F-1/A

As filed with the Securities and Exchange Commission on October 2, 2008.

Registration No. 333-152425

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 5 to

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

GCL Silicon Technology Holdings Inc.

(Exact Name of Registrant as Specified in Its Charter)

Not Applicable

(Translation of Registrant’s Name into English)

Cayman Islands	3674	Not Applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(IRS Employer Identification Number)

Suite 3601, Two Exchange Square

Central, Hong Kong

(852) 2526 8368

(Address telephone number of Registrant’s principal executive offices)

CT Corporation System

111 Eighth Avenue, 13^th Floor

New York, New York 10011

(212) 894-8641

(Name, address and telephone number of agent for service)

Copies to:

Douglas A Tanner, Esq. Milbank, Tweed, Hadley & McCloy LLP 1 Chase Manhattan Plaza New York, New York 10005 Tel: (212) 530-5000 Fax: (212) 822-5219 Chris Lin, Esq. Simpson Thacher & Bartlett LLP 35^th Floor, ICBC Tower 3 Garden Road Central, Hong Kong Tel: (852) 2514-7600

Approximate date of commencement of proposed sale to the public:    As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, please check the following box.  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be registered		Proposed maximum offering price per ordinary share		Proposed Maximum Aggregate Offering Price			Amount of Registration Fee
Ordinary Shares, par value $0.00001 per share(1)(2)		(2)(3)	$	(3)	$	600,000,000	(3)	$	33,896.25	(4)

(1) American depositary shares issuable upon deposit of the ordinary shares registered hereby will be registered under a separate registration statement on Form F-6. Each American depositary share represents four ordinary shares.

(2) Includes (i) ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this Registration Statement and the date the shares are first bona fide offered to the public, and (ii) ordinary shares that may be purchased by the underwriters pursuant to an option to purchase additional ordinary shares represented by American depositary shares. These ordinary shares are not being registered for the purpose of sales outside the United States.

(3) Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

(4) Previously paid.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)

Issued October 2, 2008

American Depositary Shares

GCL Silicon Technology Holdings Inc.

REPRESENTING              ORDINARY SHARES

GCL Silicon Technology Holdings Inc. is offering              American depositary shares, or ADSs, each representing four ordinary shares. This is our initial public offering and no public market currently exists for our ADSs or ordinary shares. We anticipate that the initial public offering price of the ADSs will be between $             and $             per ADS.

Our ADSs have been approved for listing on the New York Stock Exchange under the symbol “GCL”.

Investing in our ADSs involves risks. See “Risk Factors” beginning on page 15.

PRICE $             PER ADS

	Price to Public	Underwriting Discounts and Commissions	Proceeds to Company
Per ADS	$	$	$
Total	$	$	$

The selling shareholders have granted the underwriters the right to purchase up to an additional              ADSs to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the ADSs on         , 2008.

MORGAN STANLEY CREDIT SUISSE

HSBC

COWEN AND COMPANY PIPER JAFFRAY

                    , 2008

TABLE OF CONTENTS

	Page
Prospectus Summary	1
Risk Factors	15
Forward-Looking Statements	48
Use of Proceeds	50
Dividend Policy	51
Capitalization	52
Dilution	54
Exchange Rate Information	56
Enforceability of Civil Liabilities	57
Selected Consolidated Financial Data	58
Management’s Discussion and Analysis of Financial Condition and Results of Operations	61
Unaudited Pro Forma Condensed Consolidated Financial Information	82

	Page
Business	89
PRC Government Regulation	111
Management	115
Principal and Selling Shareholders	123
Related Party Transactions	127
Description of Share Capital	131
Description of American Depositary Shares	143
Shares Eligible for Future Sale	151
Taxation	153
Underwriting	159
Legal Matters	169
Experts	169
Where You Can Find More Information	169
Index to Consolidated Financial Statements	F-1

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information which is different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, these ADSs only in jurisdictions where offers to buy and sell are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or time of any sale of our ADSs.

We have not taken any action to permit a public offering of the ADSs outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to this offering of the ADSs and the distribution of the prospectus outside the United States.

Until             , 2008 (25 days after the date of this prospectus), all dealers that buy, sell or trade ADSs, whether or not participating in this offering, may be required to deliver a prospectus. This requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed information and financial statements and notes thereto appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our ADSs discussed under “Risk Factors” before deciding whether to buy our ADSs.

Overview

We supply polysilicon and wafers to companies operating in the solar industry. Polysilicon is the primary raw material for wafers used in the solar and electronics industries. We manufacture polysilicon at our production complex in Xuzhou, Jiangsu Province, China and intend to establish a second polysilicon production complex in Xilinhot, Inner Mongolia, China. We also intend to commence wafer manufacturing in Xuzhou in the third quarter of 2009. Our business was founded in March 2006 and we intend to ramp up our production capacity to 24,000 metric tonnes, or MT, per year by December 2010. We currently plan to build 2.7 gigawatts, or GW, of wafer production capacity by the end of 2011. We commenced construction of our first polysilicon production facility, our Xuzhou Phase I production facility, which produces solar grade polysilicon, in July 2006 and produced our first batch of polysilicon in September 2007. In the six months ended June 30, 2008, we produced 661 MT of polysilicon. For the months of July and August 2008, we produced 175 MT and 185 MT of polysilicon, respectively. We began selling wafers produced for us through tolling arrangements with third party manufacturers in the second quarter of 2008 and expect wafer sales to contribute a significant majority of our revenues after 2009.

We ramped up our Xuzhou Phase I production facility to its designed annual capacity of 1,500 MT in March 2008. We commenced commercial production of our Xuzhou Phase II production facility in July 2008 and expect it to achieve its fully ramped up capacity by December 2008. In December 2007, we commenced preparation for construction of our Xuzhou Phase III production facilities, which are expected to have an aggregate annual production capacity of 10,500 MT. We have already commenced equipment installation and expect our Xuzhou Phase III production facilities to commence commercial production in December 2008. We intend to fully ramp up our Xuzhou Phase III production facilities by February 2010. We have begun planning for our Xilinhot production facilities and expect to begin construction activities in October 2008. We expect to commence commercial production at our Xilinhot production facilities in December 2009 and to fully ramp it to its designed annual capacity of 10,500 MT by December 2010. We have implemented proven technologies in our polysilicon production facilities. We utilize a modified Siemens process to produce polysilicon and, starting from Xuzhou Phase II onwards, our production facilities are designed to produce both solar and electronic grade polysilicon.

We use industrial trichlorosilane, or TCS, to produce polysilicon. TCS is one of the main and most costly production inputs, and to date, we have relied on third party suppliers for most of our TCS requirements. To reduce our reliance on TCS from third party suppliers, we are increasingly incorporating TCS production into our production process. We integrated the hydrochlorination process for our Xuzhou Phase I production facility in February 2008 and in our Xuzhou Phase II production facility in September 2008. For the six months ended June 30, 2008 and the months ended July and August 2008, approximately 7%, 23% and 36% of the TCS we consumed was produced in-house, respectively. Our Taixing joint venture has constructed a TCS production facility with an initial annual capacity of 20,000 MT in Taizhou, Jiangsu Province, China, which commenced commercial production in September 2008. We have already successfully used the TCS produced by our Taixing joint venture in our polysilicon production process. We intend to increase the Taixing joint venture annual TCS production capacity to up to 60,000 MT by 2010. Upon ramp up of this facility, we expect to substantially reduce our reliance on third parties for our TCS requirements.

We intend to begin construction of our first multicrystalline and monocrystalline wafer production facility in Xuzhou by the end of 2008 and expect to commence pilot production by the third quarter of 2009. We intend to

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ramp up these facilities to a combined 0.8 GW production capacity by the end of 2009 and to further expand our production capacity to 1.9 GW by the end of 2010 and to 2.7 GW by the end of 2011. We have entered into equipment supply contracts to purchase over half of the wire saws and squarers for our expansion to 1.9 GW with the first deliveries expected to commence in the second quarter of 2009 and have identified several domestic producers of ingot furnaces. We also intend to explore opportunities to further expand our wafer production capacity through strategic acquisitions and partnerships. Until we have sufficient in-house wafer production capacity, we will continue to rely on medium- to short-term wafer tolling arrangements to support our wafer sales. We are currently in preliminary discussions with our wafer tolling producer, Changzhou Huasheng Hengneng Optoelectronics Co., Ltd., or Huasheng, with respect to a potential acquisition of such producer to increase our in-house wafer production capacity.

We have entered into polysilicon and wafer supply agreements with cell and module manufacturers that provide for aggregate sales of approximately 15.1 GW of wafers and approximately 40,356 MT of polysilicon for aggregate total contracts prices of $21.3 billion (RMB146.2 billion). The majority of these contracts extend to 2015. We have contracted to sell approximately 90% of our anticipated production from now to the end of 2015 under our current supply agreements after giving effect to our current polysilicon expansion plan to 24,000 MT and wafer expansion plan to 2.7 GW. Our existing contracts generally require customers to make advance payments or provide financial guarantees or support, have pre-set prices which decline significantly over the length of the contract and have pre-set volumes that increase significantly in the early years of the contract. We agreed to supply approximately 8.4 GW of wafers and approximately 3,510 MT of polysilicon to JA Solar at a total contract price of $9.4 billion (RMB64.8 billion) through 2015, approximately 2.2 GW of wafers and approximately 16,926 MT of polysilicon to Trina Solar at a total contract price of $4.0 billion (RMB27.2 billion) through 2015, approximately 1.8 GW of wafers and approximately 510 MT of polysilicon to Canadian Solar at a total contract price of $2.2 billion (RMB15.2 billion) through 2015, approximately 1.1 GW of wafers and approximately 9,420 MT of polysilicon to Suntech at a total contract price of $2.6 billion (RMB17.8 billion) through 2012, approximately 0.9 GW of wafers to AIDE at a total contract price of $1.1 billion (RMB7.3 billion) through 2015, approximately 0.7 GW of wafers to Solarcell at a total contract price of $0.9 billion (RMB6.3 billion) through 2015 and 9,990 MT of polysilicon to Solarfun at a total contract price of $1.1 billion (RMB7.6 billion) through 2015. See “Business—Customers and Markets”. Prior to our entry into these supply contracts, we sold all of our polysilicon on the spot market to major Chinese solar manufacturers.

For the year ended December 31, 2007, we sold 153 MT of polysilicon, all in the three months ended December 31, 2007. For the six months ended June 30, 2008, we sold 551 MT of polysilicon and 10.1 MW of wafers. Our revenues for the year ended December 31, 2007 and the six months ended June 30, 2008 were $40.8 million and $173.6 million, respectively. Net loss attributable to holders of ordinary shares was $2.9 million in the year ended December 31, 2007 and net profit attributable to holders of ordinary shares was $66.4 million in the six months ended June 30, 2008.

Our business in China is conducted through our subsidiary, Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., or JZPTD. For all periods for which financial statements are presented in this prospectus, we or our predecessor owned 64% of JZPTD. Prior to this offering, Sun Wave Group Ltd., or Sun Wave, and Greatest Joy International Limited, or Greatest Joy, acquired 20% and 16% equity interest of JZPTD, respectively, from the remaining minority shareholders. These two companies are jointly owned by entities affiliated with Mr. Zhu Gongshan, our chairman, and Moonchu Foundation for Culture & Education, or Moonchu, a charitable entity established by Mr. Zhang Songyi, one of our directors, and his family. We intend to acquire Sun Wave and Greatest Joy concurrently with the closing of this offering so that we will own 100% of JZPTD. See “— Corporate Structure — Corporate Structure Immediately After the Acquisition and the Offering” and “Related Party Transactions — Acquisition of 36% JZPTD Onshore Equity Interests”.

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Our Competitive Strengths

We believe that the following competitive strengths of our company enable us to compete effectively and to capitalize on the rapid growth in the market for polysilicon and wafers:

• proven capability in constructing and ramping up polysilicon production capacity;

• contracted customer revenues;

• cost effective production process, facilities and operations; and

• experienced management team.

Our Strategies

Our goal is to become a leading global supplier of wafers for the solar industry. We intend to achieve this goal by pursuing the following strategies:

• significantly expanding polysilicon production capacity;

• establishing in-house wafer production capacity;

• reducing our production costs;

• investing in technology development; and

• selectively pursuing strategic acquisitions, investments and alliances to expand our business.

Our Challenges

We believe that the following are some of the major risks and uncertainties that may materially affect our business, results of operations and financial condition:

• our limited operating history may not serve as an adequate measure of our future prospects and results of operations;

• if we are unable to manage our growth effectively, our business and financial results may be adversely affected;

• we did not achieve profitability until the three months ended December 31, 2007 and we may not maintain profitability;

• we may not be successful in producing polysilicon cost-effectively;

• we do not yet have National Development and Reform Commission of the PRC, or NDRC, approval for the remaining 4,500 MT of our Xuzhou Phase III production facilities and our Xilinhot production facilities and failure to get such approvals could adversely affect our growth and profitability;

• we have no experience in wafer production and may not be able to establish in-house production;

• our Taixing joint venture has not obtained land use rights and related planning and construction permits for the buildings it is constructing and the approval for its pilot production from the bureau of environmental protection and may be required to stop operations, further expansion and cure deficiencies and could be subject to fines;

• we operate in a highly competitive market and we may not be able to compete successfully with competitors who have greater resources than us;

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• our future success depends substantially on our ability to significantly expand both our polysilicon production capacity and output, which exposes us to a number of risks and uncertainties;

• Development of our proposed Xilinhot polysilicon production facilities will be in Inner Mongolia. We and our affiliates have no prior experience operating in Inner Mongolia and may face severe weather conditions, different legal requirements and a lack of project infrastructure;

• any failure by us to control the use or to adequately restrict the discharge of hazardous substances or to obtain work safety and professional health approvals could subject us to potentially significant monetary damages and fines or suspensions in our business operations;

• assertions that we or our affiliates have participated in misappropriation of trade secrets could result in severe monetary damages or injunctive relief;

• we do not have the land use rights for the land on which we are building our Xuzhou Phase III production facilities and we have not obtained the required construction permits for our Xuzhou Phase III production facilities. It is a violation of PRC law to build on land without such rights and permits and we may be forced to terminate the construction of our Xuzhou Phase III production facilities or be subject to significant monetary penalties;

• if we are unable to remedy the material weakness and significant deficiencies in our internal control over financial reporting, we may be unable to timely and accurately record, process and report financial data or comply with disclosure controls and procedures, internal control over financial reporting and other obligations;

• if we were required to obtain the prior approval of the MOFCOM, for or in connection with our restructuring, or of the CSRC, for or in connection with this offering and the listing and trading of our ADSs on the New York Stock Exchange, our failure to do so could have a material adverse effect on our business, operating results, reputation and trading price of our ADSs, and may also create uncertainties for this offering; and

• uncertainties with respect to the Chinese legal system could have a material adverse effect on us.

See “Risk Factors” and other information included in this prospectus for a more detailed discussion of these and other risks, uncertainties and challenges that we face.

Corporate Information

Our principal executive offices are located at Suite 3601, Two Exchange Square, Central, Hong Kong and our telephone number at that location is (852) 2526 8368. Our registered office in the Cayman Islands is located at Offshore Incorporations (Cayman) Limited, Scotia Centre, 4^th Floor, P.O. Box 2804, George Town, Grand Cayman KY1-1112, Cayman Islands. Our agent for service of process in the United States is CT Corporation System at 111 Eighth Avenue, 13^th Floor, New York, New York 10011.

Our website address is http://www.gcl-silicon.com. Information contained on our website does not constitute a part of this prospectus.

Conventions Which Apply to This Prospectus

Except where the context otherwise requires and for purposes of this prospectus only:

• “we,” “us,” “our company,” “our” and “GCL” refer to GCL Silicon Technology Holdings Inc., a Cayman Islands company, and its subsidiaries;

• “ADSs” refers to our American depositary shares, each of which represents four ordinary shares, and “ADRs” refers to the American depositary receipts that evidence our ADSs;

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• “China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this prospectus only, Taiwan, Hong Kong and Macau;

• “GCL HK” refers to GCL Silicon Technology Holdings Limited, a Hong Kong company, wholly-owned by our company;

• “Happy Genius” means Happy Genius Holdings Limited, our principal shareholder which is indirectly owned and controlled by Mr. Zhu Gongshan, our chairman;

• “JZPTD” refers to Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., our operating company in China;

• “Taixing JV” or “Taixing joint venture” refers to Taixing Zhongneng Far East Polysilicon Technology Development Co., Ltd.;

• “shares” or “ordinary shares” refers to our ordinary shares, par value $0.00001 per share;

• “convertible redeemable preferred shares” or “Series A Shares” refers to our Series A Convertible Redeemable Preferred Shares;

• “floating rate bonds” refers to our Tranche A Floating Rate Secured Redeemable Bonds due 2009 and our Tranche B Floating Rate Secured Convertible Bonds due 2009;

• “Golden Concord Group” refers to the group of companies controlled by Mr. Zhu Gongshan, our chairman;

• “2008 Convertible Bonds” refers to the convertible bonds we intend to issue in connection with the acquisition of 36% of the equity interests of JZPTD from entities affiliated with Mr. Zhu Gongshan, our chairman, and Moonchu, concurrently with this offering, which will be transferred to the holders of exchangeable bonds issued by Happy Genius;

• “watts” or “W” refer to the measurement of total electrical power, where “kilowatts” or “KW” means one thousand watts, “megawatts” or “MW” means one million watts and “gigawatts” or “GW” means one billion watts, GW when used to calculate the amount of wafers sold pursuant to our wafer contracts assume an output of 2.4 W from a cell manufactured from each 125 mm x 125 mm monocrystalline wafer and 3.7 W from a cell manufactured from each 156 mm x 156 mm multicrystalline wafer;

• “Xilinhot production facilities” refers to our proposed polysilicon production facilities with a designed annual production capacity of 10,500 MT in Xilinhot, Inner Mongolia; and

• all references to “RMB” or “Renminbi” refer to the legal currency of China; all references to “$,” “dollars” and “U.S. dollars” refer to the legal currency of the United States.

Unless otherwise mentioned, all numbers of our shares and ADSs set forth in this prospectus assume: (1) no exercise by the underwriters of their option to purchase up to             additional ADSs from the selling shareholders to cover over-allotments; (2) conversion of all outstanding convertible redeemable preferred shares into 16,667,000 ordinary shares upon completion of this offering; (3) conversion of our outstanding Tranche B Floating Rate Secured Convertible Bonds due 2009 into 29,850,000 ordinary shares, (4) the issuance of 270,322,853 shares to entities affiliated with Mr. Zhu Gongshan and Moonchu in connection with the acquisition of the 36% of JZPTD concurrently with the closing of this offering assuming that the ADSs are sold at $             per ADS (the midpoint of the estimated range of the initial public offering price). If the initial public offering price is less than $             per ADS, the number of shares issued will be lower, as discussed under “Related Party Transactions—Acquisition of 36% of JZPTD Onshore Equity Interests”; (5) exclusion of 50,000,000 ordinary shares issuable upon exercise of options issued under the 2007 Share Incentive Plan and 15,000,000 ordinary shares available for grant under our 2008 Restricted Share Compensation Plan; and (6) exclusion of              ordinary shares, issuable in the form of ADSs upon conversion of the 2008 Convertible Bonds being issued at the

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closing of this offering in connection with our purchase of the remaining 36% of JZPTD, assuming that the ADSs are sold at $             per ADS, the midpoint of the estimated range of the initial public offering price. Assuming the initial public offering price is $1.00 less than $             per ADS, the number of shares issued upon conversion would increase by              shares.

This prospectus contains translations of certain Renminbi amounts into U.S. dollars at the rate of RMB6.8591 to $1.00, the noon buying rate in effect on June 30, 2008 in New York City for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York. We make no representation that the Renminbi or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. On October 1, 2008, the noon buying rate was RMB6.8485 to $1.00.

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CORPORATE STRUCTURE

Ownership of Our Business

In March 2006, our operating subsidiary in China, JZPTD, was formed, as a limited liability company, by Guotai Energy Investments Ltd., or Guotai, Suyuan Group Ltd., or Suyuan, Beijing Zhongneng Renewable Energy Investments Ltd., or Beijing Zhongneng, Xuzhou Suyuan Group Ltd., or Xuzhou Suyuan, Nanjing Linyang Power Investment, or Nanjing Linyang and Hebei Jinglong Group Ltd., or Hebei Jinglong. At JZPTD’s inception, Guotai, Suyuan, Beijing Zhongneng, Xuzhou Suyuan, Nanjing Linyang and Hebei Jinglong held 55%, 15%, 10%, 10%, 5% and 5%, respectively, of JZPTD. Guotai and Beijing Zhongneng were originally owned by Mr. Zhu Gongshan. In September 2007, Mr. Zhu Gongshan became our chairman as a result of the transactions described below.

In November 2006, GCL Silicon Technology Holdings Limited, or GCL HK, was formed as a limited liability company in Hong Kong. Mr. Zhang Songyi owned a controlling interest in GCL HK through Happy Genius. GCL HK agreed to purchase 64% of JZPTD from Guotai and Beijing Zhongneng on November 29, 2006 and completed the purchase on December 13, 2006. In May 2007, our company was formed in the Cayman Islands and owned by Mr. Zhang Songyi through Happy Genius.

From December 2006 to April 2007, Mr. Zhang Songyi sold shares of Happy Genius to various individuals and institutional investors aggregating approximately 10% of the ownership of Happy Genius, a substantial majority of the proceeds of which were downstreamed through Happy Genius and GCL HK to JZPTD to finance the construction of our Xuzhou Phase I production facility and provide working capital. On August 10, 2007, Mr. Zhang Songyi agreed to sell the remaining shares of Happy Genius held by him, after completion of the reorganization discussed below, to Boulina Investments Limited, or Boulina, a company owned by Mr. Zhu Gongshan. On August 21, 2007, as part of the reorganization, the shareholders of Happy Genius exchanged approximately 25% of the ownership interest of Happy Genius for approximately 25% of our ordinary shares. Also, Happy Genius exchanged all of its ownership interest in GCL HK for approximately 75% of our shares. In September 2007, the previously agreed transfer of ownership of Happy Genius was completed from Mr. Zhang Songyi to Boulina. As a result of these transactions, Mr. Zhu Gongshan became the indirect owner of all the outstanding shares of Happy Genius, which owned approximately 75% of our ordinary shares, Mr. Zhang Songyi became the indirect owner of approximately 15% of our ordinary shares and other shareholders became the owners of an aggregate of approximately 10% of our shares. We became the indirect owner of 64% of the equity interest in JZPTD indirectly through GCL HK.

In December 2007, Sun Wave and Greatest Joy, companies owned by entities affiliated with Mr. Zhu Gongshan and Moonchu, agreed to acquire 20% and 16% of JZPTD, respectively, from the remaining minority shareholders for an aggregate purchase price of $430.5 million. These purchases were completed in early May and early June 2008. Concurrently with the closing of this offering, we will acquire Sun Wave and Greatest Joy, which hold the remaining 36% of JZPTD. As a result, JZPTD will become our wholly-owned indirect subsidiary.

As consideration for our acquisition of Sun Wave and Greatest Joy, we intend to: (1) pay $240.6 million to entities affiliated with Mr. Zhu Gongshan and Moonchu, in cash using a portion of the proceeds from the offering, which will be used partially to redeem the exchangeable bonds issued by Happy Genius; (2) issue the 2008 Convertible Bonds to entities affiliated with Mr. Zhu Gongshan and Moonchu in the aggregate principal amount of $446.9 million which will be exchanged for the remaining portion of the exchangeable bonds issued by Happy Genius; and (3) issue 270,322,853 of our shares to entities affiliated with Mr. Zhu Gongshan and Moonchu. The purchase price and the form of consideration were established through negotiations involving the sellers, our shareholders and holders of the exchangeable bonds issued by Happy Genius and were approved by our shareholders in July 2008. See “Related Party Transactions — Acquisition of 36% JZPTD Onshore Equity Interests”.

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Corporate Structure Immediately After the Acquisition and the Offering

The following chart summarizes our corporate structure immediately after the offering, assuming that the underwriters do not exercise their option to purchase additional ADSs:

Notes:

(1) Includes entities owned and controlled by Mr. Zhu Gongshan.

(2) Includes Mandra Esop Ltd., or Mandra Esop, and Mandra Materials Ltd., or Mandra Materials, Mandra Esop and Mandra Materials are entities owned and controlled by Mr. Zhang Songyi.

(3) Moonchu wholly owns Woo Foong Hong Ltd., or Woo Foong Hong. Woo Foong Hong wholly owns Mandra Silicon, which is the direct holder of shares of Sun Wave and Greatest Joy. See Notes (4) and (5) below.

(4) Immediately prior to the offering, Sun Wave was 82% owned by Happy Genius and 18% owned by Mandra Silicon, an entity indirectly owned by Moonchu.

(5) Immediately prior to the offering, Greatest Joy was 82% owned by Happy Genius and 18% owned by Mandra Silicon, an entity indirectly owned by Moonchu.

(6) Our proposed Xilinhot production facilities will be constructed and operated by a domestic subsidiary of JZPTD.

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THE OFFERING

Offering price $             per ADS.

ADSs offered by us               ADSs.

ADSs outstanding immediately after this offering               ADSs.

Ordinary shares outstanding immediately after this offering               ordinary shares, par value $0.00001 per share.

Ordinary shares Each ordinary share is entitled to one vote on all matters subject to shareholders’ vote.

The ADSs Each ADS represents four of our ordinary shares, par value $0.00001 per share. The ADSs will be evidenced by ADRs.

• The depositary will hold the shares underlying your ADSs. You will have rights as provided in the deposit agreement.

• If, however, we declare dividends on our ordinary shares, the depositary will pay you the cash dividends and other distributions it receives on our ordinary shares, after deducting its fees and expenses.

• You may turn in your ADSs to the depositary in exchange for ordinary shares. The depositary will charge you fees for any exchange.

• We may amend or terminate the deposit agreement without your consent. If you continue to hold your ADSs, you agree to be bound by the deposit agreement as amended.

To better understand the terms of the ADSs, you should carefully read the “Description of American Depositary Shares” section of this prospectus. You should also read the deposit agreement, which is filed as an exhibit to the registration statement that includes this prospectus.

Over-allotment option The selling shareholders have granted to the underwriters an option, which is exercisable within 30 days from the date of this prospectus, to purchase up to          additional ADSs at the offering price less underwriting discounts and commissions.

Use of Proceeds We intend to use our net proceeds from this offering for the following purposes:

• approximately $150.0 million for contribution to JZPTD;

• $20.0 million to redeem the Tranche A Floating Rate Secured Redeemable Bonds due 2009 issued by us in September 2007;

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• $240.6 million to acquire Sun Wave and Greatest Joy in connection with our acquisition of 36% of JZPTD from our affiliates;

• approximately $15.3 million to repay the principal of and fees relating to a promissory note issued by us to Happy Genius, our controlling shareholder in June 2008; and

• the remaining amount for general corporate purposes, including potential acquisitions or investments such as wafer operations. We are currently in preliminary discussions with our tolling wafer producer, Huasheng, with respect to a potential acquisition of such producer.

Proceeds in the amount of approximately $150.0 million contributed to JZPTD will be used to fund the capital expenditures related to our polysilicon production facilities expansion and our in-house wafer production facilities.

The $240.6 million to be used as part of the consideration to acquire the remaining 36% of JZPTD, which will be payable to entities affiliated with Mr. Zhu Gongshan and Moonchu, will be used to partially redeem the exchangeable bonds issued by Happy Genius.

See “Use of Proceeds” for additional information.

We will not receive any of the proceeds from the sale of ADSs by the selling shareholders.

Lock-up We, each of the selling shareholders, our directors and executive officers and             % of our other existing holders and beneficial owners of our ordinary shares, except for persons subject to the restrictions in the following sentence, have agreed with the underwriters, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of our ADSs or ordinary shares or securities convertible into or exercisable or exchangeable for our ADSs or ordinary shares for a period of 180 days following the date of this prospectus. In addition, holders and owners of economic and beneficial interests of the 2008 Convertible Bonds that will be issued concurrently with the closing of this offering in exchange for exchangeable bonds issued by Happy Genius have agreed with the underwriters, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of the 2008 Convertible Bonds or enter into certain hedging transactions with respect to the 2008 Convertible Bonds for a period of 130 days following the date of this prospectus. See “Underwriting” for more information.

Listing Our ADSs have been approved for listing on the New York Stock Exchange under the symbol “GCL”. Our ADSs and ordinary shares will not be listed on any other stock exchange or traded on any automated quotation system.

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Risk Factors See “Risk Factors” and other information included in this prospectus for a discussion of risks you should carefully consider before investing in our ADSs.

Depositary JPMorgan Chase Bank, N.A.

Reserved ADSs At our request, the underwriters have reserved for sale, at the initial public offering price, up to an aggregate of              ADSs, to certain of our directors, officers, employees or their friends and families, business associates and other persons associated with us through a directed share program.

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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

The following tables present the summary consolidated financial information of us and our predecessor, JZPTD. You should read the following information in conjunction with our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus. The historic results are not necessarily indicative of results to be expected in any future period.

The following summary consolidated statement of operations data and consolidated statement of cash flow data for the period from March 7, 2006 to December 13, 2006 (predecessor), the period from November 13, 2006 to December 31, 2006 (successor) and the year ended December 31, 2007 (successor) and the consolidated balance sheet data as of December 31, 2006 and December 31, 2007 have been derived from our audited consolidated financial statements, which are included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. JZPTD is considered our predecessor because we acquired 64% of the equity interest in JZPTD on December 13, 2006 and our own operations prior to the succession were insignificant relative to the operations assumed or acquired.

The following summary consolidated statement of operations data and consolidated statement of cash flow data for the six months ended June 30, 2007 and 2008 and the summary consolidated balance sheet data as of June 30, 2007 and 2008 have been derived from the unaudited condensed consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma balance sheet information as of June 30, 2008, which is derived from information included in our unaudited condensed consolidated financial statements included elsewhere in this prospectus, assumes the conversion upon completion of this offering of our convertible redeemable preferred shares and the convertible portion of our floating rate bonds, cash payment of $240.6 million to entities affiliated with Mr. Zhu Gongshan and Moonchu and the issuance of the 2008 Convertible Bonds in the principal amount of $446.9 million. We have prepared the unaudited condensed consolidated financial statements on the same basis as the audited consolidated financial statements. The unaudited financial information includes all adjustments, consisting only of normal and recurring adjustments, that we consider necessary for a fair presentation of our financial position and operating results for the periods presented. The unaudited results for the six months ended June 30, 2008 may not be indicative of our results for the full year ending December 31, 2008.

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	March 7, 2006 to December 13, 2006 (Predecessor)			November 13, 2006 to December 31, 2006 (Successor)			Year Ended December 31, 2007 (Successor)			Six Months Ended June 30,
										2007 (Successor)			2008 (Successor)
	(in thousands, except per share and per ADS data)
Consolidated Statements of Operations Data
Revenues	$	—		$	—		$	40,848		$	—		$	173,607
Gross profit		—			—			29,852			—			124,877
Operating income (loss)		(2,776	)		(239	)		12,016			(8,978	)		118,237
(Loss) income before income tax and minority interest		(3,449	)		(330	)		6,867			(9,784	)		111,262
Net (loss) income		(3,449	)		(212	)		(1,796	)		(8,446	)		68,073
Deemed distribution on convertible redeemable preferred shares-accretion of redemption premium		—			—			(1,111	)		—			(1,667	)
Net (loss) income attributable to holders of ordinary shares	$	(3,449	)	$	(212	)	$	(2,907	)	$	(8,446	)	$	66,406
Weighted average shares used in (loss) earnings per share calculation
Basic—ordinary share					1,000,000			994,292			1,000,000			979,844
Basic—convertible redeemable preferred share					—			—			—			16,667
Diluted—ordinary share					1,000,000			994,292			1,000,000			981,436
(Loss) earnings per ordinary share and ADS
Basic—ordinary share					(0.0002	)		(0.0029	)		(0.0084	)		0.0666
Basic—convertible redeemable preferred share					—			—			—			0.1667
Diluted—ordinary share					(0.0002	)		(0.0029	)		(0.0084	)		0.0665
Basic—ADS					(0.0008	)		(0.0116	)		(0.0336	)		0.2664
Diluted—ADS					(0.0008	)		(0.0116	)		(0.0336	)		0.2660
Weighted average shares used in proforma earnings per ordinary share
Basic														[	]
Diluted														[	]
Proforma earnings per ordinary share and ADS
Basic—ordinary share														[	]
Diluted—ordinary share														[	]
Basic—ADS
Diluted—ADS

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	March 7, 2006 to December 13, 2006 (Predecessor)			November 13, 2006 to December 31, 2006 (Successor)			Year Ended December 31, 2007 (Successor)			Six Months Ended June 30,
										2007 (Successor)			2008 (Successor)
	(in thousands)
Consolidated Statements of Cash Flow Data
Net cash (used in) provided by operating activities	$	(2,782	)	$	(842	)	$	15,515		$	(5,681	)	$	277,935
Net cash (used in) provided by investing activities		(60,857	)		1,865			(96,716	)		(19,327	)		(284,378	)
Net cash provided by financing activities		87,670			4,010			116,120			42,923			115,675
Capital expenditures(1)		(40,928	)		(6,562	)		(96,025	)		(49,202	)		(249,901	)

Note:

(1) Capital expenditures consists of payments for purchase of property, plant and equipment and deposits for purchase of plant and equipment.

	December 31, 2006 (Successor)		December 31, 2007 (Successor)			June 30, 2008 (Successor)		June 30, 2008 Pro Forma (Successor)
	(in thousands)
Consolidated Balance Sheet Data
Cash and cash equivalents	$	5,033	$	40,067		$	151,661	$	132,439
Total current assets		21,840		63,724			221,538		201,538
Property, plant and equipment, net		18,909		141,731			306,975
Total assets		94,291		232,970			671,792		650,295
Distribution payable		—		—			—		240,625
Total current liabilities		49,258		60,948			187,411		428,036
Floating rate bonds		—		62,099			65,789		—
Convertible bonds		—		—			—		446,875
Total liabilities		82,680		181,697			507,115		1,128,826
Minority interest		9,823		34,935			81,150		81,150
Series A convertible redeemable preferred shares		—		21,111			22,778		—
Total shareholders’ equity (deficit)		1,788		(4,773	)		60,749		(559,681	)

	March 7, 2006 to December 13, 2006 (Predecessor)		November 13, 2006 to December 31, 2006 (Successor)		Year Ended December 31, 2007 (Successor)		Six Months Ended June 30, 2008 (Successor)
Selected Operating Data
Polysilicon produced (in MT)		—		—		154		661
Polysilicon sold (in MT)		—		—		153		551
Wafers sold (in MW)		—		—		—		10.1
Average polysilicon selling price (net of VAT) (per kg)	$	—	$	—	$	267	$	293
Average wafer selling price (net of VAT) (per W)	$	—	$	—	$	—	$	1.22

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RISK FACTORS

An investment in our ADSs involves significant risks. You should carefully consider all of the information in this prospectus, including the risks and uncertainties described below, before making an investment in our ADSs. Any of the following risks could have a material adverse effect on our business, financial condition and results of operations if it actually occurs. In any such case, the market price of our ADSs could decline, and you may lose all or part of your investment.

Risks Relating to Our Business

Our limited operating history may not serve as an adequate measure of our future prospects and results of operations.

We have only limited historical operating data and financial information available on our company upon which you can base your evaluation of our business and prospects. Our business was founded in March 2006 and we only began manufacturing polysilicon in September 2007. We only began commercial shipment of polysilicon in October 2007. As a result, we sold only a limited amount of polysilicon and we have never manufactured wafers in-house. In the second quarter of 2008, we began selling wafers produced for us through tolling arrangements with third party wafer manufacturers. Several members of our senior management and key employees have worked together at our company for a relatively short period of time. Our chief executive officer and director, Mr. Hunter Jiang, joined us in September 2007. Our chief financial officer, Mr. Jason Li, joined us in August 2008. Our three independent directors will join us only upon our listing on the New York Stock Exchange. As a result, we may not have sufficient experience to address the risks frequently encountered by companies with limited operating history, including our potential failure to:

• increase our polysilicon manufacturing capacity significantly beyond current levels;

• successfully manufacture wafers;

• maintain profitability;

• acquire and retain customers;

• attract, train, motivate and retain qualified personnel;

• keep up with evolving industry standards and market developments;

• manage our expanding operations and product offerings, including the integration of any future acquisitions;

• anticipate and adapt to any changes in government regulation, mergers and acquisitions involving our competitors, technological developments and other significant competitive and market dynamics;

• maintain adequate control over our costs and expenses; or

• manage risks relating to intellectual property rights, including the documentation and protection of our proprietary technologies.

If we fail to address any of these risks, our business and financial results would be materially and adversely affected. Accordingly, you should consider our business and prospects in light of the risks, expenses and challenges that we will face as a company with limited operating history seeking to produce polysilicon and wafers in a rapidly growing market.

If we are unable to manage our growth effectively, our business and financial results may be adversely affected.

We have experienced a period of rapid growth and expansion that has placed, and continues to place, significant strain on our management and resources. To accommodate our growth, we anticipate that we will

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need to implement a variety of new and upgraded operational and financial systems, procedures and controls, including the improvement of our accounting and other internal management systems, all of which require substantial management efforts. We also will need to continue to expand, train, manage and motivate our workforce and manage our customer relationships. All of these endeavors will require substantial management effort and skill and require significant additional expenditures. We cannot assure you that we will be able to manage our growth effectively, and any failure to do so may have a material adverse effect on our business and financial results.

We did not achieve profitability until the three months ended December 31, 2007 and we may not maintain profitability.

We incurred net losses attributable to holders of ordinary shares of $3.4 million, $0.2 million and $2.9 million in the period from March 7, 2006 to December 13, 2006, the period from November 13, 2006 to December 31, 2006 and the year ended December 31, 2007, respectively, and achieved a net income attributable to holders of ordinary shares of $66.4 million in the six months ended June 30, 2008. As of December 31, 2007 and June 30, 2008, we had accumulated a deficit of $23.1 million and retained earnings of $43.3 million, respectively. Our initial losses resulted principally from general and administrative expenses and interest expenses. In addition, we will have start-up expenses for our expansion facilities, increased compensation expenses from our option issuances, depreciation of our expanded facilities, amortization of intangible assets acquired in our purchase of the 36% equity interest in JZPTD we will own upon the completion of the offering and increased interest expenses related to additional borrowings to support our growth. Further, while we achieved a net income attributable to holders of ordinary shares of $66.4 million for the six months ended June 30, 2008, our profitability may decline in future periods. Net income attributable to holders of ordinary shares decreased 8.6% from $34.7 million in the three months ended March 31, 2008 to $31.7 million in the three months ended June 30, 2008. The decline in profitability from the three months ended March 31, 2008 to the three months ended June 30, 2008 was primarily due to the fact that all of our sales volumes in the prior period were derived from spot market sales, while approximately 60% of our sales volumes in the latter period were derived from spot market sales. Under most of our current supply contracts, we recognize revenues on a weighted average basis, and the resulting per unit selling price for polysilicon or wafers is significantly lower than our historical spot market sales prices and lower than the initial set prices in the early years of our supply contracts. We expect that for the three months ending September 30, 2008 and the three months ended December 31, 2008, approximately 25% and less than 10% of our sales volumes will be derived from spot market sales, respectively. Historical losses have had an adverse effect on our working capital, total assets and stockholders’ equity. Due to the numerous risks and uncertainties associated with growing our business, we may not be able to achieve long-term profitability. If we fail to maintain profitability in the future, the market price of our ADSs could decline.

We currently rely on one wafer tolling producer to manufacture wafers for all of our wafer sales. Any event that prevents our current third party manufacturer from producing wafers for us, or our failure to successfully manage our relationships with this manufacturer or our future manufacturers could damage our relationships with our customers, cause us to default on our wafer supply agreements, decrease our sales and limit our growth.

Currently, we do not own or operate any wafer production facility. Instead we rely on a wafer tolling arrangement with Huasheng, a third party, to manufacture our wafers. Although we intend to commence pilot production of wafers in-house by the third quarter of 2009, and we are currently in preliminary discussions with Huasheng with respect to a potential acquisition, we do not expect our in-house wafer production to entirely replace our reliance on wafer tolling arrangements. Presently, Huasheng manufactures all of our wafers. As a result, if this company experiences any catastrophic or other event that causes it to be unable to conduct manufacturing operations, or otherwise chooses to discontinue manufacturing wafers, our ability to sell wafers would be adversely impacted. Even if other manufacturers were willing to produce wafers for us, they may be unable to provide us with the same pricing, committed capacity, or be able to manufacture our wafers with the same yield rate or quality, as we currently have with Huasheng. Most of the wafers produced for us by Huasheng

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are committed to customers under our wafer supply agreements. Failure of Huasheng to meet its obligations under the tolling agreement could result in our default under such wafer supply contracts. As a result, we are highly dependent on our relationship with Huasheng and its continued ability to manufacture our wafers to maintain our revenues and customer relationships.

There are additional risks associated with our reliance on wafer tolling arrangements with third parties, including:

• their inability to increase production and achieve acceptable quality on a timely basis;

• reduced control over delivery schedules and product quality;

• limited warranties on wafers supplied to us;

• shortages of materials and consumables other than polysilicon that wafer manufacturers use to manufacture wafers;

• labor shortages, strikes or disputes; and

• actions taken by such third-parties that breach our agreements.

We may not be successful in producing polysilicon cost-effectively.

We made our first commercial shipment of polysilicon in October 2007. We have limited operating experience and may face significant challenges relating to polysilicon production. The technology used to manufacture polysilicon is complex, requires costly equipment and is continuously being modified in an effort to improve yields and product performance. Microscopic impurities such as dust and other contaminants, difficulties in the manufacturing process, disruptions in the supply of utilities or defects in the key materials and tools used to manufacture polysilicon could interrupt manufacturing, reduce yields or cause a portion of the polysilicon to be rejected by our customers or be difficult or costly to use in wafer production, which would negatively affect our profitability. If we are unable to build our polysilicon production capability on a timely basis, or if we face technological difficulties in our production of polysilicon, we may be unable to achieve cost-effective production of polysilicon which could prevent us from competing successfully in the polysilicon and wafer markets.

Our effective capacity and ability to produce high volumes of polysilicon depend on the cycle times for each batch of polysilicon. We may encounter problems in our manufacturing process or facilities as a result of, among other things, production failures, construction delays, human error, equipment malfunction or process contamination, all of which could seriously harm our operations. We may experience production delays if any modifications we make in the manufacturing process to shorten production cycles are unsuccessful. Moreover, the failure to achieve acceptable manufacturing levels may cause our polysilicon costs not to be competitive, which could adversely affect our business, financial condition and results of operations.

We expect the price of polysilicon to decrease in the future. In order for us to maintain profitability, we need to reduce costs, in particular TCS costs. We believe the market price of TCS, which is the principal raw material used for polysilicon production, will remain high in the near future. See “—We will need to purchase TCS in substantial quantities to operate our production facilities and if we are unable to source such TCS at a reasonable cost or at all, it could have a material adverse effect on our financial condition and results of operations.” If we are unable to reduce TCS costs, we may not be able to cost-effectively produce polysilicon, which will adversely affect our business, financial condition and results of operations.

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Our ability to cost-effectively manufacture polysilicon depends on our ability to recycle the STC produced as a by-product of the polysilicon production process into TCS, which ability is materially dependent on our continued ability to install and integrate our hydrochlorination process into a closed loop system.

Our ability to recycle the STC produced as a by-product from the polysilicon production process into TCS is a critical factor in reducing production costs and environmental costs and is principally accomplished through hydrochlorination.

Currently, we apply a hydrochlorination process in a closed loop system in our production facility. We have licensed our hydrochlorination process technology from Hualu Engineering Technology Co., Ltd, or Hualu, and Xuzhou Southeast Polysilicon Materials Research and Development Ltd., or Xuzhou Southeast, which are relatively new participants in hydrochlorination process design. While we are currently the sole licensee of this intellectual property, our license is non-exclusive and Hualu and Xuzhou Southeast may license the hydrochlorination process technology to other parties. Hualu and Xuzhou Southeast are in the process of applying for the utility model patent and the inventory patent for the intellectual properties we are licensing from them. The State Intellectual Property Office of the PRC has notified them that their utility model patent application has been examined and approved and will be formally granted and registered upon full payment of related application fees in the required time limit. The invention application is still under examination and has been published for public review since April 2008. We cannot assure you that Hualu and Xuzhou Southeast will be granted such patents. Moreover, we cannot assure you that they have not infringed other market participants’ patents, trade secrets, know-how or other intellectual properties. We cannot assure you that we will continue to be successful in operating the hydrochlorination process on a continuing basis or with high conversion rates.

