documents are approved;

(4)

failing to follow provisions concerned to issue a discharge permit, permit for operation of dangerous wastes, permit for operation
of units disposing medical wastes in a centralized manner, permit for nuclear and radioactive safety and other environmental protection
permits, or failing to applying for environmental protection approval documents in conformity with provisions;

(5)

violating laws by approving the reduction, exemption or delayed payment of pollutant discharges; and

(6)

committing other acts of granting licenses or conducting examination and approval in violation of provisions on environmental protection.

Article 6

Where State administrative organs and their personnel commit any of the following acts, persons with direct responsibility shall be
given warnings, have demerits or serious demerits on their record; if circumstances are comparatively serious, they shall be degraded;
in serious cases, they shall be removed from their office:

(1)

canceling natural reserves or adjusting or changing the nature, range, boundary or functional division of any natural reserve, without
an approval;

(2)

carrying out visiting or tourism activities in natural reserves, without an approval;

(3)

running visiting or tourism programs which are not oriented to the protection of natural reserves; and

(4)

failing to carry out visiting or tourism activities in accordance with approved schemes.

Article 7

Where State administrative organs and their personnel that have functions and responsibilities in supervising and administering environmental
protection commit any of the following acts, persons with direct responsibility shall be given warnings, have demerits or serious
demerits on their record; if circumstances are comparatively serious, they shall be degraded; in serious cases, they shall be removed
from their office:

(1)

giving administrative sanctions for illegal acts in environmental protection not subject to legal requirements or in violation of
legal procedures;

(2)

authorizing others to exercise the right of giving administrative punishments for illegal acts in environmental protection, without
any approval;

(3)

adopting compulsory measures for protection of the environment, such as illegally sealing up, seizure and so on, thus causing citizens’
personal and property damages or losses to legal persons or other organizations; and

(4)

giving other administrative penalties or adopting other compulsory administrative measures in violation of provisions on environmental
protection.

Article 8

Where State administrative organs and their personnel that have functions and responsibilities in supervising and administering environmental
protection commit any of the following acts, persons with direct responsibility shall be given warnings, have demerits or serious
demerits on their record; if circumstances are comparatively serious, they shall be degraded or removed from their office; in serious
cases, they shall be dismissed:

(1)

failing to timely investigate and punish illegal acts in environmental protection as soon as they are found or after being reported
the same;

(2)

failing to exercise functions in supervising and administering enterprises, which have legally obtained environmental protection permits,
such as discharge permit, permit for operation of dangerous wastes, permit for nuclear and radioactive safety, etc., or environmental
protection approval documents, thus causing serious consequences;

(3)

failing to report serious environmental pollution accidents or ecological damage accidents in conformity with provisions or practicing
frauds in such reports or failing to take necessary measures according to law or delaying to take such measures or shifting such
responsibility onto others, thus aggravating accidents or delaying the handling of such accidents;

(4)

failing to transfer some cases violating laws or disciplines on environmental protection, which ought to be transferred to pertinent
organs for handling, thus providing a chance for persons contravening laws and disciplines to escape sanctions, administrative or
criminal penalties free; and

(5)

committing other acts of failing to exercise functions in supervising and administering environmental protection.

Article 9

Where State administrative organs and their personnel commit any of the following acts, persons with direct responsibility shall be
given warnings, have demerits or serious demerits on their record; if circumstances are comparatively serious, they shall be degraded
or removed from their office:; in serious cases, they shall be dismissed:

(1)

taking advantage of their office to misappropriate, steal, swindle collected fines, pollutant discharges or other properties or using
other means to keep the same for their own;

(2)

extorting properties from others with job convenience or illegally accepting others’ properties and seeking advantages for them in
return;

(3)

withholding or misappropriating special funds for environmental protection or using special funds for environmental protection for
other purposes;

(4)

using, exchanging, selling or destroying properties which have been legally sealed up or distrained; and

(5)

withholding, or privately dividing up fines or confiscated illegal proceeds or properties, or privately dividing up so in a disguised
form.

Article 10

Where State administrative organs and their personnel divulge secret information to units under inspection or harbor or connive illegal
acts and disciplinary offences in environmental protection, persons with direct responsibilities shall be degraded or removed from
their office; or in case of serious damages to legitimate rights and interests, as well as public interests of citizens, legal persons
or other organizations, or in case of group events or conflicts, thus greatly impacting the social stability, persons with direct
responsibility shall be dismissed.

Article 11

Should any of the following acts be committed by enterprises, persons appointed by State administrative organs among persons in charge
of such enterprises who have direct responsibility and other persons with direct responsibility shall be degraded; if circumstances
are comparatively serious, they shall be removed from their office or retained at their positions under observation; in serious cases,
they shall be dismissed:

(1)

commencing the construction discretionarily by failing to go through formalities for examining and approving environmental impact
assessment documents or, after being ordered to suspend the construction, still failing to effect supplementary handling of formalities
for examining and approving environmental impact assessment even if given a specified period to do so;

(2)

failing to simultaneously design, construct or place into operation the environmental protection facilities, which are proposed to
be constructed in support of construction projects, together with principal parts of such projects;

(3)

discretionarily dismantling, leaving idle or misusing facilities for prevention and control of environmental pollution or failing
to discharge pollution in a normal manner;

(4)

contravening environmental protection laws and regulations, thereby causing environmental pollution accidents in serious cases;

(5)

failing to prepare emergency plans in accordance with pertinent State provisions or failing to timely take effective control measures
upon occurrence of emergencies, thus causing serious consequences;

(6)

continuing the production as usual although after being ordered to cease doing business or close down according to law;

(7)

precluding environmental law enforcers from legally performing official functions; and

(8)

committing other acts of carrying out construction, production or business operation in violation of environmental protection laws
and regulations.

Article 12

Where illegal acts and disciplinary offences in environmental protection are committed, thus involving crimes, matters shall be referred
to judicial organs for handling in accordance with law.

Article 13

Where cases violating environmental protection laws and disciplines under investigation fall into the jurisdiction of the other party,
either a competent administrative department for environmental protection or a supervisor organ shall timely refer such cases to
the other party having jurisdiction over them.

If it is necessary to give punishments to relevant persons liable, a supervisory organ shall make a supervision decision or a supervision
recommendation of giving punishments according to law.

Article 14

Should punishments be given to organizations with a function of administering public affairs under the authorization of laws and regulations,
organizations entrusted by State administrative organs according to law and personnel thereof, as well as persons appointed by State
administrative organs to work in other institutions, for their commission of illegal acts and disciplinary offences in environmental
protection, these Regulations shall apply.

Article 15

The Ministry of Supervision and the State Environmental Protection Administration and the State Environmental Protection Administration
shall be responsible for the interpretation of these Regulations.

Article 16

These Regulations shall go into effect as of the date of promulgation.



