Issued: May 29 2006

Effective: as of date of issue

Applicability: The term 'due diligence' refers to the process whereby a sponsor conducts a comprehensive investigation on a company for which it intends to be the sponsor for its public offering of securities, obtains a full understanding of the operations of the issuer as well as the risks and problems it has to face, and forms solid reasons to believe that the issuer complies with the offering conditions, as provided by such laws and regulations as the Securities Law and by the China Securities Regulatory Commission, and that issuer's application documents and public offering documents are true, accurate and compete (Article 2).