If we are unable to continually operate our hydrochlorination processes and further increase production yields and benefit from efficiencies in purchasing, manufacturing, sales and shipping, we may not be able to achieve lower costs per unit of production, which would decrease our margins and lower our profitability. In addition, we do not have any proprietary access to hydrochlorination technologies and our competitors may have access to better technologies or have greater resources and the ability to develop advanced process technologies based on the intellectual property to which we have access. If our current licenses with Hualu and Xuzhou Southeast are terminated, there can be no assurance that we will be able to independently develop equivalent technology successfully or obtain licenses for alternative technologies, or that we will be able to redesign our production lines to eliminate the need for such a license. Any of the foregoing factors could materially and adversely affect our business, operating results or financial condition.

We may not be able to continue to integrate our hydrochlorination process successfully within our expected timeframe, within our budget, or at all, and in-house TCS production may not be more cost-efficient than purchasing TCS from third party suppliers.

TCS is one of the main and most costly raw materials in the production of polysilicon, the costs of which accounted for a majority of our total cost of sales for the year ended December 31, 2007 and the six months ended June 30, 2008. We intend to reduce production costs by producing TCS internally and through our affiliates. We integrated the hydrochlorination process in our Xuzhou Phase I production facility in February 2008 and in our Xuzhou Phase II production facility in September 2008. For the six months ended June 30, 2008 and the months ended July and August 2008, approximately 7%, 23% and 36% of the TCS we consumed was produced in-house, respectively. We own a 70% controlling interest in the Taixing joint venture, which commenced commercial production of TCS at an initial annual capacity of 20,000 MT in September 2008. We have already successfully used the TCS produced by our Taixing joint venture in our polysilicon production process. We intend to increase the Taixing joint venture annual TCS production capacity to up to 60,000 MT by 2010. However, the production of TCS is difficult and requires strict controls over the management of raw materials and over the production process itself. While we have gained limited experience in the production of TCS through the Taixing joint venture, we cannot assure you that we will complete our TCS production facilities

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within the expected timeframe, within our budget or at all, or that our own production of TCS will be more cost-efficient than purchasing TCS from third party suppliers. Any failure to complete our TCS production facilities may have a material adverse effect on our business, prospects, financial condition and results of operations.

We do not yet have NDRC approval for the remaining 4,500 MT of our Xuzhou Phase III production facilities and our Xilinhot production facilities and failure to obtain such approvals could adversely affect our growth and profitability.

We have obtained approval to produce an aggregate annual production of 6,000 MT of polysilicon at our Xuzhou Phase III production facilities, and intend to apply for approval from NDRC for an additional 4,500 MT annual production capacity. Such approval is required before we can increase our investment to construct the additional 4,500 MT annual production capacity and commence construction of such facilities. We have not applied for or received any NDRC approvals for our Xilinhot production facilities. If we are not able to get such approvals, we will not be able apply for the land use rights for our Xilinhot production facilities and will be unable to obtain the necessary planning and construction permits to commence such activities for our Xilinhot production facilities. Therefore, we would be unable to achieve a production capacity in our Xuzhou production complex of 13,500 MT per year by February 2010 or 24,000 MT per year by December 2010, which would delay our expansion and would adversely affect our growth and profitability.

We have no experience in wafer production and may not be able to establish in-house production.

Our strategy includes commencing our own wafer production on a pilot basis by the third quarter of 2009. We intend to use a portion of the proceeds of this offering to procure the necessary equipment, land and other facilities to construct our in-house wafer production facility. If equipment suppliers fail to deliver, or delay the delivery of, our equipment for any reason, the implementation of our expansion plan would be materially and adversely affected. In addition, there are limited sources of supply for the principal wafer manufacturing equipment we intend to use and we may not be able to replace such sources at all, at reasonable costs and on a timely basis to implement our wafer production expansion plan.

To carry out our wafer production strategy we will need to integrate the personnel we have hired to create an effective team and infrastructure to supervise construction and oversee the start-up and operation of our production facility.

We cannot assure you that we will be able to establish our own wafer production capacity on a timely basis or at all. Our ability to successfully establish wafer manufacturing capacity and to increase sales is subject to various risks and uncertainties, including:

• the need to acquire the land on which to construct our wafer production facility at a reasonable cost and on a timely basis;

• the need to procure wafer production equipment at reasonable costs and on a timely basis;

• the need to procure supplies of consumables and other materials at reasonable costs and on a timely basis;

• the need to raise additional funds to finance our purchase of equipment and the construction of manufacturing facilities, which we may be unable to obtain on reasonable terms or at all;

• construction delays and cost overruns;

• difficulties in recruitment and training of additional skilled employees, including technicians and managers at different levels;

• diversion of significant management attention and other resources;

• delays or denials of required permits and approvals for our land acquisition, plant construction and operations, including but not limited to environmental approvals, by relevant government authorities;

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• the need to achieve acceptable wafer yields, thickness and quality; and

• the need to produce wafers cost-effectively.

We will need to purchase TCS in substantial quantities to operate our production facilities and if we are unable to source such TCS at a reasonable cost or at all, it could have a material adverse effect on our financial condition and results of operations.

Even if we are able to produce TCS in-house, we may from time to time be required to purchase from external sources a substantial quantity of the TCS required for our production of polysilicon. The quality of TCS that we have been able to purchase has fluctuated, and the price has increased substantially since we commenced TCS procurement. Although the Taixing joint venture commenced commercial production of TCS in September 2008, it may be forced to stop production and expansion. See “— Our Taixing joint venture has not obtained land use rights and related planning and construction permits for the buildings it is constructing and may be required to stop operations, further expansion and cure deficiencies and could be subject to fines.” The expansion or development of polysilicon production capacity by existing or new solar industry participants could increase the price or limit the supply of TCS available to us. If we are unable to source the TCS we require at a reasonable cost or at all, it could have a material adverse effect on our financial condition and results of operations.

The production of polysilicon presents operational difficulties and dangers; if we are unable to operate effectively or natural disasters or operational disruptions occur, our business, results of operations and financial condition could be adversely affected.

Production of polysilicon requires the use of volatile materials and chemical reactions sensitive to temperature, pressure and requires the use of external controls to maintain safety and provide commercial production yields. For example, in the production of polysilicon we use TCS, which is a type of chlorosilane gas that when purified can be a highly combustible substance if brought into contact with moisture in the air and is therefore potentially destructive and extremely dangerous if mishandled or used in uncontrolled circumstances. The occurrence of a catastrophic event involving TCS as a result of a natural disaster or human error or otherwise at one of our polysilicon production facilities could threaten, disrupt or destroy a significant portion or all of our polysilicon production capacity at such facility for a significant period of time. Additionally, our polysilicon production facilities, in particular, are highly reliant on our ability to maintain temperatures and pressure at appropriate levels, the supply of steam at a consistent pressure level, the availability of adequate electricity and our ability to control the application of such electricity. Accordingly, mistakes in operating our equipment or an interruption in the supply of electricity at our production facilities could result in the production of substandard polysilicon or substantial shortfalls in production and could reduce our production capacity for a significant period of time. In connection with the start up of our Xuzhou Phase II production facility, we experienced trial production quality issues caused by a shortfall in the supply of steam at a consistent level of pressure to our Xuzhou Phase II production facility. Damage or loss of revenue from any such events or disruptions may not be adequately covered by insurance, and could also damage our reputation, any of which could have a material adverse effect on our business, operating results and financial condition.

Polysilicon and wafer production is energy-intensive and if our energy costs rise or if our energy supplies are disrupted, our results of operations will be materially adversely affected.

The polysilicon production process is highly dependent on a constant supply of electricity to maintain the optimal conditions for polysilicon production. The wafer production process is similarly dependent on electricity. If these levels are not maintained, we may experience significant delays in the production of polysilicon and wafers. With the rapid development of the PRC economy, demand for electricity has continued to increase. There have been shortages in electricity supply in various regions across China, especially during peak seasons, such as summer. We currently depend on a single power grid for our electric power and we do not have any backup electricity generators in case there is a power shortage. In the event that energy supplies to our manufacturing

20

facilities are disrupted, our business, results of operations and financial condition could be materially and adversely affected. In addition to shortages, we are subject to potential risks of interruptions in energy supply due to equipment failure, weather events or other causes. There can be no assurance that we will not face power related problems in the future.

Even if we had access to sufficient sources of electricity, as we consume substantial amounts of electricity in our manufacturing process, any significant increase in the costs of electricity could adversely affect our profitability. Our supply arrangement with Xuzhou Electricity Company, does not provide protection against electricity price fluctuations. At the end of June 2008, the NDRC announced an increase in average electricity rates by RMB0.0301 per KWh in Jiangsu Province, where our production facilities are located. Our electricity costs starting in July 2008 increased as a result of the June 2008 announcement. We expect additional increases in electricity costs in the future. The electricity price in China will also be largely dependent on the price for coal, which has been increasing. If energy costs were to rise, our business, financial condition, results of operations or liquidity position could be adversely affected.

We obtain certain production equipment from a limited number of suppliers and if such equipment is not delivered on time, is damaged in shipment or is otherwise unavailable, our ability to deliver polysilicon and wafers on time will suffer, which in turn could result in order cancellations and loss of revenue.

Our operations and expansion plans depend on our ability to obtain a sufficient amount of equipment that meets our specifications on a timely basis. Some of our equipment used in polysilicon, TCS and wafer production is not readily available from alternative vendors and would be difficult to repair or replace if it were to become damaged or stop working. If any of these suppliers were to experience financial difficulties or go out of business, or if there were any damage to or a breakdown of our production equipment, our business would suffer. In addition, a supplier’s failure to supply our ordered equipment in a timely manner, with adequate quality and on terms acceptable to us, could delay the capacity expansion of our manufacturing facilities and otherwise disrupt our production schedule or increase our costs of production. Failure to obtain equipment meeting our specifications could have a material adverse effect on our business, financial condition and results of operations.

We have experienced significant delays in the delivery of our key equipment in the past. For example, the delivery of our Xuzhou Phase I reactors was delayed up to six months from the original contracted delivery schedule. In the event we experience delays in equipment deliveries for any of our production facilities in the future, we will not be able to increase our output at the rates we anticipate. In addition, demand for polysilicon and wafer production equipment may result in significant increases to prices of such equipment or shortages in related components for our intended expansion. If deliveries are delayed or such prices increase beyond our expectations, our business, financial condition and results of operations would be adversely affected.

We have sourced and will continue to source some of our production equipment from PRC manufacturers and we cannot assure you that this domestically sourced equipment will perform at the same level as our imported equipment or will meet our quality requirements.

We have purchased key equipment from domestic suppliers. In particular, 13 out of a total of 18 reactors for our Xuzhou Phase II production facility were purchased from domestic suppliers. In our Xuzhou Phase III production facility, we intend to use substantially all domestic reactors. We have entered into a reactor supply agreement with Tap Mate Limited to obtain 144 reactors manufactured by Shanghai Morimatsu Chemical Equipment Engineering Co., Ltd., or Shanghai Morimatsu. We have separately entered into a guaranty agreement with Tap Mate Limited and Shanghai Morimatsu, under which Shanghai Morimatsu has guaranteed the obligations of Tap Mate Limited under the reactor supply agreement. A substantial number of these reactors will be used for our Xuzhou Phase III production facilities. Shanghai Morimatsu, like the other domestic suppliers of our reactors, has limited experience in producing polysilicon reactors. We placed orders for 60 additional Shanghai Morimatsu reactors for our proposed Xilinhot production facilities. The reactors from Shanghai Morimatsu that we intend to use in our Xilinhot production facilities will be 24-pair reactors. While we have operated 24-pair reactors from another supplier, we cannot assure you we will have the same results with those

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produced by Shanghai Morimatsu. Also, Shanghai Morimatsu has never produced 24-pair reactors. There can be no assurance they will produce such reactors at all or at quality levels similar to our current operational reactors. Although we believe the domestic reactors we have purchased and have contracted to purchase are of at least similar quality as those we have sourced from foreign suppliers, these locally made reactors may not perform at similar levels of quality and reliability or they may not be delivered in a timely manner. We cannot assure you that the polysilicon we may produce using equipment from domestic suppliers will be of similar quality or quantity as those we currently produce which may lead to rejections of our polysilicon by our customers. In the event the domestic equipment does not perform as well as the imported equipment or does not perform at all, our business, financial condition and results of operations could be adversely affected.

In addition, certain components of the hydrochlorination equipment for our Xuzhou Phase I production facility, most of which were sourced from domestic suppliers, have shown significant corrosion, which has increased and may continue to increase our maintenance costs and may adversely affect our results of operations. While we have replaced the affected parts and have required the domestic suppliers to improve the quality of the components supplied to us, we cannot assure you that the components we will receive from such suppliers will meet our quality requirements in the future.

Our Taixing joint venture has not obtained land use rights and related planning and construction permits for the buildings it is constructing and may be required to stop operations and further expansion and to cure deficiencies and could be subject to fines.

Our Taixing joint venture does not have land use rights to the land on which construction has begun and does not have the required planning and construction permits for the buildings it is constructing. The joint venture could be required to stop construction of the project and cure the deficiencies and could be subject to a fine related to such construction. While we received approval to commence pilot production of TCS from the bureau of safety production in August 2008 that extends to February 2009, we have not yet obtained the approval to commence pilot production from the bureau of environmental protection. We commenced commercial production of TCS in September 2008 and are required to obtain applicable environmental, work safety and professional health approvals. Our failure to obtain the land use right and construction permits could delay or prevent us from obtaining such approvals. If the joint venture is unable to obtain the necessary approvals, permits and land use rights, it would not be able to produce TCS for us and we will need to continue to source TCS from third parties, which could prevent us from achieving self sufficiency in TCS production and adversely affect our results of operations.

We operate in a highly competitive market and we may not be able to compete successfully with competitors who have greater resources than us.

The solar wafer market is highly competitive and the polysilicon market is expected to become increasingly competitive. While we currently do not manufacture wafers, we compete directly with wafer manufacturers for wafer sales. Our competitors include polysilicon producers, such as DC Chemical Co., Ltd., or DC Chemical, Hemlock Semiconductor Corporation, or Hemlock, MEMC Electronic Materials, Inc., or MEMC, Renewable Energy Corporation ASA, or REC, Tokuyama Corporation, or Tokuyama, Wacker Chemie AG, or Wacker, and wafer manufacturers such as Deutsche Solar AG, a subsidiary of Solarworld AG, or SolarWorld, Green Energy Technology, Inc., or Green Energy, Glory Silicon Energy Co., Ltd., or Glory Silicon, Jiangsu Shunda PV-Tech Co., Ltd., or Shunda, Jinglong Industry and Commerce Group Co., Ltd., or Jinglong, Kyocera Corporation, or Kyocera, LDK Solar Co., Ltd., or LDK Solar, MEMC, M.SETEK Co. Ltd., or M.SETEK, PV Crystalox Solar AG, or PV Crystalox, REC, ReneSola Ltd., or ReneSola, and Sino-American Silicon Products Inc., or Sino-American Silicon. We also compete with producers of upgraded metallurgical silicon such as Dow Corning Corporation, or Dow Corning, Elkem AS, or Elkem and Becancour Silicon Inc., or Becancour, which is a division of Timminco Limited, or Timminco.

We believe our competitors have substantially greater financial, technical, manufacturing and other resources than we do. Our competitors’ greater size and longer operating history in some cases provide them with a competitive advantage with respect to manufacturing costs because of their economies of scale and their ability to purchase raw materials at lower prices. In addition, our competitors may have stronger relationships or may

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enter into exclusive relationships with some of our key customers. As a result, they may be able to respond more quickly to changing customer demands or to devote greater resources to the development, promotion and sales of polysilicon or wafers than we can. Our failure to adapt to changing market conditions and to compete successfully with existing or new competitors may materially and adversely affect our financial condition and results of operations.

We depend on a limited number of customers and supply contracts for a significant portion of our revenues and the loss of any customer or cancellation of any contract may cause significant fluctuations or declines in our revenues.

We have entered into polysilicon and wafer supply agreements with cell and module manufacturers that provide for aggregate sales of approximately 15.1 GW of wafers and approximately 40,356 MT of polysilicon for aggregate total contract prices of $21.3 billion (RMB146.2 billion). These contracts are with JA Solar, Trina Solar, CSI, Suntech, AIDE, Solarcell and Solarfun. See “Business—Customers and Markets”. Our commitments in 2009 and 2010 under the supply contracts exceed our combined Xuzhou Phase I and Xuzhou Phase II production capacity by approximately 5,309 MT and approximately 16,993 MT, respectively. Any significant delays in our anticipated capacity expansion or deviation from the contract terms on our customers’ part or our inability to negotiate or renegotiate acceptable quantities, prices and delivery terms from time to time with our customers may disrupt our operations and materially adversely affect our financial results. In addition, if any customers were to default on their obligations under our polysilicon and wafer supply contracts, we may need to find other buyers for our products. Sales to these other customers may be on less favorable terms or may not be feasible at all.

We intend to expand our customer base and enter into additional polysilicon and wafer supply contracts. There can be no assurance that we will be able to enter into contracts with any additional customers. Furthermore, there can be no assurance that if we enter into such contracts with other customers, that the terms of such contracts will be on equal or more favorable terms as those contracts we have with our existing customers or that such additional customers will be of equal quality to our existing customers. Failure to enter into additional supply contracts will have a material adverse effect on our business, financial condition and results of operations.

If we are unable to fulfill our commitments to customers or customer orders on a timely basis or at all, we may lose customers, our reputation may be damaged, and we may face significant penalties for breach of contract.

Due to delays in the delivery of the reactors for our Xuzhou Phase I production facility, we did not meet contractual commitments for delivery of polysilicon as a result of delayed ramp-up of commercial production in 2007. Our ability to meet existing contractual commitments to our customers depends on the successful and timely implementation of our expansion plan. Delays in the delivery of equipment, like those we experienced in the past, could delay implementation of our expansion plan. If we are unable to fulfill our commitments to customers or customer orders on a timely basis or at all, we may lose our customers and our reputation may be damaged. Moreover, our contracts with our customers sometimes provide for specified monetary damages or penalties, which may be significant, for non-delivery or failure to meet delivery schedules or product specifications and allow a termination of the contract by our customer. See “Business—Customers and Markets”. If any of our customers invoke these clauses against us, we may lose future sales and need to defend against the relevant claims, which could be time consuming and expensive. We may be found liable under these clauses and be required to pay damages.

Our future success depends substantially on our ability to significantly expand both our polysilicon production capacity and output, which exposes us to a number of risks and uncertainties.

Our future success depends on our ability to significantly increase both our polysilicon production capacity and output. If we are unable to do so, we may be unable to benefit from economies of scale to decrease our costs

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per kilogram of polysilicon, apply capital efficiently, meet our obligations under supply agreements, maintain our competitive position and improve our profitability. Our ability to establish additional production capacity and increase output is subject to significant risks and uncertainties, including:

• the need to raise significant additional funds to purchase additional production equipment or to build additional manufacturing facilities, which we may be unable to obtain on commercially viable terms or at all;

• cost overruns and delays as a result of a number of factors, many of which are beyond our control, such as increases in the price of electricity and problems with equipment delivery, particularly with respect to major equipment such as our polysilicon deposition reactors;

• delays or denial of required approvals by relevant government authorities;

• failure to obtain production inputs in sufficient quantities or at acceptable cost;

• diversion of significant management attention and other resources; and

• failure to execute our expansion plan effectively.

We intend to construct additional production facilities that would bring our aggregate annual polysilicon production capacity to 24,000 MT by the end of 2010. We have begun planning and expect to begin construction activities in our Xilinhot production facilities in October 2008. In addition, we are evaluating further expansion of our polysilicon production capacity in Xuzhou on land close to our existing Xuzhou complex and have an option to assume the undertaking of an affiliate in an agreement to expand our Xilinhot production facilities to 20,000 MT per year. See “Business — Polysilicon Production — Production Capacity”. Such expansions are subject to obtaining all approvals and land use rights. The agreement between our affiliate and the Inner Mongolia government may not be enforceable or assignable and therefore receipt of investment incentives may require us to negotiate one or more direct agreements with the Inner Mongolia government. Market conditions change very rapidly in the solar industry. Industry research institutions such as Solarbuzz and others have forecasted substantial overcapacity in polysilicon and wafer manufacturing in the next few years. We may not complete our polysilicon manufacturing expansion due to cost, demand, financing or other reasons. If we do not complete such expansion, we may not be able to meet contractual obligations and our share price and financial results could be adversely affected.

Our profitability may suffer as we continue with our capacity expansion.

We expect to experience increased costs as a result of the ramp-up of our Xuzhou Phase II production facility and the construction and ramp-up of our Xuzhou Phase III, Xilinhot and any additional production facilities, including our wafer production facility. Before our production facilities become fully operational, we will need to make substantial payments for the installation of machinery and equipment, the training of personnel and other related expenses. Much of these payments will be incurred prior to any revenue being realized from these projects, as the first production line of the Xuzhou Phase III production facilities is not expected to commence commercial production until December 2008 and our Xilinhot production facilities are not expected to begin commercial production until December 2009. We expect to experience initial operational inefficiencies and lower production yields during the early stages of production at our newly constructed production facilities. As with our Xuzhou Phase I and Xuzhou Phase II production facilities, we will install the hydrochlorination process equipment in our Xuzhou Phase III production facilities and will integrate the hydrochlorination process after initial production has commenced on our newly constructed production facilities. Unless we are able to integrate our hydrochlorination process at these facilities and increase production yields and benefit from efficiencies in purchasing, manufacturing, sales and shipping, we may not be able to achieve lower costs per unit of production, which would decrease our margins and lower our profitability.

We have significant outstanding bank borrowings and may not be able to arrange adequate financing to repay these borrowings when they mature.

As of June 30, 2008, we had principal amount of $60.0 million of outstanding floating rate bonds, one-third of which will be redeemed upon the closing of this offering and the remaining two-thirds will be converted into 29,850,000 ordinary shares. See “Use of Proceeds” and “Description of Share Capital—Tranche A Floating Rate

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Secured Redeemable Bonds due 2009 and Tranche B Floating Rate Secured Convertible Bonds due 2009”. As of June 30, 2008, we had $206.1 million in onshore bank borrowings, $95.8 million of which were due within one year. Subsequent to June 30, 2008, we incurred an additional RMB2.1 billion ($311.0 million) in onshore borrowings which will be used to finance our intended expansion of polysilicon production facilities and in-house wafer production facility. Our onshore borrowings are secured by certain of our assets including land and equipment. We expect our future onshore borrowings to also be secured by certain of our assets. Although we believe, with existing onshore bank borrowings, our cash flow from operating activities, which includes advances from customers pursuant to our supply contracts, and the proceeds of this offering, we will have sufficient cash flow for our current expansion, there can be no assurance that additional funding needs will not arise. We cannot assure you that we will be able to meet these or other current obligations as they become due. In the event we are unable to meet these obligations or obtain extensions of borrowings, or if we are unable to obtain sufficient alternative funding at reasonable terms or at all to make payment, we will have to make payments with cash generated by our operating activities. In addition, meeting the payment obligations of these borrowings with cash generated by our operating activities will divert our financial resources from the requirements of our ongoing operations and future growth, and would have a material adverse effect on our business, financial condition and future prospects.

It is difficult to plan for capital requirements in our rapidly changing industry. Future market conditions or other developments may require us to obtain additional funds.

Our ability to obtain additional funds on acceptable terms will be subject to a variety of uncertainties, including:

• investor perceptions of and demand for securities of companies engaged in the solar industry;

• conditions of the U.S. and other capital markets in which we may seek to raise funds;

• our future results of operations, financial condition and cash flows;

• Chinese governmental regulation of foreign investment;

• economic, political and other conditions in China;

• the amount of capital that other Chinese entities may seek to raise in the U.S. and other foreign capital markets; and

• Chinese governmental policies relating to foreign currency borrowings.

Our inability to raise additional funds in a timely manner and on terms acceptable to us, or at all, may have a material adverse effect on our business, financial condition and results of operations. For example, we may be required to scale back our planned expenditures, which could adversely affect our ability to achieve economies of scale or achieve our planned growth. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

We may not have sufficient cash available to pay holders of the 2008 Convertible Bonds if we are required to repay the outstanding principal amount at maturity.

The 2008 Convertible Bonds will be issued concurrently with this offering in the aggregate principal amount of $446.9 million. The 2008 Convertible Bonds mature 18 months after this offering. In the event bondholders choose not to exercise their conversion rights prior to maturity, we would be required to repay the outstanding principal amount of the 2008 Convertible Bonds at maturity. The 2008 Convertible Bonds will be U.S. dollar obligations and our sole source of operating cash flows are all generated in the PRC by our onshore subsidiaries. There can be no assurance that we will be able to upstream cash from our operating subsidiary, to successfully raise capital or that we will be able to access other credit facilities. Therefore, we may not have sufficient cash on hand or credit available to redeem the outstanding principal amount of the 2008 Convertible Bonds at maturity. Payment of amounts owed on the 2008 Convertible Bonds and the related financial covenant requiring us to maintain consolidated net indebtedness no more than 4.0 times our annualized consolidated earnings before interest, taxes, depreciation and amortization for the first three consecutive quarters following this offering and

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no more than 3.75 times our annualized consolidated earnings before interest, taxes, depreciation and amortization for the second three consecutive quarters following this offering may prevent us from maintaining our capital expenditures at the levels we have planned. Any delay in capital expenditures will have a material adverse effect on our business, financial condition and results of operations.

We face risks associated with the marketing, distribution and sale of our wafers internationally, and if we are unable to effectively manage these risks, they could impair our ability to expand our business and operate profitably.

With our increased production we intend to sell a portion of our wafers outside of China. The marketing, distribution and sale of our wafers in the international markets expose us to a number of risks, including:

• fluctuations in currency exchange rates;

• increased costs associated with maintaining marketing efforts in various countries;

• difficulty and costs relating to compliance with the different commercial and legal requirements of the overseas markets in which we offer our products; and

• trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses, which could increase the prices of our products and make us less competitive in some countries.

If we are unable to effectively manage these risks, we may not be able to successfully expand our business abroad, operate profitably, exploit our expansion and grow our business as we have planned.

Development of our proposed Xilinhot polysilicon production facilities will be in Inner Mongolia. We and our affiliates have no prior experience operating in Inner Mongolia and may face severe weather conditions, different legal requirements and a lack of project infrastructure.

We intend to expand our polysilicon production capacity to 24,000 MT per year by constructing our 10,500 MT Xilinhot production facilities in Xilinhot, Inner Mongolia. We have entered into a memorandum of understanding with the Xilinguole Government of Inner Mongolia, or the Inner Mongolia government, with respect to the proposed Xilinhot production facilities. Although the memorandum of understanding sets forth certain benefits offered and undertakings by the Inner Mongolia government, the memorandum of understanding is not an enforceable agreement and there is no assurance that the Inner Mongolia government will carry out the undertakings or that we will receive the economic benefits that are set forth in the memorandum of understanding. We have no experience producing polysilicon outside of Jiangsu Province, China. Inner Mongolia, in particular, may be subject to severe winter conditions that could affect, among other things, the construction and operation of our production facilities. In addition, we may face different legal requirements, experience delays in acquiring the necessary permits for construction and difficulties in complying with the various labor laws and other regulations. Moreover, operation of the Xilinhot production facilities depends on the completion of various infrastructure projects to allow water, electricity, steam, telecommunications and other services to be connected to the plant. Although the Inner Mongolia government has undertaken in the memorandum of understanding to provide such infrastructure, we cannot be sure that it will be completed in a timely manner or at all. Any difficulties or delays could prevent our manufacturing from commencing on time or at all and could increase our costs of construction or operation, any of which could have a material adverse effect on our business, financial condition and future prospects.

Product defects could result in increased costs, decreased sales, and damage to our customer relationships and our reputation.

Our polysilicon and wafers may contain defects that are not detected until after they are shipped or installed. As all of our wafers currently are and a portion of our wafers will continue to be produced by wafer manufacturers under tolling arrangements, we do not have complete control over whether our contractors use our polysilicon or the quality of wafers our contractors produce. If our tolling partners use defective polysilicon to produce wafers, such wafers will likely be defective. In the event our products are returned to us due to non-conformity with customers’ specifications or product defects, we would be required to replace our products

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promptly. Product defects could cause significant damage to our customer relationships and our reputation. If we cannot successfully maintain the quality throughout our production process, this will result in substandard quality or performance of our polysilicon and wafers, including the reduced photovoltaic conversion efficiency of solar cells and modules made from the wafers we supply and higher wafer breakage. If we deliver products with defects, or if there is a perception that our products are of substandard quality, we may incur substantially increased costs associated with termination of contracts, replacements of polysilicon or wafers, and our credibility and market reputation will be harmed and sales of our products may be adversely affected.

Most of our production, storage, administrative and research and development facilities are located in close proximity to one another in an industrial park in China. Any damage or disruption at these facilities would have a material adverse effect on our financial condition and results of operations.

Our production, storage, administrative, research and development facilities are located in close proximity to one another in an industrial park in Xuzhou. Significant damage or other impediments at such location, whether as a result of fire, weather, disease, civil strike, industrial strikes, breakdowns of equipment, difficulties or delays in obtaining materials and equipment, natural disasters, such as earthquakes, terrorist incidents, industrial accidents or other causes, could temporarily disrupt or even shut down our operations, which would have a material adverse effect on our business, financial condition and results of operations. Some of the processes utilized in our operations place us at risk of fire and other damage. We cannot assure you that the insurance we maintain will be sufficient to cover all of our potential losses.

On May 12, 2008, an earthquake reaching a magnitude of 8.0 on the Richter scale according to the State Seismological Bureau of China hit Sichuan Province, China. Businesses and production operations in the affected areas of Sichuan Province have been shut down due to safety concerns. Although our operations were not affected by the earthquakes in Sichuan Province, there can be no assurance that we may not be directly or indirectly affected by similar natural disasters in the future.

Our business depends substantially on the continuing efforts of our executive officers and qualified technical personnel, and our business may be severely disrupted if we lose their services.

Our industry is characterized by high demand and intense competition for talent. Our strategy and success therefore depends substantially on the continued services of our executive officers and, to a significant extent, on our ability to attract, train and retain qualified technical personnel, particularly those with expertise in the solar and electronics industries. We depend on the efforts of Mr. Zhu Gongshan, our chairman, for a significant portion of our business operations. If one or more of our executive officers or key employees were unable or unwilling to continue in his or their present positions, we might not be able to replace him or them easily or at all. There is substantial competition for qualified technical personnel in China, and we cannot assure you that we will be able to attract new or retain our existing qualified technical personnel. As we are still a relatively young company and our business has grown rapidly, our ability to train and integrate new employees into our operations may not meet the growing demands of our business.

If any of our executive officers or key employees were to join a competitor or form a competing company, we may lose customers, suppliers, know-how and key professionals and staff members. Each of our executive officers has entered into an employment agreement with us, which contains non-competition provisions. However, if any dispute arises between our executive officers or key employees and us, we cannot assure you the extent to which any of these employment agreements could be enforced in China or Hong Kong, where these executive officers and key employees reside, in part as a result of the uncertainties with China’s legal system. See “—Risks Relating to Doing Business in China—Uncertainties with respect to the Chinese legal system could have a material adverse effect on us.”

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Our existing shareholders have substantial influence over our company and their interests may not be aligned with the interests of our other shareholders.

Mr. Zhu Gongshan, our chairman, will beneficially own approximately             % of our outstanding ordinary shares upon completion of this offering, assuming no exercise of the over-allotment option, and             % of our outstanding ordinary shares upon completion of this offering assuming the full exercise of the over-allotment option. As such, Mr. Zhu Gongshan has substantial influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions, timing and amount of our dividend payments, and otherwise controls or influences actions that require the approval of our shareholders.

This concentration of ownership may discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of our ADSs. These actions may be taken even if they are opposed by our other shareholders, including those who purchase ADSs in this offering. Furthermore, our amended articles of association, which will become effective immediately upon the closing of this offering, contain a quorum requirement of two of our members present in person or by proxy representing in excess of 50% of the total issued voting shares in our company. Existing shareholders may approve actions which may not be in the best interest of our minority shareholders. In addition, Mr. Zhu Gongshan controls the Golden Concord Group. As a result, his interests in the Golden Concord Group may conflict with the interests of our other shareholders, as he may cause us to enter into transactions or take (or fail to take) other actions or make decisions that conflict with the best interests of our other shareholders.

Any failure by us to control the use or to adequately restrict the discharge of hazardous substances or to obtain work safety and professional health approvals could subject us to potentially significant monetary damages and fines or suspensions in our business operations.

We use, generate, store and discharge toxic, volatile and otherwise hazardous chemicals and wastes in our research and development and production processes, and we are subject to regulations and periodic monitoring by local environmental protection and work safety authorities and are required to comply with all PRC national and local environmental protection and work safety laws and regulations. Under PRC environmental and work safety regulations, we are required to obtain a pollutant discharging permit, a work safety permit for the storage and use of hazardous chemicals and a permit for the use of atmospheric pressure containers, from relevant governmental authorities after we have completed the installation of our manufacturing lines but before the manufacturing lines commence formal commercial production. We are also required to undergo the acceptance inspections of environmental protection, work safety and professional health and obtain respective approval with relevant governmental authorities before the manufacturing lines commence full production. We have obtained the pollutant discharge permit, the work safety permit for storage and use of hazardous chemicals and permit for the registration of use of atmospheric pressure containers for the pressure containers we have installed. We passed the environmental protection examination and work safety examination for our Xuzhou Phase I production facility in June 2008 and have received government approval in connection with professional health for Xuzhou Phase I production facility in July 2008. We obtained the environmental and work safety approvals for the pilot production of our Xuzhou Phase II production facility on May 21, 2008 and July 30, 2008, respectively. Since the pilot production period of our Xuzhou Phase II production facility expired on August 21, 2008, we must obtain the necessary environmental work safety and professional health approvals. We currently expect to obtain these approvals by the end of 2008. However, there can be no assurance that we will pass the necessary examinations and receive the necessary approvals for our Xuzhou Phase II, Xuzhou Phase III and other production facilities.

We obtained the work safety approval for pilot production at our Taixing joint venture on August 2, 2008 but currently lack environmental approval for pilot production. We are also required to obtain a health approval relating to occupational disease hazards, for which we need to prepare an assessment report for the city of

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Taixing. We have not prepared such report yet and if, upon review of our report, the city of Taixing deems our business has a high risk of occupational disease, we will also be subject to an occupational disease prevention examination in accordance with the Interim Examination Measure on the Occupational Hygiene of Construction Projects in the Jiangsu Province.

If we fail to comply with relevant environmental work safety and professional health laws, regulations and/or administrative rules relating to hazardous materials and chemicals in the future, we may be required to pay fines, suspend production or cease operation. In addition, if more stringent regulations are adopted in the future, the costs of compliance with these new regulations could be substantial. Any failure by us to control the use of, or to adequately restrict the discharge of, hazardous substances could subject us to potentially significant monetary damages and fines or suspensions in our business operations.

We may not be successful in finding alternative means of producing TCS in-house.

We commenced construction planning for a hydrogenation and a TCS production facility in Xuzhou in August 2008. This would be a separate facility to produce TCS which can then be used in our production process. We would purchase equipment for the facility which includes the rights to the intellectual property incorporated into such equipment, but we have no experience in constructing, installing or operating a facility that employs the hydrogenation process. Our ability to cost-effectively manufacture polysilicon will depend, in part, on our ability to operate the hydrochlorination and hydrogenation process to produce TCS from STC efficiently and, if we pursue this hydrogenation process, our ability to construct and operate this process.

Our failure to protect our intellectual property rights may undermine our competitive position, and litigation to protect our intellectual property rights may be costly and may not be resolved in our favor.

We seek to protect our proprietary production processes, documentation and other written materials primarily through intellectual property laws and contractual restrictions. However, we have not obtained patent protection for our technology related to our polysilicon production processes. Instead, we rely on know-how, trade secrets and other similar protections. We also require employees and consultants with access to our proprietary information to execute confidentiality agreements with us. The steps taken by us to protect our proprietary information may not be adequate to prevent misappropriation of our technology. In addition, our proprietary rights may not be adequately protected because:

• others may not be deterred from misappropriating our technologies despite the existence of laws or contracts prohibiting it;

• policing unauthorized use of our intellectual property may be difficult, expensive and time-consuming, and we may be unable to determine the extent of any unauthorized use; and

• the intellectual property laws and enforcement proceedings in China are uncertain and do not protect intellectual property rights to the same extent as do the laws and enforcement procedures in the United States. See “—Risks Relating to Doing Business in China—Uncertainties with respect to the PRC legal system could have a material adverse effect on us.”

Reverse engineering, unauthorized copying or other misappropriation of our proprietary technologies could enable third parties to benefit from our technologies without paying us for doing so. Any inability to adequately protect our proprietary rights could harm our ability to compete, to generate revenue and to grow our business.

To protect our intellectual property rights and to maintain our competitive advantage, we may file suits against parties who we believe infringe our intellectual property. Such litigation may be costly and may divert

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management attention and expend our resources away from our business. In certain situations, we may have to bring suit in foreign jurisdictions, in which case we will be subject to additional risks as to the result of the proceedings, the amount of damages that we can recover and our ability to enforce a judgment. An adverse determination in any such litigation will impair our intellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and would have to bear all costs arising from such litigation to the extent we are unable to recover them from other parties. The occurrence of any of the foregoing could have a material adverse effect on our business, results of operations and financial condition.

Although we are currently strengthening our research and development capability, to date, substantially all of the intellectual property used in our polysilicon production process was developed by third parties. We may be exposed to infringement or misappropriations claims by third parties which, if determined adversely to us, could cause us to pay significant damage awards.

Our success depends largely on our ability to develop and use our technology and know-how without infringing the intellectual property rights of third parties. The validity and scope of claims relating to technology patents involve complex scientific, legal and factual questions and analysis and, therefore, may be highly uncertain. While we have a non-exclusive license from Hualu for the hydrochlorination process, for other steps of our production process, we do not have any patents or licenses. Hualu has also entered into agreements with us for the design of the production process for our Xuzhou Phase I, Xuzhou Phase II and Xuzhou Phase III production facilities. We are also in discussions with Hualu in connection with our proposed Xilinhot production facilities. Although Hualu has represented to us that it has not violated any third party intellectual property rights in providing us the designs for our production facilities, these agreements only provide us with indemnity for a maximum of 50% of the total value of the agreements we have entered into with them in the event that we incur losses for intellectual property infringement claims as a result of engaging Hualu.

We also rely on protection against infringement claims afforded in the intellectual property indemnification provisions under our equipment supply contracts. Most of our equipment supply contracts with international suppliers include an indemnification provision, under which the supplier undertakes to indemnify us against actions, claims, demands, costs, charges, and expenses arising from or incurred by reason of any infringement or alleged infringement of patents, copyrights, trade marks or trade names by the use of the equipment provided by the supplier. However, it is unclear that we will be entitled to such indemnification in the event that we use the equipment supplied by such supplier in conjunction with other equipment not supplied by such supplier. In addition, a portion of our equipment from international manufacturers were supplied by several intermediate trading companies, not the manufacturer themselves. There is no assurance that such intermediate trading companies have sufficient assets to meet their indemnification obligations under their equipment supply contracts with us. Moreover, some of our equipment supply contracts with domestic suppliers do not provide any intellectual property indemnification provisions.

Historically, China has afforded less protection to a company’s intellectual property than the United States and western Europe. The defense and prosecution of intellectual property suits, patent opposition proceedings and related legal and administrative proceedings can be both costly and time consuming and may significantly divert the efforts and resources of our technical and management personnel. An adverse determination in any such litigation or proceedings to which we may become a party could subject us to significant liability to third parties, require us to seek licenses from third parties, to pay ongoing royalties, or to redesign our products or subject us to injunctions prohibiting the manufacture and sale of our products or the use of our technologies. Protracted litigation could also result in our customers or potential customers deferring or limiting their purchase or use of our products until resolution of such litigation.

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Assertions that we or our affiliates have participated in misappropriation of trade secrets could result in severe monetary damages or injunctive relief.

The polysilicon industry in China, and especially in Sichuan Province and Jiangsu Province, has received a great deal of attention with respect to potential trade secret violations. In response to departures of employees of certain Sichuan Province-based silicon companies and the increasing development of the silicon-based industry in Jiangsu Province, representatives from the Sichuan and Jiangsu provincial governments met on several occasions in 2007 and 2008 to discuss the development of the solar industry in China in general and the issues arising from a specific ex-employee of a polysilicon manufacturer in Sichuan Province. This individual was detained and convicted of trade secret theft and sentenced to imprisonment and a RMB1.0 million fine. Although certain news articles indicated that the Sichuan manufacturer’s commercial secrets alleged to be misappropriated by the ex-employee were provided to JZPTD, our domestic operating company, and were used in JZPTD’s production process, neither we nor any of our affiliates has been named a party to any trade secret or other intellectual property case, civil or criminal. One news report indicated that the convicted individual collaborated with representatives of JZPTD and that JZPTD should be severally responsible for the damage caused, which the news report stated the court found to be RMB34.1 million ($4.9 million). Although we do not believe that we have infringed on any party’s intellectual property, we may nevertheless be subject in the future to civil intellectual property infringement claims or criminal prosecution against us, JZPTD or our other affiliates. If we lose in any such claim, we may be subject to severe monetary damages and/or injunctive relief, any of which would have a material impact on our reputation and results of operations.

We do not have the land use rights for the land on which we are building our Xuzhou Phase III production facilities and we have not obtained the required construction permits for our Xuzhou Phase III production facilities. It is a violation of PRC law to build on land without such rights and permits and, we may be forced to terminate the construction of our Xuzhou Phase III production facilities or be subject to significant monetary penalties.

Our Xuzhou Phase III production facilities are being built on 80.9 acres of land adjacent to our Xuzhou Phase I and Xuzhou Phase II production facilities in the Xuzhou Economic Development Zone in Jiangsu Province, China. Under PRC law, the land use right of such parcel cannot be granted until various governmental approvals have been obtained and we have won the public auction in connection with such parcel. With the knowledge of the Xuzhou Economic and Development Committee and pursuant to a memorandum of understanding between us and such Committee, we had commenced the construction of our Xuzhou Phase III production facilities before winning the public auction for the sale of such parcel and the receipt of all necessary approvals. In September 2008, we won the public auction and have signed two contracts with the Land and Resource Administration of Xuzhou granting us the land use right over a total area of 79.8 acres. We expect to obtain the land use certificates by the end of 2008. Because we did not have the land use right for the underlying land, we have not yet obtained the required construction or zoning permits for the construction of our Xuzhou Phase III production facilities. As a result, we do not yet have ownership rights to this facility. In addition, construction on land prior to its legal approval for sale is a violation of PRC law and could result in prosecution of us and the imposition of monetary penalties, which could be substantial. In the event we fail to obtain the land use rights, we will need to locate another site and delay our planned expansion, which would have a material impact on our ability to meet contractual obligations to our customers. As a result, we may incur a loss on the cost of constructing our Xuzhou Phase III production facilities on our current site, which will negatively affect our profitability. We cannot assure you that we will be able to obtain the land use rights for the construction of our Xuzhou Phase III production facilities. Our rights as owner or occupier of the parcel on which our current Xuzhou Phase III production facilities are located and buildings on such parcel may be adversely affected as a result of the absence of formal land use rights and we may be subject to lawsuits or other actions taken against us and/or lose the right to continue to operate on such property.

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Our operations present risks of fire, explosions and other accidents that can create damage to our property or third-parties and we have limited insurance coverage. Such accidents may result in losses from operating hazards, product liability claims or business interruptions.

As with other polysilicon producers, our operations involve the use, handling, generation, processing, storage, transportation and disposal of hazardous materials, which may result in fires, explosions, spills and other unexpected or dangerous accidents causing personal injuries or death, property damage, environmental damage and business interruption.