 
Ministry of Supervision, State Environmental Protection Administration
2006-02-20

 






AUDIT LAW OF THE PEOPLE’S REPUBLIC OF CHINA

the Standing Committee of the National People’s Congress

Audit Law of the People’s Republic of China

(Adopted at the Ninth Meeting of the Standing Committee of the Eighth National People’s Congress on August 31, 1994, and amended in
accordance with the Decision on Amending the Audit Law of the People’s Republic of China at the 20th meeting of the Standing Committee
of the 10th National People’s Congress of the People’s Republic of China on February 28, 2006)

ContentsChapter I General Provisions

Chapter II Auditing Organs and Auditors

Chapter III Functions and Responsibilities of Auditing Organs

Chapter IV Limits of Power of Auditing Organs

Chapter V Audit Procedures

Chapter VI Legal Liabilities

Chapter VII Supplementary Provisions

Chapter I General Provisions

Article 1

In order to strengthen the audit supervision of the State, maintain the fiscal and economic order of the State, enhance the efficiency
in using fiscal capital, promote the construction of a clean government and ensure the sound development of national economy and
the society, this Law is formulated in the light of the Constitution.

Article 2

The State shall carry out an audit supervision system. Auditing organs shall be set up by the State Council and the local people’s
governments at or above the county level.

The government revenues and expenditures of all the departments of the State Council, of the local people’s governments at all levels
and their departments, the financial revenues and expenditures of State-owned financial institutions, enterprises and public institutions,
as well as other government revenues and expenditures and financial revenues and expenditures that should be audited in the light
of this Law shall be taken the audit supervision in the light of the provisions prescribed in this Law.

Auditing organs shall implement audit supervision over the authenticity, legality and effectiveness of the government revenues and
expenditures or financial revenues and expenditures specified in the preceding Paragraph.

Article 3

Auditing organs shall implement audit supervision in the light of the functions and procedures prescribed in the law.

An auditing organ shall make audit evaluation in accordance with the laws and regulations on government revenues and expenditures
and financial revenues and expenditures as well as other relative provisions of the State, and shall make an audit decision under
its statutory authorities.

Article 4

The State Council and the local people’s government at or above the county level shall annually put forward to the standing committee
of the people’s congress at the same level an audit work report of the auditing organ on budget implementation and other government
revenues and expenditures. An audit work report shall put stress on the audit of budget implementation. When necessary, the standing
committee of the people’s congress may make a resolution on the audit work report.

The State Council and the local people’s government at or above the county level shall hand in a report to the standing committee
of the people’s congress at the same level about the correction of the problems found out in the audit work report and the handling
results.

Article 5

Auditing organs shall independently exercise their power of audit supervision in the light of the law, and not be interfered by any
administrative organ, social organization or individual.

Article 6

When conducting audit matters, auditing organs and auditors shall be objective and fair, practical and realistic, clean and devoted,
and shall keep secrets to themselves.

Chapter II Auditing Organs and Auditors

Article 7

The National Audit Office shall be set up by the State Council to be responsible for the audit work all over the country under the
leadership of the Premier of the State Council. The Auditor-General shall be the administrative leader of the National Audit Office.

Article 8

The auditing organs of the people’s governments of the provinces, autonomous regions, municipalities directly under the Central Government,
cities divided into districts, autonomous prefectures, counties, autonomous counties, cities not divided into districts, and districts
under the jurisdiction of cities shall be responsible for the audit work in their respective administrative areas under the respective
leadership of the governor of the provinces, chairman of the autonomous regions, mayors, head of prefectures, counties and districts,
as well as under the leadership of auditing organs at the next higher levels.

Article 9

Local auditing organs at all levels shall be responsible for reporting their work to the people’s governments at the same levels and
the auditing organs at the next higher level, and their audit work shall be chiefly under the direction of the auditing organs at
the next higher level.

Article 10

In accordance with the requirements for the work, an auditing organ may, upon the approval of the people’s government at the same
level, set up dispatched offices under its audit jurisdiction.

The dispatched organs shall implement the audit work upon the strength of the authorization granted by the auditing organ.

Article 11

The funds necessary for auditing organs to implement their functions shall be included into the government budgets and be guaranteed
by the people’s government at the same level.

Article 12

Auditors shall possess the professional knowledge and ability suitable for the audit work they are engaged in.

Article 13

An auditor shall withdraw if he has interests with the entity under audit or the audited items in conducting audit matters.

Article 14

An auditor shall have the responsibility for keeping to themselves the State secrets and the business secrets of the entity being
audited he has access to when carrying out his functions.

Article 15

An auditor shall be protected by law when carrying out his functions in the light of the law.

No organization or individual may refuse or obstruct auditors’ performance of their functions in the light of the law, or retaliate
against auditors.

The persons-in-charge of the auditing organs shall be appointed or dismissed in the light of statutory procedures. None of them may
be dismissed or replaced at random unless they carry out illegal activities, neglect their duties, or are no longer qualified to
their posts.

It is necessary to solicit the opinions of the auditing organ at the next higher level before the persons in-charge of the local auditing
organ at any level are appointed or dismissed,.

Chapter III Functions and Responsibilities of Auditing Organs

Article 16

The auditing organs shall carry out audit supervision over the budget implementation, final settlement of accounts as well as other
government revenues and expenditures of all the other departments (including subordinate organs) at the same level and of the governments
at lower levels.

Article 17

Under the leadership of the Premier of the State Council, the National Audit Office shall carry out audit supervision over the implementation
of the central budget and other government revenues and expenditures, and hand in a report of audit results to the Premier.

Under the respective leadership of the governor of the province, chairman of the autonomous region, mayor, head of the county and
head of the district as well as the leadership of the auditing organ at the next higher level, the local auditing organ at any level
shall carry out audit supervision over the budget implementation and other government revenues and expenditures of the same level,
and hand in a report of audit results to the people’s government at the same level and the auditing organ at the next higher level.

Article 18

The National Audit Office shall carry out audit supervision over the financial revenues and expenditures of the Central Bank.

Auditing organs shall carry out audit supervision over the assets, liabilities, profits and losses of State-owned financial institutions.

Article 19

Auditing organs shall carry out audit supervision over the financial revenues and expenditures of public institutions of the State
and other public organizations using fiscal capital.

Article 20

Auditing organs shall carry out audit supervision over the assets, liabilities, profits and losses of the State- owned enterprises.

Article 21

The audit supervision over the enterprises and financial institutions in which the State-owned assets play a controlling or leading
role shall be formulated by the State Council.

Article 22

Auditing organs shall carry out audit supervision over the budget implementation and final settlement of accounts relating for the
construction projects invested or mainly invested by the government.

Article 23

Auditing organs shall carry out audit supervision over the financial revenues and expenditures of the social security funds, funds
from public donations and other relevant funds and capital managed by the government department or by any other entity upon authorization
of the government department.

Article 24

Auditing organs shall carry out audit supervision over the financial revenues and expenditures of projects with aids or loans offered
by international organizations or governments of other countries.

