Constituents Of Governance Index Adjusted As Re-Evaluation Result Of The Shanghai Stock Exchange Corporate Governance Sector Unveiled

Upon review by the Expert Consultative Committee for SSE Corporate Governance Sector Appraisal, the Shanghai Stock Exchange (SSE) and China Securities Index Co., Ltd. (CSI) have recently jointly announced the adjustment to the company list of SSE Corporate Governance Sector according to rules. Constituents of SSE Corporate Governance Index, SSE 180 Corporate Governance Index and SSE Social Responsibility Index would be adjusted accordingly. The above adjustments will take effect on July 1, 2011.

In this adjustment, 29 new constituents including China State Construction Engineering Corporation and Shanghai Pharmaceuticals Holding Co., Ltd. are added to SSE Corporate Governance Index, while five old ones such as Shandong Nanshan Aluminum Co., Ltd. (Nanshan Aluminum) and Inner Mongolia Baotou Steel Rare Earth (Group) Hi-tech Co., Ltd. are deleted as Nanshan Aluminum was publicly punished by the Ministry of Finance in November 2010 for accounting irregularities and another four were criticized by the SSE due to illegal stock trading of senior management. After the adjustment, the number of SSE Corporate Governance Index constituents increases from 242 to 266, with their total market capitalization up to RMB10.8510 trillion, or 61.59% of the total of all SSE-listed A shares, and free float adjusted market capitalization hitting RMB3.3180 trillion, or 56.34% of the total of all SSE-listed A shares.

According to the index rules, the constituents of SSE Corporate Governance Index are made up of all the stocks in the SSE Corporate Governance Sector. In line with the "Appraisal Measures of SSE Corporate Governance Sector", the SSE Corporate Governance Sector is finally formed through voluntary application of listed companies, public opinion solicitation, comments by consultancies, primary selection, and examination by the expert consultative committee. The Sector is re-appraised from May to June every year, and CSI adjusts the SSE Corporate Governance Index in early July according to the re-assessment result. For details of the appraisal measures of SSE Corporate Governance Sector and the compiling method of SSE Corporate Governance Index, please refer to the websites of the SSE (www.sse.com.cn) and CSI (www.csindex.com.cn).

Twelve institutions participated in the appraisal of the SSE Corporate Governance Sector. They are Guotai Junan Securities Co. Ltd., Shenyin & Wanguo Securities Co., Ltd., China International Capital Corporation Limited, Haitong Securities Company Limited, Fortune SG Fund Management Co., Ltd., AEGON-INDUSTRIAL Fund Management Co., Ltd., E Fund Management Co., Ltd., CCB Principal Asset Management Co., Ltd., Bank of Communications Schroders Fund Management Co., Ltd., Research Center for Financial Engineering of Nanjing University, Pengyuan Credit Rating Co., Ltd., and China Chengxin Securities Rating Co., Ltd.