We are also exposed to risks associated with product liability claims in the event that the use of our wafers results in injury. Since our wafers are made into electricity producing devices, any product malfunctions, defects, improper installations or other deficiencies may endanger wafer users. Due to our limited operating history, we cannot predict whether product liability claims will be brought against us in the future or the effect of any resulting negative publicity on our business. Moreover, we do not have any product liability insurance and may not have adequate resources to satisfy a judgment in the event of a successful claim against us. The successful assertion of product liability claims against us could result in potentially significant monetary damages and require us to make significant payments. In addition, as the insurance industry in China is still in an early stage of development, business interruption insurance available in China offers limited coverage compared to that offered in many other countries. We cannot assure you that our existing insurance policies are sufficient to insulate us from all loss and liabilities that we may incur and significant damage to any of our production facilities could have a material adverse effect on our business, financial condition or results of operations.

We have previously operated as a private company and have no experience in attempting to comply with U.S. public company obligations. In addition, we only recently began to prepare our financial reports in accordance with U.S. GAAP. Attempting to comply with these requirements will increase our costs and require additional management resources, and we still may fail to comply.

We only recently began to prepare our financial reports in accordance with U.S. GAAP. We recently hired a new chief financial officer who has no prior experience with our company. Although we are in the process of expanding our accounting and finance staff, we expect to encounter substantial difficulty attracting qualified staff with requisite experience due to the high level of competition for experienced financial professionals. In the short term, we are providing training for our current staff with respect to U.S. GAAP. However, our training may not be effective.

We will face increased legal, accounting, administrative and other costs and expenses as a public company that we did not incur as a private company. Compliance with the U.S. Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as other rules of the Securities and Exchange Commission, or the SEC, the Public Company Accounting Oversight Board and the New York Stock Exchange, will result in significant initial costs to us as well as an ongoing increase in our legal, audit and financial compliance costs, and we still may fail to comply.

If we are unable to remedy the material weakness and significant deficiencies in our internal control over financial reporting, we may be unable to timely and accurately record, process and report financial data or comply with disclosure controls and procedures, internal control over financial reporting and other obligations.

During the course of the preparation and external audit of our consolidated financial statements as of December 31, 2006 and 2007 and for the period from March 7, 2006 to December 13, 2006 (predecessor), the period from November 13, 2006 to December 31, 2006 (successor) and the year ended December 31, 2007 (successor), we and our independent registered public accounting firm identified a number of deficiencies in our internal control over financial reporting, including a number of material weaknesses and significant deficiencies, as defined in the standards established by the U.S. Public Company Accounting Oversight Board.

The material weaknesses identified were: (1) lack of an accounting policies and procedures manual; and (2) a lack of dedicated financial reporting and accounting resources necessary to comply with U.S. GAAP. In

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addition, we and our independent registered public accounting firm identified certain significant deficiencies in our internal control over financial reporting. These significant deficiencies were: (1) lack of a risk assessment process; and (2) related party transactions were not accounted for separately from non-related party transactions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Internal Control Over Financial Reporting.”

Material weaknesses and significant deficiencies in our internal control over financial reporting could result in a material misstatement of our financial statements that will not be prevented or detected. As a result, we have taken action and measures to significantly improve our internal control over financial reporting in order to obtain reasonable assurance regarding the reliability of our financial statements. However, we have not yet implemented all of these actions and measures and tested them. Furthermore, we cannot assure you if or when we will be able to remedy these control deficiencies, that our independent registered public accounting firm will agree with our assessment, or that additional material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. If the control deficiencies we have identified recur, or if we identify additional weaknesses or deficiencies or fail to implement new or improved controls successfully in a timely manner, we may be unable to issue timely and accurate financial reports and investors could lose confidence in the reliability of our financial statements, which in turn could have a material adverse effect on the trading price of our ADSs, or otherwise harm our reputation.

We will be subject to reporting obligations under the U.S. securities laws upon completion of this offering. The SEC, as required by Section 404 of the Sarbanes-Oxley Act, adopted rules requiring each public company to include a management report on such company’s internal controls over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal controls over financial reporting. In addition, an independent registered public accounting firm must attest to and report on the effectiveness of the company’s internal controls over financial reporting. These requirements will first apply to our annual report on Form 20-F for the fiscal year ending on December 31, 2009. Our management may conclude that our internal controls over our financial reporting are not effective. Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may still issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.

We plan to continue to address and remedy these deficiencies in time to meet the deadline for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. If, however, we fail to timely achieve and maintain the adequacy of our internal controls, we may not be able to conclude that we have effective internal controls over financial reporting. Moreover, effective internal controls over financial reporting are necessary for us to produce reliable financial reports and are important to help prevent fraud. Furthermore, we anticipate that we will incur considerable costs and devote significant management time and efforts and other resources to comply with Section 404 of the Sarbanes-Oxley Act.

The grant of employee share options and other share-based compensation will dilute your investment in us and will reduce our reported net income.

As of June 30, 2008, we granted 5,000,000 options to purchase 50,000,000 ordinary shares in the aggregate to our directors, officers and certain other employees and consultants at an exercise price of $0.50 per share. These options can only be exercised if we successfully complete this offering. As this grant price is substantially below the estimated initial offering price, if option holders exercised their options, such exercises will be dilutive to purchasers in this offering. In accordance with the Financial Accounting Standards Board, or FASB, Statement No. 123 (Revised 2004), Share-Based Payment or SFAS No. 123R, we account for compensation costs for all share options including share options granted to our directors and employees using a fair-value based method. The estimated fair value for the 5,000,000 options granted under the share incentive plan aggregates $69.4 million. Such amount will begin to amortize on the closing of this offering as an expense over the vesting period

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for the options, which ends at the end of the 48th month after the closing of this offering. Assuming this offering is completed by the end of September 2008, we expect the amortization will decrease our net profit attributable to holders of our ordinary shares by $21.7 million in the second half of 2008, which will be recognized entirely in the fourth quarter of 2008 and $23.4 million will be recognized in 2009. We have adopted a restricted share compensation plan that provides for the grant of up to 15,000,000 restricted shares in the future, 1,600,000 of which we have agreed to grant to Mr. Jason Li immediately following this offering. See “Management—2008 Restricted Share Compensation Plan”.

Future acquisitions and expansion into the production of wafers may have an adverse effect on our financial condition and results of operations.

We intend to produce wafers in-house and may consider future acquisitions of or investments in existing wafer manufacturers. We are currently in preliminary discussions with our tolling wafer manufacturer, Huasheng, regarding the potential purchase of the business. Such discussions are preliminary and there can be no assurance that any transaction will occur. We will likely acquire technologies, businesses or assets in businesses other than polysilicon production. Future acquisitions could expose us to potential risks, including risks associated with the assimilation of new technologies, businesses and personnel, unforeseen or hidden liabilities, the diversion of management attention and resources from our existing business, and the inability to generate sufficient revenue to offset the costs and expenses of acquisitions. Further, we have no experience in the business of ingot or wafer production. There can be no assurance we will be successful in producing wafers in-house. Any difficulties encountered in the acquisition of, or expansion into, any business other than polysilicon production may have an adverse effect on our financial condition and results of operations.

Risks Relating to Our Industry

Prices for polysilicon and wafers are expected to decline in the next few years, which is reflected in the pricing of our supply contracts, and could adversely affect our gross margin.

According to Solarbuzz’s Balanced Energy Forecast Scenario, global average polysilicon capacity is projected to grow from 63,000 MT per year in 2008 to 234,000 MT per year by 2012. If current capacity expansion plans are met, the polysilicon production industry may experience a period of excess capacity. During a period of excess capacity, polysilicon producers will experience pricing pressures and may be forced to reduce polysilicon prices until such time, if ever, as demand increases to such extent to offset such overcapacity. In addition, our polysilicon supply agreements provide for substantial reductions in the prices we will be paid over the life of the agreements. If the price of polysilicon decreases faster than we are able to reduce our manufacturing costs, our operating margins will be reduced and our financial condition and results of operations may be adversely affected.

According to Solarbuzz, wafer prices on a per-watt basis are expected to decline in the next few years. Our wafer supply agreements provide for substantial reductions in the prices we will be paid over the life of these agreements. If we are unable to lower our costs in line with the price decline, our gross margins would be adversely affected. In addition, if polysilicon availability increases and prices decline faster than we are able to reduce our manufacturing costs, wafer manufacturers may be more inclined to produce wafers for their own sales and their willingness to enter into tolling agreements may decrease.

Our future growth and profitability depend on the demand for solar power and semiconductor products and the development of solar power and semiconductor technologies.

The solar industry is at a relatively early stage of development, and the extent of acceptance of solar power products is uncertain. Market data on the solar power industry are not as readily available as those for the electronics industry and other more established industries for which trends can be assessed more reliably from data gathered over a longer period of time. In addition, demand for solar power may not develop or may develop

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to a lesser extent than we anticipate. Many factors may affect the viability of widespread adoption of solar power technology and demand for solar power products, including:

• decreases in government subsidies and incentives to support the development of the solar power industry;

• the relative cost-effectiveness, performance and reliability of solar power products compared to conventional and other renewable energy sources and products;

• success of other alternative energy sources, such as wind power, hydroelectric power and biofuel;

• fluctuations in economic and market conditions that affect the viability of conventional and other renewable energy sources, such as increases or decreases in the prices of oil and other fossil fuels;

• capital expenditures by end users of solar power products, which tend to decrease when the economy slows down; and

• deregulation or other regulatory actions affecting the electric power industry and broader energy industry.

The electronics industry has experienced substantial and sustained growth globally over the last 20 years. In the PRC, demand for semiconductor products has been a more recent phenomenon and growth may not be sustained. Moreover, semiconductor technology development may not lead to greater demand for silicon-based products. In a mature industry it may be more difficult for us to break into the polysilicon market if demand growth is not sustained.

In the event demand for solar and semiconductor products does not expand as we expect or solar power or semiconductor technologies do not develop in a manner consistent with continued demand for polysilicon, our future growth and profitability will be adversely affected.

The reduction or elimination of government subsidies and economic incentives could cause demand for our products and our revenue to decline.

We believe that the near-term growth of the market for on-grid applications of solar energy depends in large part on the availability and size of government subsidies and economic incentives. The reduction or elimination of government subsidies and economic incentives may hinder the growth of this market or result in increased price competition for solar energy products, which could cause our revenue to decline.

Today, when upfront system costs are factored into cost per kilowatt hour, the cost of solar power substantially exceeds the cost of power furnished by the electric utility grid in many locations. As a result, federal, state and local governmental bodies in many countries, such as Germany, Spain, Italy, the United States, Japan and China, have provided subsidies and economic incentives in the form of feed-in tariffs, rebates, tax credits and other incentives to distributors, system integrators and manufacturers of solar power products to promote the use of solar energy in on-grid applications and to reduce dependency on other forms of energy. These government subsidies and economic incentives could be reduced or eliminated altogether. For example, Germany has been a strong supporter of solar power products and systems. Utilities in Germany are generally obliged to purchase electricity generated from grid-connected solar power installations at defined feed-in tariff rates, which decline over time according to a predetermined schedule. Any political or market changes in Germany could result in significant reductions or the elimination of subsidies or economic incentives, such as a more accelerated reduction of feed-in tariffs than as planned according to the current schedule. Reductions in, or elimination of, government subsidies and economic incentives for on-grid solar energy applications before the solar power industry reaches the economies of scale necessary for solar power to become cost-effective in a non-subsidized market place could result in decreased demand for solar generation products and, as a result, for polysilicon, which could cause our revenue to decline.

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Existing regulations and policies and changes to these regulations and policies may present technical, regulatory and economic barriers to the purchase and use of solar power products, which may significantly reduce demand for our products.

The market for electricity generation products is heavily influenced by government regulations and policies concerning the electric utility industry, as well as policies adopted by electric utilities. These regulations and policies often relate to electricity pricing and technical interconnection of customer-owned electricity generation. In a number of countries, these regulations and policies are being modified and may continue to be modified. Customer purchases of, or further investment in the research and development of, alternative energy sources, including solar power technology, could be deterred by these regulations and policies, which could result in a significant reduction in the potential demand for our products. For example, without a regulatory mandated exception for solar power systems, utility customers are often charged interconnection or standby fees for putting distributed power generation on the electric utility grid. These fees could increase the cost to the end customers of using the solar power products and make them less desirable, thereby harming our business, prospects, results of operations and financial condition.

We anticipate that our customers’ products that use polysilicon will be subject to oversight and regulation in accordance with national and local regulations relating to building codes, safety, environmental protection, utility interconnection and metering and related matters. New government regulations or utility policies pertaining to solar power products may result in significant additional expenses to our customers and, as a result, could cause a significant reduction in demand for our products.

Alternative technologies in cell manufacturing may replace the need to use polysilicon or wafers such as the wafers we sell and intend to manufacture in solar applications.

The vast majority of silicon-based solar cell manufacturers uses chunk or granular polysilicon. However, alternative technologies are being developed. One such technology, thin-film cell production, uses little to no amounts of silicon in the production of solar cells. Thin-film solar cells are currently less costly to produce than silicon-based solar cells. Significant expansion of thin-film solar cell production has been announced which may put pressure on the entire value chain of silicon-based solar cell production. This expansion may in turn restrict the market for silicon-based solar cells which would decrease the demand for our polysilicon and wafers. The further development of thin-film or other alternative technologies may have a significant impact on the solar industry by reducing the necessity for wafers made from polysilicon. If the demand for polysilicon or wafers is negatively affected by increased demand for and improvements to alternative technologies, our revenue and results of operations could be negatively affected.

Further development in the fluidized bed reactor, or FBR, method, upgraded metallurgical silicon or other alternative polysilicon production technologies or other changes in the solar power industry could render our production process too costly or obsolete, which could reduce our market share and cause our sales and profits to decline.

Although the vast majority of the polysilicon produced in the world utilizes the Siemens process, several alternative production processes that may have significantly lower production costs have been developed. A clear disadvantage of the Siemens process is the large volume of electricity required. MEMC, REC and Wacker are three competitors that operate or are constructing facilities that use the FBR method for producing polysilicon. Tokuyama has developed a polysilicon technology called the “Vapor-to-Liquid Deposition” process. Companies such as Becancour, Dow Corning, Elkem and others are establishing facilities for the production of upgraded metallurgical silicon.

Further developments in competing polysilicon production technologies may result in lower manufacturing costs or higher product performance than those achieved from Siemens processes, including the one we employ. We will need to invest significant financial resources in research and development to expand our market position,

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keep pace with technological advances in polysilicon production and effectively compete in the future. Failure to further refine our technology could make our production process too costly or obsolete, which could reduce our margins and market share, cause our revenue to decline and adversely affect our results of operations.

Risks Relating to Doing Business in China

If we were required to obtain the prior approval of the China Ministry of Commerce, or MOFCOM, for or in connection with our restructuring, or of the China Securities Regulatory Commission, or the CSRC, for or in connection with this offering and the listing and trading of our ADSs on the New York Stock Exchange, our failure to do so could have a material adverse effect on our business, operating results, reputation and trading price of our ADSs, and may also create uncertainties for this offering.

On August 8, 2006, six PRC regulatory agencies, including the CSRC, promulgated a regulation, or Regulation No. 10, that became effective on September 8, 2006. This regulation has provisions that purport to require an offshore special purpose vehicle, or SPV, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals to obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings. However, the application of this PRC regulation remains unclear and no consensus currently exists among the leading PRC law firms regarding the scope and applicability of the CSRC approval requirement.

JZPTD was originally controlled by Mr. Zhu Gongshan through two PRC domestic entities which were direct equity holders of JZPTD. In December 2006, GCL HK acquired its initial 64% equity interest in JZPTD from these two PRC domestic entities, or the GCL HK acquisition. At the time of the GCL HK acquisition, GCL HK was a subsidiary of Happy Genius, which was controlled by Mr. Zhang Songyi. In September 2007, after the reorganization discussed in “Corporate Structure — Ownership of Our Business”, Mr. Zhu Gongshan, through Boulina, purchased 100% of the total outstanding shares of Happy Genius from entities controlled by Mr. Zhang Songyi, or the Boulina acquisition. Mr. Zhang and Mr. Zhu had no affiliated relationship or entrustment arrangement for the GCL HK acquisition and the Boulina acquisition at the time of any of these two acquisitions.

Our PRC counsel, Grandall Legal Group, has advised us, based on their understanding of the current PRC laws, regulations and the procedures announced on September 21, 2006, and subject to any future rules, regulations, requirements, or explanations to the contrary promulgated by competent PRC governmental authorities, that:

• the CSRC approval requirement under Regulation No. 10 described above is only applicable to an offshore special purpose vehicle which is defined as an offshore entity formed for listing purposes and controlled directly or indirectly by PRC domestic companies or individuals. Neither Mr. Zhu Gongshang nor Mr. Zhang Songyi is a PRC domestic natural person under Regulation No. 10. Mr. Zhu Gongshan, who currently controls our company, was not a PRC domestic natural person at the time of, or subsequent to, the GCL HK acquisition or the Boulina acquisition, and has not been a PRC domestic natural person since the GCL HK acquisition, as Mr. Zhu Gongshan has maintained non-immigrant permanent residency in the Philippines since 2002 and residency in Hong Kong since 2004, and deregistered his PRC residency in 2005. Mr. Zhang Songyi, a director and our second largest shareholder, was not a PRC domestic natural person at the time of, or subsequent to, the GCL HK acquisition or the Boulina acquisition, as Mr. Zhang Songyi has always been a permanent resident of Hong Kong. Our Company is not an offshore special purpose vehicle as defined in Regulation No. 10 since our Company is not directly or indirectly controlled by any PRC domestic enterprise or individuals. Therefore, we are not required to submit applications to the CSRC for its approval for the listing and subsequent trading of our ADSs on the New York Stock Exchange.

• Article 11 of Regulation No. 10 requires domestic enterprises or domestic natural persons to submit application to the MOFCOM for approval when they, in the name of the offshore companies legally

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established or controlled by them, merge or acquire domestic companies having a connected relationship with them. The GCL HK acquisition did not require MOFCOM approval since no affiliated relationship existed between the GCL HK and the selling equity holders of JZPTD. Regulation No. 10 was not applicable to the Boulina acquisition since the Boulina acquisition did not involve any PRC domestic enterprise and was not subject to any PRC laws on cross border transactions. Since there was no affiliated relationship or arrangement between Mr. Zhu Gongshan and Mr. Zhang Songyi for the GCL HK acquisition and the Boulina acquisition, Mr. Zhu Gongshan and Mr. Zhang Songyi have not circumvented such MOFCOM approval requirement under Regulation No. 10, and the GCL HK acquisition and the Boulina acquisition, taken as a whole, will not be regarded as a circumvention of relevant approval requirement under Regulation No. 10. Therefore, the MOFCOM approval requirement under Regulation No. 10 is not applicable to the GCL HK acquisition, the Boulina acquisition or the combination of these two acquisitions, and we are not required to submit an application to the CSRC to obtain its approval.

A copy of Grandall Legal Group’s legal opinion regarding this new PRC regulation is being filed as an exhibit to our registration statement on Form F-1, which is available at the website of the SEC at www.sec.gov.

The application of Regulation No. 10 is unclear in certain respects, including the definition of a PRC domestic natural person and what constitutes a circumvention of its approval requirements. If the MOFCOM or the CSRC subsequently determines that MOFCOM approval of the transfer of JZPTD or CSRC approval was required for this offering, we may face regulatory actions or other sanctions from the MOFCOM or the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from this offering into the PRC, restrict or prohibit payment or remittance of dividends by JZPTD, or take other actions that may have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs. The CSRC or other PRC regulatory agencies also may take actions that require us, or make it advisable for us, to halt this offering before settlement and delivery of the ADSs offered hereby. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery may not occur.

Also, if the CSRC requires in the future that we obtain its approval for any part of our reorganization, we may be unable to obtain a waiver of the CSRC approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect on the trading price of our ADSs.

Recent regulations relating to offshore investment activities by PRC residents may limit our ability to acquire PRC companies and could adversely affect our business, financial condition and results of operations.

In October 2005, the SAFE promulgated a regulation entitled “Circular on several issues concerning foreign exchange regulation of corporate finance and roundtrip investments by PRC residents through special purpose companies incorporated overseas,” or Circular No. 75. Circular No. 75 states that PRC residents, including both legal persons and natural persons, must register with the relevant local SAFE branches before establishing or controlling any company outside of China with assets or equity interests in PRC companies for the purpose of capital financing. Any such company is referred to as an “offshore special purpose company”. Although we believe that Circular No. 75 does not apply to the sale of the interest in JZPTD to Happy Genius in December 2006 because Happy Genius was set up and owned by Mr. Zhang Songyi, who was a permanent Hong Kong resident at the time of sale and has not been a PRC resident since then, we cannot assure you that SAFE will not interpret Circular No. 75 to apply to the transactions through which our shareholders acquired their interests and conclude that under Circular No. 75 one or more of our existing shareholders should be treated as PRC domestic residents required to register with SAFE. Such PRC residents must also file amendments to their registrations if their offshore companies are engaged in material events involving capital variation, such as changes in share capital, share transfers, mergers and acquisitions, spin-off transactions, long-term equity or debt investments or

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creation of any security interest over any assets located in China or any other material change in share capital. Under Circular No. 75, PRC domestic residents are allowed to pay profits to offshore special purpose companies in the form of dividends, to transfer shares in liquidation of a company, to decrease capital and take similar actions only after effecting registration pursuant to the registration procedures set forth in such regulation. Failure to comply with the registration procedures may result in restrictions being imposed on the foreign exchange activities of the relevant PRC entity, including the payment of dividends and other distributions to its offshore parent company, as well as restrictions on the capital inflow from the offshore entity to the PRC entity. We understand that any future failure by any of our shareholders who is a PRC resident, or controlled by a PRC resident, to comply with relevant requirements under Circular No.75 could subject our company to fines or sanctions imposed by the PRC government, including restrictions on JZPTD’s ability to pay dividends or make distributions to us and our ability to increase our investment in or to provide loans to JZPTD. According to the Regulation on the Foreign Exchange System of the PRC, as modified on August 5, 2008, or the Foreign Exchange Regulation, SAFE has been authorized to check the use of funds remitted from overseas.

As it is uncertain how SAFE will interpret or implement the Foreign Exchange Regulation and its Circular No. 75, we cannot predict how Circular No. 75 and other SAFE circulars will affect our business operations or future strategies. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign currency-denominated borrowings, which may adversely affect our business and prospects. See “PRC Government Regulation — Circular No. 75.”

Adverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our products and materially and adversely affect our competitive position.

Substantially all of our business operations are conducted in China and we expect most of our sales will be made in China. Accordingly, we expect our business, financial condition, results of operations and prospects to be affected significantly by economic, political and legal developments in China. The Chinese economy differs from the economies of most developed countries in many respects, including the fact that it:

• has a high level of government involvement;

• is in the early stages of development of a market-oriented economy;

• has tight government foreign exchange controls; and

• has demonstrated inefficient allocation of resources.

While the Chinese economy has grown significantly in the past 20 years, the growth has been uneven, both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. The PRC government has implemented measures, including recent interest rate increases, to control the pace of economic growth.

The Chinese economy has been transitioning from a planned economy to a more market-oriented economy. Although in recent years the PRC government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of sound corporate governance in business enterprises, a substantial portion of the productive assets in China are still owned by the PRC government. The continued control of these assets and other aspects of the national economy by the PRC government could materially and adversely affect our business. The PRC government also exercises significant control over Chinese economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Efforts by the PRC government to slow the pace of growth of the Chinese

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economy could result in decreased capital expenditure by solar energy users and semiconductor manufacturers, which in turn could reduce demand for our polysilicon and wafers.

Any adverse change in the economic conditions or government policies in China could have a material adverse effect on the overall economic growth and the level of renewable energy investments and expenditures in China, which in turn could lead to a reduction in demand for our polysilicon and wafers and consequently have a material adverse effect on our business.

Uncertainties with respect to the Chinese legal system could have a material adverse effect on us.

We conduct substantially all of our manufacturing operations through our wholly-owned subsidiary, JZPTD, a limited liability company established in China. JZPTD is generally subject to laws and regulations applicable to foreign investment in China. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties. We cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, the preemption of local regulations by national laws, or the overturn of local government’s decisions by the national government. These uncertainties may limit legal protections available to us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

PRC regulation of direct investment and loans by offshore holding companies to PRC entities may delay or limit us from using the proceeds of this offering to make additional capital contributions or loans to JZPTD.

Any capital contributions or loans that we, as an offshore entity, make to JZPTD, including from the proceeds of this offering, are subject to PRC regulations. For example, none of our loans to JZPTD can exceed the difference between the total amount of investment in JZPTD approved under relevant PRC laws and the registered capital of JZPTD, and the loans must be registered with the local branch of the SAFE. In addition, our capital contributions to JZPTD must be approved by the PRC Ministry of Commerce and the NDRC or their respective local counterparts. We cannot assure you that we will be able to obtain these approvals on a timely basis, or at all. If we fail to obtain such approvals, our ability to make equity contributions or provide loans to JZPTD or to fund its operations may be negatively affected, which could adversely affect JZPTD’s liquidity and its ability to fund its working capital and expansion projects and meet its obligations and commitments.

An economic slowdown in China may adversely affect our financial condition and results of operations, as well as our future prospects.

We conduct most of our business and generate most of our revenue in China. As a result, economic conditions in China have a significant effect on our financial condition and results of operations, as well as our future prospects. Since 1978, China has been one of the world’s fastest growing economies in terms of GDP growth. We cannot assure you, however, that such growth will be sustained in the future. Moreover, the recent slowdown in the economies of the United States, the European Union and certain Asian countries may adversely affect economic growth in China. An economic downturn in China could adversely affect our financial condition and results of operations, as well as our future prospects.

We will rely on dividends paid by our subsidiary for our cash needs.

We will rely on dividends paid by our wholly-owned Chinese subsidiary, JZPTD, for our cash needs, including the funds necessary to pay dividends and other cash distributions, if any, to our shareholders, to service

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any debt we may incur outside of the PRC and to pay our offshore operating expenses. The payment of dividends by entities organized in China is subject to limitations. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. JZPTD is also required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registered capital. These reserves are not distributable as cash dividends. JZPTD is also required to allocate a portion of its after-tax profit, as determined by its board of directors, to its staff welfare and bonus funds, which may not be distributed to equity owners. In addition, if JZPTD incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

Pursuant to the new EIT Law and its Implementing Regulation, which became effective on January 1, 2008, dividends payable by a foreign-invested enterprise to its foreign investors are subject to a 10% withholding tax if the foreign investors are considered as non-resident enterprises without any establishment or place within China or if the dividends payable have no connection with the establishment or place of the foreign investors within China, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. As JZPTD is owned directly by our Hong Kong subsidiary, which is a non-resident enterprise, and as Hong Kong has an arrangement with the PRC under which the tax rate from dividend income is 5%, dividends paid by JZPTD would be subject to a 5% withholding tax.

Fluctuation in the value of the Renminbi may have a material adverse effect on your investment.

The change in value of the Renminbi against the U.S. dollar and other currencies is affected by, among other things, changes in China’s political and economic conditions. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. dollar. Under the new policy, the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximately 17.1% appreciation of Renminbi against the U.S. dollar between July 21, 2005 and June 30, 2008. While the international reaction to the Renminbi revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in a further and more significant appreciation of the Renminbi against the U.S. dollar. Since substantially all of our costs and expenses are denominated in Renminbi, any appreciation or revaluation of the Renminbi could increase our costs in U.S. dollar terms. For example, to the extent that we need to convert U.S. dollars we receive from this offering into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we receive from the conversion. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.

In addition, an appreciation in the value of the Renminbi against foreign currencies could make our polysilicon more expensive for our international customers as well as reduce the competitiveness of our PRC customers in the international market, thus potentially leading to a reduction in our sales and profitability. Furthermore, many of our competitors are foreign companies that could benefit from such a currency fluctuation, making it more difficult for us to compete with these companies.

You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based on United States or other foreign laws against us, our management or the experts named in the prospectus.

We conduct all of our operations in China and substantially all of our assets are located in China. In addition, some of our directors and executive officers reside within China. As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon some of our directors and senior executive officers, including with respect to matters arising under U.S. federal securities laws or applicable U.S. state securities laws. Moreover, our PRC legal counsel, Grandall Legal Group, has advised us

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that the PRC does not have treaties with the United States or many other countries providing for the reciprocal recognition and enforcement of judgment of courts.

Our PRC legal counsel, Grandall Legal Group, has also advised us that PRC courts are unlikely to (a) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated on the civil liability provisions of the securities laws of the United States or (b) entertain original actions brought against us or our directors or officers predicated upon the securities laws of the United States as there is no treaty between United States and the PRC and the PRC courts will only recognize and enforce foreign judgments in accordance with PRC Civil Procedure Law.

An outbreak of the highly pathogenic avian influenza caused by the H5N1 virus, or avian flu or bird flu, Severe Acute Respiratory Syndrome, or SARS, or other contagious disease may have an adverse effect on the economies of certain Asian countries and may adversely affect our results of operations.

During 2004, large parts of Asia experienced unprecedented outbreaks of avian flu which, according to a report of the World Health Organization, or WHO, in 2004, placed the world at risk of an influenza pandemic with high mortality and social and economic disruption. Currently, no fully effective avian flu vaccines have been developed and there is evidence that the H5N1 virus is evolving so there can be no assurance that an effective vaccine can be discovered in time to protect against a potential avian flu pandemic. In the first half of 2003, certain countries in Asia experienced an outbreak of SARS, a highly contagious form of atypical pneumonia, which seriously interrupted economic activities and caused the demand for goods to plummet in the affected regions. An outbreak of avian flu, SARS or other contagious disease or the measures taken by the governments of affected countries against such potential outbreaks, could seriously interrupt our production, which could have a material adverse effect on our results of operations.

Governmental control of currency conversion may affect the value of your investment.

The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We have received substantially all our revenue in Renminbi. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiary to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency- denominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade related transactions, can be made in foreign currencies without prior approval from the SAFE by complying with certain procedural requirements. However, approval from the SAFE or its local branch is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the purchase of equipment from foreign suppliers. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to expand our production facilities as planned or pay in dividends in foreign currencies to our shareholders, including holders of our ADSs.

Risks Relating to Our ADSs and This Offering

There has been no public market for our ADSs prior to this offering, and you may not be able to resell our ADSs at or above the price you paid, or at all.

Prior to this initial public offering, there has been no public market for our ADSs. Our ADSs have been approved for listing on the New York Stock Exchange. If an active trading market for our ADSs does not develop after this offering, the market price and liquidity of our ADSs will be materially and adversely affected. The initial public offering price for our ADSs is determined by negotiations between us and the underwriters and may bear no relationship to the market price for our ADSs after this initial public offering. We cannot assure you

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that an active trading market for our ADSs will develop or that the market price of our ADSs will not decline below the initial public offering price.

The market price for our ADSs may be volatile.

The market price for our ADSs is likely to be highly volatile and subject to wide fluctuations in response to factors including the following:

• announcements of technological or competitive developments;

• regulatory developments in our target markets affecting us, our customers or our competitors;

• actual or anticipated fluctuations in our quarterly operating results;

• changes in financial estimates by securities research analysts;

• changes in the economic performance or market valuations of other solar power technology companies;

• addition or departure of our executive officers and key research personnel;

• announcements of studies and reports relating to solar or electronics industry applications that do not require polysilicon;

• announcements regarding patent litigation or the issuance of patents to us or our competitors;

• fluctuations in the exchange rates between the U.S. dollar, the Euro and Renminbi;

• release or expiry of lock-up or other transfer restrictions on our outstanding ordinary shares or ADSs; and

• sales or perceived actual or potential sales of additional ordinary shares or ADSs.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also have a material adverse effect on the market price of our ADSs.

Because the initial public offering price is substantially higher than our net tangible book value per ADS, you will incur immediate and substantial dilution.

If you purchase ADSs in this offering, you will pay more for your ADSs than the amount paid by our existing shareholders for their ordinary shares on a per share basis. As a result, you will experience immediate and substantial dilution of approximately $             per ADS (assuming no exercise by the underwriters of their over-allotment option), representing the difference between our net tangible book value per ADS as of June 30, 2008, after giving effect to this offering and the assumed initial public offering price of $             per ADS, the midpoint of the estimated range of the initial public offering price. See “Dilution.” In addition, you may experience further dilution to the extent that our ordinary shares are issued upon the exercise of share options and upon conversion of the 2008 Convertible Bonds.

We may need additional capital and may sell additional ADSs or other equity securities or incur indebtedness, which could result in additional dilution to our shareholders or increase our debt service obligations.

We will require borrowings of significant amounts to refinance Renminbi denominated bank debt, the 2008 Convertible Bonds, and to fund our Xuzhou Phase III, Xilinhot and any additional facility expansions as well as our wafer production facilities. We may, in addition, require additional cash resources due to changes in business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If these resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in additional dilution to

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our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

Substantial future sales or perceived sales of our ADSs in the public market could cause the price of our ADSs to decline.

Sales of our ordinary shares or ADSs in the public market after this offering, or the perception that these sales could occur, could cause the market price of our ADSs to decline. Upon completion of this offering, we will have              ordinary shares outstanding, including              ordinary shares represented by              ADSs. All ADSs sold in this offering will be freely transferable without restriction or additional registration under the Securities Act of 1933, as amended, or the Securities Act. The remaining ordinary shares outstanding after this offering will be available for sale upon the expiration of any applicable 180-day lock-up period beginning from the date of this prospectus, subject to volume and other restrictions as applicable under Rule 144 and Rule 701 under the Securities Act. In addition, although persons who will receive our 2008 Convertible Bonds concurrently with the closing of this offering have agreed, subject to certain exceptions, to refrain from offering for sale or selling, directly or indirectly, 2008 Convertible Bonds or entering into certain hedging transactions for 130 days after the date of this prospectus, the permitted sales and hedging under such lock-up agreements and sales or hedging after such period could cause the market price of our ADSs to decline. Any or all of these shares may be released prior to expiration of these lock-up periods at the discretion of the representatives of the underwriters. See “Shares Eligible for Future Sale.” We are also obligated to file a registration statement for resales of ADSs issued on conversion of our 2008 Convertible Bonds within 60 days of the closing of this offering. The registration statement will allow such sales only after six months from the closing of this offering. We intend to ask the representatives of the underwriters for their agreement to file such registration statement as an exception to the lock-up. The representatives of the underwriters are not required to grant this exception. To the extent prior to the expiration of the lock-up periods, ordinary shares, ADSs or 2008 Convertible Bonds are sold into the market or hedging transactions are conducted by the holders of the 2008 Convertible Bonds, the market price of our ADSs could decline.

As a holder of our ADSs, you may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise your right to vote.

As a holder of ADSs, you will not be treated as one of our shareholders. Instead, the depositary will be treated as the holder of the shares underlying your ADSs. However, you may exercise some of the shareholders’ rights through the depositary, and you will have the right to withdraw the shares underlying your ADSs from the deposit facility as described in “Description of American Depositary Shares—Deposit, Withdrawal and Cancellation” and “Your Right to Receive the Shares Underlying Your ADRs.”

Except as described in this prospectus and provided in the deposit agreement, holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSs may instruct the depositary to exercise the voting rights attaching to the shares represented by the ADSs. If no instructions are received by the depositary on or before a date established by the depositary, the depositary shall deem the holders to have instructed it to give a discretionary proxy to a person designated by us to exercise their voting rights. You may not receive voting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote.

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The depositary of our ADSs will, except in limited circumstances, grant to us a discretionary proxy to vote the ordinary shares underlying your ADSs if you do not vote at shareholders’ meetings, which could adversely affect your interests and the ability of our shareholders as a group to influence the management of our company.

Under the deposit agreement for the ADSs, the depositary will give us a discretionary proxy to vote our ordinary shares underlying your ADSs at shareholders’ meetings if you do not vote, unless:

• we have failed to timely provide the depositary with our notice of meeting and related voting materials;

• we have instructed the depositary that we do not wish a discretionary proxy to be given;

• we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting;

• a matter to be voted on at the meeting would have a material adverse impact on shareholders; or

• voting at the meeting is made on a show of hands.

The effect of this discretionary proxy is that you cannot prevent our ordinary shares underlying your ADSs from being voted, absent the situations described above, and it may make it more difficult for shareholders to influence the management of our company. Holders of our ordinary shares are not subject to this discretionary proxy.

As a holder of our ADSs, you may not be able to participate in rights offerings that are made available to our shareholders, and you may not receive cash dividends if it is impractical to make them available to you.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement, the depositary will not make rights available to you unless the distribution to ADS holders of both the rights and any related securities are either registered under the Securities Act, or exempted from registration under the Securities Act with respect to all holders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, you, as a holder of our ADSs, may be unable to participate in our rights offerings and may experience dilution in your holdings.

In addition, the depositary of our ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, the depositary may, at its discretion, decide that it is inequitable or impractical to make a distribution available to any holders of ADSs. For example, the depositary may determine that it is not practicable to distribute certain property through the mail, or that the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may decide not to distribute such property and you will not receive such distribution.

You may be subject to limitations on transfer of your ADSs.

Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

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We are a Cayman Islands company and, because shareholders of Cayman Islands companies have more limited rights and judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than that under United States law, our shareholders may have less protection for their shareholder rights than they would under United States law.

Unlike many jurisdictions in the United States, Cayman Islands law does not specifically provide for shareholder appraisal rights on a merger or consolidation of a company. This may make it more difficult for you to assess the value of any consideration you may receive in a merger or consolidation or to require that the offeror give you additional consideration if you believe the consideration offered is insufficient.

Shareholders of Cayman Islands exempted companies such as ourselves have no general rights under Cayman Islands law to inspect corporate records (save for the register of mortgages) and accounts or to obtain copies of lists of shareholders of these companies. Save for the register of mortgages, our directors have discretion to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

Our corporate affairs are governed by our amended and restated memorandum and articles of association, the Cayman Islands Companies Law and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law (2007 Revision) are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. In addition, some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands.

There is uncertainty as to whether the Cayman Islands courts will:

• recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or

• entertain original actions brought against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the Cayman Islands will generally recognize as a valid judgment a final and conclusive judgment in person obtained in the federal or state courts in the United States under which a sum of money is payable (other than a sum of money payable in respect of generally, taxes or other charges of a like nature or in respect of a fine or other penalty) and would give a judgment based thereon provided that (i) such courts were competent to hear the action in accordance with private international law principles as applied in the Cayman Islands; (ii) such courts did not contravene the rules of natural justice of the Cayman Islands; (iii) such judgment was not obtained by fraud; (iv) the enforcement of the judgment would not be contrary to the public policy of the Cayman Islands; and (v) is not bound on an error in Cayman Islands law. You should also read “Description of Share Capital— Differences in Corporate Law” for some of the differences between the corporate and securities laws in the Cayman Islands and the United States.

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As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a U.S. company.

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FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts are forward looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.

The words “anticipate,” “believe,” “could,” “estimate,” “intend,” “may,” “plan,” “seek,” “would” and similar expressions, as they relate to us, are intended to identify a number of these forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategies and financial needs. These forward-looking statements includes, without limitation:

• our business and operating strategies;

• our expansion and capital expenditure plans;

• our operations and business prospects;

• our planned use of proceeds;

• our financial condition and results of operations;

• the industry regulatory environment as well as the industry outlook generally; and

• future PRC or global developments in the polysilicon manufacturing and solar and electronics industries.

You should read this prospectus thoroughly and the documents that we refer to in this prospectus with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements. Other sections of this prospectus include additional factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

This prospectus also contains data related to the polysilicon and wafer markets in several countries, including China. This market data, including data from Solarbuzz and iSuppli Corporation, or iSuppli, includes projections that are based on a number of assumptions. Solarbuzz is an independent solar energy research company headquartered in San Francisco, California, U.S.A. iSuppli is an electronics research firm headquartered in El Segundo, California, U.S.A. The Solarbuzz data has been derived from MARKETBUZZ 2007 and MARKETBUZZ 2008. The forecast information is taken from Solarbuzz’s Balanced Energy Scenario, which assumes end-market demand through the period is based on existing and currently known emerging PV incentive programs. The Solarbuzz report includes two more aggressive growth scenarios which have not been discussed in this prospectus. The iSuppli data has been derived from the iSuppli Global IDM Market Tracker—H1 2008 and Regional Application Market Forecast Tool (AMFT)^™ 2008-Q2 2008. The polysilicon and wafer markets may not grow at the rates projected by the market data, or at all. The failure of such markets to grow at the projected rates may materially and adversely affect our business and the market price of our ADSs. In addition, the rapidly changing nature of the polysilicon and wafer markets subjects any projections or estimates relating to the growth prospects or future condition of such markets to significant uncertainties. If any one or more of the assumptions underlying the market data proves to be incorrect, actual results may differ from the projections based on these assumptions. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus might not occur in the way we expect, or at all. You should not place undue reliance on these forward-looking statements.

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Although we will become a reporting company after this offering and have ongoing disclosure obligations under U.S. federal securities laws, we do not intend to update or otherwise revise the forward-looking statements in this prospectus, whether as a result of new information, future events or otherwise.

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USE OF PROCEEDS

We estimate we will receive net proceeds from this offering of approximately $            million, after deducting the underwriting discounts and offering expenses payable by us in this offering. These estimates are based upon an assumed initial offering price of $            per ADS, the midpoint of the range shown on the cover page of this prospectus.

We intend to use our net proceeds from this offering for the following purposes:

• approximately $150.0 million for contribution to JZPTD;

• $20.0 million to fully redeem the Tranche A Floating Rate Secured Redeemable Bonds due 2009 issued by us in September 2007;

• $240.6 million to acquire Sun Wave and Greatest Joy in connection with our acquisition of 36% of JZPTD from our affiliates;

• approximately $15.3 million to repay the principal of and fees relating to a promissory note issued by us to Happy Genius, our controlling shareholder in June 2008; and

• the remaining amount for general corporate purposes, including potential acquisitions or investments in downstream expansion such as wafer operations. We are currently in preliminary discussions with our tolling wafer manufacturer, Huasheng, with respect to a potential acquisition of such manufacturer.

The floating rate bonds were issued to fund equity contributions to JZPTD to fund a portion of the cost of constructing our Xuzhou Phase II facility and to pay the balance of the purchase price of our initial 64% equity interest in JZPTD. The floating rate bonds bear interest at three month LIBOR plus 3.0% per annum.

Proceeds in the amount of approximately $150.0 million contributed to JZPTD will be used to fund the capital expenditures related to our polysilicon production facilities expansion and our in-house wafer production facilities.

The $240.6 million to be used as part of the consideration to acquire the remaining 36% of JZPTD, which will be payable to entities affiliated with Mr. Zhu Gongshan and Moonchu, will be used partially to redeem the exchangeable bonds issued by Happy Genius.

The foregoing represents our current intentions to use and allocate the net proceeds of this offering based upon our present plans and business conditions. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus.

To the extent that the net proceeds of this offering are not immediately applied for the above purposes, we intend to deposit the proceeds into interest bearing bank accounts or to invest in short-term investment grade debt securities.

A $1.00 increase (decrease) in the initial public offering price would increase (decrease) the net proceeds of this offering by $            million, after deducting underwriting discounts and commissions and the estimated offering expenses payable by us.

We will not receive any of the proceeds from the sale of ADSs by the selling shareholders. See “Principal and Selling Shareholders.”

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DIVIDEND POLICY

We have never declared or paid any dividends on our ordinary shares. We have no present plan to declare and pay any dividends on our shares or ADSs in the near future. We currently intend to retain our available funds and any future earnings to operate and expand our business.

We are a holding company incorporated in the Cayman Islands. We rely on dividends from JZPTD, our subsidiary in China, for our cash needs. Current PRC regulations restrict the ability of our subsidiary to pay dividends to us. See “Risk Factors—Risks Relating to Doing Business in China—We will rely on dividends paid by our subsidiary for our cash needs.”

Subject to our Memorandum and Articles of Association and the applicable laws, our board of directors has complete discretion as to whether to recommend a distribution of dividends to shareholders, which distribution is then subject to the approval of our shareholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our board of directors may deem relevant. If we pay dividends, we will pay our ADS holders to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See “Description of American Depositary Shares.” Cash dividends on our ADSs and ordinary shares, if any, will be paid in U.S. dollars.