Article 25

In accordance with the relative provision of the State, auditing organs shall carry out audit supervision over the principal responsible
persons of the state organs and other entities under the audit supervision of the auditing organ for their performance of economic
liabilities of government revenues and expenditures, financial revenues and expenditures, and other economic activities for their
respective regions, departments or entities during their tenure of office.

Article 26

Other than the audit matters as prescribed in this Law, auditing organs shall, in the light of the provisions prescribed in this Law
as well as relative laws and administrative regulations, carry out audit supervision over the matters that should be audited by auditing
organs as formulated in other laws or administrative regulations.

Article 27

For particular matters relating to the State revenues and expenditures, auditing organs shall have the power to make special audit
investigations to relevant regions, departments or entities, and shall hand in a report about the audit investigation results to
the people’s governments at the same levels and the auditing organs at the next higher levels.

Article 28

Auditing organs shall make a determination on their audit jurisdiction in the light of the subordination of fiscal and financial affairs
or the State-owned asset supervisory and managerial relation of the entity under audit.

If there is any dispute over audit jurisdiction between auditing organs, the auditing organ superior to both parties shall make a
determination on the matter.

Auditing organs at higher levels may authorize auditing organs at lower levels to audit the matters under the audit jurisdiction of
the former and specified in Paragraph 2 of Article 18 through Article 25 in this Law. Auditing organs at higher levels may directly
give audits on the major matters under the jurisdiction of auditing organs at lower levels. However, unnecessary repetitive audits
shall be avoided.

Article 29

The entities under audit supervision of auditing organs shall set up and perfect their internal auditing systems in the light of the
relative provisions of the State. And their internal auditing work shall be professionally guided and supervised by the auditing
organs.

Article 30

If an entity is subject to audit supervision of a social auditing organ, the auditing organ shall have the right to examine the relative
audit reports issued by the aforesaid social auditing organ in accordance with the provisions of the State Council.

Chapter IV Limits of Power of Auditing Organs

Article 31

In accordance with the provisions of the auditing organ, the auditing organs shall have the right to order an entity under audit to
submit the budget or plan on financial revenues and expenditures, budget implementation, final settlement of accounts, financial
accounting reports, electronic data on government or financial revenues and expenditures stored and processed by computers and necessary
computer technical documents, the information about the account opening at financial institutions, the audit reports issued by the
social auditing organs as well as other materials about government or financial revenues and expenditures. The entity under audit
shall not refuse or delay to submit reports or give a false report.

The person in-charge of an entity under audit shall be responsible for the authenticity and integrity of the financial accounting
materials offered by his/her own entity.

Article 32

Auditing organs shall, during the course of audit, be enpost_titled to examine accounting vouchers, accounting books, financial accounting
reports, the electronic data system of government or financial revenues and expenditures operated by computers as well as other materials
and assets about government or financial revenues and expenditures. And the entity under audit shall not refuse to submit them.

Article 33

Auditing organs shall, when conducting audits, have the power to make investigations to relative entities or individuals concerning
audit matters and obtain relative certification materials. The entities and individuals concerned shall support and assist the auditing
organs in their work by providing them with truthful information and relative certification materials.

Auditing organs shall have the right to inquire about the account of an entity under audit at the financial institution upon the approval
of the person in-charge of the auditing organ of the people’s government at or above the county level.

If the auditing organ have any evidence that an entity under audit deposits public money in the name of individuals, it shall have
the right to make investigations on the deposits of the entity being audited in the name of individuals at the financial institution
upon the approval of the person in-charge of the auditing organ of the people’s government at or above the county level.

Article 34

When being audited by an auditing organ, the entity shall not transfer, conceal, alter or destroy any of its accounting vouchers,
accounting books, financial accounting reports and other materials about fiscal or financial revenues and expenditures, nor shall
it transfer or conceal any of the assets it obtained violating the provisions of the State.

Where an entity being audited violates the preceding Paragraph, the auditing organ shall have the right to prevent it, and, when necessary
and upon approval of the person in-charge of the auditing organ of the people’s government at or above the county level, the auditing
organ shall have the right to seal up the relative materials and the assets obtained violating the provisions of the State. If the
auditing organ needs to freeze the relative deposits at the financial institution, it shall hand in an application to the people’s
court.

Where an entity under audit is carrying out any act concerning government or financial revenues and expenditures violating the provisions
of the State, the auditing organ shall have the right to prevent it. If it is invalid to prevent, the auditing organ shall, upon
approval of the person-in-charge of the auditing organ of the people’s government at or above the county level, inform the fiscal
department and the competent authorities to suspend the allocation of money directly pertinent to the act of government or financial
revenues and expenditures violating the provisions of the State; if the aforesaid money has been allocated, the use thereof shall
be suspended.

When implementing the measures as prescribed in the preceding two paragraphs, an auditing organ shall not cause effect on the lawful
business operations or production and management activities of the entity being audited.

Article 35

If any auditing organ believes that the provisions of the competent departments at any higher levels on government revenues and expenditures
or financial revenues and expenditures carried out by the entity under audit in contradiction with any of the laws or administrative
regulations, it shall make a suggestion to the competent departments concerned to make rectifications. If the competent departments
concerned fail to make rectifications, the auditing organs shall submit the matter to the relevant organs for disposition.

Article 36

Auditing organs may notify the relative government departments of their audit results or make such results public.

When circulating or making public audit results, auditing organs shall keep to themselves on the State secrets and business secrets
of the entities being audited in the light of the law and complying with the relative provisions prescribed by the State Council.

Chapter V Audit Procedures

Article 37

When performing the duty of audit supervision, an auditing organ may request assistance from the administrative department of public
security, supervision, public finance, taxation, customs, price or industry and commerce.

Article 38

An auditing organ shall set up an audit team in accordance with the audit matters as ascertained in the plan on audit, and shall,
within 3 days before the audit implementation, send an audit notice to the entity to be audited. In the case of any special circumstance,
the auditing organ may, upon approval of the people’s government at the same level, directly implement the audit upon the strength
of the audit notice.

The entities being audited shall cooperate with the auditing organs in their work and offer necessary work conditions.

Auditing organs shall improve the efficiency of their audit work.

Article 39

The auditors shall implement their audit and obtain the certification materials by auditing accounting vouchers, accounting books
and financial accounting reports, consulting the documents and materials pertinent to audit matters, examining the cash, physical
objects and securities, and making investigations on the entities or individuals concerned.

When making investigations on entities and individuals concerned, the auditors shall show their work certificates and photocopies
of audit notices.

Article 40

After an audit to the auditing matters, an audit team shall hand in an audit report to the auditing organ. Prior to handing in the
audit report, the audit team shall solicit the opinions of the entity being audited. The entity being audited shall, within ten days
as of the receipt of the audit report of the audit team, hand in its opinions in written form to the audit team. The audit team shall
hand in the aforesaid written opinions together with the audit report to the auditing organ.

Article 41

An auditing organ shall review the audit report handed in by the audit team in accordance with the procedures prescribed by the National
Audit Office, and present an audit report of its own after concurrently studying the opinions of the entity being audited about the
audit report delivered by the audit team. It shall, under its statutory jurisdiction, make a decision on audit or give its suggestions
on disposition and punishment to the relevant competent authorities for an act of fiscal or financial revenues and expenditures violating
the provisions of the State that deserves disposition or punishment.

An auditing organ shall serve the audit report and audit decision of its own to the entity being audited and the relevant competent
organ or entity. The audit decision shall go into effect as of the date of service.

Article 42

If an auditing organ at a higher level considers that an audit decision made by an auditing organ at a lower level has violated the
relative provisions of the State, it may order the auditing organ at the lower level to make alteration or cancellation on the aforesaid
decision, and may directly make a decision on alteration or cancellation when it is necessary.

Chapter VI Legal Liabilities

Article 43

If an entity under audit violating any provisions prescribed in this Law by refusing or delaying the provision of the materials about
audit matters, providing untrue or incomplete materials, or refusing or impeding the inspection, it shall be ordered to make corrections,
given a criticism by circulating a notice and given a warning by the auditing organ. If the entity under audit refuses to make corrections,
it shall be called to account in accordance with the law.

Article 44

Where an entity being audited violating the provisions prescribed in this Law by transferring, concealing, altering or destroying
any accounting vouchers, accounting accounts, financial accounting reports or other materials pertinent to government or financial
revenues and expenditures, or transferring or concealing the assets obtained by violating the provisions of the State, and if the
auditing organ considers that the principal and other persons held to be directly responsible should be given sanctions, the auditing
organ shall give suggestions for punishment. The entity being audited or the organ at the higher level and the supervisory organ
shall make a decision in a timely manner, and notify the result to the auditing organ in written form. If a crime is constituted,
the entity being audited shall be called to account in accordance with the law.

Article 45

Where any other department (including subordinate entities) at the same level or the government at the lower level commits the acts
against the budget or other acts of government revenues and expenditures against the provisions of the State, the auditing organ,
the people’s government or the relevant competent authorities shall, under its statutory authorities and in the light of the laws
and administrative regulations, take the following measures on the basis of the specific situation:

(1)

Ordering it to pay the money that should be turned over within the time limit;

(2)

Ordering it to return the occupied state-owned assets within the time limit;

(3)

Ordering it to refund the illegal incomes within the time limit;

(4)

Ordering to handle the matter in the light of the relative provisions in the unified national accounting system; and

(5)

Other measures.

Article 46

Where an entity being audited commits the acts of financial revenues and expenditures by violating the provisions of the State, the
auditing organ, the people’s government or the relevant competent authorities shall, under its statutory jurisdiction and in the
light of the laws and administrative regulations, take measures prescribed in the preceding Article on the basis of the specific
situation, and may impose punishments on the entity being audited in the light of law.

Article 47

The entity being audited shall carry out the decision made by the auditing organ under its statutory jurisdiction.

Where the auditing organ orders an entity being audited to pay the money that should be turned over, but the entity being audited
refuses to do so, the auditing organ shall circulate a notice to the relevant competent authorities, and the relevant competent authorities
shall, in accordance with the laws and administrative regulations, withhold the aforesaid money or take other measures, and notify
the written results to the auditing organ.

Article 48

Where an entity being audited object an audit decision on financial revenues and expenditures made by the auditing organ, it may hand
in an application for administrative reconsideration or lodge an administrative lawsuit.

Where an entity being audited object an audit decision on government revenues and expenditures made by the auditing organ, it may
request the people’s government at the same level as the auditing organ for ruling, and the ruling delivered by the people’s government
at the same level shall be final.

Article 49

Where the government or financial revenues and expenditures of an entity being audited violating the provisions of the State, the
auditing organ considers it necessary to punish the principal and other persons held to be directly responsible, it shall give suggestions
for punishment, and the entity being audited, the organ at the higher level or the supervisory organ shall make a decision in a timely
manner and notify the written results to the auditing organ.

Article 50

Where the government or financial revenues and expenditures of an entity under audit violates any of the laws or administrative regulations
and a crime is constituted, the entity being audited shall be subject to criminal liabilities.

Article 51

Anyone who retaliates or makes a false charge against the auditor shall be given sanctions; and shall be subject to criminal liabilities
if any crime is constituted.

Article 52

Where an auditor abuses his authorities, conducts malpractice out of personal considerations, neglects his duties or divulges national
secrets or business secrets he has access to, he shall be punished; and if a crime is constituted, he shall be subject to criminal
liabilities.

Chapter VII Supplementary Provisions

Article 53

The provisions on audit work of Chinese People’s Liberation Army shall be formulated by the Central Military Commission in the light
of this Law.

Article 54

This Law shall go into effect as of January 1, 1995. The Audit Regulation of the People’s Republic of China promulgated by the State
Council on November 30, 1988 shall be abolished at the same time.



 
the Standing Committee of the National People’s Congress
2006-02-28

 






LETTER OF CHINA BANKING REGULATORY COMMISSION CONCERNING APPROVING INDIA UTI BANK LIMITED TO ESTABLISH SHANGHAI REPRESENTATIVE OFFICE

Letter of China Banking Regulatory Commission concerning Approving India UTI Bank Limited to Establish Shanghai Representative Office

India UTI Bank Limited,

This Commission has received the letter which was signed by Mr. P. J. Nayak, the Chairman of the board of directors and the executing
director of your bank,

You are hereby approved to establish a representative office in Shanghai, whose Chinese name is “ӡ￿￿￿￿￿￿￿￿￿￿￿￿˾￿￿￿￿￿”
and whose name in English is ” UTI Bank Limited, Shanghai Representative Office “, according to the Measures on the Administration
of Foreign-funded Financial Institutions’ Representative Offices in China (Order No. 8, 2002 of the People’s Bank of China) (hereinafter
referred to as these Measures)

According to the related provisions of these Measures, upon approval, Raj Kumar Khosa is granted to have the qualifications as the
chief representative of this Representative Office.

China Banking Regulatory Commission

March 2, 2006



 
China Banking Regulatory Commission
2006-03-02

 






INTERIM PROVISIONS CONCERNING THE ADMINISTRATION ON OVERSEAS INVESTMENT OF THE NATIONAL SOCIAL SECURITY FUND

National Council for Social Security Fund

Interim Provisions concerning the Administration on Overseas Investment of the National Social Security Fund

National Council for Social Security Fund

March 14, 2006

Chapter I General Provisions

Article 1

The present Provisions are formulated in accordance with the relevant laws and regulations of the state for the purpose of regulating
the overseas investment by the national social security fund (hereinafter referred to as the NSSF) and preventing and solving the
relevant risks arising from the NSSF investment.

Article 2

The overseas investment of NSSF shall follow the principles of security and stability .