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CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2008. Our capitalization is presented:

• on an actual basis;

• on a pro forma basis to give effect to (i) the automatic conversion of our outstanding convertible redeemable preferred shares into 16,667,000 of our ordinary shares upon completion of this offering and (ii) the automatic redemption of our Tranche A Floating Rate Secured Redeemable Bonds due 2009 and the conversion of all of our outstanding Tranche B Floating Rate Secured Convertible Bonds due 2009 into 29,850,000 of our ordinary shares, upon completion of this offering;

• on an as adjusted basis to give effect to (i) the events listed in the preceding paragraph, (ii) the issuance of 270,322,853 ordinary shares in the form of ADSs by us to entities affiliated with Mr. Zhu Gongshan and Moonchu in connection with our acquisition of the remaining 36% of JZPTD assuming an initial public offering price of $             per ADS, the midpoint of the estimated range of the initial public offering price and (iii) the issuance and sale of $446.9 million principal amount of the 2008 Convertible Bonds to entities affiliated with Mr. Zhu Gongshan and Moonchu in connection with our acquisition of the remaining 36% of JZPTD which will be delivered to the holders of the exchangeable bonds issued by Happy Genius and (iv) the acquisition of 36% of JZPTD; and

• on an as further adjusted basis to give effect to (i) the events listed in the preceding paragraphs and (ii) the issuance and sale of              ordinary shares in the form of ADSs by us in this offering at the initial public offering price of $              per ADS, the midpoint of the estimated range of the initial public offering price, after deducting underwriting discounts and estimated aggregate offering expenses payable by us.

You should read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements included elsewhere in this prospectus.

	As of June 30, 2008
	Actual		Pro Forma		As Adjusted(1)			As Further Adjusted(2)
	(in thousands, except share data)
Long-term indebtedness:
Floating rate bonds	$	65,789	$	—	$	—			—
Bank borrowings		110,219		110,219		110,219			110,219
Convertible bonds		—		—		446,875			446,875
Series A convertible redeemable preferred shares, $0.00001 par value, 50,000,000 shares authorized; 16,667,000 shares outstanding		22,778		—		—			—
Shareholders’ equity:
Ordinary shares, $0.00001 par value, 100,000,000,000 ordinary shares authorized; 978,333,000 ordinary shares issued,              ordinary shares outstanding on a pro forma basis,              ordinary shares outstanding on an as adjusted basis (1)              ordinary shares outstanding on an as further adjusted basis		10		10		10
Additional paid-in capital		8,009		76,576		[	]
Retained earnings (Accumulated deficit)		43,287		41,790		[	]
Accumulated other comprehensive income		9,443		9,443		9,443			9,443
Total shareholders’ equity (deficit)		60,749		127,819		[	]
Total capitalization	$	259,535	$	238,038	$	[	]	$

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Note:

(1) A $1.00 increase (decrease) in the assumed initial public offering price of $             per ADS, the midpoint of the estimated range of the initial public offering price, would increase (decrease) each of (i) ordinary shares and additional paid-in capital in the aggregate, (ii) total shareholders’ equity and (iii) total capitalization by $             million, assuming the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

(2) A $1.00 increase (decrease) in the assumed initial public offering price of $             per ADS, the midpoint of the estimated range of the initial public offering price, would increase (decrease) each of (i) ordinary shares and additional paid-in capital in the aggregate, (ii) total shareholders’ equity and (iii) total capitalization by $             million, assuming the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

53

DILUTION

If you invest in our ADSs, your interest will be diluted to the extent of the difference between the initial public offering price per ADS and our net tangible book value per ADS after this offering. Dilution results from the conversion of our convertible redeemable preferred shares and floating rate bonds and the fact that the initial public offering price per ordinary share of our ADSs is substantially in excess of the book value per ordinary share attributable to the existing shareholders for our presently outstanding ordinary shares. Our net tangible book value as of June 30, 2008 was approximately $83.5 million, or $0.0854 per ordinary share and $0.3415 per ADS, giving effect to the conversions above. Net tangible book value per ADS represents our total tangible assets minus our total liabilities and minority interests, divided by the total number of ADS equivalents outstanding upon incorporation of our company. Dilution is determined by subtracting net tangible book value per ordinary share, after giving effect to the conversion of all outstanding convertible redeemable preferred shares and the convertible portion of our floating rate bonds into ordinary shares upon the completion of this offering and the additional proceeds we will receive from this offering, from the initial public offering price per ordinary share.

Without taking into account any other changes in such tangible book value after June 30, 2008 other than giving effect to the sale of our ADSs offered in this offering at the assumed initial public offering price of $            per ADS, the midpoint of the estimated range of the initial public offering price, and after deducting underwriting discounts and commissions and other estimated expenses of this offering, the conversion of our convertible redeemable preferred shares and the convertible portion of our floating rate bonds into ordinary shares upon completion of this offering and the acquisition of 36% of the interest in JZPTD upon completion of this offering, our adjusted net tangible book value as of June 30, 2008 would have been $            million, or $            per outstanding ordinary share, including ordinary shares underlying our outstanding ADSs, or $            per ADS. This represents an immediate increase of $            in net tangible book value per ADS to the existing shareholders and an immediate dilution in net tangible book value of $            per ordinary share or $            per ADS, to investors purchasing ADSs in this offering.

The following table illustrates such dilution on a per ADS basis assuming the underwriters do not exercise the over-allotment option:

Assumed initial public offering price per ADS	$
Net tangible book value per ADS as of June 30, 2008
Adjusted net tangible book value per ADS after giving effect to the conversion of all outstanding convertible redeemable preferred shares and after giving effect to the conversion of the convertible portion of our floating rate bonds into ordinary shares upon completion of this offering
Adjusted net tangible book value per ADS after giving effect to the conversion of all outstanding convertible redeemable preferred shares, the conversion of the convertible portion of our floating rate bonds into ordinary shares and the acquisition of 36% of the interests in JZPTD upon the completion of this offering
Adjusted net tangible book value per ADS after giving effect to the conversion of all outstanding convertible redeemable preferred shares, the conversion of the convertible portion of our floating rate bonds, the acquisition of 36% of the interests in JZPTD and the additional proceeds we will receive from this offering
Dilution in net tangible book value per ADS to new investors in this offering

A $1.00 increase (decrease) in the assumed initial offering price of $             per ADS (the mid-point of the price range set forth on the cover page of this prospectus) would increase (decrease) the total consideration and the total average price per ordinary share and per ADS paid by new investors by $            , $            , and $            , assuming the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same, and without deducting underwriting discounts and commissions and estimated expenses payable by us.

54

The following table summarizes, on an as adjusted basis, as of June 30, 2008, the differences between the existing shareholders (as defined below) and the new investors with respect to the number of ordinary shares (in the form of ADSs or ordinary shares) purchased from us, the total consideration paid and the average price per ordinary share paid at the assumed initial public offering price of $            per ADS, the midpoint of the estimated range of the initial public offering price, before deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

	Ordinary Shares Purchased			Total Consideration			Average Price Per Ordinary share	Average Price Per ADS
	Number	Percent		Amount	Percent
Existing shareholders(1)			%	$		%	$	$
New investors			%	$		%	$	$
Total			%	$		%	$	$

Note:

(1) Existing shareholders for this purpose includes holders of our ordinary shares, holders of our convertible redeemable preferred shares to be converted into ordinary shares upon completion of this offering, holders of the convertible portion of our floating rate bonds to be converted into ordinary shares upon completion of this offering and holders of our ordinary shares to be issued in connection with our acquisition of 36% of JZPTD.

The discussion and tables above also assume no exercise of any outstanding stock options. As of June 30, 2008, we had outstanding options to purchase 50,000,000 ordinary shares at $0.5 per share. These options will vest in four equal amounts at the end of one year from the date of this offering and on the three succeeding anniversaries of such date. Upon exercise, we will issue ADSs representing such ordinary shares. If all of these options had been exercised on or prior to June 30, 2008, after giving effect to the conversion of the convertible redeemable preferred shares, floating rate bonds, and this offering, ordinary shares purchased would have been             , total consideration would have been             , our net tangible book value per ADS would have been approximately $              million, or $              per ADS, and the dilution in net tangible book value per ADS to new investors would have been $              per ADS.

55

EXCHANGE RATE INFORMATION

Our business is conducted in China and we expect that substantially all of our revenues will be denominated in RMB. This prospectus contains translations of RMB amounts into U.S. dollars at specific rates solely for the convenience of the reader. The conversion of RMB into U.S. dollars in this prospectus is based on the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB in this prospectus were made at a rate of RMB6.8591 to $1.00, the noon buying rate in effect as of June 30, 2008. We make no representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB, as the case may be, at any particular rate, the rates stated below, or at all. The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through restrictions on foreign trade. On October 1, 2008, the noon buying rate was RMB6.8485 to $1.00.

The following table sets forth information concerning exchange rates between the RMB and the U.S. dollar for the periods indicated. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this prospectus or will use in the preparation of our periodic reports or any other information to be provided to you. The source of these rates is the Federal Reserve Bank of New York.

	Noon Buying Rate
Period	Period End	Average(1)	Low	High
	(RMB per $1.00)
2006	7.8041	7.9579	8.0702	7.8041
2007	7.2946	7.5806	7.8127	7.2946
2008 (through October 1)	6.7810	6.9933	7.2946	6.7800
March	7.0120	7.0722	7.1110	7.0105
April	6.9870	6.9997	7.0185	6.9840
May	6.9400	6.9725	7.0000	6.9377
June	6.8591	6.8993	6.9633	6.8591
July	6.8388	6.8355	6.8632	6.8104
August	6.8252	6.8462	6.8705	6.7800
September	6.7899	6.8307	6.8510	6.7810

Source: Federal Reserve Bank of New York

Note:

(1) Averages for a period are calculated by averaging the noon buying rates on the last business day of each month or the elapsed portion thereof during the relevant period. Monthly averages are calculated using the average of the daily rates during the relevant period.

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ENFORCEABILITY OF CIVIL LIABILITIES

We are incorporated in the Cayman Islands in order to enjoy the following benefits:

• political and economic stability;

• a relatively effective judicial system;

• a favorable tax system;

• the absence of exchange control or currency restrictions; and

• the availability of professional and support services.

However, certain disadvantages accompany incorporation in the Cayman islands. These disadvantages include:

• the Cayman Islands has a less developed body of securities laws as compared to the United States and these securities laws provide significantly less protection to investors; and

• Cayman Islands companies may not have standing to sue before the federal courts of the United States.

Our constituent documents do not contain provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders, be arbitrated.

Substantially all of our operations are conducted in China, and substantially all of our assets are located in China. The majority of our directors and officers are nationals or residents of jurisdictions other than the United States and a substantial portion of their assets are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons, or to enforce against us or them judgments obtained in the United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

We have appointed CT Corporation System, located at 111 Eighth Avenue, 13^th Floor, New York, New York 10011, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

Appleby, our Cayman Islands counsel, and Grandall Law Group, our PRC counsel, have advised us that there is uncertainty as to whether the courts of the Cayman Islands and China, respectively, would:

• recognize or enforce judgments of United States courts obtained against us or our directors or officers predicted upon the civil liability provisions of the securities laws of the United States; or

• entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

Grandall Law Group has further advised us that the recognition and enforcement of foreign judgments are provided for under PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements for PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. If there are neither treaties nor the PRC Civil Procedures Law, matters relating to the recognition and enforcement of a foreign judgment in China may be resolved through diplomatic channels. China does not have any treaties or other arrangements that provide for reciprocal recognition and enforcement of foreign judgments with the United States or the Cayman Islands. As a result, it is generally difficult to recognize and enforce in China a judgment rendered by a court in either of these two jurisdictions.

57

SELECTED CONSOLIDATED FINANCIAL DATA

The following tables present the selected consolidated financial information of us and our predecessor, JZPTD. You should read the following information in conjunction with our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus. The historic results are not necessarily indicative of results to be expected in any future period.

The following selected consolidated statement of operations data and consolidated statement of cash flow data for the period from March 7, 2006 to December 13, 2006 (predecessor), the period from November 13, 2006 to December 31, 2006 (successor) and for the year ended December 31, 2007 (successor) and the consolidated balance sheet data as of December 31, 2006 and December 31, 2007 have been derived from our audited consolidated financial statements, which are included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP. JZPTD is considered our predecessor because we acquired 64% of the equity interest in JZPTD on December 13, 2006 and our own operations prior to the succession were insignificant relative to the operations assumed or acquired.

The following selected consolidated statement of operations data and consolidated statement of cash flow data for the six months ended June 30, 2007 and 2008 and the selected consolidated balance sheet data as of June 30, 2007 and 2008 have been derived from the unaudited condensed consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma balance sheet information as of June 30, 2008, which is derived from information included in our unaudited condensed consolidated financial statements included elsewhere in this prospectus, assumes the redemption and conversion upon completion of this offering of our convertible redeemable preferred shares and the convertible portion of our floating rate bonds, cash payment of $240.6 million to entities affiliated with Mr. Zhu Gongshan and Moonchu and the issuance of the 2008 Convertible Bonds in the principal amount of $446.9 million. We have prepared the unaudited condensed consolidated financial statements on the same basis as the audited consolidated financial statements. The unaudited financial information includes all adjustments, consisting only of normal and recurring adjustments, that we consider necessary for a fair presentation of our financial position and operating results for the periods presented. The unaudited results for the six months ended June 30, 2008 may not be indicative of our results for the full year ending December 31, 2008.

58

	March 7, 2006 to December 13, 2006 (Predecessor)			November 13, 2006 to December 31, 2006 (Successor)			Year Ended December 31, 2007 (Successor)			Six Months Ended June 30,
										2007 (Successor)			2008 (Successor)
	(in thousands, except per share and per ADS data)
Consolidated Statement of Operations Data
Revenues
Third party sales	$	—		$	—		$	33,378		$	—		$	153,690
Related party sales		—			—			7,470			—			19,917
Total		—			—			40,848			—			173,607
Cost of revenues		—			—			(10,996	)		—			(48,730	)
Gross profit		—			—			29,852			—			124,877
Operating expenses (general and administrative)		(2,776	)		(239	)		(17,836	)		(8,978	)		(6,640	)
Operating income (loss)		(2,776	)		(239	)		12,016			(8,978	)		118,237
Non-operating income (expense)
Interest income		58			54			376			109			582
Interest expense		(743	)		(147	)		(6,097	)		(1,482	)		(7,042	)
Other income (expense)		12			2			6			1			(747	)
Gain on disposal of JSJST		—			—			566			566			—
Amortization of other deferred income		—			—			—			—			232
(Loss) income before income tax and minority interest		(3,449	)		(330	)		6,867			(9,784	)		111,262
Income tax (expense) credit		—			—			(3,123	)		2			(297	)
(Loss) income before minority interest		(3,449	)		(330	)		3,744			(9,782	)		110,965
Minority interest		—			118			(5,540	)		1,336			(42,892	)
Net (loss) income		(3,449	)		(212	)		(1,796	)		(8,446	)		68,073
Deemed distribution on convertible redeemable preferred shares-accretion of redemption premium		—			—			(1,111	)		—			(1,667	)
Net (loss) income attributable to holders of ordinary shares	$	(3,449	)	$	(212	)	$	(2,907	)	$	(8,446	)	$	66,406
Weighted average shares used in (loss) earnings per share calculation
Basic—ordinary share					1,000,000			994,292			1,000,000			979,844
Basic—convertible redeemable preferred share					—			—			—			16,667
Diluted—ordinary share					1,000,000			994,292			1,000,000			981,436
(Loss) earnings per ordinary share and ADS
Basic—ordinary share					(0.0002	)		(0.0029	)		(0.0084	)		0.0666
Basic—convertible redeemable preferred share					—			—			—			0.1667
Diluted—ordinary share					(0.0002	)		(0.0029	)		(0.0084	)		0.0665
Basic—ADS					(0.0008	)		(0.0116	)		(0.0336	)		0.2664
Diluted—ADS					(0.0008	)		(0.0116	)		(0.0336	)		0.2660
Weighted average shares used in proforma earnings per ordinary share
Basic														[	]
Diluted														[	]
Proforma earnings per ordinary share and ADS
Basic—ordinary share														[	]
Diluted—ordinary share														[	]
Basic—ADS
Diluted—ADS

59

	March 7, 2006 to December 13, 2006 (Predecessor)			November 13, 2006 to December 31, 2006 (Successor)			Year Ended December 31, 2007 (Successor)			Six Months Ended June 30,
										2007 (Successor)			2008 (Successor)
	(in thousands)
Consolidated Statements of Cash Flow Data
Net cash (used in) provided by operating activities	$	(2,782	)	$	(842	)	$	15,515		$	(5,681	)	$	277,935
Net cash (used in) provided by investing activities		(60,857	)		1,865			(96,716	)		(19,327	)		(284,378	)
Net cash provided by financing activities		87,670			4,010			116,120			42,923			115,675
Capital expenditures(1)		(40,928	)		(6,562	)		(96,025	)		(49,202	)		(249,901	)

Note:

(1) Capital expenditures consist of payments for purchase of property, plant and equipment and deposits for purchase of plant and equipment.

	December 31, 2006 (Successor)		December 31, 2007 (Successor)			June 30, 2008 (Successor)		June 30, 2008 Pro Forma (Successor)
	(in thousands, except share data)
Consolidated Balance Sheet Data
Cash and cash equivalents	$	5,033	$	40,067		$	151,661	$	132,439
Total current assets		21,840		63,724			221,538		201,538
Property, plant and equipment, net		18,909		141,731			306,975
Total assets		94,291		232,970			671,792		650,295
Distribution payable		—		—			—		240,625
Total current liabilities		49,258		60,948			187,411		428,036
Floating rate bonds		—		62,099			65,789		—
Convertible bonds		—		—			—		446,875
Total liabilities		82,680		181,697			507,115		1,128,826
Minority interest		9,823		34,935			81,150		81,150
Series A convertible redeemable preferred shares ($0.00001 par value; no shares authorized and issued as of December 31, 2006 and 50,000,000 shares authorized and 16,667,000 shares outstanding as of December 31, 2007 and June 30, 2008; no shares outstanding on a pro-forma basis as of June 30, 2008)		—		21,111			22,778		—
Total shareholders’ equity (deficit)	$	1,788	$	(4,773	)		60,749		(559,681	)

	March 7, 2006 to December 13, 2006 (Predecessor)		November 13, 2006 to December 31, 2006 (Successor)		Year Ended December 31, 2007 (Successor)		Six Months Ended June 30, 2008 (Successor)
Selected Operating Data
Polysilicon production (in MT)		—		—		154		661
Polysilicon sold (in MT)		—		—		153		551
Wafers sold (in MW)		—		—		—		10.1
Average polysilicon selling price (net of VAT) (per kg)	$	—	$	—	$	267	$	293
Average wafer selling price (net of VAT) (per W)	$	—	$	—	$	—	$	1.22

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the section entitled “Selected Consolidated Financial Data” and the historical consolidated financial statements of our company for the period from November 13, 2006 to December 31, 2006, the year ended December 31, 2007 and unaudited condensed consolidated financial statements for the six months ended June 30, 2007 and 2008 and the historical predecessor financial statements of JZPTD for the period from March 7, 2006 to December 13, 2006, including the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

Overview

We supply polysilicon and wafers to companies operating in the solar industry. Polysilicon is the primary raw material for wafers used in the solar and electronics industries. We manufacture polysilicon at our production complex in Xuzhou, Jiangsu Province, China and intend to establish a second polysilicon production complex in Xilinhot, Inner Mongolia, China. We also intend to commence wafer manufacturing in the third quarter of 2009. Our business was founded in March 2006 and upon completion and ramp up of our planned expansion to 24,000 MT per year by December 2010, we believe we will be one of the leading polysilicon producers in terms of production capacity. We currently plan to build 2.7 GW of wafer production capacity by the end of 2011. We commenced construction of our Xuzhou Phase I production facility, which produces solar grade polysilicon, in July 2006 and produced our first batch of polysilicon in September 2007. We made our first commercial shipment of polysilicon in October 2007. In the six months ended June 30, 2008, we produced 661 MT of polysilicon. For the months of July 2008 and August 2008, we produced 175 MT and 185 MT of polysilicon, respectively. We began selling wafers produced for us through tolling arrangements with third party manufacturers in the second quarter of 2008 but expect polysilicon sales to contribute a significant majority of our revenues in the future until the end of 2009.

We have an extremely limited operating history to serve as the basis for evaluating our business. You should consider the risks and difficulties frequently encountered by companies such as us in new and rapidly evolving markets such as the polysilicon and wafer markets. We ramped up our Xuzhou Phase I production facility to its designed annual capacity of 1,500 MT in March 2008. We commenced commercial production of our Xuzhou Phase II production facility in July 2008 and expect to achieve its fully ramped up capacity by December 2008. In December 2007, we commenced preparation for construction of our Xuzhou Phase III production facilities, which is expected to have an aggregate annual production capacity of 10,500 MT. Our first production line at our Xuzhou Phase III production facilities is expected to commence commercial production in December 2008. We intend to fully ramp up our Xuzhou Phase III production facilities by February 2010. We have begun planning and expect to begin construction activities for our Xilinhot production facilities in October 2008. We expect to commence commercial production at our Xilinhot production facilities in December 2009 and to fully ramp it to its designed annual capacity of 10,500 MT by December 2010. As we began selling wafers produced for us through tolling arrangements with third parties in April 2008, only the six months ended June 30, 2008 reflect the results of such sales. In addition, we intend to commence in-house wafer manufacturing in 2009, which will have an impact on our financial results. We may not be able to achieve significant revenues or revenues growth in the future. In addition, our limited operating history provides a limited basis to assess the impact that critical accounting policies may have on our business and our financial performance.

We have entered into polysilicon and wafer supply agreements with cell and module manufacturers that provide for aggregate sales of approximately 15.1 GW of wafers and approximately 40,356 MT of polysilicon for aggregate total contract prices of $21.3 billion (RMB146.2 billion). These contracts are with JA Solar, Trina Solar, CSI, Suntech, AIDE, Solarcell and Solarfun. Some of these contracts are for solely polysilicon and some solely wafers and others a combination, which may vary over time. Prior to our entry into these supply contracts, we sold all of our polysilicon on the spot market to major Chinese solar manufacturers. See “Business —

61

Customers and Markets”. We will recognize the revenues from most of these supply contracts on a weighted average basis. See “— Key Factors Affecting Our Results of Operations — Supply Contracts with Customers”.

We have operated and managed our business as a single segment since inception. Although we commenced sales of wafers in April 2008, we intend to continue to operate and manage our business as a single segment. We currently do not account for the results of our operations on a geographic or other basis.

Key Factors Affecting Our Results of Operations

The most significant factors that directly or indirectly affect and will affect our financial performance and results of operations are:

• supply contracts with customers;

• polysilicon production capacity and volume;

• cost of producing polysilicon;

• wafer production volume and cost;

• market price of polysilicon and wafers; and

• industry demand.

Supply Contracts with Customers

We began shipments of polysilicon and wafers under supply contracts in April 2008 that generally require customers to make advance payments or to provide other financial guarantees or support, have pre-set prices which decline over the length of the contract and have pre-set volumes that increase in the early years of the contract. Prior to these shipments we sold all of our polysilicon on the spot market. Under our current supply agreements, we contracted to sell approximately 90% of our anticipated production from now to the end of 2015 after giving effect to our current polysilicon expansion plan to 24,000 MT and wafer expansion plan to 2.7 GW. We will recognize the revenues from most of our current supply contracts on a weighted average basis. The resulting per kilogram average selling price for polysilicon supply contracts and the per piece average selling price for wafer supply contracts are significantly lower than our historical spot market sales prices and lower than the initial set prices in the early years of our contracts.

Pursuant to preferential tax treatment in the PRC, we are exempt from income tax in 2008 and 2009 and will be exempt from 50% of the applicable income tax for each of 2010, 2011 and 2012. As a result, deferred tax benefits are expected to constitute a material portion of our reported net income starting in 2010 when we become subject to 50% of the applicable income tax.

Polysilicon Production Capacity and Volume

We ramped up our Xuzhou Phase I production facility to its designed annual capacity of 1,500 MT in March 2008. We plan to double our annual fully ramped-up manufacturing capacity from 1,500 MT to 3,000 MT by December 2008 when we complete ramp up of our Xuzhou Phase II production facility, and to further expand our total fully ramped-up polysilicon production capacity to 13,500 MT per year by February 2010. We have begun planning for our Xilinhot production facilities and expect to begin construction activities in October 2008. We expect to commence commercial production at our Xilinhot production facilities in December 2009 and to fully ramp it to its designed annual capacity of 10,500 MT by December 2010. We believe anticipated increases in our production capacity will have a significant effect on our results of operations, both in allowing us to produce and sell more polysilicon and wafers and to achieve higher revenue, and in lowering our marginal manufacturing costs resulting from economies of scale.

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New and existing polysilicon manufacturers have announced expansion plans that could add capacity by tens of thousands of MT per year. Such capacity additions could reduce polysilicon prices and result in increased competition for us. In the event that excess capacity results in reduced utilization of our facilities, our per unit cost of production will increase and our business will be less competitive.

Cost of Producing Polysilicon

We will need to significantly reduce our cost of polysilicon production. A significant portion of our future sales are subject to contracts which have fixed prices that decline substantially over the contract term. Accordingly, in order to maintain or improve our margins, we will need to continuously reduce our cost of polysilicon production.

To date we have focused on ramping Xuzhou Phase I capacity and maximizing the output. We have only a limited production history to measure our cost of manufacturing polysilicon. With the completion of our production ramp-up and implementation of the hydrochlorination process, we have shifted our focus to process integration in order to improve efficiency and reduce production costs. We plan to reduce the costs of our key production inputs, such as TCS and electricity consumption. We have thus far been able to shorten our production cycles by adjusting reactor parameters as well as improving the efficiency of our electricity usage.

We use TCS to produce polysilicon. TCS is one of the main and most costly production inputs and to date, we have relied on third party suppliers for substantially all of our TCS requirements. For the year ended December 31, 2007 and the six months ended June 30, 2008, TCS costs represented approximately 39% and 54% of our total costs of revenues, respectively. To reduce our reliance on TCS from third party suppliers, we are increasingly incorporating TCS production into our production process. We integrated the hydrochlorination process for our Xuzhou Phase I production facility in February 2008 and in our Xuzhou Phase II production facility in September 2008. We intend to integrate hydrochlorination processes into our Xuzhou Phase III production facilities and our Xilinhot production facilities. Our Taixing joint venture has constructed a TCS production facility with an initial annual capacity of 20,000 MT in Taizhou, Jiangsu Province, China, which commenced commercial production in September 2008. We intend to increase the Taixing joint venture annual TCS production capacity to up to 60,000 MT by 2010. Upon ramp up of this facility, we expect to substantially reduce our reliance on third parties for our TCS requirements.

Wafer Production Volume and Cost

We intend to use a portion of the proceeds from this offering to finance the construction of our monocrystalline and multicrystalline wafer production facilities. We intend to begin constructing our first monocrystalline and multicrystalline production facility in Xuzhou by the end of 2008 and to commence pilot production by the third quarter of 2009. We intend to ramp up these facilities to a combined 0.8 GW production capacity by the end of 2009 and to further expand our wafer production capacity to 1.9 GW by the end of 2010 and to 2.7 GW by the end of 2011. Our financial condition and results of operations will be determined, to a large extent, on whether we can finish the construction of and operate our wafer production plant at the planned production capacity in a cost effective manner.

We have entered into a tolling contract with Huasheng and intend to enter into additional tolling contracts with other wafer manufacturers.

Market Price of Polysilicon and Wafers

Companies in the solar industry have been paying increasingly higher prices in recent years for polysilicon as demand has exceeded supply. According to Solarbuzz, the average long-term contract price for polysilicon increased from $35-40/kg in 2005 to $60-65/kg in 2007. The spot market for polysilicon reached $250-400/kg by the end of 2007. Although we have contracted to sell approximately 90% of our anticipated production from now to the end of 2015 after giving effect to our current polysilicon expansion plan to 24,000 MT and wafer expansion plan to 2.7 GW, we may from time to time sell polysilicon or wafers that have not been committed on the spot market.

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We believe the average selling price of polysilicon will remain high in the near term due to the continued strong demand for polysilicon resulting from the rapid growth of the solar industry, the significant lead time required for building additional capacity for polysilicon production and significant competing demand for polysilicon from the electronics industry. We believe that none of these factors can be predicted with reasonable certainty as of the date of this prospectus. We expect that as polysilicon production capacity expands and the market supply increases, the price of polysilicon will likely decline in the medium- to long-term.

Wafer prices are based on a variety of factors, including global market wafer prices, supply and demand conditions in China, and the terms of our customer contracts. We price our wafers on a per-piece basis. According to Solarbuzz, wafer prices on a per-watt basis are expected to decline in the next few years. We expect this will be due to increased production efficiencies, expected increases in global polysilicon supplies and declines in polysilicon prices, and increased wafer production capacity in our industry, and we expect the average spot selling price of our wafers to decline in 2009 and thereafter.

Industry Demand

As we currently only sell polysilicon and wafers to the solar industry, our business and revenue growth depends significantly on the growth of the solar energy industry and associated demand for polysilicon and wafers. According to Solarbuzz, polysilicon-based technologies accounted for approximately 88.4% of global solar production in 2007. This market includes thin-film and other forms of solar production. Although solar power technology has been used for several decades, the solar market has only grown significantly in the past several years as solar power became an increasingly cost competitive alternative source of energy. We believe that the near-term demand growth for polysilicon and wafers depends largely on the availability and size of government subsidies and economic incentives for solar products and the current shortage of polysilicon supply. Today, the cost of solar power substantially exceeds the cost of electrical power generated from conventional fossil fuels such as coal and natural gas. As a result, governments in many countries, including Germany, Spain, Italy, the United States, Japan and China, have provided subsidies and economic incentives for the use of renewable energy such as solar power to reduce dependency on conventional fossil fuels as a source of energy. The demand for our polysilicon and wafers in our current, targeted or potential markets is affected significantly by these government subsidies and economic incentives.

China has also seen a recent increase in demand for electronic grade polysilicon for use in the manufacture of semiconductors. We believe the production of semiconductors in China will increase in the future and expect the demand for electronic grade polysilicon will also increase. We intend to improve our manufacturing process so that we have the flexibility to sell into both the solar and electronics industries.

Components of Results of Operations

Revenues

Our polysilicon revenues are determined by the metric tonnes of polysilicon that we are able to sell as well as the average selling prices of our polysilicon. Our wafer revenues are determined by the number of wafers that we are able to sell as well as the average selling prices of our wafers. Through September 30, 2007, we had no revenue. Our production prior to that date was very small. In the three months ended December 31, 2007, we sold 153 MT of polysilicon and recorded $40.8 million in revenues. In the six months ended June 30, 2008, we sold 551 MT of polysilicon and 10.1 MW of wafers that resulted in $173.6 million in revenues.

To date, we have reported our revenues separated into third party and related party revenues. All related party revenues reflect sales to Jiangsu Yangguang Jingyuan Science and Technology Co., Ltd., or JSJST, an entity affiliated with minority shareholders of JZPTD and Hebei Jinglong, a minority shareholder of JZPTD. JSJST and Hebei Jinglong ceased to be related parties on June 10, 2008 upon the completion of the acquisition by entities affiliated with Mr. Zhu Gongshan and Moonchu of the 36% of JZPTD that we currently do not own. As a result, sales to JSJST and Hebei Jinglong will no longer be related party sales.

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Our initial sales have consisted of solar grade polysilicon sold at spot market prices, where prices of our products are subject to greater price volatility than prices under negotiated contract agreements. We began selling wafers produced for us through tolling arrangements with third party manufacturers in April 2008. We have entered into polysilicon and wafer supply agreements with JA Solar, Trina Solar, CSI, Suntech, AIDE, Solarcell and Solarfun. These contracts generally require customers to make advance payments or provide financial guarantees or support, have pre-set prices which decline substantially over the length of the contract and have pre-set volumes that increase substantially in the early years of the contract. See “Business — Customers and Markets”. We will recognize the revenues from most of our current supply contracts on a weighted average basis.

Any dramatic decline in spot prices of polysilicon would cause us to incur losses later than some of our competitors with similar costs of production but who sell at lower spot market prices. On the other hand, participants in the spot market would benefit more quickly from continued high spot prices and face lower accounts receivable risks as spot market sales are generally not made on credit terms.

Cost of Revenues

Our cost of revenues related to polysilicon sales is affected primarily by our ability to control raw material costs, to achieve economies of scale in our operations and to efficiently manage our supply chain.

We expect to incur cost of revenues in our operations primarily consisting of:

• TCS. TCS is a key component of producing polysilicon, the costs of which accounted for a majority of our total cost of sales for the year ended December 31, 2007 and the six months ended June 30, 2008. We currently purchase TCS pursuant to short term agreements with a number of TCS suppliers. With the ramp-up of our hydrochlorination process in Xuzhou Phase I in February 2008 and in Xuzhou Phase II in September 2008, we have been able to reduce our reliance on third-party sources of TCS. For the six months ended June 30, 2008 and the months ended July and August 2008, approximately 7%, 23% and 36% of the TCS we consumed was produced in-house, respectively. We have a 70% controlling interest in the Taixing joint venture from which we source a portion of our TCS. We began to source TCS from our Taixing joint venture in September 2008. In the future we will purchase less TCS from third parties as we are now able to implement the hydrochlorination process in the Xuzhou Phase II production facility. We expect our initiatives at process integration will decrease TCS costs in the future. See “Business—Manufacturing Process—Materials and Inputs used in Polysilicon Production—Trichlorosilane”.

• Electricity. The cost of electricity is a substantial component of our total cost of revenue. We source our electricity from the Xuzhou Electricity Company at market prices which could vary.

• Tolling fees. We pay tolling fees in connection with the wafers we sell to our customers. Before we commence in-house production of wafers, we will pay a per wafer tolling fee on all our sales of wafers.

• Other materials and inputs. The production of polysilicon requires water, steam, metallurgical silicon, or MG-Si, sulphuric acid and sodium hydroxide as its most significant inputs. Of these, we purchase water on long-term contracts and the other products on the spot market.

• Direct labor. Direct labor costs include salaries and benefits for personnel directly involved in production activities.

• Depreciation of property, plant and equipment. Depreciation of property, plant and equipment is provided on a straight-line basis over the estimated useful life, which is 50 years for land use rights, generally 20 years for buildings, 15 years for equipment and machinery and five years for motor vehicles and electronic equipment and furniture and fixtures, taking into account their estimated residual value. Due to our capacity expansion, depreciation in absolute terms has increased significantly. We expect this trend to continue as we expand our production capacity.

Our cost of revenues related to wafer sales, until our in-house wafer manufacturing facility is operational, is primarily affected by the tolling fees we pay, which will depend on market demand for such capacity and the amount of available capacity. We expect to have an increased portion of international wafer sales as our production increases. Current export VAT refund rate is 5% for wafer products. The remaining VAT after such refund of 12% due to the difference between the VAT rate and the export VAT refund will be recorded as our

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cost of revenues. As polysilicon supplies become more readily available, to the extent wafer manufacturing capacity has not similarly increased, we would expect wafer processing capacity for third party processing will become less available and hence such capacity would be more expensive. We intend to build our own wafer manufacturing capacity in order to control our production costs. At such time, our cost of revenues related to wafer sales will be affected primarily by the same factors as the cost of revenues for polysilicon above, as well as the cost of other consumables used in the production of wafers.

General and Administrative Expenses

Our general and administrative expenses consist primarily of salaries and benefits for our administrative and finance personnel, other travel and other corporate expenses, bank charges and depreciation of equipment used for administrative purposes. We expect our general and administrative expenses will increase in the near term as a percentage of revenue as we hire additional personnel and incur professional expenses to support our operations as a listed company in the United States as well as additional employees in connection with the start-up of our Xuzhou Phase III production facilities, our proposed Xilinhot production facilities, our wafer production facilities and any future production facilities. However, we expect that our general and administrative expenses will decrease as a percentage of our revenues over time as we achieve greater economies of scale. In addition, before we commence commercial production of a new manufacturing facility, we account for all production-related costs, including direct labor costs and overhead costs, as administrative expenses. After the commencement of commercial production at a production facility, these expenses are accounted for as our cost of revenues. We expect our administrative expenses to grow as we expect to hire additional supporting staff in conjunction with our growth.

Research and Development Expenses

To date, our research and development expenses have been minimal as we have focused on initial production. Research and development expenses have been included in general and administrative expenses. Our research and development expenses will consist primarily of costs of raw materials used in research and development activities, salaries and employee benefits for research and development personnel, and equipment costs relating to the design, development, testing and enhancement of our production process. We will conduct our research and development, design and manufacturing operations primarily in China, where the costs of skilled labor, engineering and technical resources, as well as land, facilities and utilities, tend to be lower than those in more developed countries. We expect our research and development expenses to increase significantly in the future as we continue to hire additional research and development personnel and focus on continuous innovation of process technologies for our products, including improving our technical know-how to produce higher purity polysilicon and wafers.

Selling and Marketing Expenses

We incurred no material selling and marketing expenses through June 30, 2008. To date, our selling expenses have been included in general and administrative expenses. Our selling and marketing expenses consist primarily of advertising costs, packaging and shipping costs, salaries and employee benefits of sales personnel, sales-related travel and entertainment expenses and other selling and marketing expenses including sales commissions paid to our sales agents. We expect that our selling and marketing expenses will increase in the near term as we increase our sales efforts, hire additional sales personnel and expand into the electronic grade polysilicon and international markets. However, we expect that the growth in revenues will outpace the growth in selling and marketing expenses over time.

Taxation

We expect our net income to be derived primarily from JZPTD, our operating subsidiary in China. Prior to January 1, 2008, JZPTD was subject to PRC enterprise income tax of 33.0%, which included a 30.0% state income tax and a 3.0% local income tax. For the year ended December 31, 2007, JZPTD was exempt from the

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local income tax. As of January 1, 2008, we became subject to the new EIT Law, which provides for a national 25% rate applicable to most enterprises and replaces the prior income tax rate subject to the benefits that had been previously granted.

We have received approval for a two-year tax exemption from the enterprise income tax for the years ended December 31, 2008 and 2009 and will be taxed at 50.0% of the new EIT tax rate for the years ending December 31, 2010, 2011 and 2012, providing a tax rate of 12.5%.

In addition, under the new EIT Law, an enterprise established outside of the PRC with “de facto management bodies” within the PRC may be considered a resident enterprise and will normally be subject to the enterprise income tax at the rate of 25% on its global income. The rule implementing the EIT Law provides that the term “de facto management bodies” refers to management bodies which have material management and control over all aspects of the business, including without limitation, the production, operation, personnel, finance, and assets of the enterprise. However, it is still unclear if the PRC tax authorities would subsequently determine that, notwithstanding our status as the Cayman Islands holding company of our operating business in the PRC, with administrative headquarters and personnel in Hong Kong, we should be classified as a resident enterprise, whereby our global income will be subject to PRC income tax at a tax rate of 25%. In any event, we do not expect to derive substantial earnings outside the PRC in the foreseeable future. A foreign investor would be subject to a 10% tax for dividends received from its PRC enterprise, provided that such foreign investor does not set up any entity in China. However, as JZPTD is owned directly by our Hong Kong subsidiary, which is a non-resident enterprise, and as Hong Kong has an arrangement with the PRC under which the tax rate from dividend income is 5%, dividends paid by JZPTD would be subject to a 5% withholding tax.

Pursuant to the Interim Regulations on Value Added Tax and its Implementation Rules issued in 1993, all entities and individuals that are engaged in the sale of goods, the provision of repairs and replacement services and the importation of goods in China are generally required to pay value-added tax, or VAT, at a rate of 17% of the gross sales proceeds received. We anticipate that most of our initial sales will be made domestically. We have received VAT rebates from the purchase of certain domestically manufactured equipment. As of December 31, 2007, we received VAT rebates of RMB10.0 million.

We expect to have minimal taxable income in jurisdictions other than China. Under current laws of the Cayman Islands, we are not subject to income or capital gains tax. Additionally, dividend payments made by us are not subject to withholding tax in the Cayman Islands.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the end of each reporting period and (iii) the reported amounts of revenue and expenses during each reporting period. We continually evaluate these estimates and assumptions based on historical experience, knowledge and assessment of current business and other conditions, expectations regarding the future based on available information and reasonable assumptions, which together form a basis for making judgments about matters not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. When reviewing our financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgment and other uncertainties affecting the application of such policies and (iii) the sensitivity of reported results to changes in conditions and assumptions. We consider the policies discussed below to be critical to an understanding of our financial statements as their application places the most significant demands on the judgment of our management.

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Revenue Recognition

We manufacture and sell polysilicon and wafers. We recognize revenue when all of the following conditions are met: price to the buyer is fixed and determinable, products are delivered and title has passed to customers and collectability is reasonably assured. Sales agreements typically do not contain customary product warranties except for return and replacement of defective products within period of 30 days from delivery. Sales agreements do not contain post-shipment obligations or any other return or credit provisions.

A majority of the sales contracts provide that customers must arrange for the shipping of the goods and bear all the costs of such shipping and the risks associated with loss or damage of the goods from our manufacturing premises. Thus, we fulfill our obligation of delivery when the goods are shipped. We required and received cash (or bank note of equivalent value) on or before delivery for a majority of our sales transactions. We extended a credit term to only one customer since commencement of operations and have assessed a number of factors to determine whether collection was reasonably assured including the customer’s credit worthiness.

We also entered into supply agreements for sale of polysilicon and wafers. Most of these contracts provide for supply of specified volumes and pre-set pricing that decreases over the terms of the agreements. Revenues under our supply agreements have been recognized in the statement of operations using the weighted average prices over the contractual terms. Revenues relating to future price decreases under these agreements have been classified as a liability on the balance sheet and reported as deferred revenues.

Long-lived Assets

We depreciate and amortize our property, plant and equipment using the straight-line method of accounting over the estimated useful lives of the assets. We make estimates of the useful lives of plant and equipment in order to determine the amount of depreciation expense to be recorded during each reporting period. We estimate the useful lives at the time the assets are acquired based on historical experience with similar assets as well as anticipated technological or other changes. If technological changes were to occur more rapidly than anticipated or in a different form than anticipated, we might shorten the useful lives assigned to these assets, which would result in the recognition of increased depreciation and amortization expense in future periods. There has been no change to the estimated useful lives during the period presented.

We evaluate long-lived assets, including property, plant and equipment, which are subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess recoverability by comparing the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, we recognize an impairment charge based on the amount by which the carrying amount of the asset exceeds the fair value of the asset. We estimate the fair value of the asset based on the best information available, including prices for similar assets and in the absence of an observable market price, the results of using a present value technique to estimate the fair value of the asset.

Share-based Compensation

As further described in Note 12 to our Consolidated Financial Statements, we account for share-based compensation under Statement of Financial Accounting Standards No. 123-R, “Share-Based Payment”, or SFAS No. 123R. Under SFAS No. 123R, the cost of all share-based payment transactions must be recognized in our consolidated financial statements based on their grant-date fair value over the required period, which is generally the period from the date of grant to the date when the share compensation is no longer contingent upon additional service from the employee, or the vesting period. This statement also requires us to adopt a fair value- based method of measuring the compensation expense related to share-based compensation. For options granted to employees, we record share-based compensation expenses for the fair value of the options at the grant date. We categorize these share-based compensation expenses in our (i) cost of revenues; (ii) general and administrative expenses; and (iii) research and development expenses, depending on the job functions of the grantees of our restricted shares.

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The determination of fair value of equity awards such as options requires making complex and subjective judgments about the projected financial and operating results of the subject company. It also requires making certain assumptions such as cost of capital, general market and macroeconomic conditions, industry trends, comparable companies, share price volatility of the subject company, expected lives of options and discount rates. These assumptions are inherently uncertain. Changes in these assumptions could significantly affect the amount of employee share-based compensation expense we recognize on our consolidated financial statements.

We had 5,000,000 options to acquire 50,000,000 shares outstanding as of June 30, 2008. The fair value of the options at February 29, 2008, the grant date, was $13.89 per option.