Article 3

The overseas investment of NSSF shall be organized and carried out by the National Council for Social Security Fund (hereinafter referred
to as the NCSSF).

Article 4

In cooperation with the Ministry of Labor and Social Security (hereinafter referred to as the MOLSS) and the State Administration
of Foreign Exchange (hereinafter referred to as the SAFE), the Ministry of Finance (hereinafter referred to as the MOF) shall formulate
the relevant policies for the administration and operation of overseas investment of NSSF and scrutinize the operation thereof.

China Securities Regulatory Commission (hereinafter referred to as the CSRC) and China Banking Regulatory Commission (hereinafter
referred to as the CBRC) shall, in accordance with their respective functions and duties, carry out supervision on relevant matters
of the overseas investment of NSSF.

Chapter II Overseas Investment Managers of the National Social Security Fund

Article 5

The NCSSF shall entrust overseas investment managers that meet the requirements as prescribed in Article 6 of the present Provisions
to carry out the overseas investment of NSSF.

Article 6

An overseas investment manager of NSSF shall meet the requirements as follows:

(1)

Having stable financial status, good creditworthiness and risk control indicators that meet the provisions of laws and regulations
as well as the relevant requirements of the regulatory organs in the country or region where it is located;

(2)

Having a work experience on asset management for more than 6 years and the assets under its management is no less than US $ 5 billion
(or equivalent currency) in the latest fiscal year;

(3)

The practitioners meeting the relevant requirements for qualification of practice in the country or region where it is located;

(4)

Having a sound management structure and perfect internal control rules as well as standardized business operation;

(5)

No major punishment given by the regulatory organs of the country or region where it is located for the latest 3 years; and

(6)

Having been established and registered outside the territory of China, the legal system and financial regulatory rules in a country
or region where it is located are perfect and the regulatory organ of which has concluded an Understanding Memorandum with the CSRC
for Supervisory Cooperation and maintains an effective supervisory cooperation relationship therewith.

Article 7

The NCSSF shall, by referring to the current international conventions, organize an appraisal in order to determine an overseas investment
manager of NSSF. The appraisal result shall, within 10 days as of the day after an appraisal is concluded, be reported to the MOF,
the MOLSS, the CSRC and the SAFE.

Article 8

The NCSSF shall conclude a Contract on the Management of Entrusted Assets with an overseas investment manager of NSSF, except for
meeting the conventions of general entrusted operation, the Contract on the Management of Assets shall satisfy the following provisions:

(1)

The Chinese shall prevail in the written languages of Contract, whereas in case any foreign language is required by the Contract itself,
market situation or any convention, a Chinese version shall be attached thereto;

(2)

Clarifying that the trustee shall be subject to the principles of withdrawal from the conflict of interest;

(3)

Clarifying the responsibilities and faithful obligation of the trustee ;

(4)

Clarifying the restrictions about the investment varieties or tools;

(5)

Clarifying the restrictions on the total investment amount in stocks, bonds or other securities of any listed company;

(6)

Clarifying the restrictions on the proportion of the stock investment of a listed company in the company’s total amount of stocks
as publicly offered;

(7)

Clarifying the calculating method of the net asset value and yield rate of the NSSF;

(8)

Clarifying that the NCSSF may employ an accounting firm to implement an auditing on the NSSF assets managed by an overseas investment
manager of NSSF;

(9)

Clarifying the relevant terms for rescinding and terminating the contract; and

(10)

Other necessary matters need to be clarified.

Before the NCSSF concludes a Contract on the Entrusted Management of NSSF Assets, a clean legal opinion shall be produced by a professional
lawyer with an experience on practice more than 5 years.

The NCSSF shall report the contract , together with the legal opinion thereof to the MOF, the MOLSS, the CSRC and the SAFE within
15 days as of the day when a Contract on the Entrusted Management of NSSF Assets is concluded.

Chapter III Overseas Assets Trustee of NSSF

Article 9

The NCSSF shall entrust overseas assets trustee that meet the provisions of Article 10 of the present Provisions to take charge of
the overseas asset trust business of NSSF.

Article 10

An overseas assets trustee of NSSF shall meet the requirements as follows:

(1)

Its paid-up capital in the lasted fiscal year shall be not less than US $ 5 billion (or equivalent currency) or the scale of the trust
assets shall be not less than US $ 500 billion (or equivalent currency);

(2)

Its long-term credit having been rated as Grade A /equivalent grade or above for the latest 3 years by an internationally accepted
rating agency ;

(3)

Having enough special personnel who are familiar with the trusted operation;

(4)

Having capability of conducting settlement and delivery in a safe and highly efficient manner;

(5)

Having a business place, facilities for security protection that meets the relevant requirements and any other facilities related
to the trusted operation of NSSF ;

(6)

Having a perfect internal audit and inspection and control system as well as a perfect risk control system;

(7)

No major punishment is given by the regulatory organ in the country or region where it is located in the latest 3 years; and

(8)

Having been established and registered outside the territory of China, the legal system and financial regulatory rules are perfect
in a foreign country or region where it is located, and the regulatory organ of which has concluded an Understanding Memorandum for
Supervisory Cooperation with the CSRC and maintains an effective supervisory cooperation relationship therewith.

Article 11

In the light of the international conventions, the NCSSF shall organize an appraisal in order to determine an overseas assets trustee
of NSSF. The appraisal result shall, within 10 days as of the day when an appraisal is concluded, be reported to the MOF, the MOLSS,
the CBRC, the CSRC and the SAFE.

Article 12

The NCSSF shall conclude with an overseas assets trustee of NSSF a Contract on the Overseas Assets Trust of NSSF, which shall satisfy
the provisions as follows except for satisfying the conventions of the general contracts on trust:

(1)

The Chinese shall prevail in the written languages of Contract, in case any foreign language is required by the Contract itself, market
situation or any convention, a Chinese version shall be attached thereto;

(2)

Clarifying the responsibilities and faithful obligation of a trustee;

(3)

Clarifying that the NCSSF may employ an accounting firm to carry out an auditing on the NSSF Assets as mandated by the overseas assets
trustee of NSSF ;

(4)

Clarifying the relevant terms for rescinding and terminating a contract; and

(5)

Other necessary matters need to be clarified.

Before the NCSSF concludes a Contract on the Custody of Overseas NSSF Assets, a clean legal opinion shall be produced by a professional
lawyer with an experience on practice more than 5 years.

The NCSSF shall report the contract, together with the legal opinion thereof to the MOF, the MOLSS, the CBRC, the CSRC and the SAFE
within 15 days as of the day when a Contract on the NSSF Assets is concluded.

Article 13

An overseas assets trustee of NSSF shall make a written commitment to the NCSSF on the terms as follows:

(1)

Being subject to the provisions of Articles 22 and 23 of Chapter V herein on the range of incomes and expenditures of an overseas
NSSF foreign exchange account;

(2)

Carrying out the obligation of information reporting prescribed in Article 25 of Chapter V herein; and

(3)

Supervising the investment operation of an overseas investment manager of NSSF and, in case any overseas investment manager of NSSF
is found to have broken the relevant provisions of Article 22 or 23 of Chapter V herein on the range of incomes and expenditures
of an overseas NSSF foreign exchange account, it shall be reported to the NCSSF and the SAFE in time.

If an overseas assets trustee of NSSF fails to perform the aforesaid obligations without any justifiable reason, the MOF, the MOLSS,
and the SAFE may advise the NCSSF to rescind the relevant Contract on the Custody of Overseas NSSF Assets.

Chapter IV Overseas investment of NSSF

Article 14

The capital source of the overseas NSSF investment shall come from the proceeds as generated from the reduction of overseas held state
shares, which are turned over in foreign exchange. The proportion of overseas investment of NSSF shall be calculated in the light
of costs and shall not exceed 20% of the total NSSF assets.

Article 15

An overseas investment of NSSF shall be restricted to the investment varieties and tools as follows:

(1)

Bank deposits;

(2)

Bonds of foreign governments, bonds of international financial organizations, bonds of foreign organizations and foreign companies;

(3)

Bonds issued overseas by the Chinese government or Chinese enterprises;

(4)

Monetary market derivatives, like bank’s bills and large negotiable certificates of deposits;

(5)

Stocks;

(6)

Funds;

(7)

Financial derivatives like swap, forward and etc.; and

(8)

Other investment variety or tool, which the MOF together with the MOLSS has approved.

The term “bank” mentioned in Item (1) herein refers to that an overseas Chinese-funded bank or a foreign bank whose long-term credit
has been rated as Grade A / equivalent grade or above by an internationally accepted rating agency.

The term “bonds” mentioned in Item (2) herein refers to the bonds that have been rated as Grade BBB / equivalent grade or above by
an internationally accepted rating agency.

The term “monetary market derivatives” mentioned in Item (4) herein refers to the monetary market derivatives that have been rated
as Grade AAA /equivalent grade or above by an internationally accepted rating agency.

The term “stocks” mentioned in Item (5) herein refers to the stocks that are listed in an overseas stock exchange;

The term “funds” mentioned in Item (6) herein refers to the funds that have been publicly issued in the securities market, the investment
scope of which shall meet the provisions of this Article on other investment varieties and tools.

The term “financial derivatives like swap, forward and etc.” mentioned in Item (7) herein refers to the current financial derivatives
traded in the financial market. The investment of NSSF on financial derivatives tools shall be limited only for the requirement of
the risk management and be prohibited from the speculation or magnified transaction.

Article 16

The investment of entrusted assets of NSSF made by a single overseas investment manager of NSSF on a single securities or fund issued
by an organization shall not be more than 10 % of the said securities or fund. Under the circumstance of cost-based calculation,
it shall not be more than 20 % of the total value of the entrusted overseas assets of NSSF under its management.

Under any of the circumstances as follows, the restrictions on proportion as prescribed in the preceding paragraph may not apply:

(1)

Where an overseas investment manager of NSSF is entrusted by the NCSSF to participate in the listing placement or directional placement
as an institutional investor; or

(2)

Where the stocks, which are held by the NCSSF, are entrusted to an overseas investment manager of NSSF for investment operation.

Article 17

In accordance with the overseas investment operation of NSSF, the MOF together with the MOLSS may make adjustment on the varieties
and proportions of the overseas investment of NSSF.

Article 18

The NCSSF shall entrust overseas investment managers of NSSF for investment operation according to the principles of decentralization.

The assets entrusted by the NCSSF to a single overseas investment manager of NSSF for investment operation shall not exceed 50% of
the total value of the NSSF assets entrusted for overseas investment.

Article 19

The management fee and trust fee for the overseas investment of NSSF shall be decided by referring to the rating standards of international
identical products and shall be reported to the MOF and MOLSS.

Chapter V Administration on Foreign Exchange of the Overseas Investment of NSSF

Article 20

The overseas investment of NSSF shall be subject to the relevant provisions of state foreign exchange administration.

Article 21

In the light of the international conventions as well as requirements for overseas investment, the NCSSF shall establish an overseas
foreign exchange capital account of NSSF in the organization of the relevant trustee of overseas NSSF assets. The NCSSF shall report
it to the SAFE for archival filing within 5 days after an aforesaid foreign exchange account is opened.

Article 22

The scope of incomes in an overseas foreign exchange capital account of NSSF shall include :

(1)

Capital remitted from a foreign exchange deposit account within the territory of China;

(2)

Capital generated from the sale of investment products;

(3)

Proceeds generated from overseas investment; and

(4)

Any other relevant income generated from overseas investment as well as other income that has been approved by the SAFE.

Article 23

The scope of expenditures from an overseas foreign exchange capital account of NSSF shall include :

(1)

Capital remitted back to foreign exchange deposit account within the territory of China;

(2)

Capital paid for the purchase of investment products; and

(3)

Any other relevant expenditure by overseas investment (including the relevant taxes and fees) as well as any other expenditure that
has been approved by the SAFE.

Article 24

Where the NCSSF remits outward, or inward any principal or proceeds over US $50 million (or equivalent currency), it shall report
it to the SAFE for archival filing 3 workdays in advance.

Upon the approval of the State Council, in accordance with the situation of international balance of payments, the SAFE may require
the NCSSF to adjust the time for remitting outward or inward the principals or proceeds.

Article 25

The NCSSF shall, in the Contract on the Overseas Assets Trust of NSSF, require the trustee of NSSF overseas assets to report the relevant
information to the SAFE as follows:

(1)

Reporting the outward or inward remittance within 2 workdays after the NCSSF remits outward or inward the foreign exchange fund;

(2)

Reporting the relevant circumstances about the overseas investment of NSSF in the previous last month within 5 workdays at the beginning
of each month; and

(3)

Reporting the relevant accounting statements of overseas investment of NSSF in the previous year within 3 months at the beginning
of each accounting year.

The term “workday” as mentioned herein shall be based on the workday applied in the country or region where a trustee of overseas
assets of NSSF is located.

Chapter VI Reporting System

Article 26

The NCSSF shall implement supervision, examination and appraisal on the circumstance of management and trust of overseas investment
of NSSF and report the relevant information to the MOF and the MOLSS on a quarterly, 6-month and annual basis. In the case of any
major event in the overseas investment of NSSF, the NCSSF shall report it to the MOF, MOLSS and SAFE immediately.

Article 27

The NCSSF shall incorporate the entrusted overseas assets of NSSF into the total NSSF assets and work out the financial statements
in a unified manner and make disclosure and reports in accordance with the provisions of the Interim Measures for the Administration
of the National Social and Security Fund Investment.

Article 28

The MOF, the MOLSS and the SAFE shall have the right to require the NCSSF to provide the relevant reports on the overseas investment
of NSSF. In case the NCSSF has any act in violation of the present Provisions, the MOF, MOLSS and SAFE shall order it to correct
in the light of their respective functions and duties, and give a punishment thereto in accordance with the relevant provisions.