We are responsible for estimating the fair value of the options granted by us. When estimating the fair value of such options, our management has considered a number of factors, including the result of a third-party appraisal and an equity transaction of our company, while taking into account standard valuation methods and the achievement of certain events. We engaged Jones Lang Lasalle Sallmans Limited, an independent third party valuation firm, to assess the fair value of our share options as of February 29, 2008 on a contemporaneous basis.

Changes in our estimates and assumptions regarding the expected volatility of our ordinary shares could significantly impact the estimated fair values of our share options and, as a result, our net income and the net income available to our ordinary shareholders.

We determined the fair value of the options on the date of grant by using the binomial option-pricing method under the following assumptions: risk free interest rate of 3.71%, 60.65% volatility, no dividends, zero forfeiture rate and a suboptimal exercise factor of 1.5. If different assumptions were used, our share-based compensation expenses, net income and income available to our shareholders could have been significantly different. The total compensation expenses in connection with our option grants that will be recognized for the vesting period of the options granted on February 29, 2008 will be approximately $69.4 million.

The 5,000,000 options granted on February 29, 2008 with an exercise price of $5 per option, or $0.50 per share. At the grant date, the underlying ordinary shares had a fair value of $1.71 per share; providing an intrinsic value of $12.14 per option.

Determining the fair value of our ordinary shares requires making complex and subjective judgments regarding projected financial and operating results, our unique business risks, the liquidity of our shares and our operating history and prospects at the time of grant. The assumptions used in deriving the fair value of our ordinary shares include: i) there will be no material change in the existing political, legal, technological, fiscal or economic condition of China that may adversely affect our business; ii) the contracts and agreements we entered into will be honored; and iii) our competitive advantages and disadvantages do not change significantly during the period under consideration. These assumptions are inherently uncertain. If different assumptions were used, our share-based compensation expenses, net income and income per share could have been significantly different.

The independent appraiser used solely the income approach to determine the fair value of our ordinary shares. In the income approach, the value depends on the present worth of future economic benefits to be derived from our projected sales income. Indications of value are developed by discounting projected future net cash flows available for payment of shareholders’ interest to their present worth at a discount rate that reflects a number of factors, including the current cost of financing and the risk considered inherent in the business. A discount rate represents an estimate of the rate of return required by a third party investor for an investment of this type. The rate of return expected from an investment by an investor relates to the perceived risk of the investment. The calculation of the discount rate is based on the Capital Asset Pricing Model, which takes into account the risk free rates, beta of selected comparable solar cell companies, market returns in comparative markets and our company specific risks, including business risk, small size risk and country risk. For this method, the independent appraiser used a discount rate of 13.25%.

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Because the interest in the equity value of our company includes both preferred shares and ordinary shares, the fair value of the equity interest is allocated to preferred shares and ordinary shares using the option-pricing method. Under the option-pricing method, the independent appraiser treats ordinary shares and preferred shares as call options on our company’s value, with exercise prices based on the value of the liquidation preference of the preferred shares. Because a call option is used, the Black-Scholes model, which is commonly adopted in the option-pricing method, is applied to price the call option. The independent appraiser considered various terms of the preferred shares and ordinary shares, including the level of seniority, dividend policy, conversion ratios, and cash allocation upon liquidation of the enterprise in the option-pricing method.

Internal Control Over Financial Reporting

Prior to this offering, we have been a private company with limited accounting personnel and other resources to address our internal controls and procedures. During the course of the preparation and external audit of our consolidated financial statements as of December 31, 2006 and December 31, 2007 and for the period from March 7, 2006 to December 13, 2006 (predecessor), the period from November 13, 2006 to December 31, 2006 (successor) and the year ended December 31, 2007 (successor), we and our independent registered accounting firm identified a number of deficiencies in our internal control over financial reporting, including a number of material weaknesses and significant deficiencies as defined in the standards established by the U.S. Public Company Accounting Oversight Board. Material weaknesses and significant deficiencies in our internal control over financial reporting could result in a material misstatement of our financial statements that will not be prevented or detected. The material weaknesses identified were: (1) lack of an accounting policies and procedures manual; and (2) a lack of dedicated financial reporting and accounting resources necessary to comply with U.S. GAAP. In addition, we and our independent registered public accounting firm identified certain significant deficiencies in our internal control over financial reporting. These significant deficiencies were: (1) lack of a risk assessment process; and (2) related party transactions were not accounted for separately from non-related party transactions.

In order to remedy the material weaknesses and significant deficiencies, we are undertaking several measures to further improve our internal control over financial reporting. We hired Mr. Jason Li, who commenced his employment with us in August 2008, as our chief financial officer. We have hired an outside consulting firm to review our internal control processes, policies and procedures in order to assist us in identifying weaknesses in our internal control over financial reporting. We plan to provide further training to our financial and accounting staff to enhance their knowledge of U.S. GAAP. We are also adopting and implementing additional policies and procedures, including an enterprise resource planning system, to strengthen our internal controls over financial reporting. We plan to continue to take additional steps to remedy these material weaknesses and significant deficiencies in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. These steps include (i) performing management testing on internal controls, (ii) hiring additional experienced internal auditors and (iii) conducting dry-run testing for compliance with Section 404. If, however, we fail to timely achieve and maintain the adequacy of our internal controls, we may not be able to conclude that we have effective internal control over financial reporting at a reasonable assurance level. Moreover, effective internal controls over financial reporting is necessary for us to produce reliable financial reports and is important to help prevent fraud. As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our ADSs. Furthermore, we anticipate that we will incur considerable costs and use significant management time and other resources in an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley Act.

Recent Quarterly Results of Operations

The following table presents our consolidated quarterly results of operations for the three months ended December 31, 2007, March 31, 2008 and June 30, 2008 and as a percentage of total revenues for our respective

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periods. You should read the following table in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this prospectus. We have prepared the consolidated quarterly financial information on the same basis as our audited consolidated financial statements. This unaudited consolidated financial information includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair representation of our financial position and operating results for the quarters presented. Our operating results for any particular quarter are not necessarily indicative of our future results.

	Three Months Ended
	December 31, 2007 (unaudited)					March 31, 2008 (unaudited)					June 30, 2008 (unaudited)
	(in thousands, except percentages)
Consolidated Statement of Operations Data
Revenues:
Third party sales	$	33,378		81.7	%	$	72,947		89.5	%	$	80,743		87.7	%
Related party sales		7,470		18.3			8,584		10.5			11,333		12.3
Total revenues		40,848		100.0			81,531		100.0			92,076		100.0
Cost of revenues		(10,996	)	(26.9	)		(18,483	)	(22.7	)		(30,247	)	(32.9	)
Gross profit		29,852		73.1			63,048		77.3			61,829		67.1
Operating expenses (general and administrative)		(4,458	)	(10.9	)		(3,449	)	(4.2	)		(3,191	)	(3.5	)
Non-operating income (expenses):
Interest income		239		0.6			195		0.2			387		0.4
Interest expense		(3,949	)	(9.7	)		(3,419	)	(4.2	)		(3,623	)	(3.9	)
Other income (expenses)		1		0.0			(112	)	(0.1	)		(635	)	(0.6	)
Amortization of other deferred income		—		—			115		0.1			117		0.1
Income before income tax and minority interest		21,685		53.1			56,378		69.1			54,884		59.6
Income tax (expense) benefit		(3,290	)	(8.1	)		1,207		1.5			(1,504	)	(1.6	)
Income before minority interest		18,395		45.0			57,585		70.6			53,380		58.0
Minority interest		(8,010	)	(19.6	)		(22,063	)	(27.0	)		(20,829	)	(22.6	)
Net income		10,385		25.4			35,522		43.6			32,551		35.4
Deemed distribution on convertible redeemable preferred shares-accretion of redemption premium		(833	)	(2.0	)		(833	)	(1.0	)		(834	)	(0.9	)
Net income attributable to holders of ordinary shares	$	9,552		23.4	%	$	34,689		42.6	%	$	31,717		34.5	%

Revenues, cost of revenues and gross profit. Revenues increased 12.9% from $81.5 million in the three months ended March 31, 2008 to $92.1 million in the three months ended June 30, 2008. This increase was primarily due to increased sales volumes of polysilicon and sales of wafers which was partially offset by an increase in the percentage of sales volumes derived from contract sales. Our polysilicon sales volumes increased from 256 MT of polysilicon in the three months ended March 31, 2008 to 295 MT of polysilicon in the three months ended June 30, 2008. We sold 10.1 MW of wafers at a per W average selling price, excluding VAT, of $1.20 in the three months ended June 30, 2008. We recognized the revenues from our contract sales on a weighted average basis, which effectively reduces the average selling prices on our polysilicon and wafers to a level below spot market prices for these periods. All of our sales volumes in the three months ended March 31, 2008 were done on the spot market whereas approximately 60% of our sales volumes in the three months ended June 30, 2008 were done on the spot market. The shift away from spot market sales decreased our average selling price for polysilicon, excluding VAT, from $318.5 per kg to $270.1 per kg. Our contract sales of wafers, excluding VAT, were at an average selling price of $1.22 per W, which is lower than spot market prices for wafers in that period. Cost of revenues increased 63.6% from $18.5 million in the three months ended March 31, 2008 to $30.2 million in the three months ended June 30, 2008. This increase was primarily due to increased sales volumes and tolling contract costs. We incurred $5.0 million in tolling contract costs in the three months ended June 30, 2008 as we began supplying wafers in April 2008. As a result of the foregoing, our gross profit declined from $63.0 million in the three months ended March 31, 2008 to $61.8 million in the three months ended June 30, 2008, and gross margins decreased from 77.3% in the three months ended March 31, 2008 to 67.1% in the three months ended June 30, 2008.

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Revenues increased 99.6% from $40.8 million in the three months ended December 31, 2007 to $81.5 million in the three months ended March 31, 2008. This increase was primarily due to increased sales volume from 153 MT of polysilicon in the three months ended December 31, 2007 to 256 MT in the three months ended March 31, 2008 with an increase in the average selling price of polysilicon, excluding VAT, from $267 per kg to $318 per kg. All these sales were made on the spot market. Cost of revenues increased 68.1% from $11.0 million in the three months ended December 31, 2007 to $18.5 million in the three months ended March 31, 2008. This increase was primarily due to increased sales volumes and an increase in TCS purchase prices. As a result of the foregoing, our gross profit increased from $29.9 million in the three months ended December 31, 2007 to $63.0 million in the three months ended March 31, 2008, representing gross margins of 73.1% in the three months ended December 31, 2007 and 77.3% in the three months ended March 31, 2008.

Operating expenses. Operating expenses decreased 7.5% from $3.4 million in the three months ended March 31, 2008 to $3.2 million in the three months ended June 30, 2008. This increase was primarily due to a reversal of a provision for penalty payments pursuant to our supply contract with JSJST of $0.3 million and a foreign exchange gain of $0.8 million, partially offset by an increase in legal fees.

Operating expenses decreased 20.1% from $4.5 million in the three months ended December 31, 2007 to $3.6 million in the three months ended March 31, 2008. This decrease was primarily due to an exchange loss of $0.5 million in the three months ended December 31, 2007 and an exchange gain of $0.2 million in the three months ended March 31, 2008 and a decrease in management fees which were partially offset by an increase in entertainment expenses, legal and professional fees, consultancy fees and sundry expenses.

Non-operating income (expenses). Our non-operating expenses were $3.2 million in the three months ended March 31, 2008 and $3.8 million in the three months ended June 30, 2008. Non-operating expenses for both periods was primarily due to interest on our floating rate bonds, onshore loans and the amortization of deferred financing costs and a one time $0.8 million charitable donation to the Sichuan Province earthquake disaster relief in the three months ended June 30, 2008. Interest income was $0.2 million in the three months ended March 31, 2008 and $0.4 million in the three months ended June 30, 2008 which was offset by a 6.0% increase in interest expenses from $3.4 million in the three months ended March 31, 2008 to $3.6 million in the three months ended June 30, 2008.

We had non-operating expenses of $3.7 million in the three months ended December 31, 2007 and non-operating expense of $3.2 million in the three months ended March 31, 2008. Non-operating expense in the three months ended December 31, 2007 was primarily due to interest on our floating rate bonds, onshore loans and the amortization of deferred financing costs aggregating $3.9 million. Non-operating expenses in the three months ended March 31, 2008 was primarily due to interest expenses on our floating rate bonds, onshore loans and amortization of deferred financing cost aggregating $3.4 million.

Net income attributable to holders of ordinary shares. Net income attributable to holders of ordinary shares decreased 8.6% from $34.7 million in the three months ended March 31, 2008 to $31.7 million in the three months ended June 30, 2008, and net margin decreased from 42.6% in the three months ended March 31, 2008 to 34.5% in the three months ended June 30, 2008. This decrease was mainly attributable to the decline in gross margin.

Net income attributable to holders of ordinary shares increased 263.2% from $9.6 million in the three months ended December 31, 2007 to $34.7 million in the three months ended March 31, 2008, representing a net margin of 23.4% in the three months ended December 31, 2007 and 42.6% in the three months ended March 31, 2008.

Comparative Results of Operations

We have only been in existence for a limited period of time and only began to generate revenues in the three months ended December 31, 2007. We have no comparable annual periods for a year to year comparison. We

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have set forth below a discussion of our results of operations comparing the six months ended June 30, 2007 to the six months ended June 30, 2008 and discussing each of the periods covered by our consolidated financial statements included elsewhere in this prospectus. In addition, we received our first revenues from wafer sales in April 2008. None of the periods covered by our consolidated financial statements reflect wafer revenues or wafer related cost of revenues.

Six months ended June 30, 2007 and 2008

Revenues, cost of revenues and gross profit. We had no revenues, cost of revenues or gross profit for the six months ended June 30, 2007, as we were constructing our Xuzhou Phase I production facility. For the six months ended June 30, 2008 we had $173.6 million in revenues and $48.7 in cost of revenues, reflecting the factors outlined in the previous section, which resulted in gross profit of $124.9 million.

Operating expenses and non-operating expenses. We had operating expenses of $9.0 million, consisting primarily of consultancy fees of $5.1 million paid to Triple A Investments Limited and Goldfinch Consultants Limited, which are both non-affiliates, for consulting services, for the six months ended June 30, 2007. For the six months ended June 30, 2008, we had $6.6 million of operating expenses due primarily to the increase in staffing to support our operations, legal and professional fees, entertainment expenses and management fees paid to the Golden Concord Group. We had non-operating expenses of $0.8 million for the six months ended June 30, 2007 which increased to $7.0 million for the six months ended June 30, 2008. This increase was primarily due to increased interest expenses due to our increased domestic Renminbi borrowings and the addition of our floating rate bonds.

Net (loss) income attributable to holders of ordinary shares. We had a net loss attributable to holders of ordinary shares for the six months ended June, 2007 resulting from the expenses discussed above and the absence of any revenues. We had net income attributable to holders of ordinary shares of $66.4 million for the six months ended June 30, 2008.

Year ended December 31, 2007

Revenues, cost of revenues and gross profit. We had revenues of $40.8 million in the year ended December 31, 2007, all of which was recorded in the final three months of that period. We sold 153 MT of polysilicon in the final three months of 2007, which was substantially all we manufactured. Our cost of revenues in the year ended December 31, 2007, which related entirely to the final three months of the period, was $11.0 million. As this period reflected initial ramping up of production and did not include any benefit from the hydrochlorination process, we do not believe our gross profit of $29.9 million on sale of 153 MT and revenues of $40.8 million is necessarily representative of results to be expected in future periods.

Operating expenses. Our operating expenses consisted of both general and administrative and of selling and marketing expenses in the year ended December 31, 2007. Operating expenses for the year ended December 31, 2007 were $17.8 million, including consulting fees of $5.1 million paid to Triple A Investments Limited and Goldfinch Consultants Limited, which are both non-affiliates, for consulting services, salaries for employees of $2.5 million, a discretionary bonus paid to our employees for meeting construction targets of $0.7 million, handling fees paid to Shanghai Creative Energy Company Limited, an affiliate, for the acquisition of property, plant and equipment of $0.4 million and a foreign exchange loss of $1.5 million. The consulting services related to assistance in setting up our business, sourcing equipment, human resources and regulatory matters. The exchange loss in the year ended December 31, 2007 primarily related to the delayed payment of the RMB-denominated purchase price of JZPTD. The payment, which was made in December 2007, was made in U.S. dollars to Guotai Energy Investments Ltd. and Beijing Zhongneng Renewable Energy Investments Ltd., which are both non-affiliate equity investors in JZPTD. Other operating expenses in the year ended December 31, 2007 included travel expenses and other professional expenses.

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Non-operating income (expenses). Our non-operating expenses for the year ended December 31, 2007 were $5.2 million. This was primarily due to interest expenses on our loan facilities and our floating rate bonds of $5.7 million and amortization of deferred financing costs of $0.4 million which was partially offset by a gain on the disposal of JSJST of approximately $0.6 million and interest income of approximately $0.4 million earned from our bank deposits.

Net loss attributable to holders of ordinary shares. As a result of the factors described above, we had a net loss attributable to holders of ordinary shares of $2.9 million for the year ended December 31, 2007.

Period from November 13, 2006 to December 31, 2006 (successor)

Revenues, cost of revenues and gross profit. No revenues, cost of revenues and gross profit were recorded by us in the period from November 13, 2006 to December 31, 2006 (successor).

Operating expenses. Operating expenses for the period from November 13, 2006 to December 31, 2006 (successor) were $0.2 million. Our operating expenses consisted only of general and administrative expenses. These expenses consisted of initial business start up costs to fund the commencement of construction of our Xuzhou Phase I production facility.

Non-operating income (expenses). Non-operating expenses for the period from November 13, 2006 to December 31, 2006 (successor) were $0.1 million. These expenses consisted primarily of net interest expenses related to borrowings incurred to fund our initial operations.

Net loss attributable to holders of ordinary shares. As a result of the factors described above, we had a net loss attributable to holders of ordinary shares of $0.2 million for the period from November 13, 2006 to December 31, 2006 (successor).

Period from March 7, 2006 to December 13, 2006 (predecessor)

Revenues, cost of revenues and gross profit. No revenues, cost of revenues and gross profit were recorded by our predecessor in the period from March 7, 2006 to December 13, 2006 (predecessor).

Operating expenses. Operating expenses for the period from March 7, 2006 to December 14, 2006 (predecessor) were $2.8 million. These expenses consisted of initial business start up costs to fund the commencement of construction of our Xuzhou Phase I production facility in June 2006, and included $1.5 million in consultancy fees paid to an affiliate under a technical consultancy agreement for the procurement of polysilicon production technology including the sourcing and import of equipment.

Non-operating income (expenses). Non-operating expenses for the period from March 7, 2006 to December 13, 2006 (predecessor) were $0.7 million. These expenses consisted primarily of net interest expenses related to borrowings incurred to fund our initial operations.

Net loss attributable to holders of ordinary shares. As a result of the factors described above, we had a net loss attributable to holders of ordinary shares of $3.4 million for the period from March 7, 2006 to December 13, 2006 (predecessor).

Plan of Operations for 2008

We have completed installation of all 18 reactors, five imported and 13 domestically produced, in our Xuzhou Phase II production facility, and in July 2008, we commenced commercial production and expect to achieve its fully ramped up capacity by December 2008. After June 30, 2008, we incurred RMB2.1 billion ($311.0 million) in onshore borrowings which will be used to finance our intended expansion of polysilicon production facilities and in-house wafer production facility.

Our Taixing joint venture has constructed a TCS production facility with an initial annual capacity of 20,000 MT which commenced commercial production in September 2008. We intend to increase the Taixing joint

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venture annual TCS production capacity to up to 60,000 MT by 2010. We commenced construction planning for a hydrogenation and a TCS production facility in Xuzhou in August 2008. If we decide to commence construction of the hydrogenation and in-house TCS production facility, we expect the capital expenditures, excluding capitalized interest during construction, will be approximately RMB260.0 million ($37.9 million) and RMB60.0 million ($8.7 million), respectively, the majority of which we expect to incur in 2008.

We have received PRC government environmental and NDRC approvals for 6,000 MT per year of our 10,500 MT per year Xuzhou Phase III production facilities. We intend to apply for NDRC approvals for the remaining capacity of Xuzhou Phase III production facilities in the near future. We will source a greater portion of our equipment for the Xuzhou Phase III production facilities from domestic manufacturers and have entered into equipment supply contracts for reactors and certain other equipment for our Xuzhou Phase III production facilities. See “Business—Equipment”. We expect the capital expenditures related to the Xuzhou Phase III production facilities, excluding capitalized interest during construction, will be approximately $874.8 million, approximately one-third of which we expect to incur in 2008. We expect to finance this expenditure with our onshore borrowings, cash generated by our operating activities, which includes advances from customers pursuant to our supply contracts, and proceeds from this offering. For initial equipment purchases, we may fund a portion of the equipment deposits or purchase price from advance payments we receive on wafer and polysilicon supply contracts discussed below. Xuzhou Phase III will consist of three production lines with annual capacities of 3,500 MT each, each of which is expected to be able to produce both solar and electronic grade polysilicon. The first production line at our Xuzhou Phase III production facilities is expected to commence commercial production in December 2008. We intend to fully ramp up our Xuzhou Phase III production facilities by February 2010.

On September 11, 2008, we entered into a non-binding memorandum of understanding with the Inner Mongolia government relating to the development of 10,500 MT polysilicon production facilities to be built in Xilinhot, Inner Mongolia through an affiliated domestic subsidiary of JZPTD. We have begun planning for our Xilinhot production facilities and expect to begin construction activities in October 2008. See “Risk Factors — Risks Relating to Our Business — Development of our proposed Xilinhot polysilicon production facilities will be in Inner Mongolia. We and our affiliates have no prior experience operating in Inner Mongolia and may face severe weather conditions, difficult legal requirements and a lack of project infrastructure.”

We have entered into equipment supply contracts for wire saws and squarers for our in-house production of wafers. We will also enter into additional equipment purchase contracts for our wafer capacity expansion. Committed capital expenditures related to these equipment purchase contracts are approximately $238.7 million. Although deposits will be made in 2008, we expect the majority of such capital expenditures to be incurred in 2009.

We have entered into supply contracts for the sale of polysilicon and wafers with seven customers. The weighted average selling price for the polysilicon supply contracts and for the wafer supply contracts are significantly lower than our historical spot market sales prices. We recognize revenues from most of these contracts on a weighted average basis. For the three months ended June 30, 2008, approximately 60% of our sales volumes were from spot market sales. As a result of the foregoing, our profitability for the three months ended June 30, 2008 was adversely effected. We expect that for the three months ending September 30, 2008 and December 31, 2008, approximately 25% and less than 10% of our sales volumes will be derived from spot market sales, respectively. See “Risk Factors — Risks Relating to Our Business — We did not achieve profitability until the three months ended December 31, 2007 and we may not maintain profitability.” We also intend, to seek a greater proportion of international sales.

We expect to finance the expenditure to be incurred in connection with our expansion plans described above in this section with our onshore borrowings, cash generated by our operating activities, which includes advances from customers pursuant to our supply contracts, and proceeds from this offering.

We expect to significantly increase the number of our employees, but less than proportionally to our increased capacity, as our Xuzhou Phase II production facility ramps up and our Xuzhou Phase III production facilities come on line.

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Liquidity and Capital Resources

Cash Flows and Working Capital

To date, we have financed our operations primarily through the issuance of ordinary shares and bonds, bank loans and contributions from a shareholder. We received $60.0 million in proceeds from the issuance and sale of our floating rate bonds. We obtained bank loans which aggregated $206.1 million as of June 30, 2008. We also received net contributions from shareholders in the total amount of $8.0 million as of June 30, 2008.

The following table sets forth a summary of our cash flows for the periods indicated:

	March 7, 2006 to December 13, 2006 (Predecessor)			November 13, 2006 to December 31, 2006 (Successor)			Year Ended December 31, 2007 (Successor)			Six Months Ended June 30,
										2007 (Successor)			2008 (Successor)
	(in thousands)
Net cash (used in) provided by operating activities	$	(2,782	)	$	(842	)	$	15,515		$	(5,681	)	$	277,935
Net cash (used in) provided by investing activities		(60,857	)		1,865			(96,716	)		(19,327	)		(284,378	)
Net cash provided by financing activities		87,670			4,010			116,120			42,923			115,675
Net increase in cash and cash equivalents		24,031			5,033			34,919			17,915			109,232
Cash and cash equivalents at beginning of period		—			—			5,033			5,033			40,067
Effect of foreign exchange on cash and cash equivalents		453			—			115			134			2,362
Cash and cash equivalents at end of period	$	24,484		$	5,033		$	40,067		$	23,082		$	151,661

In addition to our past sources of liquidity, we expect in the future to enter into additional polysilicon and wafer supply contracts that will include interest-free advance payments or provide for financial guarantees or support against future polysilicon or wafer deliveries. We have received such advances or financial guarantees or support from all but one of our customers so far. We will recognize the revenues from most of these supply contracts on a weighted average basis. As the prices paid in the early years on the supply agreements exceed the prices paid in later years, this will have the effect of deferring revenues, and as a result the cash flows from sales under these contracts will exceed recorded revenues from these contracts in the early years. We believe the ability to enter into such agreements will add to our ability to fund both capital expenditures and working capital. Subsequent to June 30, 2008, we incurred an additional RMB2.1 billion ($311.0 million) in onshore borrowings which may be used to finance our intended expansion of polysilicon production facilities and in-house wafer production facility. We believe our existing onshore borrowings, the cash generated from our operations, which includes advances from customers pursuant to our supply contracts, and proceeds from this offering should provide us with sufficient funds for our intended capacity expansion plans.

Operating Activities

Net cash provided by operating activities for the six months ended June 30, 2008 was $277.9 million compared to cash used in operating activities for the six months ended June 30, 2007 of $5.7 million. Net cash provided by operating activities for the six months ended June 30, 2008 primarily resulted from net income of $68.1 million, advances from customers of $147.2 million, an increase in deferred revenues of $23.5 million, decrease in accounts receivable of $6.4 million and non-cash adjustments of $51.9 million mainly including the depreciation of property, plant and equipment of $4.6 million, amortization of discount and deferred financing

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costs on the floating rate bonds of $4.4 million and minority interests of $42.9 million, partially offset by an increase in inventories of $5.6 million, a decrease in accrued expenses and other current liabilities of $5.4 million, an increase in prepaid expenses and other current assets of $5.3 million and a decrease in income tax payables of $4.5 million. Net cash used in operating activities for the six months ended June 30, 2007 primarily resulted from a net loss of $8.4 million, an increase in amounts due to affiliated companies of $3.3 million and an increase in accrued expenses and other current liabilities of $1.7 million, partially offset by non-cash adjustments of $1.7 million, which consisted primarily of minority interests of $1.3 million and a gain on the disposal of JSJST of $0.6 million.

Net cash provided by operating activities for the year ended December 31, 2007 was $15.5 million compared to cash used in operating activities for the period from November 13, 2006 to December 31, 2006 and the period from March 7, 2006 to December 13, 2006 (predecessor) of $0.8 million and $2.8 million, respectively. Net cash provided by operating activities for the year ended December 31, 2007 primarily resulted from an increase in accrued expenses and other current liabilities of $11.0 million, an increase in minority interest of $5.5 million and an increase in income tax payable of $4.3 million, depreciation of $2.4 million and amortization of discount and deferred financing costs on floating rate bonds of $2.5 million, partially offset by an increase in accounts receivable of $6.2 million, an increase in prepaid expenses of $2.5 million and our net loss of $1.8 million. Net cash used in operating activities from November 13, 2006 to December 31, 2006 primarily resulted from a net loss of $0.2 million and a decrease in accrued expenses and other current liabilities of $0.6 million. Net cash used in operating activities from March 7, 2006 to December 13, 2006 primarily results from a net loss of $3.4 million which was partially offset by an increase in accrued expenses and other current liabilities of $0.7 million. The improvement in operating cash flows in 2007 as compared to the 2006 periods reflects the commencement of polysilicon sales in October 2007. Prior to March 31, 2008, substantially all of our product sales were made on a spot basis, for which we generally have not taken any credit risk of our buyers. As we make more sales under contracts, we will take more of such risk, which we have not had to analyze in the past. Although medium- to long-term supply contracts offer assurance of future sales, pricing of such sales are commonly at a discount to sales on the spot market. Although through December 31, 2007 we only made spot sales, we had $6.3 million of accounts receivable as of December 31, 2007 from an extension of credit on one sale to a large public solar company.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2007 and 2008 was $19.3 million and $284.4 million, respectively. Net cash used in investing activities for the six months ended June 30, 2008 primarily resulted from deposits for the purchase of property and equipment of $130.6 million, payments for the purchase of property, plant and equipment of $119.3 million and an increase in restricted cash of $40.0 million. Net cash used in investing activities for the six months ended June 30, 2007 primarily resulted from payments for the purchase of property, plant and equipment of $35.2 million and deposits for the purchase of property and equipment of $14.0 million, partially offset by a full repayment of a $17.9 million (RMB130 million) short-term advance to Shanghai Creative, an affiliated company and $12.0 million from the disposal of JSJST.

Net cash used in investing activities totaled $96.7 million in the year ended December 31, 2007. Net cash provided by investing activities totaled $1.9 million in the period from November 13, 2006 to December 31, 2006. Net cash used in investing activities totaled $60.9 million in the period from March 7, 2006 to December 13, 2006 (predecessor). Net cash used in investing activities in the year ended December 31, 2007 primarily resulted from payments for the purchase of property, plant and equipment of $80.5 million, deposits for purchase of property, plant and equipment of $15.5 million, an increase in restricted cash related to our convertible bonds and deposits for short-term letters of credit for the purchase of property, plant and equipment of $13.8 million and a net payment for the acquisition of JZPTD of $16.4 million, which was partially offset by a full repayment of a $17.5 million (RMB130 million) short-term advance to Shanghai Creative and net proceeds

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from the disposal of JSJST of $12.0 million. We acquired JSJST from onshore parties on December 6, 2006 and sold it to two minority shareholders of JZPTD on June 20, 2007. Net cash provided by investing activities in the period from November 13, 2006 to December 31, 2006 was primarily due to the cash balances of JZPTD of $24.5 million that we acquired on December 13, 2006 which was partially offset by a RMB130 million short-term advance to Shanghai Creative of $16.8 million and a deposit for the purchase of property, plant and equipment of $5.1 million. Cash balances of JZPTD on December 13, 2006 included cash balances of JSJST which was a subsidiary of JZPTD on such date. Net cash used in investing activities in the period from March 7, 2006 to December 13, 2006 was primarily due to deposits for the purchase of property, plant and equipment of $34.5 million, payment for the purchase of land use rights of $6.9 million, payment for the purchase of property, plant and equipment of $6.4 million and consideration paid for the acquisition of JSJST of $12.2 million. See “Related Party Transactions—Share Transfer Agreement with Prior Onshore Shareholders Regarding JSJST”.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2007 and 2008 was $42.9 million and $115.7 million, respectively. Net cash provided by financing activities for the six months ended June 30, 2008 primarily resulted from proceeds from bank borrowings of $130.8 million and advances from affiliated companies of $16.3 million, partially offset by our repayment of loans from Taicang Harbour Golden Concord Electric-Power Generation Co., Ltd., an affiliated company, of $14.3 million, our repayment of bank borrowings of $10.2 million and the repurchase of shares amounting to $7.0 million. Net cash provided by financing activities for the six months ended June 30, 2007 was primarily due to proceeds from bank borrowings of $38.9 million and contributions from shareholders and minority shareholders of JZPTD of $16.6 million, partially offset by a repayment of other borrowings of $12.6 million.

Net cash provided by financing activities in the year ended December 31, 2007, the period from November 13, 2006 to December 31, 2006 and the period from March 7, 2006 to December 13, 2006 was $116.1 million, $4.0 million and $87.7 million, respectively. Net cash provided by financing activities in the year ended December 31, 2007 primarily resulted from the issuance of floating rate bonds of $60.0 million, bank borrowings of $46.8 million, capital contributions to JZPTD by its minority shareholders of $18.1 million and equity contributions from shareholders of $13.0 million, which was partially offset by repayments of other borrowings of $19.2 million, which included repayments of loans received from Guotai for the acquisition of JSJST of $12.2 million, and financing costs for the floating rate bonds of $2.5 million. See “Related Party Transactions—Share Transfer Agreement with Prior Onshore Shareholders Regarding JSJST”. Net cash provided by financing activities in the period from November 13, 2006 to December 31, 2006 primarily resulted from contribution by shareholders of $2.0 million and capital contributed to JZPTD by its minority shareholders of $2.0 million. Net cash provided by financing activities in the period from March 7, 2006 to December 13, 2006 primarily resulted from bank borrowings of $31.5 million, our initial capital contribution of $25.0 million and other borrowings of $31.2 million.

Capital Expenditures

We made capital expenditures for construction of our production facilities of $40.9 million, $6.6 million, $96.0 million and $249.9 million in the period from March 7, 2006 to December 13, 2006 (predecessor), the period from November 13, 2006 to December 31, 2006, the year ended December 31, 2007 and the six months ended June 30, 2008, respectively. Our capital expenditures have historically been used primarily to purchase polysilicon production equipment but we anticipate approximately $83.1 million will be spent on costs associated with land, construction and additional wafer production equipment for the year ended December 31, 2008. We expect that purchases of equipment for our polysilicon and wafer capacity expansion will continue to constitute a significant portion of our capital expenditures.

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We believe that our current onshore borrowings, cash and cash equivalents, anticipated cash flow from operations, which includes customer advances, and the net proceeds from this offering, will be sufficient to meet our anticipated cash needs, including our cash need for working capital and our anticipated capital expenditures for our Xuzhou Phase III and Xilinhot polysilicon production facilities, wafer production facilities and further expansion. As part of the anticipated cash need for the year ending December 31, 2008, we have, after June 30, 2008, incurred additional RMB2.1 billion ($311.0 million) onshore borrowings, which may be used for our intended expansion of polysilicon production facilities and in-house wafer production facility. We expect our capital expenditures in connection with our current expansion plans will be approximately $700 million and approximately $1.7 billion for the years ending December 31, 2008 and 2009, respectively. We may require additional cash due to changes in business conditions or other future developments, including any additional investments or acquisitions we may decide to pursue and in the event we cannot extend indebtedness that is maturing in 2008. If our onshore borrowings, existing cash, cash flows from operations, which include advances from customers pursuant to our supply contracts, and proceeds from this offering are insufficient to meet our requirements, we may seek to sell additional equity or debt securities or borrow from lending institutions. See “Risk Factors — Risks Relating to Our Business — We have significant outstanding bank borrowings and may not be able to arrange adequate financing to repay these borrowings when they mature.”

Contractual Obligations and Commercial Commitments

The following table sets forth our contractual obligations and commercial commitments as of June 30, 2008:

	Payments Due by Period
	Total		Within 1 Year		1-3 Years		3-5 Years		Thereafter
	(in thousands)
Contractual Obligations:
Short-term debt(1)	$	80,425	$	80,425	$	—	$	—	$	—
Long-term debt(1)		143,601		28,454		115,147		—		—
Floating rate bonds(2)		75,000		—		75,000
Capital commitments(3)		392,226		392,226		—		—		—
Operating lease obligations		218		160		58		—		—
Total obligations	$	691,470	$	501,265	$	190,205	$	—	$	—

Notes:

(1) Includes fixed rate interest payments at the interest rate in effect as of June 30, 2008. Our fixed interest rate debt is all RMB-denominated and the interest rate can be adjusted annually by the People’s Bank of China. Does not include interest on our floating rate bonds which will be redeemed and converted in connection with the closing of this offering.

(2) Represents payments that would be due at maturity if we have not effected a qualified public offering. The floating rate bonds mature on September 10, 2009. At the closing of this offering, we will redeem $20 million principal amount of such bonds and the remaining $40 million principal amount will be converted into our shares.

(3) Represents commitments related to construction of our Xuzhou Phase II and Xuzhou Phase III production facilities and purchase of plant and machinery related to such facilities.

In addition to the contractual obligations discussed above, we are party to polysilicon and wafer supply agreements. Those agreements obligate us to manufacture polysilicon and to manufacture wafers in-house or produce wafers through tolling arrangements for our customers. In addition, we have entered into a tolling agreement with respect to the manufacture of wafers for us using our polysilicon. After June 30, 2008, we entered into several equipment purchase contracts relating to our wafer production equipment for which we have committed $238.7 million. We also ordered 60 Shanghai Morimatsu reactors for our Xilinhot production facilities with expected deliveries to commence in June 2009. See “Business—Customers and Markets.”

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Off Balance Sheet Commitments and Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of third parties. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

Inflation

Since our inception, inflation in China has not materially affected our results of operations. According to the National Bureau of Statistics of China, the change in the consumer price index in China was 1.5% and 4.8% for 2006 and 2007, respectively. Since the beginning of 2008, the rate of change in the consumer price index in China has accelerated, and inflation may have effects on our business in the future.

Market Risks

Foreign Exchange Risk

Most of our sales are currently denominated in Renminbi, with a small portion in U.S. dollars. Substantially all of our operating costs are denominated in Renminbi. Our material non-Renminbi expenses consist of U.S. dollar interest expenses for interest on our debt outside of the PRC and employee compensation expenses for employees based in Hong Kong who are paid in Hong Kong dollars. Immediately after this offering our only U.S. dollar interest expense will be related to the 2008 Convertible Bonds. We also have U.S. dollar obligations for equipment purchases for our Xuzhou Phase II facility we are contractually obligated to buy and expect to have U.S. dollar and Euro obligations for equipment we expect to order for our Xuzhou Phase III facilities expansion. We expect in the future to have a greater portion of our revenue generated from export sales. As a result of these factors, we do not believe our operations are exposed to a significant amount of currency risk. For the three months ended June 30, 2008 we entered into four short-term forward currency purchases with Bank of China to hedge an aggregate of $11.0 million and €11.7 million principal amount of onshore borrowings incurred for equipment purchases. We have no other forward contracts, currency options or borrowings to hedge our exposure to foreign currency exchange risk.

JZPTD maintains its books in its functional currency, which is Renminbi. Monetary assets and liabilities of JZPTD denominated in other currencies, such as U.S. dollar bank balances are recorded at the prevailing exchange rate at the date of the transaction. Changes in relative exchange rates are recorded as gains and losses in the JZPTD statements of operations, which can result in gains or losses in our statements of operations. As the functional currency of our Cayman Islands holding company is U.S. dollars, in the event we maintained monetary assets and liabilities denominated in currencies other than U.S. dollars, we would translate their value at the rates of exchange in effect at each balance sheet date. We would record these exchange gains and losses in the statements of operations. We recorded net foreign currency gain of approximately $1.0 million for the six months ended June 30, 2008 related to non-RMB denominated monetary assets at JZPTD. We cannot predict the impact of future exchange rate fluctuations on our results of operations and may incur net foreign currency losses in the future. If our sales denominated in foreign currencies, continue to grow, we will consider using derivate instruments to hedge our exposure to foreign currency exchange risk.

As a result, the value of your investment in our ADSs will be affected by the foreign exchange rate between U.S. dollars and Renminbi. To the extent we hold assets denominated in U.S. dollars, including the net proceeds to us from this offering, any appreciation of the Renminbi against the U.S. dollar could result in a change to our statement of operations and a reduction in the value of our U.S. dollar denominated assets. On the other hand, a decline in the value of Renminbi against the U.S. dollar could reduce the U.S. dollar equivalent amounts of our financial results, the value of your investment in our company and the dividends we may pay in the future, if any, all of which may have a material adverse effect on the prices of ADSs.

80

Interest Rate Risk

Our exposure to interest rate risk primarily relates to interest expenses incurred by our short-term and long-term borrowings, as well as interest income generated by excess cash invested in demand deposits and liquid investments with original maturities of three months or less. Such interest-earning instruments carry a degree of interest rate risk. As of June 30, 2008, our total outstanding interest-bearing onshore borrowings were $206.1 million with varying interest rates of 5.98% to 9.40%. An increase of 1.0% in the applicable interest rate would have added $1.0 million to our interest expense for the six months ended June 30, 2008. We have not used any derivative financial instruments to manage our interest rate risk exposure. However, our future interest expense may increase due to changes in market interest rates. Our fixed interest rate debt is all RMB-denominated and the interest rate can be adjusted annually by the People’s Bank of China.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurement, or SFAS No. 157. SFAS No. 157 addresses standardizing the measurement of fair value for companies that are required to use a fair value measure for recognition or disclosure purposes. The FASB defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” SFAS No. 157 is effective and applicable to us on and after January 1, 2008. The adoption of this statement did not have a material effect on our consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, Fair Value Option for Financial Assets and Financial Liabilities, or SFAS No. 159. SFAS No. 159 permits companies to measure certain financial instruments and certain other items at fair value. The standard requires that unrealized gains and losses on items for which the fair value option has been elected be reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 159 did not have a material effect on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141R, Business Combination, or SFAS No. 141R, to improve reporting creating greater consistency in the accounting and financial reporting of business combinations. The standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We do not expect the adoption of SFAS 141R to have a material impact on our financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, or SFAS No. 160, to improve the relevance, comparability, and transparency of financial information provided to investors by requiring all entities to report noncontrolling (minority) interests in subsidiaries in the same way as required in the consolidated financial statements. Moreover, SFAS No. 160 eliminates the diversity that currently exists in accounting for transactions between an entity and noncontrolling interests by requiring they be treated as equity transaction. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. We are currently evaluating whether the adoption of SFAS No. 160 will have a significant effect on our consolidated financial position, results of operations or cash flows.

In March 2008, the FASB issued SFAS No. 161, or SFAS No. 161, Disclosures About Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133. The new standard requires enhanced disclosures to help investors better understand the effect of an entity’s derivative instruments and related hedging activities on its financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. We will apply SFAS No. 161 effective January 1, 2009.

81

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information is derived from our historical consolidated financial statements included elsewhere in this prospectus. It should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this prospectus, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the other financial information included elsewhere in this prospectus.

In early May and early June 2008, respectively, Sun Wave and Greatest Joy, companies owned by entities affiliated with Mr. Zhu Gongshan and Moonchu, acquired 20% and 16% equity interest of JZPTD, respectively, from the remaining minority shareholders for a cash consideration of $430.5 million. Concurrent to this offering, entities owned by Mr. Zhu Gongshan and Moonchu, will transfer 36% of JZPTD through 100% purchase of Sun Wave and Greatest Joy by our Company for a consideration consisting of (i) $240.6 million in cash using a portion of the proceeds from this offering, (ii) the 2008 Convertible Bonds, to be issued concurrently with this offering, with principal value of $446.9 million convertible into our Company’s ordinary shares and (iii) 270,322,853 ordinary shares of our Company to be issued concurrently with this offering. Sun Wave and Greatest Joy are under the common control of Mr. Zhu Gongshan, our chairman and majority shareholder, which have been created for the sole purpose of holding their respective ownership interests in JZPTD.

The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2007 and for the six months ended June 30, 2008 and the unaudited pro forma condensed consolidated balance sheet as of June 30, 2008 have been prepared by our management based on our historical consolidated statement of operations for the year ended December 31, 2007 and for the six months ended June 30, 2008, and our historical unaudited condensed consolidated balance sheet as of June 30, 2008. These pro forma adjustments were made to give effect to the following events (1) redemption and conversion of the convertible redeemable preferred shares and floating rate bonds into ordinary shares upon completion of the initial public offering, (2) the acquisition of 36% equity interest in JZPTD by Sun Wave and Greatest Joy for a cash consideration of $430.5 million, (3) transfer by entities owned by Mr. Zhu Gongshan and Moonchu of 36% interest in JZPTD through contribution of Sun Wave and Greatest Joy and elimination of minority interest upon completion of the initial public offering, and (4) distribution to the shareholders by (i) payment of cash of $240.6 million, (ii) issuance of 2008 Convertible Bonds with principal value of $446.9 million, and (iii) issuance of 270,322,853 ordinary shares to entities owned by Mr. Zhu Gongshan and Moonchu. The pro forma consolidated statements of operations were prepared as if the above pro forma adjustments had occurred on January 1, 2007 for the year ended December 31, 2007 and the six months ended June 30, 2008. The pro forma condensed consolidated balance sheet has been prepared as if the event had occurred on June 30, 2008.

The unaudited pro forma condensed consolidated financial information reflects pro forma adjustments that are described in the accompanying notes and is based on currently available information and assumptions that we believe provide a reasonable basis for presenting the significant effects of the acquisition of 36% equity interest in JZPTD. We have made, in our opinion, adjustments that are necessary to present fairly the pro forma condensed consolidated financial information. The unaudited pro forma condensed consolidated financial information is presented for informational purposes only and does not purport to represent what our actual results of operations or financial position would have been had the transaction been consummated on the dates indicated and does not purport to be indicative of our financial position as of any future data or our results of operations for any future period.

82

UNAUDITED PRO FORMA CONDENSED BALANCE SHEET

AS OF JUNE 30, 2008

(in thousands, except share and per share data)

	June 30, 2008		Pro forma Adjustments			Notes	Pro forma Results
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	151,661	$	(20,000	)	A	$	[	]
				778		A
				[	]	C
				(240,625	)	E
Restricted cash		54,486		(778	)	A		53,708
Accounts receivable		287						287
Inventories		6,556						6,556
Prepaid expenses and other current assets		8,548						8,548
Total current assets		221,538		[	]			[	]
Property, plant and equipments, net		306,975						306,975
Deposits for purchase of plant and equipment		131,381						131,381
Deposit for purchase of land use right		2,449						2,449
Land use right		7,940						7,940
Intangible assets				397,198		D		397,198
Goodwill				51,365		D		51,365
Deferred financing cost		1,497		(1,497	)	B		—
Deferred tax assets		12						12
TOTAL ASSETS	$	671,792	$	[	]		$	[	]
LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	3,345					$	3,345
Accrued expenses and other current liabilities		33,680						33,680
Advances from customers		36,590						36,590
Other deferred income		478						478
Bank borrowings		95,847						95,847
Loans from and other amounts due to affiliated companies		17,471						17,471
Total current liabilities		187,411						187,411
Floating rate bond		65,789		(20,000	)	A		—
				(45,789	)	B
Deferred tax liabilities				99,300		D		99,300
Convertible bonds				446,875		E		446,875
Advance from customers under long-term sales arrangement		113,743						113,743
Other deferred income		6,458						6,458
Deferred revenues		23,495						23,495
Bank borrowings		110,219						110,219
TOTAL LIABILITIES		507,115		480,386				987,501
MINORITY INTEREST		81,150		(81,194	)	F		(44	)
Series A convertible redeemable preferred shares ($0.00001 par value; 50,000,000 shares authorized and 16,667,000 shares issued and outstanding as of June 30, 2008; no shares outstanding on a pro-forma basis as of June 30, 2008)		22,778		(22,778	)	G		—
SHAREHOLDERS’ EQUITY
Ordinary shares ($0.00001 par value; 100,000,000,000 shares authorized and 978,333,000 shares issued as of June 30, 2008; [            ] shares outstanding on a pro-forma basis as of June 30, 2008)		10		3		E		[	]
				[	]	C
Additional paid-in capital		8,009		45,789		B		[	]
				22,778		G
				[	]	C
				[	]	E
(Accumulated deficit) Retained earnings		43,287		(1,497	)	B		[	]
				430,457		D
				[	]	E
Accumulated other comprehensive income		9,443						9,443
Total shareholders’ equity		60,749		[	]			[	]
TOTAL LIABILITIES, MINORITY INTEREST, CONVERTIBLE REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY	$	671,792	$	[	]		$	[	]

83

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2007

(in thousands, except share and per share data)

	For the year ended December 31, 2007		Pro forma Adjustments		Notes	Pro forma Results
REVENUES
Third party sales	33,378					33,378
Related party sales	7,470					7,470
Total revenues	40,848					40,848
Cost of revenues	(10,996	)				(10,996	)
Gross profit	29,852					29,852
OPERATING EXPENSES
General and administrative	(17,836	)				(17,836	)
Amortization of intangible assets	—		(52,960	)	H	(52,960	)
OPERATING INCOME (LOSS)	12,016		(52,960	)		(40,944	)
NON-OPERATING INCOME (EXPENSE)
Interest income	376					376
Interest expense	(6,097	)	3,167		I	(18,476	)
			(2,528	)	J
			388		O
			(13,406	)	K
Other income	6					6
Gain on disposal of JSJST	566					566
Total non-operating expenses	(5,149	)	(12,379	)		(17,528	)
INCOME (LOSS) BEFORE INCOME TAX AND MINORITY INTEREST	6,867		(65,339	)		(58,472	)
Income tax (expense)/benefit	(3,123	)	13,240		N	10,117
INCOME (LOSS) BEFORE MINORITY INTEREST	3,744		(52,099	)		(48,355	)
Minority interest	(5,540	)	5,540		L	—
NET INCOME (LOSS)	(1,796	)	(46,559	)		(48,355	)
Deemed distribution on convertible redeemable preferred shares—accretion of redemption premium	(1,111	)	1,111		M	—
NET LOSS ATTRIBUTABLE TO HOLDERS OF ORDINARY SHARES	(2,907	)	(45,448	)		(48,355	)
ORDINARY SHARES USED IN LOSS PER ORDINARY SHARE CALCULATION
Basic and diluted—ordinary share	994,292,123					[	]
LOSS PER ORDINARY SHARE
Basic and diluted—ordinary share	(0.0029	)				[	]

84

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2008

(in thousands, except share and per share data)

	For the period ended June 30, 2008			Pro forma Adjustments			Notes	Pro forma Results
REVENUES
Third party sales	$	153,690		$				$	153,690
Related party sales		19,917							19,917
Total revenues		173,607							173,607
Cost of revenues		(48,730	)						(48,730	)
Gross profit		124,877							124,877
OPERATING EXPENSES
General and administrative		(6,640	)						(6,640	)
Amortization of intangible assets		—			(26,480	)	H		(26,480	)
OPERATING INCOME (LOSS)		118,237			(26,480	)			91,757
NON-OPERATING INCOME (EXPENSE)
Interest income		582							582
Interest expense		(7,042	)		4,565		I		(8,537	)
					(6,703	)	K
					643		O
Amortization of other deferred income		232							232
Other non-operating expense		(747	)						(747	)
Total non-operating expenses		(6,975	)		(1,495	)			(8,470	)
INCOME BEFORE INCOME TAX AND MINORITY INTEREST		111,262			(27,975	)			83,287
Income tax (expense)/benefit		(297	)		6,620		N		6,323
INCOME BEFORE MINORITY INTEREST		110,965			(21,355	)			89,610
Minority interest		(42,892	)		42,934		L		42
NET INCOME		68,073			21,579				89,652
Deemed distribution on convertible redeemable preferred shares—accretion of redemption premium		(1,667	)		1,667		M		—
NET INCOME ATTRIBUTABLE TO HOLDERS OF ORDINARY SHARES	$	66,406		$	23,246			$	89,652
ORDINARY SHARES USED IN INCOME PER ORDINARY SHARE CALCULATION
Basic—ordinary share		979,843,989							[	]
Diluted—ordinary shares		981,436,130							[	]
EARNINGS PER ORDINARY SHARE
Basic—ordinary share		0.0666							[	]
Diluted—ordinary shares		0.0665							[	]

85

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

(in thousands, except shares and per share information)

1. Basis of Presentation

On May 6 and June 10, 2008, respectively, Sun Wave and Greatest Joy acquired 20% and 16% equity interest in JZPTD, respectively from the remaining minority shareholders for a total cash consideration of $430,457. Sun Wave and Greatest Joy are under the common control of Mr. Zhu Gongshan, majority shareholder of our company.

On July 18, 2008, the Company signed a definitive agreement to acquire the remaining 36% equity interest in JZPTD through 100% acquisition of Sun Wave and Greatest Joy. The total distribution to our majority shareholders consists of (i) cash payment of $240,625, (ii) issuance of 2008 Convertible Bonds with principal value of $446,875 which is convertible into the Company’s ordinary shares at initial public offering price and (iii) issuance of 270,322,853 ordinary shares of the Company. The number of ordinary shares will be reduced in the event the initial public offering price is below $             per ADS. See “Related Party Transactions—Acquisition of 36% of JZPTD Onshore Equity Interests”. The contribution of 36% of JZPTD to the Company by entities affiliated with Mr. Zhu Gongshan and Moonchu through 100% contribution of Sun Wave and Greatest Joy has been accounted for as a common control transaction as prescribed by Statement of Financial Accounting Standards, or SFAS, No. 141, “Business Combinations”. The assets will be transferred into the Company at Sun Wave and Greatest Joy’s carrying value and the difference between the total consideration described above and the carrying value of Sun Wave and Greatest Joy will be recorded as a distribution to shareholders.

Sun Wave and Greatest Joy accounted for the 36% equity interest acquisition of JZPTD under the purchase method. Sun Wave and Greatest Joy performed a preliminary allocation of the total purchase price of JZPTD’s net tangible and identifiable intangible assets based on their estimated fair values as of May 6, 2008 and June 10, 2008. These estimations are based on Sun Wave and Greatest Joy’s preliminary analysis and subject to change for up to twelve months from the date of acquisition. Sun Wave and Greatest Joy are arranging an independent professional appraisal firm to conduct a formal valuation on the assets acquired.

The purchase price has been preliminarily allocated by Sun Wave and Greatest Joy in May and June 2008 as follows:

	Amount			Amortization Period
Intangible assets acquired:
—Long term sales contracts	$	397,198		7.5 years
Goodwill		51,365
Other assets and liabilities acquired		81,194
Deferred tax liabilities		(99,300	)
	$	430,457

The pro forma adjustments were made to give effect to the following events (1) redemption and conversion of the convertible redeemable preferred shares and floating rate bonds into ordinary shares upon completion of the initial public offering, (2) the acquisition of 36% equity interest in JZPTD by Sun Wave and Greatest Joy for a cash consideration of $430,457, (3) transfer by shareholders of 36% interest in JZPTD through contribution of Sun Wave and Greatest Joy and elimination of minority interest upon completion of the initial public offering, and (4) distributions to the Shareholders by (i) payment of cash of $240,625, (ii) issuance of 2008 Convertible Bonds with principal value of $446,875, and (iii) issuance of 270,322,853 ordinary shares to Mr. Zhu Gongshan and Moonchu.

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2. Pro Forma Adjustments

A Repayment of $20,000 for Tranche A of the floating rate bonds redeemed upon the initial public offering. Upon redemption and conversion of the floating rate bonds, cash deposit of $778 is no longer restricted and is reclassified as cash and cash equivalents.

B Conversion of Tranche B floating rate bonds of $45,789 into 29,850,000 ordinary shares and write-off of related deferred financing costs of $1,497 as a result of automatic redemption and conversion upon the initial public offering.

C To record proceeds received from issuance of [    ] ordinary shares in the form of ADSs at an initial public offering price of [    ] per share, the midpoint of the estimated range of the initial public offering price, after deducting estimated underwriting discounts and offering expenses totaling [$            ].

D The Company recorded the assets of Sun Wave and Greatest Joy at their carrying value upon contribution of Sun Wave and Greatest Joy to the Company as follows:

	Amount			Amortization Period
Intangible assets acquired:
—Long term sales contracts	$	397,198		7.5 years
Acquired goodwill		51,365
Other assets and liabilities acquired, net		81,194
Deferred tax liabilities		(99,300	)
	$	430,457

E Distributions to the shareholders consisting of cash payment of $240,625 from the initial public offering proceeds, issuance of convertible bonds with principal value of $446,875 which is convertible into ordinary shares of the Company at the initial public offering price of [        ] per share (“2008 Convertible Bonds”) and issuance of 270,322,853 ordinary shares of the Company at the initial public offering price, assuming that the initial public offering price is $             per ADS, the midpoint of the estimated range of the initial public offering price. The 2008 Convertible Bonds mature one and a half years after issuance and are convertible as follows: 50% of outstanding principal six months after issuance, 25% of outstanding principal nine months after issuance, and the remaining 25% outstanding principal twelve months after issuance.

F Reduction of 36% minority interests in JZPTD upon the contribution of Sun Wave and Greatest Joy.

G Reduction of Series A redeemable preferred shares as a result of automatic conversion into 16,667,000 ordinary shares upon the initial public offering.

H Recognition of amortization of intangible assets acquired as if the contribution had occurred on January 1, 2007. The intangible assets are amortized over the contractual term of the long term sales contracts.

I Reduction of the floating rate bonds interest as if floating rate bonds were redeemed and converted at January 1, 2007.

J Write-off of deferred financing costs related to the floating rate bonds as if the floating rate bonds were redeemed and converted on January 1, 2007.

K Recognition of 3% interest of the 2008 Convertible Bonds issued for the contribution of Sun Wave and Greatest Joy as if the 2008 Convertible Bonds were issued on January 1, 2007.

L Reduction of 36% minority interests of JZPTD as if the acquisition of Sun Wave and Greatest Joy had occurred on January 1, 2007.

87

M Reduction of deemed distribution of convertible redeemable preferred shares as if the conversion occurred on January 1, 2007.

N Deferred tax effect related to the pro forma amortization of the non-goodwill intangible assets, which was based on the effective enterprise income tax rate of 25%.

O To reverse the deferred financing charges amortized for the year ended December 31, 2007 and the period ended June 30, 2008 as if the floating rate bonds were redeemed and converted on January 1, 2007.

3. Pro Forma Shares

The pro forma basic and diluted earnings per share are based on the weighted average number of shares of the Company’s ordinary shares outstanding for the year ended December 31, 2007 and period ended June 30, 2008 plus the (i) ordinary shares as a result of the conversion of preferred redeemable shares and floating rate bonds, (ii) the number of ordinary shares whose proceeds would be necessary to pay cash distribution of $240,625, (iii) ordinary shares issued for the JZPTD acquisition assuming the initial public offering price is $             per ADS or above and (iv) the [dilutive effect of the 2008 Convertible Bonds] on June 30, 2008 shares [(antidilutive for year ended December 31, 2007)] as shown in the following tables:

	December 31, 2007
Shares used in calculating basic and diluted loss per share on a pro forma basis:
Weighted average shares outstanding used in computing basic and diluted loss per share for the Company	994,292,123
Ordinary shares as a result of redeemable preferred shares and floating rate bonds conversion	14,995,548
Issuance of ordinary shares for distribution proceeds	[	]
Issuance of ordinary shares as distribution	270,322,853
	[	]

	June 30, 2008
Shares used in calculating basic earnings per share on a pro forma basis:
Weighted average shares outstanding used in computing basic earnings per share for the Company	979,843,989
Ordinary shares as a result of redeemable preferred shares and floating rate bonds conversion	46,667,000
Issuance of ordinary shares for distribution proceeds	[	]
Issuance of ordinary shares as distribution	270,322,853
	[	]
Shares used in calculating diluted earnings per share on a pro forma basis:
Weighted average shares outstanding used in computing diluted earnings per share for the Company	981,436,130
Ordinary shares as a result of redeemable preferred shares and floating rate bonds conversion	46,667,000
Issuance of ordinary shares for distribution proceeds	[	]
Issuance of ordinary shares as distribution	270,322,853
	[	]

88

BUSINESS

Overview

We supply polysilicon and wafers to companies operating in the solar industry. Polysilicon is the primary raw material for wafers used in the solar and the electronics industries. We manufacture polysilicon at our production facility in Xuzhou, Jiangsu Province, China and intend to establish a second polysilicon production complex in Xilinhot, Inner Mongolia, China. We also intend to commence wafer manufacturing in the third quarter of 2009. Our business was founded in March 2006 and upon completion and full ramp-up of our planned expansion to 24,000 MT per year by December 2010, we believe we will be one of the leading polysilicon producers in terms of production capacity. We currently plan to build 2.7 GW of wafer production capacity by the end of 2011. We commenced construction of our Xuzhou Phase I production facility, which produces solar grade polysilicon, in July 2006 and produced our first batch of polysilicon in September 2007. We made our first commercial shipment of polysilicon in October 2007. In the six months ended June 30, 2008, we produced 661 MT of polysilicon. For the months of July 2008 and August 2008, we produced 175 MT and 185 MT of polysilicon, respectively. We began selling wafers produced for us through tolling arrangements with third party manufacturers in the second quarter of 2008 and expect wafer sales to contribute a significant majority of our revenues after 2009.

We ramped up our Xuzhou Phase I production facility to its designed annual capacity of 1,500 MT in March 2008. We commenced commercial production of our Xuzhou Phase II production facility in July 2008 and expect it to achieve its fully ramped up capacity by December 2008. In December 2007, we commenced preparation for construction of our Xuzhou Phase III production facilities, which are expected to have an aggregate annual production capacity of 10,500 MT. We expect our Xuzhou Phase III production facility to commence commercial production in December 2008. We intend to fully ramp up our Xuzhou Phase III production facilities by February 2010. We have begun planning and expect to begin construction activities for our Xilinhot production facilities in October 2008. We expect to commence commercial production at our Xilinhot production facilities in December 2009 and to fully ramp it to its designed annual capacity of 10,500 MT by December 2010. We have implemented proven technologies in our polysilicon production facilities. We utilize a modified Siemens process to produce polysilicon and, starting from Xuzhou Phase II onwards, our production facilities are designed to produce both solar and electronic grade polysilicon.

We use TCS to produce polysilicon. TCS is one of the main and most costly production inputs and, to date, we have relied on third party suppliers for substantially all of our TCS requirements. To reduce our reliance on TCS from third party suppliers, we are increasingly incorporating TCS production into our production process. We integrated the hydrochlorination process for our Xuzhou Phase I production facility in February 2008 and in our Xuzhou Phase II production facility in September 2008. For the six months ended June 30, 2008 and the months of July 2008 and August 2008, approximately 7%, 23% and 36% of the TCS we consumed was produced in-house, respectively. Our Taixing joint venture has constructed a TCS production facility with an initial capacity of 20,000 MT in Taizhou, Jiangsu Province, China, which commenced commercial production in September 2008. We have already successfully used the TCS we produced through our Taixing joint venture in our polysilicon production process. We intend to increase the Taixing joint venture’s annual TCS production capacity to up to 60,000 MT by 2010. Upon ramp up of these facilities, we expect to substantially reduce our reliance on third parties for our TCS requirements.

We intend to begin construction of our first multicrystalline and monocrystalline wafer production facility in Xuzhou by the end of 2008 to commence pilot production by the third quarter of 2009. We intend to ramp up these facilities to a combined 0.8 GW production capacity by the end of 2009 and to further expand our wafer production capacity to 1.9 GW by the end of 2010 and to 2.7 GW by the end of 2011. We have entered into equipment supply contracts to purchase over half of the wire saws and squarers for our expansion to 1.9 GW with the first deliveries expected to commence in the second quarter of 2009. We also intend to explore opportunities to further expand our wafer production capacity through strategic acquisitions and partnerships. Until we have sufficient in-house wafer production capacity, we will continue to rely on wafer tolling arrangements to support

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our wafer sales. We are currently in preliminary discussions with our wafer tolling producer, Huasheng, with respect to a potential acquisition of such producer to increase our in-house manufacturing capacity.

We have entered into polysilicon and wafer supply agreements with cell and module manufacturers that provide for aggregate sales of approximately 15.1 GW of wafers and approximately 40,356 MT of polysilicon for aggregate total contract prices of $21.3 billion (RMB146.2 billion). These contracts are with JA Solar, Trina Solar, CSI, Suntech, AIDE, Solarcell and Solarfun. Under our current supply agreements, we have contracted to sell approximately 90% of our anticipated production from now to the end of 2015 after giving effect to our current polysilicon expansion plan to 24,000 MT and wafer expansion plan to 2.7 GW. See “—Customers and Markets”. Prior to our entry into these supply contracts, we sold all of our polysilicon on the spot market to major Chinese solar manufacturers.

For the year ended December 31, 2007, we sold 153 MT of polysilicon, all in the three months ended December 31, 2007. For the six months ended June 30, 2008, we sold 551 MT of polysilicon and 10.1 MW of wafers. Our revenues for the year ended December 31, 2007 and the six months ended June 30, 2008 were $40.8 million and $173.6 million, respectively. Net loss attributable to holders of ordinary shares was $2.9 million in the year ended December 31, 2007 and net profit attributable to holders of ordinary shares was $66.4 million in the six months ended June 30, 2008.

Our Industry

Solar Market

Solar power is one of the most rapidly growing renewable energy sources in the world today. Solar power systems generally comprise a multitude of solar modules, which are made of multiple solar cells. There are two main categories of solar cell technology entailing different production processes:

• polysilicon-based production technology; and

• thin-film technology.

Polysilicon-based technologies accounted for approximately 88.4% of total solar production in 2007, according to Solarbuzz. There are alternatives to using silicon in photovoltaic applications that may gain marketwide acceptance. Thin-film cells use little to no amounts of silicon. Although currently thin-film cells exhibit lower conversion efficiencies, improvements in such production technology could have a significant negative impact on the demand for polysilicon.

The manufacturing value chain of polysilicon-based photovoltaic products starts with the processing of quartz sands to produce metallurgical-grade silicon. This material is further purified to become solar grade or electronic grade virgin polysilicon feedstock. Recyclable polysilicon raw materials, which include tops and tails of discarded portions of polysilicon ingots, pot scraps and broken polysilicon wafers acquired from the solar and electronics industries, may also be used as feedstock when combined with high purity polysilicon.

For multicrystalline wafers, polysilicon is cast into ingots through a crystallization process and subsequently cut into blocks, whereas monocrystalline wafers are produced from a single seed crystal which is dipped in molten polysilicon and pulled into a cylindrical ingot. These ingot blocks, or ingots, are first squared into bricks and then sliced into wafers.

Wafers are then manufactured into solar cells through a multi-step manufacturing process that entails etching, doping, coating and applying electrical contacts. Solar cells are then interconnected and packaged to form solar modules, which together with system components such as batteries and inverters, are distributed to installers, systems integrators, service providers or directly to end-users, for installation onto on-grid or off-grid systems.

We believe the following factors will continue to affect the global demand in the solar industry:

Rising Prices of Conventional Energy Sources. We believe more sustainable energy sources are needed given the limited nature and increasing price of fossil fuel supply as well as escalating electricity consumption.

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Government Incentives for Renewable Energy Sources. Governments around the world have implemented renewable energy policies and incentives to encourage the use of clean and sustainable energy sources, such as solar energy. Countries including Australia, China, Germany, Japan, Korea, Spain and the United States have offered or announced plans to offer substantial incentives in the form of direct subsidies for solar power system installations or rebates for electricity produced from solar power.

Tightening of Environmental Regulations. Solar power is capable of generating electricity without producing pollution such as gaseous or water emissions or noise during operation. Many governments around the world have adopted initiatives aimed at addressing worldwide environmental concerns and climate change risks associated with the use of fossil fuels.

Increasing Cost Competitiveness of Solar Energy. The average prices of solar cells and modules are expected to decrease over the next few years as a result of improved production technologies and manufacturers attaining economies of scale. In addition, solar power systems are also more cost-effective for use in remote rural applications, where grid-connection costs are prohibitive.

Some of the key challenges faced by the solar industry include the following:

Possible Reduction or Elimination of Government Subsidies and Incentives. Solar energy may be more expensive than traditional fossil fuel generated electricity if the cost of installing a solar power system were taken into consideration. Relatively high product costs remain one of the impediments to growth in solar power usage. Therefore, the current growth of the solar power industry substantially relies on the availability and size of government subsidies and economic incentives, such as capital cost rebates, reduced tariffs, tax credits, net metering and other incentives. There have been significant government efforts to reduce or eliminate these subsidies and economic incentives. It remains a challenge for the solar power industry to reach sufficient scale to be cost-effective in a non-subsidized marketplace.

Need to Broaden Awareness and Acceptance of Solar Power Usage. Growth in solar power usage has been mostly limited to on-grid applications. Solar energy product sales consist substantially of standard solar modules and systems. Broader market awareness will be required in order to tap the potential of the off-grid market.

Electronics Market

Semiconductors are essential to all electronic products and have wide ranging end applications including computing, telecommunications, consumer electronics, automotive, industrial and medical applications. According to iSuppli, total worldwide semiconductor industry revenue was $269 billion in 2007 and is expected to grow to $369 billion by 2012.

Over the last few years, China has emerged as the global center for the manufacture of electronic systems. According to iSuppli, the share of semiconductor industry revenues in the Asia Pacific region (excluding Japan) increased from 27% to 52% from 2000 to 2007. This was a result of many original equipment manufacturers and original design manufacturers migrating their manufacturing operations to China to leverage the cost-effective facilities and the available pool of talent. We believe the production of semiconductors in China will increase in the future and thus demand for electronic grade polysilicon will also increase.

Polysilicon Market

Polysilicon is the primary raw material for the solar and electronics industries. The solar industry produces solar wafers, cells, modules and systems that convert energy from sunlight into electricity. The electronics industry produces semiconductors for use in electronic applications. Historically, the electronics industry has been the dominant user of polysilicon. Recent rapid growth of the solar industry has put it on equal footing with the electronics industry in polysilicon consumption. In 2007, for the first time the solar industry consumed more

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than half, or 54%, of the polysilicon production while the electronics industry consumed the remaining 46%, according to Solarbuzz. As a result of this rapid expansion, sales to the solar industry are now the key factor affecting the price, profit and growth of the polysilicon market.

Polysilicon is produced by refining metallurgical silicon in a highly technical and energy-intensive process. Metallurgical silicon, or MG-Si, has a purity level of 95% to 99% and is widely available. To be qualified for use in the solar industry, MG-Si needs to be refined to reach a purity level of 99.9999% (often referred to as “six nines” or 6N pure), and to be qualified to be used in the electronics industry, MG-Si needs to be refined to reach a purity level of 99.9999999% (often referred to as “nine nines” or 9N pure).

There are several ways in which MG-Si can be refined. The three main technologies used in the production of polysilicon are the Siemens reactor process, which is the dominant technology, the FBR process and the upgraded metallurgical grade silicon process.

Siemens Process. The substantial majority of polysilicon used by the solar and electronics industries is produced via a process of chemical vapor deposition, whereby a chlorosilane gas is deposited onto a heated rod. By 2007, according to Solarbuzz, most new entrants have chosen Siemens technology for manufacturing. The technology in the Siemens reactor is mature, widely implemented and produces high quality material. The process of producing polysilicon begins with MG-Si. MG-Si is purified by various chemical processes to produce solar grade or electronic grade polysilicon.

At temperatures between 1,000-1,100°C, TCS is split into its constituents, hyper-pure silicon, which grows onto a polysilicon seed rod, and hydrogen chloride. After the polysilicon rods have grown to the desired thickness, ordinarily taking 5-12 days, the reactor must then be shut down, and the batch of polysilicon rods needs to be cooled and crushed into chunks. TCS has a high deposition rate and high volatility (which makes it easier to remove boron and phosphorous, the two compounds which cause low performance in solar cells). Using the Siemens reactor process has the disadvantage of requiring high electricity usage to maintain process temperatures.

A variation of the Siemens process further refines TCS to produce monosilane. This gaseous monosilane is then deposited on heated silicon rods. Monosilane is a higher purity starting material which leads to purer polysilicon. This higher purity polysilicon has historically been more expensive to produce.

Fluidized Bed Reactor (FBR). An alternative process for polysilicon production uses a FBR which results in granular silicon. Silicon fluoride is used instead of metallurgical silicon, which is converted into monosilane. Then polysilicon seeds are dropped into the reactor while monosilane and hydrogen gases continually pass through the reactor. This is a continuous process and the reactor does not need to be shut down to obtain the polysilicon, and the rods do not need to be crushed into chunks. The principal advantage of this process is that it uses less electricity than is required in the Siemens process. To date, however, only a few producers have established production using FBR technology on a commercial scale.

Others. In addition to the Siemens reactor process and the FBR process, some manufacturers have sought to commercialize other methods dedicated specifically to solar grade polysilicon. These methods seek to lower silicon production costs and to produce feedstock meeting the lower standards for use in the solar industry cost effectively.

Polysilicon Supply

The considerable growth in the solar industry over the past several years has resulted in greater demand for polysilicon and there is currently insufficient production capacity to meet the requirements of the solar and electronics industries. Although the raw material, MG-Si, is plentiful, there are significant barriers to enter the market to produce high-purity polysilicon. Polysilicon plants involve highly complex processes and technological know-how. Secondly, significant scale of at least 3,000-5,000 MT is required to achieve a competitive cost position.

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According to Solarbuzz, at the end of 2007, total global polysilicon production capacity serving the solar and electronics industries exceeded 52,000 MT. Seven companies — Hemlock, MEMC, Mitsubishi, Osaka Titanium, REC, Tokuyama and Wacker— accounted for 82% of total polysilicon production capacity. More recently, the major incumbent polysilicon suppliers worldwide have announced new capacity expansion plans in response to the growing demand from the solar industry. In addition, many new entrants have either commenced or announced plans to produce polysilicon. Several downstream producers, such as LDK and ReneSola, have also expressed the intention to expand upstream to include polysilicon production. In China, polysilicon production capacity has lagged behind solar wafer and cell production capacity. The following table indicates market share in 2007:

	Polysilicon	Wafer	Cell(1)
China	18%	54%	41%
Rest of World	82%	46%	59%
Total capacity	52,007MT	5,834MW	6,980MW

Source: Solarbuzz 2008

Note: (1) Includes cells produced using thin-film technology.

Companies in the solar industry have been paying increasingly higher prices in recent years for polysilicon as demand has exceeded the supply. According to Solarbuzz, the average long-term contract price for polysilicon has increased from $35-40/kg in 2005 to $60-65/kg in 2007. The spot market for polysilicon reached $250-$400/kg by the end of 2007.

Some of the key challenges faced by the polysilicon market include the following:

Shortage of Polysilicon Supply. The current market shortage for polysilicon may hinder the development and usage of polysilicon in the solar industry. Further, the shortage of polysilicon provides incentives to develop non-silicon based photovoltaic technologies.

Potential Overcapacity. In 2001 and 2002, the polysilicon market experienced a period of excess capacity. Many existing manufacturers and new manufacturers have announced plans to add additional polysilicon capacity. If all of such additional capacity is built, there may be overcapacity, with resultant pressures on pricing and market share.

Solar Wafer Industry

Multicrystalline wafers generally contain more impurities and crystal defects which impede the flow of electrons as compared to monocrystalline wafers, which are made from one single crystal. Compared to monocrystalline wafers, multicrystalline wafers are cheaper to produce and offer greater scope for further technological development, such as increasing the size of the ingot and reducing silicon waste and crystal defects. According to Solarbuzz, multicrystalline wafer-based cell production represented approximately 48.6% while monocrystalline wafer-based cell production constituted approximately 39.8% of the total photovoltaic market in 2007.

Many companies compete in the solar wafer market. Some of the major wafer producers, such as Kyocera, REC, SolarWorld, Trina Solar and Yingli, use a part or all of their wafer output for the in-house production of solar cells. In additional, various existing and new wafer manufacturers are expanding their production capacity to meet growing market demand. The main barriers to entry for wafer manufacturing currently include significant capital expenditures, access to high performance manufacturing equipment, availability of polysilicon, solid customer relationships with leading solar cell producers worldwide and significant manufacturing experience required to achieve optimal manufacturing efficiency. While current polysilicon feedstock shortages enable

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wafer manufacturers reliably to sell their output, relationships with the leading established solar cell producers are critical to gaining feedback on wafer performance and fine-tuning wafer production to ensure a sustainable technological lead.

The key competitive attributes of solar wafers are conversion efficiency, certain physical properties and the production cost. These three factors ultimately contribute to a solar cell’s cost per watt of electricity generation. The photovoltaic industry’s main goal is to reduce the cost per watt of solar electricity generation in order to increase solar energy’s competitiveness. Often there exists a trade-off between achieving high technical efficiency, or a high conversion efficiency, and a high manufacturing efficiency, or low production costs. Companies in the industry are striving to improve the quality and efficiency of solar wafers through improvements to their production processes.

Production costs of monocrystalline or multicrystalline wafers can be reduced through the creation of larger ingots and thinner wafers, as well as the reduction of operational costs. Larger ingots reduce the amount of consumables and electricity used per watt of product manufactured and increase production yield. Additionally, larger ingots have less surface area per unit volume of monocrystalline or multicrystalline silicon produced, thus reducing the potential for contamination with impurities. The wafer area is the key factor in determining how much incident light can be absorbed and converted into electricity. By manufacturing thinner wafers, less polysilicon is required to capture the same area of incident light.

Competitive Strengths

We believe that the following competitive strengths enable us to compete effectively and to capitalize on the rapid growth in the market for polysilicon and wafers for the solar industry:

Proven capability in constructing and ramping up polysilicon production capacity

We have proven our capability to construct and ramp up polysilicon production capacity. Within 15 months and 11 months, we completed construction and shipped our first batch of polysilicon from our Xuzhou Phase I and Xuzhou Phase II production facilities, respectively. For the three months ended December 31, 2007, March 31, 2008 and June 30, 2008, we produced 154 MT, 302 MT and 359 MT of polysilicon, respectively, and in the months of July and August 2008, we produced 175 MT and 185 MT of polysilicon, respectively. We believe we are one of the few manufacturers of polysilicon in China to have reached commercial production of at least 100 MT per month.

We integrated the hydrochlorination process for our Xuzhou Phase I production facility in February 2008 and in our Xuzhou Phase II production facility in September 2008. For the six months ended June 30, 2008 and the months ended July and August 2008, approximately 7%, 23% and 36% of the TCS we consumed was produced in-house, respectively.

On completion of our Xuzhou Phase II, Xuzhou Phase III production facilities and Xilinhot production facilities, we will have a fully ramped-up annual polysilicon capacity of 24,000 MT by the end of 2010. Our in-house production of polysilicon protects us from the risk of insufficient polysilicon supply encountered by many of our wafer sales competitors.

We believe that we achieved these milestones by leveraging our management’s execution and coordination capability, our technical and engineering resources and our supply chain management to overcome the substantial difficulty accompanying the design, installation and operation of our production facilities.

Contracted customer revenues

We have entered into polysilicon and wafer supply agreements with cell and module manufacturers that provide for aggregate sales of approximately 15.1 GW of wafers and approximately 40,356 MT of polysilicon for aggregate total contract prices of $21.3 billion (RMB146.2 billion). These contracts are with JA Solar, Trina Solar, CSI, Suntech, AIDE, Solarcell and Solarfun. These contracts generally require customers to make advance payments or provide other financial guarantees or support, have pre-set prices which decline substantially over the length of the contract and have pre-set volumes that increase substantially in the early years of the contract. See “—Customers and Markets”. Through these contracts we have effectively contracted for the sale of

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approximately 90% of our anticipated production from now to the end of 2015. These contracts provide us with stable revenues in the near- and medium-term and protection against spot price volatility.

Cost effective production process, facilities and operations

We believe our advanced production processes and the equipment we are installing as well as our China-based production facilities provide us with a cost structure that will be competitive with the leading polysilicon producers. We believe we will be able to maximize production efficiency by leveraging our competitive costs for skilled workforce, engineering and technical resources and production equipment and facilities. In addition, the close proximity of our Xuzhou Phase I, Xuzhou Phase II and Xuzhou Phase III production facilities to both solar and electronics product manufacturers located in Jiangsu Province, the center for the solar and electronics manufacturing industries in China, enables us to have a high level of communication with our customers and efficiently manage our inventory and allows our customers to source polysilicon and wafers locally.

Experienced management team

Our management team consists of an experienced and diversified group of entrepreneurs and professionals who have positioned our company to take advantage of the increased demand for polysilicon. Members of our senior management team have a track record of founding and successfully managing enterprises as well as constructing and operating large power and chemical plants. For example, Mr. Zhu Guoming, the general manager of JZPTD, was responsible for the construction of power plants owned and operated by the Golden Concord Group and Mr. Jiang Wenwu, the deputy general manager of JZPTD, was responsible for the operation of large petrochemical projects in China.

Our Strategies

Our goal is to become a leading global supplier of polysilicon and wafers for the solar industry. We intend to achieve this goal by pursuing the following strategies:

Significantly expand polysilicon production capacity

We plan to significantly increase our production capacity in order to meet growing demand for our polysilicon and to improve economies of scale. We ramped up our Xuzhou Phase I production facility to its designed annual capacity of 1,500 MT in March 2008. We commenced commercial production at our Xuzhou Phase II production facility in July 2008 and expect to ramp it up to its design annual capacity of 1,500 MT by December 2008. We commenced preparation for construction of our Xuzhou Phase III facilities in December 2007, which are expected to increase our aggregate polysilicon production capacity in Xuzhou to 13,500 MT per year by February 2010 and to construct our Xilinhot production facility to further expand our total capacity to 24,000 MT per year by the end of 2010. In addition, we are evaluating further expansion of our polysilicon production capacity in Xuzhou on land close to our existing Xuzhou complex and have an option to assume the undertaking of an affiliate in an agreement to expand the polysilicon production facilities in Xilinhot to 20,000 MT per year. Such expansions are subject to obtaining all approvals and land use rights.

Establishing wafer production capacity

We expect wafer sales to contribute a significant majority of our revenues after 2009. We have plans to manufacture wafers at our facility by 2009 and intend to commence the construction of our multicrystalline and monocrystalline wafer production facilities by the end of 2008. As we currently do not have wafer manufacturing capabilities, we are entirely dependent on tolling arrangements for wafer manufacturing. We must ensure that our tolling partner is able to dedicate a sufficient amount of wafering capacity to support our obligations to deliver wafers pursuant to our wafer supply contracts. We will utilize tolling manufacturers to fulfill our contractual obligations until substantially all our wafers are produced in-house.

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Reducing our production costs

We aspire to be one of the most cost-efficient polysilicon producers globally. We intend to do so by investing in technological advancements and applying prudent manufacturing principles. We plan to devote substantial resources to enhance the efficiency of our production processes and in particular, reducing our polysilicon production cycle times, electricity consumption and the use of raw materials. We have thus far been able to shorten our production cycles by adjusting reactor parameters as well as optimizing electricity usage. To support our capacity expansion plans, we have sourced a portion of our production equipment from cost-competitive domestic suppliers provided that the quality is similar to that of imported equipment from our current suppliers.

We use TCS to produce polysilicon. TCS is one of the main and most costly production inputs and to date, we have relied on third party suppliers for substantially all of our TCS requirements. To reduce our reliance on TCS from third party suppliers, we are increasingly incorporating TCS production into our production process. We integrated the hydrochlorination process for our Xuzhou Phase I production facility in February 2008 and for our Xuzhou Phase II production facility in September 2008. Our Taixing joint venture has constructed a TCS production facility with an initial annual capacity of 20,000 MT in Taizhou Jiangsu Province, which commenced commercial production in September 2008. All of the Taixing joint venture’s TCS output is supplied to us at market price. We commenced construction planning of a hydrogenation and a TCS production facility in Xuzhou in August 2008. Upon ramp-up of these facilities, we expect to substantially reduce our reliance on third parties for our TCS requirements.

Investing in technology development

We intend to continually improve our production of polysilicon and wafers through our research and development efforts. We expect to significantly increase our research and development spending. We believe technological improvements can enhance product quality, reduce manufacturing costs and broaden our product markets. We may also pursue other technologies in our research and development activities that can assist us in addressing the future trends of the solar market.

Selectively pursuing strategic acquisitions, investments and alliances to expand our business

We will consider suitable opportunities to pursue strategic acquisitions, investments and alliances to expand our business. We are currently in preliminary discussions with our tolling wafer manufacturer, Huasheng, with respect to a potential acquisition of such manufacturer. Such discussions are in their early stages and there can be no assurance we will complete any acquisition. We believe that there is significant third party wafer manufacturing capacity in place and we will continue to evaluate other acquisition opportunities. In exploring future expansion opportunities, we intend to carefully consider and balance some or all of the following criteria with a view to further growing our business: (i) the synergies between us and our potential targets; (ii) geographic proximity to our existing operations; and (iii) whether the acquisition can enhance the overall sustainability of our existing and future business. We believe our relationship with industry participants and our knowledge of, and experience in, the solar industry allow us to understand industry trends, technological developments and applications of solar technologies, which will assist us in making decisions regarding such acquisitions, investments and alliances.

Our Products

We sell polysilicon and wafers to companies operating in the solar industry. We currently produce only polysilicon and intend to produce monocrystalline and multicrystalline wafers by the end of 2009. We currently rely on a third party tolling arrangement to produce the wafers we sell.

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Polysilicon Production

Production Capacity

The following table shows our major installed annual production capacity objectives as of the dates indicated and includes the expected date of initial commercial operation and fully-ramped production of each expansion phase:

	Planning/ Construction Commencement	Start Commercial Production	Fully-ramped Capacity Production
Xuzhou Phase I – 1,500 MT facility	July 2006	October 2007	March 2008
Xuzhou Phase II – 1,500 MT facility	August 2007	July 2008	December 2008
Xuzhou Phase III – 10,500 MT facility(1)	December 2007	December 2008	February 2010
Xilinhot – 10,500 MT facility(2)	October 2008	December 2009	December 2010

Notes:

(1) PRC national government environmental and NDRC approvals have been received for 6,000 MT per year of the intended Xuzhou Phase III expansion. We began preparing for construction of our Xuzhou Phase III facilities in December 2007. We received the approval to construct 6,000 MT per year of Xuzhou Phase III in April 2008 and intend to apply for the NDRC approval over the remaining capacity for our Xuzhou Phase III expansion shortly after this offering. We are in the process of obtaining the land use certificates for our Xuzhou Phase III production facility, See “—Facilities”.

(2) In September 2008, we entered into non-binding a memorandum of understanding with the Inner Mongolia government to construct a polysilicon production facility. We are in the early stages of project development and have not yet applied to obtain the necessary permits and approvals to commence construction.

On September 11, 2008, we entered into a non-binding memorandum of understanding with the Inner Mongolia government relating to the development of 10,500 MT polysilicon production facilities to be built in Xilinhot, Inner Mongolia through an affiliated domestic subsidiary of JZPTD. The memorandum provides that the Inner Mongolia government will arrange for the purchase by us of approximately 245 acres on which we will build the polysilicon production facilities. In addition to arranging for the purchase of the land, in the memorandum, the Inner Mongolia government has agreed to provide, at its cost, certain site preparation, road infrastructure, water connections, telecommunication connections, power, steam and heat connections to the site. It has also agreed in the memorandum to provide us with investment incentives and assistance in obtaining the necessary government approvals. We have agreed with the Inner Mongolia government in the memorandum to invest RMB6.0 billion ($874.8 million), which we have agreed to invest by ourselves, into the project and to meet certain production timelines, including commencing production of polysilicon by November 2009. The memorandum states that the parties will use their best efforts to fulfill the obligations under the memorandum but that it is non-binding until specific agreements are entered into.

We intend to build the Xilinhot production facilities in three production lines using the same design contractor that assisted with our Xuzhou Phase III facilities and using similar processes to achieve design and manufacturing efficiencies. Under our memorandum with the Inner Mongolia government, we expect to have electricity costs lower than for our Xuzhou production facilities.

Pursuant to a project development agreement that Golden Concord Holdings Ltd., or Golden Concord, a company owned by Mr. Zhu Gongshan, entered into with the Inner Mongolia government relating to several projects and developments, Golden Concord previously agreed to build a 20,000 MT per year polysilicon project in two phases. The obligations of the Inner Mongolia government in that agreement are equivalent to the obligations under our non-binding memorandum of understanding with the Inner Mongolia government discussed above. Our Xilinhot production facilities with a capacity of 10,500 MT are intended to satisfy a portion of the obligation of Golden Concord to build polysilicon facilities. Golden Concord has given us an option to undertake the construction of the second phase which Golden Concord agreed to build pursuant to the project development agreement, although we have no obligation to do so. In the event that we exercise the option, we expect to receive benefits from the Inner Mongolia government similar to the ones we expect to receive for our 10,500 MT facilities discussed above. The obligations of the Inner Mongolia government under the project

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development agreement may not be enforceable, and the rights of Golden Concord under such agreement may not be transferable to us. However, we do not intend to exercise the option to build the expanded facilities unless we receive benefits similar to those we expect to receive for our 10,500 MT facilities discussed above.

In addition to our proposed Xilinhot facilities, we are considering establishing additional polysilicon production capacity in Xuzhou on land near our current Xuzhou production complex.

Manufacturing Process

We use a modified Siemens process to produce polysilicon. The modified Siemens process results in a higher utilization of silicon TCS, requires less electricity and is also more environmentally friendly as less pollutants are produced than the original Siemens reactor process. The process includes four distinct steps: (1) hydrochlorination/hydrogenation; (2) distillation; (3) poly deposition; and (4) vent gas recovery. The reactor in which polysilicon is formed is a key production component.