Chapter VII Supplementary Provisions

Article 29

The investments of NSSF in Hong Kong SAR and Macao SAR shall be governed by the present Provisions.

Article 30

The present Provisions shall come into force as of May 1, 2006.



 
National Council for Social Security Fund
2006-03-14

 






LETTER OF CHINA BANKING REGULATORY COMMISSION CONCERNING THE APPROVAL FOR THE UNION BANK OF CALIFORNIA, N. A. TO CLOSE UP ITS SHANGHAI REPRESENTATIVE OFFICE

Letter of China Banking Regulatory Commission concerning the Approval for the Union Bank of California, N. A. to Close up Its Shanghai
Representative Office

Union Bank of California N. A.,

The letter which was signed by the president and chief executive officer of your bank, Takashi Morimura, on January 25, 2006, has
been received by this Commission.

You are hereby approved to close up your Shanghai Representative Office according to the Measures for the Administration of Foreign-funded
Financial Institutions’ Representative Offices in China (Order No. 8, 2002 of the People’s Bank of China). Please carry out the related
cancellation formalities in accordance with the related provisions.

China Banking Regulatory Commission

March 21, 2006



 
China Banking Regulatory Commission
2006-03-21

 






NOTICE OF THE NATIONAL DEVELOPMENT AND REFORM COMMISSION AND THE STATE ADMINISTRATION OF TAXATION CONCERNING THE EXEMPTION OF BUSINESS TAXES FROM CREDIT GUARANTY INSTITUTIONS FOR SMALL/MEDIUM-SIZED ENTERPRISES






National Development and Reform Commission, State Administration of Taxation

Notice of the National Development and Reform Commission and the State Administration of Taxation concerning the Exemption of Business
Taxes from Credit Guaranty Institutions for Small/Medium-sized Enterprises

Fa Gai Qi Ye [2006] No. 563

The development and reform commissions, economic and trade commissions (economic commissions), small/medium-sized enterprise bureaus
and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities
specifically designated in the state plan and the Xinjiang production and construction corps:

For the purpose of carrying into effect the Law of the People’s Republic of China on Promoting Small/medium-sized Enterprises, the
Notice of the General Office of the State Council concerning Forwarding the Opinions of the State Economic and Trade Commission concerning
Encouraging and Promoting the Development of Small/medium-sized Enterprises (Guo Ban Fa [2000] No. 59) and the Notice of the National
Development and Reform Commission and the State Administration of Taxation about Doing a Better Job of the Exemption of Business
Taxes from Credit Guaranty Institutions for Small/Medium-sized Enterprises (Fa Gai Qi Ye [2004] No. 303 ) as well as the relevant
instructions and spirits of the principals of the State Council concerning promoting the development of credit guaranty institutions
for small/medium-sized enterprises, the relevant issues are hereby notified as follows on getting on with a better job in the exemption
of business taxes for credit guaranty institutions for small/medium-sized enterprises:

I.

Basic Requirements for Tax Exemption for a Credit Guaranty Institution

(1)

After the approval of the authorization department of the government (administrative department of the government with responsibility
for small/medium-sized enterprises), having been registered as an enterprise legal person in accordance with law and being an institution
that mostly provides guaranty services for small/medium-sized enterprises;

(2)

Not aiming at making profits and the charging rates for guaranty services being followed to the approval of the administrative department
of the local people’s government with responsibility for small/medium-sized enterprises as well as the price department of the people’s
government at the same level;

(3)

Having a sound internal management system, the capacity to provide guaranty for small/medium-sized enterprises, outstanding business
achievements, an improved mechanism of beforehand appraisal, ongoing supervision and follow-up recourse and disposal as well as a
registered capital over 20 million Yuan;

(4)

The accumulative guaranteed amount for the loans of small/medium-sized enterprises being occupied 80% of its accumulative guaranteed
amount in total, the guaranteed balance as provided for a single enterprise being no more than 10% of its total paid-in capital,
and the guaranteed amount in a single deal shall be no more than 40 million Yuan at the maximum;

(5)

The amplified proportion between the guarantee fund and the loan under guaranty being no less than 3 times as well as the compensatory
repayment being no more than 5% of the guarantee fund;

(6)

Being subject to the supervision and administration of the administrative department of the local government in charge of small/medium-sized
enterprises and submitting the situations of guaranty undertaking and financial statements to the said department in the light of
the relevant requirements;

A credit guaranty institution, whose term for enjoying the preferential policy of exempting business taxes has expired, may continue
to apply for reducing tax or tax exemption when still meeting the aforesaid requirements.

II.

Procedures for Taxes Exemption

If the credit guaranty institutions voluntarily apply for tax exemption, after the provincial administrative department of small/medium-sized
enterprises and the provincial taxation authorities carry out examination and make recommendation, the State Development and Reform
Commission and the State Administration of Taxation shall examine and approve, and distribute a name list of the institutions that
may enjoy tax exemption. The guaranty institutions on the name list shall go to the administrative tax authority to handle the relevant
formalities for tax exemption with the relevant documents. The relevant guaranty institutions may enjoy the policies for business
tax exemption after the local tax authority examine and approve, and handle the formalities for tax exemption in the light with the
name list as distributed by the State Development and Reform Commission and the State Administration of Taxation.

III.

Term of Tax Exemption

The term for business tax exemption is 3 years, which shall be computed as of the day when the tax authority in charge of guaranty
institutions goes through the formalities for tax exemption.

IV.

The administrative departments of small/medium-sized enterprises and local tax bureaus of all provinces, autonomous regions, municipalities
directly under the Central Government and the cities specifically designated in the state plan shall do a good job in their examination
and recommendation of credit guaranty institutions for small/medium-sized enterprises in accordance with the requirements of this
Notice and the principles of openness and impartiality,.

V.

The administrative departments of small/medium-sized enterprises and local tax bureaus of all provinces, autonomous regions, municipalities
directly under the Central Government and the cities specifically designated in the state plan shall scrutinize the implementation
and effectiveness of business tax exemption for credit guaranty institutions in the preliminary phase and adopt a dynamic administration
on the credit guaranty institutions for small/medium-sized enterprises that enjoy the policy for business tax exemption in accordance
with the real situations. For the credit guaranty institution that violates the relevant provisions and fails to meet the requirements
for tax deduction and exemption, it shall, upon discovery, be reported faithfully to the State Development and Reform Commission
and the State Administration of Taxation to revoke its qualification for further enjoying tax exemption.

VI.

The administrative departments of small/medium-sized enterprises of all provinces, autonomous regions, municipalities directly under
the Central Government and the cities specifically designated in the state plan in cooperation with local taxation bureaus shall
do well in the relevant work and submit the following materials in duplicate and written form to the Small/medium-sized Enterprise
Department of the State Development and Reform Commission and the Department of Circulation Tax Administration of the State Administration
of Taxation before June 15, 2006.