Hydrochlorination. This process is used to recycle the STC produced as by-product from the poly deposition process, combining the STC with hydrogen gas to produce TCS. HCl, a by-product from this reaction, will be mixed with MG-Si simultaneously, to further produce TCS.

Hydrogenation. This process involves combining the STC produced in the poly deposition process with hydrogen under high temperatures to produce TCS and HCl. The TCS can be immediately redirected to the distillation process after which it will be used in the poly deposition process. The resulting HCl can then be combined with MG-Si to also produce TCS in our in-house TCS production facility. Although we commenced construction planning of hydrogenation and TCS production facilities in August 2008, in light of our success in implementing our hydrochlorination process, we are evaluating whether to complete such construction or to continue to rely on our hydrochlorination processes, the Taixing joint venture and third parties for our TCS needs.

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Distillation. This process involves separating the unused HCl and STC from the TCS through distillation and condensation, that is, pressure and temperature separation. The TCS will then undergo further distillation and results in high purity TCS feedstock to be used in poly deposition process.

Deposition. The resulting purified TCS is mixed with hydrogen and vaporized into a gas. The resulting gas is then released into the reactor with heated silicon rods inside the cooled bell jar of the reactor. These rods are produced in separate machines and have a diameter of approximately 8 mm. These rods are etched to remove any excess impurities prior to being placed in the polysilicon deposition reactor. The silicon contained in the gas is deposited on the heated rods, which gradually grow until the desired diameter has been reached. We grow our polysilicon rods to approximately 150 mm in diameter. The reactor must then be shut down, and the rods cooled before being broken into chunks.

Vent Gas Recovery. The manufacturing of silicon crystals generates a vent gas comprised primarily of hydrogen, chlorosilanes and hydrogen chloride. The vent gas is separately recovered using a low temperature absorption method. We use the CDI vent gas recovery system which combines compression, cryogenic condensation, catalytic reaction, distillation, ambient absorption and cryogenic absorption, to separate the vent stream into components that are readily recycled. Mixed chlorosilanes are recovered as a liquid stream suitable for distillation to TCS for reuse, and STC which can be converted to TCS through the hydrochlorination process. Anhydrous hydrogen chloride is recovered with high purity, suitable for use in TCS production. Recovered hydrogen typically contains contaminants of less than 10 parts per million, or ppm, in total and can be recycled to the TCS vaporizer without further treatment. For some applications, CDI has achieved less than 1 ppm total contaminants (99.9999% pure hydrogen). The Siemens reactor recovers and utilizes the vent gas, which enhances the quality of the polysilicon produced and reduces the need to store or dispose of by-products.

Materials and Inputs Used in Polysilicon Production

Trichlorosilane

TCS is one of the main and most costly production inputs and to date, we have relied on third party suppliers for substantially all of our TCS requirements. In the six months ended June 30, 2008 and the months of July and August 2008, approximately 7%, 23% and 36% of the TCS that we consumed was produced in-house, respectively. We purchased our TCS in such periods from unrelated suppliers including Jiaozuo Zhongsheng Fine Chemical Ltd., Zibo Baoyun Chemical Ltd., Taian Guangming Silicon Ltd., Nanchang Ganyu Organic Silicon Ltd. at an average price of approximately RMB11,404 and RMB14,535 per MT including VAT for the year ended December 31, 2007 and the six months ended June 30, 2008, respectively. As our hydrochlorination process in our Xuzhou Phase I and Xuzhou Phase II production facilities are operational, we now source less third party produced TCS.

Our Taixing joint venture constructed a TCS production facility with an initial annual capacity of 20,000 MT in Taizhou, Jiangsu Province, China which commenced commercial production in September 2008. We intend to increase the Taixing joint venture annual TCS production capacity to up to 60,000 MT by 2010. The joint venture agreement requires that the Taixing joint venture enter into a long-term contract to supply TCS to us at market price. Our maximum contribution to this joint venture is $3 million under the current joint venture agreement, which we have already contributed.

We commenced construction planning of a hydrogenation and a TCS production facility in Xuzhou in August 2008 for which we have signed a hydrogenation process design contract with NKM Co. Ltd. We are currently evaluating whether we should commence construction on such facilities in light of the success of our hydrochlorination processes and our Taixing joint venture.

We need to store the STC generated by our polysilicon production process before it is reintroduced to a STC recycling process, such as hydrochlorination or hydrogenation. Our storage tanks are able to hold approximately

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12,000 MT of STC in Xuzhou and 1,500 MT offsite. We have also sold and will continue to sell some excess STC from time to time, generally at very low prices. We have historically sold STC to Tokuyama Chemicals (Zhejiang) Co., Ltd., or Tokuyama Chemicals. Tokuyama Chemicals has, in return, supplied us with TCS. The quantity of TCS to be supplied by Tokuyama to us and STC to be supplied by us to Tokuyama from September to December 2008 and the related prices for any quantity increases are currently under discussion. When our STC recycling processes are operating at optimal efficiency levels, there is no need to sell excess STC to ensure we do not exceed sufficient storage facility. When our STC recycling processes are not operating, either during normal production interruptions or due to an unexpected failure, or not operating at optimal efficiency level, storage or disposition may be required. We believe we have sufficient storage capacity for our Xuzhou Phase I, Xuzhou Phase II and Xuzhou Phase III production facilities so long as we are able to integrate our STC recycling processes in our intended ramp-up plan.

Electricity

Electricity is a significant cost in the production of polysilicon. We obtain our electricity supply from the 220/10kv transformer station of the Xuzhou Electricity Company in the Jiangsu Xuzhou Economic Development Zone, or the Industrial Park, in Xuzhou, China. The transformer station has a capacity of 700 MW annual electricity output. We believe that this transformer station has sufficient electricity generation capacity to supply our current and future Xuzhou production facilities for the foreseeable future. Although we have contracted for the continuous use of electricity in our Xuzhou production facilities, we have minimal control over the costs of electricity. The Xuzhou Electricity Company manages the power grid that provides electricity to the Xuzhou Chemical Industrial Park. We expect our electricity costs in our proposed Xilinhot production facilities will be less than that in our Xuzhou production facilities. The price of electricity is not pre-set and is subject to fluctuation from time to time.

Steam

Steam supply is important to the production of polysilicon. We have relied upon a local power supplier as our sole source of steam for our production. We experienced shortfalls in the levels of steam at a consistent level of pressure necessary for the production of high quality polysilicon in the start up of our Xuzhou Phase II production facility. As a result, we experienced lower quality trial production runs for polysilicon at the Xuzhou Phase II production facility in June 2008. We intend to secure an assured level of steam production for our Xuzhou production facilities in the future. Our non-binding memorandum with the Inner Mongolia government provides that it will provide connection for steam to the Xilinhot production facilities.

Metallurgical Grade Silicon/Silica Fume

MG-Si, which is silicon of 95% to 99% purity, is one of the primary raw materials used in the production of TCS. We obtain all of our MG-Si from a single supplier, but we believe MG-Si is readily available in the PRC. The price at which MG-Si can be purchased has increased recently as a result of higher energy costs and industry demand.

Others

The most significant other inputs for the production of polysilicon are deionized water, HCl, nitrogen, calcium oxide, hydrogen and recycled water. We have in-house facilities for our hydrogen and nitrogen synthesis, compressed air production, deionized water production and recycled water pumps. Our Xuzhou Phase I and Xuzhou Phase II production facilities share the same in-house facility. Our Xuzhou Phase III production facilities will have their own dedicated in-house facility.

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Wafer Production

Wafer Capacity

We intend to produce both monocrystalline and multicrystalline ingots and wafers in Xuzhou. We intend to begin constructing our first multicrystalline wafer production facility and monocrystalline wafer production facility in Xuzhou by the end of 2008 and to commence pilot production by the third quarter of 2009. We intend to ramp up these facilities to a combined 0.8 GW production capacity by the end of 2009 and to further expand our wafer production capacity to 1.9 GW by the end of 2010 and to 2.7 GW by the end of 2011. In connection with our expansion to 1.9 GW, we entered into equipment supply contracts to purchase over one half of the wire saws and squarers with the first deliveries expected to commence in late 2008. We intend to build up both our ingot production and wafering capacity concurrently as part of our wafer expansion plan.

Production of wafers can be divided into two main steps:

• ingot production, and

• wafering.

Production of Ingots

Monocrystalline ingots and multicrystalline ingots are manufactured with different equipment, with monocrystalline ingots having a single orientation and produce wafers with lower electrical resistance and therefore higher conversion efficiencies. Wafers produced under our tolling arrangement to date are monocrystalline wafers and we plan to develop in-house production of monocrystalline and multicrystalline ingots and wafers.

Polysilicon feedstock is prepared with de-ionized water in etching stations. The prepared polysilicon feedstock is then placed in crucibles and each crucible is loaded into a furnace for melting and crystallization. Multicrystalline ingots formed during the crystallization process are large square parcels then cut into smaller blocks with a squarer, a process known as squaring. The resulting ingot is then cropped. Monocrystalline ingots are formed from a single seed crystal which is dipped in molten polysilicon and pulled into a single cylindrical ingot; such ingot is cropped and, then squared. These blocks are then prepared for slicing.

Wafering

The prepared blocks are sliced into wafers by wire saws. Wafers are then washed and dried at wafer cleaning stations before final inspection and packaging for delivery.

Illustrated below is a diagram of the ingot production and wafering process:

Materials Used in Wafer Production

Polysilicon Feedstock. The main raw material for both monocrystalline and multicrystalline ingot and wafer production is polysilicon feedstock. We supply our tolling manufacturer with the polysilicon we produce. Once our in-house wafer production is operational, we intend to use our own polysilicon to manufacture wafers.

Crucibles. A crucible is a container used to hold polysilicon feedstock for melting in the furnace and has to withstand extremely high temperatures. Quartz crucibles used to produce multicrystalline ingots are currently not reusable, as once the ingot is formed, the crucible holding the ingot will be broken to remove the ingot. Quartz

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crucibles which hold the molten polysilicon used to pull a monocrystalline cylindrical ingot from a seed crystal also cannot be reused.

Slurry and Wire. Slurry is used in the wire sawing process. It is a fluid composed of silicon carbide, or SiC, which functions as an abrasive, and polyethylene glycol, or PEG, which acts as a coolant. Wires are used in wire saws to carry the slurry in order to create an abrasive cutting tool.

Tolling Arrangements

In March 2008, we entered into a tolling arrangement with Huasheng to produce monocrystalline wafers for us. Huasheng has agreed to produce wafers for us at pre-set prices which decline over the length of the contract for delivery from May 2008 to December 2011. Under our tolling agreement, we provide Huasheng with polysilicon we produce and pay a per wafer processing fee for the wafers this manufacturer delivers to us.

Equipment

The major production equipment for polysilicon includes hydrochlorination synthesizers, hydrogenation synthesizers, distillation chambers, reactors, hydroelectrolysis devices, vent gas recovery mechanisms, vent gas washing towers and power supply control systems. For our Xuzhou Phase I production facility, we have purchased key equipment for polysilicon production including our reactors, vent gas recovery mechanisms, washing towers and power control systems primarily from equipment manufacturers in the United States, Europe and Japan. The major equipment for the hydrogenation process and TCS process include: heating units, STC hydrogenation units, transformers and power control systems.

We have close relationships with several of the world’s leading equipment manufacturers and work closely with selected equipment manufacturers to develop and build our production lines. In addition, we developed technical specifications for the design of our power supply systems and reactors and have engaged manufacturers to construct the equipment in accordance with our specifications. Our engineers work closely with our equipment suppliers to design our production facilities. Furthermore, to lower costs, we have purchased and will continue to purchase equipment that can be appropriately designed and manufactured from domestic suppliers. Our technical team is responsible for overseeing the installation of our manufacturing lines to ensure that the interaction between the various individual components of the entire production process is optimized. They work together with our equipment suppliers’ technical teams on site. Our aggregate capital expenditures for plant and machinery were $96.0 million and $249.9 million in the year ended December 31, 2007 and the six months ended June 30, 2008.

Our Xuzhou Phase I production facility has 18 reactors, 17 of which are from an international supplier and one from a domestic supplier. Initially all 18 reactors were to be supplied by the international supplier. Delays in delivery from our international supplier resulted in up to a six-month delay in production at our Xuzhou Phase I production facility. The same international supplier was supposed to supply the 18 reactors for our Xuzhou Phase II production facility. However, delays in delivery by this supplier and early delivery of some domestic reactors intended for our Xuzhou Phase III production facilities have resulted in our using five internationally sourced reactors and 13 domestically sourced reactors for our Xuzhou Phase II production facility. All 18 reactors for our Xuzhou Phase II production facility have been installed. The domestic reactors have operated at efficiency levels similar to those of the international reactors. We entered into an agreement to purchase 144 reactors manufactured by Shanghai Morimatsu. Shanghai Morimatsu is a new PRC-based manufacturer of reactors and wholly-owned subsidiary of Morimatsu Industry Co., Ltd. of Japan, or Morimatsu Japan, a large manufacturer of stainless steel tanks, heat exchangers, pressure vessels and oil tanks. We used the two reactors delivered by Shanghai Morimatsu in our Xuzhou Phase II production facility and determined that such reactors operate at efficiency levels similar to our existing reactors in our Xuzhou Phase I production facility. We also believe that the management support, manufacturing know-how and financial support available from Morimatsu Japan enhance Shanghai Morimatsu’s ability to deliver reactors on schedule. Our Xuzhou Phase III production facilities are expected to have an aggregate

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of 144 reactors, but we have already placed orders for more reactors than currently needed for our Xuzhou Phase III production facility in order to ensure we have sufficient reactors of further polysilicon production expansion. We currently have 42 reactors on site for Xuzhou Phase III and began equipment installation in August 2008. We have ordered 60 Shanghai Morimatsu reactors for use in our proposed Xilinhot production facilities. These reactors will have 24 base pairs as compared to the 12 base pair reactors we generally used for our Xuzhou production complex. See “Risk Factors — Risk Relating to Our Business — We have sourced and will continue to source some of our production equipment from PRC manufacturers and we cannot assure you that this domestically sourced equipment will perform at the same level as our imported equipment or will meet our quality requirements.”

We have commenced discussions with a number of wafer production equipment suppliers for the key wafer production equipment for our wafer production expansion. We have entered into equipment supply contracts to purchase over one half of the wire saws and squarers for our expansion to 1.9 GW with the first deliveries expected to commence in early 2009 and have identified several domestic producers of ingot furnaces.

Quality Assurance and Customer Support and Service

Our quality control consists of three components: incoming inspection through which we ensure the quality of the raw materials that we source from third parties, in-process quality control of our manufacturing processes and output quality control of finished products through inspection and testing. We are in the early stages of implementing our internal finished product quality control. Pilot production is less likely to yield products of comparable quality levels as products produced after commercial production due to shortfalls in inputs or limitations on production with such new production facility.

In order to facilitate our production of polysilicon and ensure both the quality and quantity of the finished products, we have set up a laboratory responsible for the analysis of raw material in-process quality control and finished products and the supervision of environmental pollution and safety. We purchase our laboratory equipment from a combination of domestic and foreign suppliers.

As we have not established any wafer manufacturing capability, we have not implemented our own quality control procedures and generally have our tolling contractors perform this function. Our tolling arrangements provide that we should be indemnified by the tolling manufacturer for any damages relating to wafer quality or delayed delivery at the fault of the tolling manufacturer.

Sales and Marketing

To date, we have not needed to market our products heavily since we have limited polysilicon output and address a market with extreme shortages and have sold initial polysilicon production to various domestic customers on a spot basis and more recently to JA Solar, Trina Solar, Suntech, CSI, Solarfun, AIDE and Solarcell under our supply contracts. We have sold all of our wafers to two customers, JA Solar and AIDE. We expect to begin selling wafers to Solarcell in September 2008. We have established a worldwide marketing capability through our direct sales team, which is based in China. Each member of our sales team is dedicated to a particular region in the world. Our marketing events include attending industrial conferences and trade fairs, as well as advertising and public relations events. Our sales and marketing team works closely with both our research and development team and production team to coordinate our ongoing supply and demand planning.

Customers and Markets

We expect the solar industry to be the principal market for our polysilicon and wafers and account for a substantial majority of our polysilicon production volume and wafer sales volume in 2008. We expect that the demand for solar grade polysilicon and wafers will increase with the expected growth of the solar industry. With the completion of our Xuzhou Phase II production facility, we expect to have the ability to commence production and sale of electronic grade polysilicon in the second half of 2008. However, we expect continued high demand and strong pricing for solar grade polysilicon will cause us to delay entry into the electronic grade market until 2009 or later.

We have entered into polysilicon and wafer supply agreements with cell and module manufacturers that provide for aggregate sales of approximately 15.1 GW of wafers and approximately 40,356 MT of polysilicon for

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aggregate total contract prices of $21.3 billion (RMB146.2 billion). The contracts generally require customers to make advance payments or provide other financial guarantees or support, have pre-set prices which decline significantly over the length of the contract and have pre-set volumes that increase significantly in the early years of the contract. The contracted amounts are summarized in the table below.

Purchaser	Product and Dates	Volume	Total Contract Price
JA Solar	Polysilicon through 2009 and then wafers through 2015	Polysilicon 3,510 MT Wafers 8.4 GW	$9.4 billion (RMB64.8 billion)
Trina Solar	Polysilicon through 2009 and then polysilicon and wafers through 2015	Polysilicon 16,926 MT Wafers 2.2 GW	$4.0 billion (RMB27.2 billion)
Suntech	Polysilicon through 2009 and then polysilicon and wafers through 2012	Polysilicon 9,420 MT Wafers 1.1 GW	$2.6 billion (RMB17.8 billion)
CSI	Polysilicon through 2009 and then wafers through 2015	Polysilicon 510 MT Wafers 1.8 GW	$2.2 billion (RMB15.2 billion)
Solarfun	Polysilicon through 2015	Polysilicon 9,990 MT	$1.1 billion (RMB7.6 billion)
AIDE	Wafers through 2015	Wafers 0.9 GW	$1.1 billion (RMB7.3 billion)
Solarcell	Wafers through 2015	Wafers 0.7 GW	$0.9 billion (RMB6.3 billion)

Prior to our entry into these supply contracts, we sold all of our polysilicon on the spot market to major Chinese solar manufacturers. We have contracted to sell approximately 90% of our anticipated production from now to the end of 2015 under our current supply agreements after giving effect to our current polysilicon and wafer expansion plans.

In March 2008, we entered into a polysilicon supply agreement with Changzhou Trina Solar Energy Co., Ltd., an onshore subsidiary of Trina Solar Limited, or Trina Solar. In August 2008, we amended such polysilicon supply agreement to deliver polysilicon for the period starting from September 2008 to December 31, 2009 and polysilicon and wafers for the period starting from January 1, 2010 to December 31, 2015. We agreed to supply 1,726 MT of polysilicon from September 2008 to December 31, 2009 at a price that adjusts to the lower of the pre-set price and a variable price based on 120% of the spot market price and pre-set volumes that increase 664% from September 2008 to December 31, 2009. Starting January 1, 2010, we agreed to supply 15,200 MT of polysilicon and 2.2 GW of wafers. This contract has a pre-set price for polysilicon that declines approximately 63% and pre-set volumes that increase 36% from January 1, 2010 to December 31, 2015. This contract has a pre-set price for wafers that declines approximately 45% and pre-set volumes that increase 36% from January 1, 2010 to December 31, 2015. Trina Solar is required to make an advance payment, a portion of which has already been paid and the remainder of which is scheduled to be paid by the end of 2009. If we fail to deliver polysilicon or wafers pursuant to this agreement, we are subject to liquidated damages. On a substantial default, Trina Solar is entitled to terminate the agreement and is entitled to recover (1) the remaining advance payment Trina Solar paid to secure such polysilicon or wafer supply from us and (2) liquidated damages.

In April 2008, we entered into a wafer supply agreement with Jing Ao Solar Co., Ltd., an onshore subsidiary of JA Solar Holdings Co., Ltd., or JA Solar. In August 2008, we amended the delivery schedule and increased the

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supply volumes under such wafer supply agreement. While no wafers will be delivered from August 2008 to December 31, 2009, additional wafers will be delivered starting from January 1, 2010 to December 31, 2014. This amended contract has a pre-set price for wafers that declines approximately 43% and pre-set volumes that increase 25% from January 1, 2010 to December 31, 2014. Pursuant to this amended contract we agreed to supply 8.4 GW of wafers. In addition, we entered into a polysilicon supply contract with JA Solar Technology Yangzhou Co., Ltd., another onshore subsidiary of JA Solar Holdings Co., Ltd., under which we agreed to provide 3,510 MT of polysilicon for the period starting from August 2008 to December 31, 2009. This contract has a pre-set price for polysilicon which declines approximately 23% and has pre-set volume requirements that increase approximately 932% over the length of the contract. JA Solar is required to make an advance payment, part of which has already been paid and the remainder of which is scheduled to be paid in installments by the end of 2009. If we fail to deliver polysilicon or wafers pursuant to this agreement, JA Solar is entitled to purchase the amount of shortfall in the market and require us to cover any shortfall in pricing. If we commit a material breach of the agreement, JA Solar is entitled to terminate the agreement and be entitled to recover (1) the remaining advance payment JA Solar paid to secure such polysilicon or wafer supply from us and (2) liquidated damages.

In April 2008, we entered into a wafer supply agreement with Jiangsu AIDE Solar Energy Technology Co., Ltd, or AIDE. Pursuant to this contract we agreed to supply 0.9 GW of wafers. This contract has a pre-set price which declines approximately 60% over the length of the contract and has pre-set volumes that increase approximately 1,100% during the first six years of the contract and become steady for the remaining contract term. AIDE is required to make an advance payment, part of which has already been paid and the remainder of which is required to be paid in installments through April 2010. If we fail to deliver wafers pursuant to this agreement, AIDE is entitled to purchase the amount of shortfall in the market and require us to cover any shortfall in pricing. If we commit a material breach of the agreement, AIDE is entitled to terminate the agreement and be entitled to recover (1) the remaining advance payment AIDE paid to secure such wafer supply from us and (2) liquidated damages.

In June 2008, we entered into a polysilicon supply agreement with Jiangsu Linyang Solarfun Co., Ltd., an onshore subsidiary of Solarfun Power Holdings Co., Ltd., or Solarfun. We agreed to supply a total of 9,990 MT of polysilicon from the period starting 2008 to 2015. This contract has a pre-set price which declines approximately 77% over the contract period and pre-set volumes that increase 788% in the first four years of the contract and become steady for the remaining contract term. Solarfun is required to make an advance payment, part of which has already been paid and the remainder of which is scheduled to be paid in installments through April 2009. If we fail to deliver polysilicon pursuant to this agreement, Solarfun is entitled to purchase the amount of shortfall in the market and require us to cover any shortfall in pricing. If we commit a material breach of the agreement, Solarfun is entitled to recover (1) the remaining advance payment Solarfun paid to secure such polysilicon supply from us and (2) liquidated damages.

In June 2008, we entered into a wafer supply agreement with Solarcell S.p.A., an offshore subsidiary of Solar Industries AG (owned 80% by Solar Industries AG and 20% by MX Group S.p.A), or Solarcell. Pursuant to this contract, we agreed to supply 0.675 GW of wafers. This contract has a pre-set price which declines approximately 56.4% over the length of the contract and has pre-set volume requirements that increase approximately 80.8% during the first six years of the contract and become steady for the remaining contract term. Solarcell is required to put up a letter of credit and make an advance payment prior to our delivery of wafers under the contract, which is expected in by September 2008. As Solarcell is a young company without substantial operating history and limited assets, it is possible that it may not be able to secure a letter of credit, in which case we may not make any sales under this agreement. If through no fault of Solarcell we fail to deliver wafers pursuant to this agreement, we are allowed a certain period to make up deliveries and if we do not make up such deliveries, Solarcell is entitled to damages limited to the value of the wafers. If we commit a material breach of the agreement, Solarcell is entitled to terminate the agreement and be entitled to recover the remaining advance payment Solarcell has paid.

In August 2008, we entered into a polysilicon and a wafer supply contract with Suzhou CSI Solar Power Technology Co., Ltd., an onshore subsidiary of Canadian Solar Inc., or CSI. We agreed to supply a total of 510

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MT of polysilicon for the period from September 2008 to December 31, 2009. This contract has a pre-set price that declines approximately 21% and pre-set volumes that increase 650% over the term of the contract. We agreed to supply 1.8 GW of wafers from the period starting January 1, 2010 to December 31, 2015. This contract has a pre-set price that declines approximately 46% and pre-set volumes that increase 116% over the term of the contract. CSI is required to make an advance payment covering both of these contracts, part of which will be paid in September 2008 and the remainder of which is scheduled to be paid by 2010. If we fail to deliver polysilicon or wafers pursuant to these agreements, CSI is entitled to purchase the amount of shortfall in the market and to require us to cover any shortfall in pricing. If we commit a material breach of any of these agreements, CSI is entitled to terminate the agreement and be entitled to recover (1) the remaining advance payment CSI paid to secure such polysilicon and wafer supply from us and (2) liquidated damages.

In August 2008, we entered into a polysilicon and a wafer supply contract with Wuxi Suntech Power Co., Ltd., an onshore subsidiary of Suntech Power Holdings Co., Ltd., or Suntech. We agreed to supply a total of 1,920 MT of polysilicon for the period starting September 2008 to December 31, 2009. This contract has a pre-set price that declines approximately 26% over the term of the contract and pre-set volumes that increase 1,400% over the term of the contract. We agreed to supply polysilicon and wafers from the period starting January 1, 2010 to December 31, 2012. We agreed to supply a total of 7,500 MT of polysilicon and 1.1 GW of wafers over this three year period. This contract has a pre-set price for polysilicon that declines approximately 43% and pre-set volumes that remain constant over the term of the contract. This contract has a pre-set price for wafers that declines approximately 33% and pre-set volumes that remain constant over the term of the contract. Suntech is required to make an advance payment covering both of these contracts, part of which will be paid in October 2008 and the remainder of which is scheduled to be paid by November 2009. If we fail to deliver polysilicon or wafers pursuant to these agreements, Suntech is entitled to purchase the amount of shortfall in the market and to require us to cover any shortfall in pricing. If we commit a material breach of any of these agreements, Suntech is entitled to terminate the agreement and be entitled to recover (1) the remaining advance payment Suntech paid to secure such polysilicon and wafer supply from us and (2) liquidated damages.

Research and Development

We believe that the continual development of our technology will be vital to maintaining our long-term competitiveness. Therefore, we intend to significantly increase our investment of management and financial resources into research and development. Our senior management team spearheads our research and development efforts and sets strategic directions for the advancement of our products and production processes, focusing on efforts to improve product quality, reduce manufacturing costs and broaden our product markets. We intend to dedicate a portion of our revenues to research and development activities. We are considering several projects including additional research and development centers in China and overseas and the pursuit of other technologies that can assist us in addressing the future trends of the solar markets.

Our research and development center employs three personnel who are focused on feedstock and product quality testing and improving manufacturing processes. We did not account separately for the costs of these three personnel for the year ended December 31, 2007 and the six months ended June 30, 2008, and all related expenses were included in general and administrative expenses. We will separately account for research and development expenses in future periods.

Intellectual Property

Our intellectual property is an essential element of our business. We rely on patents, copyrights, trademarks, trade secrets and other intellectual property laws, as well as non-competition and confidentiality agreements with our employees, suppliers, business partners and others, to protect our intellectual property rights.

We generally rely on a combination of proprietary process engineering, trade secrets and employee contractual protections, rather than patents, to establish and protect our intellectual property. We believe that

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most elements of our production processes involve proprietary know-how, technology or data that are not covered by patents or patent applications, including technical processes, equipment designs, algorithms and procedures. We have taken security measures to protect these elements. All of our research and development personnel have entered into confidentiality and proprietary information agreements with us. These agreements address intellectual property protection issues and require our employees to assign to us all of their inventions, designs and technologies that they develop, when primarily utilizing our resources or when performing their duties during their employment. Our supply contracts with our customers also typically include confidentiality undertakings.

We have entered into license agreements with third parties, specifically with Hualu and Xuzhou Southeast for use of their hydrochlorination process techniques. Under the non-exclusive patent license agreement, which has no expiration date, we are entitled to a free license for our 1,500 MT Xuzhou Phase I production facility. We are required to pay a licensing fee of RMB5 million for every further capacity expansion of 1,500 MT. See “Risk Factors—Risks Relating to Our Business—We are currently the only licensee and hold a non-exclusive license to use the intellectual property used in our hydrochlorination process. Any competitor may also be able to license this intellectual property.”

The Siemens reactor process is relatively mature, and we began our polysilicon production design process by hiring Hualu in April 2006 to design our Xuzhou Phase I polysilicon production facility. Although the Institute provided certain warranties regarding the plant operation, it did not license any technology to us nor provide us with indemnities from infringement of the intellectual property rights of others.

Most of our equipment supply contracts with international suppliers include an indemnification provision, under which the supplier undertakes to indemnify us against actions, claims, demands, costs, charges, and expenses arising from or incurred by reason of any infringement or alleged infringement of patent, copyright, trade mark or trade name by the use of the equipment provided by the supplier. However, it is unclear that we will be entitled to such indemnification in the event that we use the equipment supplied by such supplier in conjunction with other equipment not supplied by such supplier. In addition, many of our equipment supply contracts with domestic suppliers do not provide any intellectual property indemnification provisions. See “Risk Factors—Risks Relating to Our Business—Although we are currently strengthening our research and development capability, to date, substantially all of the intellectual property used in our polysilicon production process was developed by third parties. We may be exposed to infringement or misappropriation claims by third parties which, if determined adversely to us, could cause us to pay significant damage awards.”

We have also entered into a trademark lease agreement at no cost with Golden Concord Group for the use of our logo. We may be required to expend significant resources to monitor and protect our intellectual property rights. In addition, litigation may be necessary to enforce these rights. We cannot assure you that we will prevail in any such potential litigation.

Competition

The solar wafer market is highly competitive and the polysilicon market is expected to become increasingly competitive. While we currently do not manufacture wafers, we compete directly with wafer manufacturers for wafer sales. In addition, many solar cell and module manufacturers have or have announced the intention of establishing wafer and/or polysilicon production or affiliate relationships with manufacturers of polysilicon or wafers, including some of our customers and potential customers. We compete with these in-house capabilities, which could limit our ability to expand our sales. Our competitors include polysilicon producers, such as DC Chemical, Hemlock, MEMC, REC, Tokuyama, Wacker, and wafer producers, such as SolarWorld, Glory Silicon, Green Energy, Jinglong, Kyocera, LDK Solar, MEMC, M.Setek, PV Crystalox, REC, ReneSola, Shunda, Sino-American Silicon and SolarWorld. We also compete with producers of upgraded metallurgical silicon such as Dow Corning, Elkem and Becancour Silicon. Many of our current and potential competitors have a longer

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operating history, better brand recognition, greater resources, larger customer base, better access to polysilicon feedstock and greater economies of scale than we do.

Once the current polysilicon supply shortage has eased, we expect that the key competitive factors will be the ability to control cost and quality. We anticipate that production technology, energy costs and scale will determine the competitive position of the different polysilicon and wafer manufacturers going forward.

Environmental Matters

Our manufacturing processes generate noise, waste water, gaseous wastes and other industrial wastes. Our production facilities are subject to various pollution control regulations with respect to noise and air pollution and the disposal of waste and other hazardous materials. We have adopted the modified Siemens process for our polysilicon production to reduce waste discharge. We process all our waste water and waste gas by various treatments so that they meet the respective national discharge standard. In addition, most of our solid waste can be reused and does not contain poisonous materials. We have established a pollution control system and installed various types of anti-pollution equipment in our facilities to reduce, treat, and where feasible, recycle the wastes generated in our manufacturing process. We are required to undergo the acceptance inspections of environmental protection, work safety and professional health and obtain respective approval with relevant governmental authorities before the manufacturing lines commence full production. We have obtained the pollutant discharge permit, the work safety permit for storage and use of hazardous chemicals and permit for the registration of use of atmospheric pressure containers for the pressure containers we have installed. We passed the environmental protection examination and work safety examination for our Xuzhou Phase I production facility in June 2008 and received the government approval in connection with professional health for Xuzhou Phase I facility in July 2008. However, there can be no assurance that we will pass the necessary examinations and receive the necessary approvals for our Xuzhou Phase II, Xuzhou Phase III and other facilities. In addition, we must obtain the necessary environmental, work safety and professional health approvals for our Xuzhou Phase II production facility. See “Risk Factors—Risks Relating to Our Business—Any failure by us to control the use of, to adequately restrict the discharge, of hazardous substances, or to obtain work safety and professional health approvals could subject us to potentially significant monetary damages and fines or suspensions in any business operations.”

We obtained the environmental and work safety approvals for the pilot production of our Xuzhou Phase II production facility on May 21, 2008 and July 30, 2008, respectively. Since the pilot production period of our Xuzhou Phase II production facility expired on August 21, 2008, we must obtain the necessary environmental, work safety and professional health approvals. We currently expect to obtain these approvals by the end of 2008. See “Risk Factors—Risks Relating to Our Business—Any failure by us to control the use or to adequately restrict the discharge of hazardous substances or to obtain work safety and professional health approvals could subject us to potentially significant monetary damages and fines or suspensions in our business operations.”

For our Taixing joint venture, we obtained an approval to commence pilot production from the bureau of work safety in August 2008 and expect to obtain the approval for pilot production from the bureau of environmental protection. We commenced commercial production in September 2008 and are required to obtain formal approvals.

TCS is used to produce polysilicon. It is highly combustible if exposed to moisture in the air. STC is a by-product produced in the polysilicon production process. We acquire TCS from third-parties and produce the balance through the hydrochlorination process. In the future, we also plan to obtain TCS through the Taixing joint venture and through our hydrogenation process and in-house TCS production facility. The STC produced is initially stored in storage tanks on site after each batch of polysilicon is produced and later recycled in subsequent batches resulting in little to no excess STC produced requiring disposal. The polysilicon manufacturing process generates other hazardous by-products. We outsource the treatment of some of our wastes via third party contracts. Our operations are subject to regulation and periodic monitoring by local environmental protection authorities. We have

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not been subject to any material proceedings or fines for environmental violations. If we fail to comply with present or future environmental laws and regulations, we could be subject to fines, suspension of production or a cessation of operations. See “Risk Factors—Risks Relating to Our Business—Any failure by us to control the use of, or to adequately restrict the discharge of, hazardous substances could subject us to potentially significant monetary damages and fines or suspensions in our business operations.”

Employees

As of June 30, 2008, JZPTD employed 635 employees in China: 361 for key production processes; 104 for auxiliary production processes; 70 for production and construction supply and operations; 46 for finance, internal controls, human resources and administration and IT; 46 for environmental safety and protection and quality control; four for senior level management; one for sales and marketing and three for research and development. As of June 30, 2008, we employed seven employees in management or management support positions in Hong Kong. We plan to hire additional employees, primarily in China, as we expand.

We offer our employees competitive compensation packages and various training programs, as a result, we have generally been able to attract and retain qualified personnel.

As required by PRC regulations, we participate in various employee social security plans that are organized by municipal and provincial governments, including housing, pension, medical insurance and unemployment insurance. We are required under PRC law to make contributions to the employee benefit plans at specified percentages of the salaries, bonuses and certain allowance of our employees, up to a maximum amount specified by the local government from time to time. Members of the retirement plan are entitled to a pension equal to a fixed proportion of the salary prevailing at the member’s retirement date. The total amount of contributions we made to employee benefit plans for the year ended December 31, 2007 and the six months ended June 30, 2008 was $0.4 million and $0.3 million, respectively. As of June 30, 2008, there were a small number of employees who were not covered under these employee social security plans. These delays are primarily a result of administration delays either on the part of our employees or governmental entities. We may be subject to penalties as a result of our failure to provide such employee social security benefits.

We typically enter into a standard confidentiality and employment agreement with our management and research and development personnel. These contracts involve a covenant that prohibits each of them from engaging in any activities that compete with our business during and, if we continue to pay one third of their total annual compensation, for two years, after the period of their employment with us.

We believe we maintain a good working relationship with our employees, and we have not experienced any labor disputes or any difficulty in recruiting staff for our operations. Our employees are not covered by any collective bargaining agreement.

Insurance

We maintain property insurance, project construction insurance and third party liability insurance with insurance companies covering our inventory, equipment, facilities, buildings and their improvements. These insurance policies cover losses due to fire, earthquake, flood and a wide range of other natural disasters and human accident, as well as loss of profit attributable to such property damage or loss. We have a separate insurance policy covering machinery breakdowns or damages due to design, installation, raw material flows, human errors, centrifugal force and certain other causes, as well as loss of profit attributable to such machinery breakdowns or damages. We also maintain third party liability insurance and employee health insurance. We also maintain business interruption insurance. We also do not have product liability insurance or key-man life insurance. We consider our insurance coverage to be in line with other polysilicon producers in China.

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Facilities

Our corporate headquarters and Xuzhou production facilities are located in the Industrial Park. We are a party to a memorandum of understanding with the Xuzhou Economic and Development Committee relating to the land use rights for an aggregate of approximately 247 acres of office and production space in the Xuzhou Economic Development Zone. We have already paid for the land use rights for approximately 92.5 acres of this land and have received land use certificates. These 92.5 acres are sufficient for our Xuzhou Phase I and Xuzhou Phase II production facilities. We are currently in the process of completing the legal procedures for obtaining the appropriate approvals for the transfer of, and to obtain the land use certificates for, a parcel of 80.9 acres in relation to the construction of our Xuzhou Phase III production facilities for us to obtain the land use certificates for such parcel. We successfully won the public auction in connection with such parcel and have signed two contracts with the Land and Resources Administration of Xuhzou granting us the land use right over a total area of 79.8 acres. We expect to receive the land use certificates in the fourth quarter of 2008 provided that we duly pay for the grant of the state-owned land use right. See “Risk Factors—Risks Related to Our Business—We do not yet have legal rights to the land on which we are planning on building our Xuzhou Phase III production facilities and if we are unsuccessful in obtaining such rights it could delay our production which could have a material adverse effect on our results of operations”. We expect the price and conditions for the land use rights for the 80.9 acres to be similar to those for the initial 92.5 acres. All land use rights expire 50 years from the date of the land use certificates. We have not purchased land use rights for our Xilinhot production facilities or our proposed wafer manufacturing facility, although we believe sufficient land will be available for this purpose.

The Industrial Park is easily accessible by highway, railway and water transport, which is convenient for the transportation of our raw materials and finished products. It also provides a complete supply of basic utilities including water, electricity, steam, communication, and pollution control. Our location in the Industrial Park also entitles us to certain favorable treatment in terms of land, tax, mortgage, electricity pricing and municipality services.

We believe that our existing Xuzhou facilities are adequate and suitable to meet our present needs and that additional space can be obtained on commercially reasonable terms to meet our future requirements.

We recently entered into a non-binding memorandum of understanding with the Inner Mongolia government to build production facilities in Xilinhot, Inner Mongolia. Although we have no legal rights to the land, the Inner Mongolia government has agreed in its memorandum to assist us in obtaining land use rights to approximately 245 acres for our production facilities.

Legal Proceedings

We are currently not a party to any material legal or administrative proceedings and we are not aware of any material legal or administrative proceedings threatened against us. We may from time to time be subject to various legal or administrative proceedings arising in the ordinary course of business.

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PRC GOVERNMENT REGULATION

This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China and our shareholders’ right to receive dividends and other distributions from us.

Renewable Energy Law and Other Government Directives

In February 2005, China enacted its Renewable Energy Law, which became effective on January 1, 2006. The Renewable Energy Law sets forth the national policy to encourage and support the development and use of solar and other renewable energy and its use for on-grid generation.

The law also sets forth the national policy to encourage the installation and use of solar technologies in water-heating systems, heating and cooling systems, photovoltaic systems and other energy utilization systems. In addition, the law provides financial incentives, such as national funding, preferential loans and tax preferences for the development of renewable energy projects.

In January 2006, the NDRC issued two implementing rules relating to the Renewable Energy Law: (1) the Trial Measures on the Administration over the Pricing and Cost Allocation of Renewable Energy Power Generation and (2) the Administrative Regulations Relating to the Renewable Energy Power Generation. These implementing rules, among other things, set forth general policies for the pricing of on-grid power generated by solar and other renewable energy. In addition, the PRC Ministry of Finance issued the Provisional Measures for Administration of Specific Funds for Development of Renewable Energy in June 2006, which provides that the PRC government will establish a fund specifically for the purpose of supporting the development of the renewable energy industry, including the solar energy industry.

China’s Ministry of Construction and Ministry of Finance also issued “Implementary Views for Promoting Use of Renewable Energy in Construction” in August 2006, which sought to expand the use of solar energy in residential buildings.

Environmental Regulations

We use, generate and discharge toxic, volatile or otherwise hazardous chemicals and wastes in our research and development and manufacturing activities. We are subject to a variety of governmental regulations related to the storage, use and disposal of hazardous materials. The major environmental regulations, professional health regulations and work safety regulations applicable to us include the Environmental Protection Law of the PRC, the Safety Production Law of PRC the Law of PRC on the Prevention and Control of Water Pollution, Implementation Rules of the Law of PRC on the Prevention and Control of Water Pollution, the Law of PRC on the Prevention and Control of Air Pollution, the Law of PRC on the Prevention and Control of Solid Waste Pollution, the Law of PRC on the Prevention and Control of Noise Pollution, the Law of PRC on Appraising Environment Impacts, Regulation on Work Safety Permits, Administrative Regulation on the Safety of Hazardous Chemicals, the Administration Regulation on the Levy and Use Discharge Fees, the Regulation of Hazardous Chemicals Safety Management and the PRC Law of Occupational Disease Prevention.

Status of Our Business in Foreign Investment Industrial Guidance Catalogues

The principal regulation governing foreign ownership of businesses in the solar industry in the PRC is the Foreign Investment Industrial Guidance Catalogue (effective as of December 1, 2007). Under the regulation, the polysilicon manufacturing business falls into the category of encouraged foreign investment industry.

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Tax

PRC Enterprise Income Tax

On March 16, 2007, the National People’s Congress approved the draft bill of the PRC Enterprise Income Tax Law, or the new EIT Law, which became effective on January 1, 2008. The Implementation Rule for the PRC Enterprise Income Tax Law or the Implementation Rule was promulgated on December 6, 2007. The new EIT Law adopts a uniform tax rate of 25% for all enterprises (including FIEs) and revokes the tax exemption, reduction and preferential treatments formerly applicable to FIEs. The new EIT Law also provides for transitional measures for enterprises established prior to the promulgation of the new EIT Law. These enterprises are eligible for lower tax rate preferential treatment in accordance with the then prevailing tax laws, up until March 16, 2007, as well as administrative regulations. These enterprises will gradually become subject to the new, unified tax rate over a five-year period from January 1, 2008; enterprises eligible for regular tax reductions or exemptions may continue to enjoy tax preferential treatments after the implementation of the new EIT Law until their preferential treatments expire. The preferential treatment period for enterprises which have not enjoyed any preferential treatments for the reason of not having made any profits, however, shall be deemed as starting from the implementation of the new EIT Law.

In addition, under the new EIT Law, an enterprise established outside of the PRC with “de facto management bodies” within the PRC may be considered a resident enterprise and will normally be subject to the enterprise income tax at the rate of 25% on its global income. The Implementation Rule provides that the term “de facto management bodies” refers to management bodies which have material management and control over all aspects of the business, including without limitation, the production, operation, personnel, finance, and assets of the enterprise. However, it is still unclear if the PRC tax authorities would subsequently determine that, notwithstanding our status as the Cayman Islands holding company of our operating business in the PRC, with administrative headquarters and personnel in Hong Kong, we should be classified as a resident enterprise, whereby our global income will be subject to PRC income tax at a tax rate of 25%. Furthermore the exemption to the 20% withholding tax on dividends distributed by FIEs to their foreign investors under the former tax laws is no longer available. The Implementation Rule provides a 10% statutory dividend withholding rate.