(1)

The achievements of, existing problems in and suggestion on the work relating to business tax exemption for credit guaranty institutions
for small/medium-sized enterprises in the preliminary four batches;

(2)

A name list of the credit guaranty institutions for small/medium-sized enterprises, which meet the requirements for tax exemption
(the name list shall have been publicized);

(3)

Registration Forms (see Appendix) as well as the photocopies of business licenses and constitutions of the credit guaranty institutions
for small/medium-sized enterprises, which meet the requirements for tax exemption;

(4)

A name list of the credit guaranty institutions for small/medium-sized enterprises, which fail to meet the requirements for tax exemption
in the preliminary four batches after examination as well as the reasons.

Contact entity: Department of Small/Medium-sized Enterprise of the National Development and Reform Commission

Linkman: Zhang Haiying

Contact No.: 68535638

Appendix: Registration Form of the Credit Guaranty Institutions for Small/Medium-sized Enterprises

State Development and Reform Commission

State Administration of Taxation

April 3, 2006 htm/e05058.htmAppendix

￿￿

￿￿

Appendix:

Registration Form of the Credit Guaranty Institutions for Small/medium-sized Enterprises

￿￿

￿￿￿￿Date of Filling in the Form                           

Name of a guaranty institution (full name)

 

Address

 

Nature of legal person

 

Examination opinions produced by the local administrative department of small/medium-sized enterprises of the city

Legal representative (person-in-charge)

 

Person-in-charge:             

Seal:                                 

Contact person

 

Address

 

Telephone

 

Fax

  

Time of establishment

 

Registered capital (in 10, 000 Yuan)

 

Guarantee fund (in 10, 000 Yuan)

Total amount

 

Monetary Capital

 

Examination opinions as produced by the local administrative department of Small/medium-sized enterprises of the province,
autonomous regions or municipalities directly under the Central Government

Practitioners

 

 

Range of guarantee premiums

 

 

Number of guaranteed enterprises

Accumulated number

 

Person-in-charge:               

Seal:                                      

Number of small/medium-sized enterprises

 

Guaranteed number at present

 

Loan under guaranty (in 10, 000 Yuan)

Accumulated amount

 

Guaranteed amount at present

 

Reserve funds for risk and compensatory repayment (in 10, 000 Yuan)

Accumulated withdrawal of reserve funds in total

   

Accumulated compensatory repayment

 

Accumulated losses incurred from compensation

 

Business income (in 10, 000 Yuan)

Accumulated amount

 

 

Income generated from guaranty premiums

 

Total Profits (in 10, 000 Yuan)

 

Accumulated tax return (10, 000 Yuan)

Business taxes

 

Income taxes

 

￿￿￿￿Seal of the Applicant Entity:                       Signature of the Person-in-charge:￿￿   ￿￿      ￿￿￿￿￿￿



ANNOUNCEMENT NO.58, 2006 OF THE GENERAL ADMINISTRATION OF QUALITY SUPERVISION, INSPECTION AND QUARANTINE OF THE PEOPLE’S REPUBLIC OF CHINA ON EXPANDING THE ACCESS VARIETIES OF FRUIT, VEGETABLES AND AQUATIC PRODUCTS ORIGINATED FROM TAIWAN REGION

Announcement No.58, 2006 of the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic
of China on Expanding the Access Varieties of Fruit, Vegetables and Aquatic Products Originated from Taiwan Region

[2006] No. 58

In accordance with related regulations, as from May 1, 2006, the access varieties of fruit originated from Taiwan region to the mainland
are expanded from 18 to 22, namely pineapple, banana, sweetsop, pawpaw, carambola, mango, guava, wax apple, areca, tangerine, shaddock,
Chinese date, coconut, loquat, mei, plum, persimmon, peach, lemon, orange, dragon fruit, cantaloup. 11 varieties of vegetables are
accessible to the mainland, namely lettuce, towel gourd, Pak-choi, no-heading Chinese cabbage, balsam pear, taro, cabbage, cauliflower,
carrot, onion, horseradish. The aquatic products fished by original Taiwan fishermen shall be transported to Fujian. In light of
the mainland self-fishing of the fishing boats procedure, they shall be reported to inspection and quarantine departments for inspection
with the self-fishing License in mare liberum, trade contracts and invoices. Provision of Sanitation Certificate issued by department
of administration of Taiwan shall be exempted.

Specially announced hereby.

General Administration of Quality Supervision, Inspection and Quarantine

April 19, 2006

 
General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China
2006-04-19

 



OFFICIAL REPLY OF THE CHINA SECURITIES REGULATORY COMMISSION THE SETTING UP OF GUOTAI JUNAN FINANCIAL HOLDING CO., LTD. BY GUOTAI JUNAN SECURITIES CO., LTD. IN HONG KONG SAR

Official Reply of the China Securities Regulatory Commission the Setting up of Guotai Junan Financial Holding Co., Ltd. by Guotai
Junan Securities Co., Ltd. in Hong Kong SAR

Zheng Jian Ji Gou [2006] No. 82

Guotai Junan Securities Co., Ltd.,

Your application materials on the setting up of Guotai Junan Financial Holding Co., Ltd. in Hong Kong SAR have been received. After
examination, the following reply is hereby given.

1.

Your company is authorized to set up Guotai Junan Financial Holding Co., Ltd. in Hong Kong SAR.

2.

Your company shall, in accordance with the relevant provisions of the State, appropriate the capital and assign employees to Hong
Kong SAR. The resumes of those persons who are dispatched to Hong Kong SAR as well as the approval documents on dispatching them
to Hong Kong SAR shall be reported to this Commission for archival filing.

3.

Zhu Youyi is selected as the principal of Guotai Junan Financial Holding Co., Ltd without demurrer form our Commission. In the event
that any senior manager of your overseas institutions is to be changed, you shall report it to this Commission beforehand.

4.

The business management and risk control mechanism of your overseas institutions shall be further improved and perfected, your company
shall make monthly financial reports on overseas institutions to this Commission, and send a copy of all the information as required
to be submitted by the overseas securities regulatory institution to our Commission in a timely manner. Without authorization of
our Commission, your company may not conduct financing or provide guaranty for any overseas institution.

5.

Your company shall make a timely report to this Commission on the following significant matters: (1) the occurrence of an illegal
act or major loss; (2) any cheat or fraud act of an employee of any overseas institution, which involves a large amount of money
and has caused comparatively large economic losses; and (3) any other important matter that should be reported to the local regulatory
bureau in accordance with the provisions.

6.

The institution set up by your company in Hong Kong SAR shall rigorously comply with the laws of Hong Kong SAR and shall be supervised
by the securities regulatory organ of Hong Kong SAR.

China Securities Regulatory Commission

April 28, 2006



 
China Securities Regulatory Commission
2006-04-28

 






1...373839...83Page 38 of 83

CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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