Also, under the new EIT Law, a preferential tax rate of 15% continues to be applicable to high and new technology enterprises and current preferential tax treatments for FIEs would be grandfathered for a period of five years following the effective date of the new EIT Law. The PRC Ministry of Science, Ministry of Finance and State Administration of Tax recently issued the Recognition and Administration Measures for High and New Technology, or the Measures, on April 14, 2008, which have retroactive effect from January 1, 2008. The Measures set forth detailed criteria for the recognition of a high and new technology enterprise. Therefore, whether Jiangsu Zhongneng, our principal operating subsidiary in China, can meet the requirements and be granted the status of a high and new technology enterprise and enjoy a preferential tax rate applicable to high and new technology enterprises is subject to the future implementation of the Measures.

PRC Value Added Tax

Pursuant to the Provisional Regulation of China on VAT, and its implementing rules, all entities and individuals that are engaged in the sale of goods, the provision of repairs and replacement services and the importation of goods in China are generally required to pay value-added tax of 17% of the gross sales proceeds received, less any deductible VAT already paid or borne by the taxpayer. Furthermore, when exporting goods, the exporter is entitled to a portion of or all of the refund of the VAT that it has already paid or borne. Our imported equipment are used for manufacturing export products are exempt from import VAT.

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Foreign Currency Exchange

Foreign currency exchange in China is primarily governed by the following regulations:

• Foreign Exchange Administration Rules (1996), as amended; and

• Regulations of Settlement, Sale and Payment of Foreign Exchange (1996).

Under the Foreign Exchange Administration Rules, the Renminbi is freely convertible for routine current account items, including distribution of dividends, payment of interest, trade and service-related foreign exchange transactions. Conversion of Renminbi for most capital account items, such as direct investment, overseas loan, securities investment and repatriation of investment, however, is still subject to the approval of the SAFE.

Under the Regulations of Settlement, Sale and Payment of Foreign Exchange, FIEs may only buy, sell and /or remit foreign currencies at those banks authorized to conduct foreign exchange business complying with certain procedural requirements, such as providing valid commercial documents and, in the case of capital account item transactions, obtaining approval from the SAFE. Capital investments by FIEs outside of China are also subject to limitations, which include approvals by the Ministry of Commerce, the SAFE and the NDRC.

Dividend Distribution

The principal regulations governing distribution of dividends paid by wholly foreign-owned enterprises include:

• Wholly Foreign-Owned Enterprise Law (1986), as amended;

• Wholly Foreign-Owned Enterprise Law Implementation Rules (1990), as amended; and

• Company Law of the People’s Republic of China (2005).

Under these regulations, Jiangsu Zhongneng may pay dividends only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, Jiangsu Zhongneng is required to set aside a portion of its after-tax profits according to PRC accounting standards and regulations to fund certain reserve funds that cannot be distributed as cash dividends.

Circular No. 75

On October 21, 2005, the SAFE issued Circular No. 75, which became effective as of November 1, 2005. According to Circular No. 75, PRC residents, including both legal persons and natural persons, must register with the relevant local SAFE branches before establishing or controlling any company outside of China with assets or equities interest in PRC companies for the purpose of capital financing. Any such company is referred to as an “offshore special purpose company.” Such PRC residents must also file amendments to their registrations if their offshore companies experience capital variation, such as changes in share capital, share transfers, mergers and acquisitions, long-term equity or debt investments or creation of any security interest over any assets located in China or any other material change in share capital.

Moreover, PRC residents who have established or acquired control of offshore companies that have made onshore investments in the PRC before the implementation of this regulation are required to complete the relevant registration procedures with the local SAFE branch by March 31, 2006. Under Circular No. 75, PRC residents are allowed to pay profits to offshore special purpose companies in the form of dividends to transfer shares in liquidation of a company, to decrease capital and take similar activities only after effecting registration pursuant to the registration procedures set forth in such regulation. Failure to comply with the registration procedures may result in restrictions being imposed on the foreign exchange activities of the relevant PRC entity. See “Risk Factors — Risks Relating to Doing Business in China — Recent regulations relating to offshore investment activities by PRC residents may limit our ability to acquire PRC companies and could adversely affect our business, financial condition and results of operations.”

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Regulations of Overseas Investments and Listings

The NDRC promulgated a rule in October 2004, or the NDRC Rule, which requires NDRC approvals for overseas investment projects made by PRC entities. The NDRC Rule also provides that approval procedures for overseas investment projects of PRC individuals shall be implemented with reference to this rule.

Regulation No. 10, which became effective on September 8, 2006, includes provisions that purport to require that an offshore SPV formed for purposes of overseas listing of equity interest in PRC companies and controlled directly or indirectly by PRC companies or residential individuals obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange.

On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approval procedures require the filing of a number of documents with the CSRC and the approval process takes several months to complete.

The application of Regulation No. 10 with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement.

Our PRC counsel, Grandall Legal Group, has advised us that, based on their understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006:

• CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this prospectus shall be subject to this new procedure;

• in spite of the above, since our Company is not an offshore special purpose vehicle defined in Regulation No. 10 and we have obtained an approval for our restructuring with the Department of Foreign Trade and Economic Cooperation, Jiangsu Province People’s Government, we are not required to submit an application to the CSRC for the approval of this listing and trading of our ADSs on the New York Stock Exchange, unless and until the CSRC issues new rules clearly requiring us to do so; and

• the issuance and sale of the ADSs and the listing and trading of the ADSs on the New York Stock Exchange do not conflict with or violate Regulation No. 10.

See “Risk Factors—Risks Relating to Doing Business in China—Our failure to obtain the prior approval of the China Securities Regulatory Commission, or the CSRC, for this offering and the listing and trading of our ADSs on the New York Stock Exchange could have a material adverse effect on our business, operating results, reputation and trading price of our ADSs, and may also create uncertainties for this offering.”

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MANAGEMENT

Directors and Executive Officers

The following table sets forth certain information concerning our directors and executive officers. The business address of Mr. Zhu Gongshan, Mr. Hunter Jiang, Mr. Jason Li and Mr. Zhang Songyi is Suite 3601, Two Exchange Square, Central, Hong Kong, and for each of our other directors and executive officers is 310, Xuzhou Economic Development Zone, North of the National Highway, Xuzhou, Jiangsu Province, China.

Name	Age	Position
Zhu Gongshan	50	Chairman
Hunter Jiang	50	Chief Executive Officer and Director
Jason Li	42	Chief Financial Officer
Chen Wenjie	58	Chief Technology Officer for the Wafer Division
Scott Ma	39	Chief Marketing Officer
Zhu Guomin	54	General Manager of JZPTD
Jiang Wenwu	45	Deputy General Manager in charge of Production of JZPTD
Zhong Zhenwu	36	Manager of Research and Development of JZPTD
Zhang Songyi	53	Director
David Tang	53	Independent Director(1)
John Koh	52	Independent Director(1)
Otmar Haas	66	Independent Director(1)

(1) Appointments effective on the listing date

Zhu Gongshan is our chairman. Mr. Zhu Gongshan is our controlling shareholder. He stepped down as our chief executive officer on the appointment of Mr. Hunter Jiang in February 2008. He is currently a vice principal committee member of the Chinese Society for Electrical Engineering. Mr. Zhu Gongshan held the post of general manager of the Taicang Poly Cogeneration Plant from August 1997 to November 2003. From November 1999 to July 2005 and from April 2007 till now, he has been a director of the Golden Concord Holdings Limited. Since July 2006, Mr. Zhu Gongshan has been an executive director of GCL-Poly Energy Holdings Limited, a company listed on the Hong Kong Stock Exchange. He graduated from the Nanjing Electrical Professional School, majoring in electrical automation. Mr. Zhu Gongshan obtained a Ph.D. degree in Business Administration from the Bulacan State University of the Philippines.

Hunter Jiang became our president in September 2007, our chief executive officer in February 2008 and a director in July 2008. Prior to joining us, Mr. Hunter Jiang was the chief executive officer of Shanghai Alison Group Co., Ltd., a manufacturer of steel pipe, petrochemicals, and specialty packaging headquartered in Shanghai, from 2005 to 2007. From 1998 to 2005, Mr. Hunter Jiang was the chief executive officer of IPC Corp. China, a wholly owned subsidiary of IPC Corporation Ltd, a company listed on the Mainboard of the Singapore Exchange Limited whose businesses include information technology, property investment and development as well as investment holding. Mr. Hunter Jiang obtained a bachelor’s degree in accounting from Shanghai Lixin University of Commerce, a degree in English from the East China Normal University Shanghai and an MBA from Macau University of Science and Technology.

Jason Li became our chief financial officer in August 2008. Prior to joining us, he was the chief financial officer of Shunda Holdings Co., Ltd. from August 2007 to June 2008. From March 2007 to August 2007, he was the group assistant vice president in the accounting and financial reporting group for the Asia-Pacific region of ABB Asea Brown Boveri Ltd., or ABB, and from March 2005 to March 2007, he was the vice president of corporate controlling, reporting and assurance. While he was at ABB, Mr. Jason Li was also the Sarbanes-Oxley project manager and the internal controls manager for the North Asia Region. From November 2001 to March 2005, he was the chief financial officer of the Hefei joint venture formed by Delta and Pineland Co., Ltd. Mr. Jason Li spent over seven years at PricewaterhouseCoopers and is a member of both the AICPA and CICPA. Mr. Jason Li received his bachelor’s degree in finance from Xiamen University and completed the business management program at IMD in Switzerland.

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Chen Wenjie became our Chief Technology Officer for the wafer division in June 2008. Prior to joining us he was the general manager at Yixing Jintech Solar Energy Co. Ltd., or Jintech Solar, since January 2008. Prior to Jintech Solar, he was vice general manager for Hairen Science and Technology Co., Ltd. from 2004 to 2007. Mr. Chen graduated from the Beijing Polytechnical University with a degree in semiconductors.

Scott Ma became our Chief Marketing Officer in May 2008. Prior to joining us he was procurement director at Trina Solar Energy Co., Ltd. from 2007 to 2008. His experience before that includes serving as an APR supply chain director at Avery Dennison from 2005 to 2006, a materials and logistics manager at Texas Instruments (China) Co. Ltd. from 1999 to 2004, and a manager of import and export department at Shenzhen (China) Foreign Trading Development Group from 1990 to 1997. Mr. Scott Ma earned an MBA from Nanjing University Business School and a Ph.D. in Operation Management: Supply Chain Optimization jointly from Hehai University Business School and University of Texas at Dallas School of Management.

Zhu Guomin became general manager of JZPTD in March 2006. He received his college degree from Shanghai Electrical College. From 1996 to 2000, he was the factory manager of Nantong Xinxing Cogeneration Plant. From 2000 to 2006, Mr. Zhu Guomin was the general manager for one of GCL-Poly’s Cogeneration Plants.

Jiang Wenwu became the deputy general manager of JZPTD in June 2007. He has over 20 years of experience working as an engineer. Prior to joining us, he worked at CNPL Fushan Petrochemical as a deputy general manager from 1999 to 2006 and as a project manager until October 2006. From October 2006 to June 2007 he worked as a senior manager within the Golden Concord Group. Mr. Jiang Wenwu obtained a bachelor’s degree in chemical engineering from Jiling Chemical Engineering Institute and a Ph.D. in chemical engineering at Dalian University of Technology.

Zhong Zhenwu became manager of Research and Development of JZPTD in March 2006. Prior to joining us, he was the senior engineer at Shanghai Jiao Tong University’s Department of Physics, from 2004 to 2005, specializing in superconductors and nanostructure research. From 2001 to 2003, he was a senior researcher at The National University of Singapore, Digital Storage Institute specializing in the garnet crystal liquid phase epitaxy growth thick film production. Mr. Zhong Zhenwu obtained his bachelor’s degree in applied chemicals from Shandong University, a master’s degree from Shandong University and a Ph.D. in crystalline materials from Chinese Academy of Science.

Zhang Songyi has been a director since our inception. He currently serves in senior management and advisory capacities in several companies, including acting as the chairman of Mandra Capital, an investment holding company focused on Asia investment opportunities, a senior advisor of Morgan Stanley Asia Limited and a director of SINA Corporation, a company listed on the Nasdaq Stock Market. Prior to founding Mandra Capital, Mr. Zhang Songyi served as a managing director of Asia Merger, Acquisition and Divestiture Group, and the co-head of Asia Resources and Infrastructure Group of Morgan Stanley, and a senior associate of Milbank, Tweed, Hadley & McCloy LLP. Mr. Zhang Songyi obtained a J.D. from Yale University.

David Tang will become an independent director upon our listing. Sir David Tang is the founder of Shanghai Tang, the China Clubs, China Tang and the Pacific Cigar Company Ltd. He is a director of First Pacific Company, Ltd. which is listed on the Hong Kong Stock Exchange. He was a director of Tommy Hilfiger Corporation which was listed on the New York Stock Exchange. In addition, he has served on a number of advisory boards, including the Blackstone Group, the Savoy Group of Hotels and British Airways. In Hong Kong, he is the founder and chairman of the Hong Kong Cancer Fund and the president of the Hong Kong Down Syndrome Association. In England, he is a trustee of the Royal Academy of Arts and chairman of the Asia-Pacific Acquisition Committee of the Tate Modern. He was decorated with the Chevalier de l’Ordre des Arts et des Lettres, France in 1995; an Officer of the British Empire in 2007; and conferred by Her Majesty the Queen a Knight Commander of the Order of the British Empire in 2008. Sir David Tang holds an honours degree in philosophy from the University of London, and taught at Peking University in 1983.

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John Koh will become an independent director upon our listing. Mr. John Koh has over 25 years of experience in investment banking and law. From 2002 to 2007, he was a senior advisor to The Goldman Sachs Group. Prior to joining The Goldman Sachs Group, Mr. John Koh spent 18 years as a lawyer at Paul Weiss Rifkind Wharton & Garrison LLP, Milbank, Tweed, Hadley & McCloy LLP, J. Koh & Co, a Singapore law firm founded by himself and the Singapore Attorney General’s office. Mr. John Koh has served on government committees in Singapore, most recently as a member of the Economic Review Committee’s Services sub-committee on Service Industries. He is also the chairman of the Audit Committee of the Board of Directors of Natsteel Ltd, a publicly traded Singapore conglomerate, and a director of several private companies, such as Mapletree Industrial Fund Ltd. and Mandra Forestry Finance Limited, in which Mandra Resources Limited, a company controlled by Mr. Zhang Songyi and his wife, holds a majority shareholding. He holds a B.A. and an M.A. from the University of Cambridge and obtained an LL.M. from Harvard Law School.

Otmar Haas will become an independent director upon our listing. Mr. Otmar Haas has over 30 years of experience in international business development and management. From 2001 to 2008, he has been a senior executive advisor to ProfitNet GmbH. Mr. Otmar Haas also served as the managing director of Inros Lackner Consulting Group GmbH from 2001 to 2003 and as the vice chairman of the executive board of Inros Lackner AG from January to December 2004. He was also a member of numerous professional organizations, including German Asia-Pacific Business Association, German Near and Middle East Association, German Consulting Engineering Association and Transparency International. Mr. Otmar Haas holds a degree in engineering from the Fachhochschule Osnabrück.

Composition of Board of Directors

Our board of directors consists of three directors. Three additional independent directors will join the board upon completion of this offering. A director is not required to hold any shares in our company by way of qualification. Unless disqualified by the chairman, a director may vote with respect to any contract or transaction in which he or she is materially interested provided the nature of the interest is disclosed prior to its consideration. Subject to our memorandum and articles of association the directors may exercise all the powers of our company to borrow money, mortgage its undertaking, property and uncalled capital, and issue debentures or other securities whenever outright or as security for any debt, liability or obligation of our company or of any third party. We intend to have a majority of independent directors serving on our board of directors within one year of this offering.

Duties of Directors

Under Cayman Islands law, our directors have a fiduciary duty to act honestly, in good faith and with a view to our best interests. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time. A shareholder has the right to seek damages if a duty owed by our directors is breached.

The functions and powers of our board of directors include, among other things:

• convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings;

• declaring dividends and distributions;

• appointing officers and determining the term of office of officers;

• subject to our memorandum and articles of association exercising the borrowing powers of our company and mortgaging the property of our company; and

• approving the transfer of shares of our company, including the registering of such shares in our share register.

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Terms of Directors and Executive Officers

Our officers are elected by and serve at the discretion of the board of directors. Our directors are not subject to a term of office and hold office until such time as they are removed from office in accordance with our memorandum and articles of association. A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) dies or becomes of unsound mind.

Committees of the Board of Directors

Our board of directors will establish an audit committee, a compensation committee and a corporate governance and nominating committee immediately after the closing of this offering.

Audit Committee

Our audit committee will initially consist of Mr. John Koh, Sir David Tang and Mr. Otmar Haas, and will be chaired by Mr. John Koh. All of them satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange and meet the independence Standards under Rule 10A-3 under the Securities Exchange Act of 1934, as amended. We believe that Mr. John Koh qualifies as an “audit committee financial expert”. The audit committee will oversee our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee will be responsible for, among other things:

• selecting our independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors;

• reviewing with our independent auditors any audit problems or difficulties and management’s response to such audit problems or difficulties;

• reviewing and approving all proposed related-party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;

• discussing the annual audited financial statements with management and our independent auditors;

• reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies;

• annually reviewing and reassessing the adequacy of our audit committee charter;

• such other matters that are specifically delegated to our audit committee by our board of directors from time to time;

• meeting separately and periodically with management and our internal and independent auditors; and

• reporting regularly to the full board of directors.

Compensation Committee

Our compensation committee will initially consist of Sir David Tang, Mr. Zhu Gongshan, Mr. Otmar Haas and Mr. John Koh, and will be chaired by Sir David Tang. Sir David Tang satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange. Our compensation committee assists the board in reviewing and approving the compensation structure of our directors and executive officers, including all forms of compensation to be provided to our directors and executive officers. Members of the compensation committee are not prohibited from direct involvement in determining their own compensation. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee will be responsible for, among other things:

• approving and overseeing the compensation package for our executive officers;

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• reviewing and making recommendations to the board with respect to the compensation of our directors;

• reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of those goals and objectives, and setting the compensation level of our chief executive officer based on this evaluation; and

• reviewing periodically and making recommendations to the board regarding any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

Corporate Governance and Nominating Committee

Upon completion of this offering, our corporate governance and nominating committee will consist of Mr. Otmar Haas, Mr. Zhu Gongshan, Sir David Tang and Mr. John Koh, and will be chaired by Mr. Otmar Haas. Mr. Otmar Haas satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange. The corporate governance and nominating committee will assist the board of directors in identifying individuals qualified to become our directors and in determining the composition of the board and its committees. The corporate governance and nominating committee will be responsible for, among other things:

• identifying and recommending to the board nominees for election or re-election to the board, or for appointment to fill any vacancy;

• reviewing annually with the board the current composition of the board in light of the characteristics of independence, age, skills, experience and availability of service to us;

• identifying and recommending to the board the directors to serve as members of the board’s committees;

• advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any corrective action to be taken; and

• monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

Interested Transactions

Unless disqualified by the chairman, a director may vote in respect of any contract or transaction in which he or she is interested, provided that the nature of the interest of any directors in such contract or transaction is disclosed by him or her at or prior to its consideration and any vote on that matter.

Remuneration and Borrowing

The directors may determine remuneration to be paid to the directors. The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors. Subject to our memorandum and articles of association, the directors may exercise all the powers of our company to borrow money and to mortgage or charge its undertaking, property and uncalled capital, and to issue debentures or other securities whether outright or as security for any debt obligations of our company or of any third party.

Qualification

There is no shareholding qualification for directors.

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Employment Agreements

We have entered into an employment agreement with each of our executive officers. The terms of the employment agreements are substantially similar for each executive officer, except as noted below. We may terminate an executive officer’s employment for cause, at any time, without notice or remuneration, for certain acts of the officer, including, but not limited to, a serious criminal act, willful misconduct to our detriment or a failure to perform agreed duties. Furthermore, either we or an executive officer may terminate employment at any time without cause upon advance written notice to the other party.

Each executive officer has agreed to hold, both during and after the termination of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment or as compelled by law, any of our or our customers’ confidential information or trade secrets. Each executive officer also agrees to comply with all material applicable laws and regulations related to his or her responsibilities at our company as well as all material written corporate and business policies and procedures of our company.

Each executive officer has agreed to be bound by non-competition restrictions during the term of his or her employment and, for so long as our company continues to pay at least one third of the executive officer’s total annual compensation, for two years following the termination of such employment agreement. Specifically, each executive officer has agreed not to (i) assume employment with or provide services as a director for any of our competitors who operate in a restricted area; (ii) solicit or seek any business orders from our customers; or (iii) seek directly or indirectly, to solicit the services of any of our employees.

Compensation of Directors and Executive Officers

For the year ended December 31, 2007 and the six months ended June 30, 2008, our aggregate payments of cash to directors or executive officers was $0.2 million and $0.3 million, respectively. On February 29, 2008, our directors and executive officers received options under our 2007 share incentive plan. See “—2007 Share Incentive Plan.” We have agreed to pay Mr. Zhu Gongshan a monthly compensation of $32,051 starting in June 2008. We also agreed to pay Mr. Zhang Songyi an annual remuneration of $100,000.

2007 Share Incentive Plan

We adopted a share incentive plan in August 2007, or the 2007 Plan, to attract and retain the best available personnel for positions of substantial responsibility, provide additional incentives to employees, directors and consultants and promote the success of our business. We have granted 5,000,000 options to officers, directors and employees to purchase 50,000,000 ordinary shares under the 2007 Plan, the maximum number of shares which may be granted under the 2007 Plan. Each option has a term of ten years, and has an exercise price of $0.50 per share. Each option is exercisable into 10 ordinary shares. The options vest over a four year period with 25% of the options vesting upon each of six months, 18 months, 30 months and 42 months after this offering. The following table summarizes, as of June 30, 2008, our outstanding options under the 2007 Plan.

Name	Underlying Outstanding Options	Exercise Price ($/Share)	Grant Date	Expiration Date
Zhu Gongshan	694,000	0.50	February 29, 2008	March 1, 2018
Zhu Guomin	270,000	0.50	February 29, 2008	March 1, 2018
Hunter Jiang	230,000	0.50	February 29, 2008	March 1, 2018
Jiang Wenwu	190,000	0.50	February 29, 2008	March 1, 2018
Other employees as a group	2,856,000	0.50	February 29, 2008	March 1, 2018
Consultants as a group	760,000	0.50	February 29, 2008	March 1, 2018
Total	5,000,000

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2008 Restricted Share Compensation Plan

Our Board of Directors adopted the 2008 Restricted Share Compensation Plan, or the 2008 Plan, in July 2008. The 2008 Plan is integral to our compensation strategies and programs to help recruit, motivate, and retain directors, employees and independent contractors. The 2008 Plan provides for grants of restricted stock. The 2008 Plan will be administered by our compensation committee. Subject to the terms of the 2008 Plan, the compensation committee is authorized to select persons eligible to receive awards and to determine the amount, timing and other terms of the awards to be granted. The compensation committee is authorized to interpret the 2008 Plan and any award agreements issued under the 2008 Plan.

The maximum number of shares available for grant under the 2008 Plan is 15,000,000 shares. The shares awarded or acquired upon the exercise of awards under the 2008 Plan may be authorized but unissued shares, authorized and issued shares reacquired and held as treasury shares, or any combination. If any award granted under the 2008 Plan expires, terminates, or is forfeited or canceled, the shares subject to such award become available for the grant of new awards under the 2008 Plan. In addition, shares tendered or withheld to satisfy the exercise price of an award, if any, shall again be available for the grant of new awards under the 2008 Plan.

Our directors, employees and independent contractors and those of any of our subsidiaries and affiliates who are designated by the compensation committee are eligible to receive awards under the 2008 Plan. Persons receiving awards will enter into individual award agreements with us that will contain the terms and conditions of the award established by the compensation committee. We have agreed to grant to Mr. Jason Li 1,600,000 shares pursuant to the 2008 Plan immediately after the closing of this offering with a restricted period of four years.

Award Grants. The compensation committee is authorized to grant awards of restricted stock. A grant of restricted stock is an award of shares which may not be sold or disposed of prior to the end of a restricted period specified in the award agreement. The compensation committee may set additional restrictions on restricted stock as it may deem advisable or appropriate in the individual award agreements. A recipient of restricted stock generally has the right to vote the shares. During the restricted period, recipients holding shares of restricted stock are entitled to receive all dividends and other distributions paid with respect to such shares, unless otherwise determined by the compensation committee. However, dividends and other distributions with respect to restricted stock that are paid in shares will be held by us subject to the same restrictions that apply to the restricted shares.

In addition, the compensation committee may stipulate in the relevant award agreement that restricted stock awards be subject to the achievement of performance goals as may be determined by the compensation committee. The performance goals may be based on such factors including, but not limited to: (a) revenue, (b) earnings per share, (c) net income per share, (d) share price, (e) pre-tax profits, (f) net earnings, (g) net income, (h) operating income, (i) cash flow, (j) earnings before interest, taxes, depreciation and amortization, (k) sales, (l) total stockholder return relative to assets, (m) total stockholder return relative to peers, (n) financial returns (including, without limitation, return on assets, return on equity and return on investment), (o) cost reduction targets, (p) customer satisfaction, (q) customer growth, (r) gross margin, (s) revenue growth, or (t) any combination of the foregoing, or such other criteria as the compensation committee may determine. The compensation committee may determine performance goals in respect of our performance, any of our subsidiaries or affiliates or any combination thereof on either a consolidated, business unit or divisional level. Performance goals may be absolute or relative and may be expressed in terms of a progression within a specified range.

Tax Withholding; Other Terms of Awards. The compensation committee or the Board may condition any payment relating to an award on the withholding of taxes and may provide that a portion of any shares to be distributed will be withheld (or previously acquired shares or other property be surrendered) to satisfy withholding and other tax obligations. Awards granted under the 2008 Plan generally may not be pledged or otherwise encumbered and are not transferable except by will or by the laws of descent and distribution, or to a designated beneficiary upon the participant’s death, except that the compensation committee may, in its discretion, permit transfers for other purposes.

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Amendment and Termination. Our Board may amend, suspend or terminate the 2008 Plan or any part thereof, at any time and for any reason, subject to any stockholder approval required by law or the rules of the New York Stock Exchange. Unless earlier terminated by the Board, the 2008 Plan will terminate ten years after adoption by the Board. The termination (or early termination) of the 2008 Plan will not affect any awards granted prior to the termination (or early termination) of the 2008 Plan.

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PRINCIPAL AND SELLING SHAREHOLDERS

The table below sets forth information with respect to the beneficial ownership, within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, of our ordinary shares, as of the date of this prospectus, including ordinary shares to be issued upon conversion of our convertible redeemable preferred shares and Tranche B Floating Rate Secured Convertible Bonds, and with respect to the shares beneficially owned after this offering, as adjusted to reflect (a) the sale of our ADSs offered in this offering, (b) the issuance of 270,322,853 ordinary shares as partial consideration, assuming the initial offering price of the ADSs exceeds $             per ADS, for the purchase of the 36% interest in JZPTD, our operating subsidiary, and (c) certain share transfers by Happy Genius identified under “Related Party Transactions—Acquisition of 36% JZPTD Onshore Equity Interest”, all of which will be completed concurrently with the closing of this offering for:

• each person or entity who we know beneficially owns more than 5% of our ordinary shares;

• each selling shareholder;

• each of our directors and executive officers; and

• all of our directors and executive officers as a group.

This table assumes the underwriters will exercise their option to purchase              ADSs from the selling shareholders to cover over-allotments in full.

	Shares Beneficially Owned Prior to this Offering(1)(2)			Shares Being Sold in this Offering			Shares Beneficially Owned After this Offering(1)(3)
Name of Beneficial Owner	Number	Percent		Number	Percent		Number	Percent
Directors and Executive Officers:
Zhu Gongshan(4)	604,403,810	59.0	%	—	—		749,243,763		%
Hunter Jiang	—	—		—	—		—	—
Jason Li	—	—		—	—		—	—
Scott Ma	—	—		—	—		—	—
Chen Wenjie	—	—		—	—		—	—
Zhang Songyi(5)	142,018,370	13.9	%			%			%
Zhu Guoming	—	—		—	—		—	—
Jiang Wenwu	—	—		—	—		—	—
Zhong Zhenwu	—	—		—	—		—	—
David Tang**	—	—		—	—		—	—
John Koh**	—	—		—	—		—	—
Otmar Haas**	—	—		—	—		—	—
All directors and executive officers as a group	—	—		—	—		—	—
Other Principal and Selling Shareholders:
TB Silicon Limited(6)	51,786,000	5.1	%			%			%
Deutsche Bank AG(7)	34,390,280	3.4	%			%			%
Guinness Mahon & Co. Limited(8)	16,583,330	1.6	%			%			%
Wang Qiang(9)	14,372,580	1.4	%			%			%
D. E. Shaw Composite Portfolios, L.L.C.(10)	9,950,030	*			*			*
New Horizon Melody Investment Ltd.(11)	8,291,670	*			*			*
Chan Marc(12)	6,000,000	*			*			*
Li Feng and Liu Ping(13)	4,422,220	*			*			*
Wang Chunlin and Chan Hiulai(14)	2,729,330	*			*			*
Cheng Zaizhong(15)	3,333,000	*			*			*
Dong Xuanming(16)	3,000,000	*			*			*
Frank Lin(17)	1,667,000	*			*			*
Yu Baodong(18)	2,300,690	*			*			*
Chang Tsongzung(19)	1,667,000	*			*			*
Zhang Yuhong(20)	829,170	*			*			*
Fung Kakeung(21)	—	*			*			*

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* Less than one percent.

** Appointment effective upon completion of this offering.

(1) Beneficial ownership is determined in accordance with Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, and includes voting or investment power with respect to the securities. The share numbers and percentages listed in the first column of the table reflect the share number and percentage held by each director, executive officer and principal shareholder plus ordinary shares to be issued on conversion of our convertible redeemable preferred shares and Tranche B Floating Rate Secured Convertible Bonds.

(2) For each person included in this table, percentage ownership prior to this offering and percentage of the ordinary shares being sold in this offering are calculated by dividing the number of shares beneficially owned or being sold by such person by the sum of (i) 1,024,850,000, being the number of ordinary shares outstanding as of the date of this prospectus plus ordinary shares to be issued on conversion of our convertible redeemable preferred shares and Tranche B Floating Rate Secured Convertible Bonds, and (ii) the number of ordinary shares underlying share options held by such person or group that are exercisable within 60 days after the date of this prospectus. Percentage ownership after this offering is calculated by dividing the number of shares beneficially owned by such person or group by the sum of (i)             , being the number of ordinary shares outstanding immediately after the completion of this offering, and (ii) the number of ordinary shares underlying share options held by such person or group that are exercisable within 60 days after the date of this prospectus, assuming that the underwriters do not exercise their option to purchase additional ADSs in the offering.

(3) For each person included in this column, ownership after this offering gives effect to the issuance of 270,322,853 shares in connection with the purchase of the 36% interest in JZPTD and the subsequent transfers described under “Related Party Transactions—Acquisition of 36% JZPTD Onshore Equity Interests.”

(4) Represents ordinary shares held by Happy Genius. Happy Genius is 100% beneficially owned by Mr. Zhu Gongshan. Mr. Zhu Gongshan’s business address is Suite 3601, Two Exchange Square, Central, Hong Kong. 100% interest in Happy Genius has been transferred to Mr. Zhu Gongshan’s family trust currently beneficially owned by Mr. Zhu Gongshan.

(5) Represents 130,018,370 ordinary shares held by Mandra Materials Limited and 12,000,000 ordinary shares held by Mandra Esop Limited, both of which are indirectly wholly-owned by Mr. Zhang Songyi and his wife. Mr. Zhang Songyi’s business address is 10th Floor, Fung House, 19-20 Connaught Road, Central, Hong Kong.

(6) Includes 4,167,000 ordinary shares issuable to TB ZN Silicon Limited, or TBZS, on conversion of our convertible redeemable preferred shares on completion of this offering. TB Silicon Limited is beneficially owned by Trustbridge Partners I, L.P., which is controlled by TB Partners GP1, L.P., its general partner, which is controlled by TB Partners GP Limited, its general partner. TB ZN Silicon Limited is beneficially owned by Trustbridge Partners II, L.P., which is controlled by TB Partners GP2, L.P., its general partner, which is controlled by TB Partners GP Limited, its general partner. The business address of TB Partners GP Limited is Walkers SPV Limited, Walker House, 87 Mary Street, George Town, Grand Cayman, KY1-9002, Cayman Islands.

(7) Includes 29,850,000 ordinary shares issuable on conversion of our Tranche B Floating Rate Secured Convertible Bonds due 2009 at the closing of this offering. Economic interest in 4,999,876 ordinary shares, 2,462,624 ordinary shares and 7,462,500 ordinary shares are subject to total return swap arrangements between Deutsche Bank AG and Stark Master Fund, Ltd., Stark Asia Master Fund, Ltd. and Centar Investments (Asia), Ltd, respectively. These three funds are managed by Stark Investments (Hong Kong) Limited. The business address of Stark Master Fund Ltd. is Stark Offshore Management LLC, 3600 South Lake Drive, St. Francis, WI 53523, United States. The business address of Stark Asia Master Fund Ltd. is Stark Asia Management, LLC, 3600 South Lake Drive, St. Francis, WI 53523, United States. The business address of Centar Investments (Asia) Ltd. is Centar Investments (Asia) LLC, 3600 South Lake Drive, St. Francis, WI 53523, United States. This figure also includes economic interest in 1,658,370 ordinary shares pursuant to an option transaction entered into by Deutsche Bank AG and a counterparty. The business address of Deutsche Bank AG is One Raffles Quay, #18-00 South Tower, Singapore 048583. Deutsche Bank AG is an affiliate of Deutsche Bank Securities Inc., a registered broker dealer.

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(8) Guinness Mahon & Co. Limited is beneficially owned by Investec Bank (UK) Limited. The principal business address of Investec Bank (UK) Limited is 2 Gresham Street, London, EC2V 7QP, United Kingdom. Guinness Mahon & Co. Limited is an affiliate of Investec Securities (US) LLC, a registered broker dealer.

(9) Represents ordinary shares held by Greenrich Investments Ltd., which is beneficially owned by Mr. Wang Qiang . The business address of Mr. Wang Qiang is 2^nd Floor, Abbott Building, Road Town, Tortola, British Virgin Islands.

(10) Represents (i) 8,291,660 ordinary shares held by D. E. Shaw Composite Investments Asia 5 (Cayman) Ltd., which may participate in this offering and (ii) 1,658,370 ordinary shares that may be acquired by D. E. Shaw Composite Portfolios, L.L.C. pursuant to an option transaction entered into by D. E. Shaw Composite Portfolios, L.L.C. with a counterparty. D. E. Shaw Composite Investments Asia 5 (Cayman) Ltd. disclaims beneficial ownership of the ordinary shares held by D. E. Shaw Composite Portfolios, L.L.C., except to the extent of any pecuniary interest of D. E. Shaw Composite Investments Asia 5 (Cayman) Ltd. therein. D. E. Shaw Composite Investments Asia 5 (Cayman) Ltd. is beneficially owned by D. E. Shaw Composite Portfolios, L.L.C., a Delaware limited liability company. The managing member of D. E. Shaw Composite Portfolios, L.L.C. is D. E. Shaw & Co., L.L.C., a Delaware limited liability company. The business address of D. E. Shaw Composite Investments Asia 5 (Cayman), Ltd. is Walkers SPV Limited, Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9001, Cayman Islands. The business address of D. E. Shaw Composite Portfolios, L.L.C. is 120 West 45^th Street, 39^th Floor, New York, NY 10036, United States. D. E. Shaw Composite Investments Asia 5 (Cayman) Ltd. and D. E. Shaw Composite Portfolios, L.L.C. are affiliates of D. E. Shaw Securities, L.L.C., a registered broker-dealer.

(11) New Horizon Melody Investment Ltd., or New Horizon Melody, is beneficially owned by New Horizon Capital, L.P., which is controlled by New Horizon Capital Partners Ltd. Dr. Jianming Yu exercises the investment authority for New Horizon Melody. New Horizon Capital Partners Ltd. is an exempted limited liability company organized in the Cayman Islands. The principal business address of New Horizon Capital Partners Ltd. is Unit 3328, 33/F, China Merchants Tower, Nos. 168-200 Connaught Road Central, Hong Kong.

(12) Represents 6,000,000 ordinary shares held by Amplewood Resources Limited, which is beneficially owned by Mr. Chan Marc. The business address of Mr. Chan Marc is Unit 21E, 21/F, United Centre, 95 Queensway, Admiralty, Hong Kong.

(13) Represents 4,422,220 ordinary shares held by Success Central Investments Limited, which is beneficially owned by Mr. Li Feng and Ms. Liu Ping. The business address of Mr. Li Feng and Ms. Liu Ping is 2^nd Floor, Abbott Building, Road Town, Tortola, British Virgin Islands.

(14) Represents 2,729,330 ordinary shares held by Successful Lane Limited, which is beneficially owned by Mr. Wang Chunlin and Ms. Chan Hiulai. The business address of Mr. Wang Chunlin and Ms. Chan Hiulai is Sea Meadow House, Blackburne Highway, P.O. Box 116, Road Town, Tortola, British Virgin Islands.

(15) Represents 3,333,000 ordinary shares held by Thornton Asset Management Service Centre Limited, which is beneficially owned by Mr. Cheng Zaizhong and Ms. Chim Chuishan. The business address of Mr. Cheng Zaizhong and Ms. Chim Chuisan is Unit 2201, 22^nd Floor, Worldwide House Central, Hong Kong.

(16) Represents 3,000,000 ordinary shares held by Charm Mind International Ltd., which is beneficially owned by Mr. Dong Xuanming. The business address of Mr. Dong Xuanming is P.O. Box 957 Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.

(17) The business address of Mr. Frank Lin is 99 Puming Lu, Block 33, Apt. 1501, Pudong, Shanghai, People’s Republic of China.

(18) Represents 1,592,000 ordinary shares held by Joy Big Holdings Limited and 708,690 ordinary shares held by Bonus Billion Group Limited, which are each beneficially owned by Mr. Yu Baodong, who is an executive director and vice-president of GCL-Poly. He began his employment with GCL-Poly in November 2006. The business address of Mr. Yu Baodong is P.O. Box 957 Offshore Incorporation Centre, Road Town, Tortola, British Virgin Islands.

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(19) Represents 1,667,000 ordinary shares held by Mr. Chang Tsongzung. In addition, 410,000 ordinary shares are expected to be transferred to TZ Holdings Limited, or TZ Holdings, in connection with the closing of this offering by Happy Genius from proceeds of the 36% equity interest in JZPTD. TZ Holdings is beneficially owned by Mr. Chang Tsongzung, who is the brother of Mr. Zhang Songyi, one of our directors. TZ Holdings is one of our affiliates as Mr. Zhu Gongshan is one of its two directors. The business address of Mr. Chang Tsongzung is A1, 46-48 Kadoorie Avenue, Kowloon, Hong Kong.

(20) Represents 829,170 ordinary shares held by Asia Bright International Limited, or Asia Bright. Asia Bright is beneficially owned by Ms. Zhang Yuhong. The business address of Asia Bright International Limited is Suite 2003, 20/F, Queen’s Place, 74 Queen’s Road Central, Central, Hong Kong.

(21) 14,590,000 ordinary shares are expected to be transferred to Top Plenty Limited, or Top Plenty, in connection with the closing of this offering by Happy Genius from part of the purchase price of the 36% equity interest in JZPTD. Top Plenty is beneficially owned by Mr. Fung Kakeung, who is the general manager of the finance group of Golden Concord Holdings Limited. He began his employment with Golden Concord Holdings Limited in September 2004. The business address of Mr. Fung Kakeung is Suite 3601, Two Exchange Square, Central, Hong Kong.

Except as indicated, each of the selling shareholders named above has represented to us that it is not a broker-dealer or an affiliate of a broker-dealer. Each of the selling shareholders that is identified as affiliated with a registered broker dealer represents that it purchased the ordinary shares being sold by it in the ordinary course of business and that at the time of the purchase, the selling shareholder had no agreements or understandings, directly or indirectly, with any person to distribute the securities.

Immediately upon the completion this offering, we will use $240.6 million of the proceeds from this offering, together with $446.9 million aggregate principal amount of the 2008 Convertible Bonds and 270,322,853 of our ordinary shares, to purchase from Happy Genius and Moonchu the 36% equity interest in JZPTD they hold through Sun Wave and Greatest Joy. Happy Genius in turn will use the cash it will receive from us to redeem 35% of the aggregate outstanding amount of the exchangeable bonds. The purchase price and the form of consideration were established through negotiations involving the sellers, our shareholders and holders of the exchangeable bonds issued by Happy Genius and were approved by our shareholders in July 2008. In addition, Happy Genius agreed to cause 12,634,490 ordinary shares to be transferred to TB Silicon Limited, 1,105,540 ordinary shares to be transferred to TB ZN Silicon Limited and 3,316,620 ordinary shares to be transferred to Balderton Capital III, L.P. from the ordinary shares to be issued by us to Happy Genius in connection with the acquisition of the 36% equity interest in JZPTD at the closing of this offering. See “Related Party Transactions — Acquisition of 36% JZPTD Onshore Equity Interests.”

Happy Genius intends to use the 2008 Convertible Bonds it receives from us to exchange for 65% of the aggregate outstanding amount of the exchangeable bonds to the extent that certain conditions to exchange are satisfied. For a description of the 2008 Convertible Bonds, see “Description of Share Capital — Ownership of Our Business and Securities Issuances — 2008 Convertible Bonds” and “Description of Share Capital — Registration Rights.” The holders of our 2008 Convertible Bonds will hold an aggregate of             % of our total outstanding ordinary shares on an as-converted basis immediately upon the completion of this offering.

None of our shareholders has different voting rights from other shareholders after the closing of this offering. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

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RELATED PARTY TRANSACTIONS

Share Transfer Agreement with Prior Onshore Shareholders Regarding JSJST

Pursuant to a share purchase agreement dated June 6, 2007 between JZPTD, Nanjing Linyang and Lianyungang Suyuan, JZPTD transferred 100% of its shareholding in JSJST, a wholly owned subsidiary of JZPTD, to Nanjing Linyang and Lianyungang Suyuan, minority shareholders of JZPTD. Under this agreement, JZPTD transferred 70% of JSJST to Nanjing Linyang for the purchase price of RMB69.0 million ($9.0 million) and 30% of JSJST to Lianyungang Suyuan for the purchase price of RMB29.6 million ($3.9 million). At the time of the transfer, the buyers were equity investors in JZPTD.

The share purchase agreement also provided the framework under which JZPTD would supply to JSJST a minimum of 50 MT of polysilicon in 2007, 700 MT in 2008 and 1,200 MT in 2009 in accordance with definitive purchase agreements to be negotiated. The purchase price for such polysilicon is to be determined quarterly and equal to 97% of the average market price for the comparable product during the preceding quarter. The share purchase agreement provided that other detailed provisions related to the sale were to be set out in the relevant definitive sales agreement to be entered by JSJST and JZPTD.

No definitive purchase agreements implementing the framework provisions in the share purchase agreement were entered into until June 2008, although for the year ended December 31, 2007 and the period from January 1, 2008 to June 10, 2008, JZPTD entered into six and 22 purchase orders with JSJST, respectively. Pursuant to these purchase orders, JZPTD supplied JSJST a total of 27 MT of polysilicon at an average price (net of VAT) of RMB1,884 ($255) per kilogram with a total sales amount of $6.9 million for the year ended December 31, 2007 and a total of 61 MT of polysilicon at an average price, net of VAT, of RMB2,302 ($326) per kilogram with a total sales amount of $19.9 million for the period from January 1, 2008 to June 10, 2008. JSJST ceased to be a related party on June 10, 2008 upon the completion of the acquisition by entities affiliated with Mr. Zhu Gongshan and Moonchu of the 36% of JZPTD that we currently do not own. In June 2008, we entered into a polysilicon supply agreement with Solarfun, another onshore subsidiary of Solarfun Power Holdings Limited, the parent company of JSJST, which replaces the obligation under the framework agreement. See “Business – Customers and Markets.”

Transactions with Affiliated Companies

JZPTD withdrew balances held in a Chinese bank and made a short-term advance of RMB130 million ($16.8 million) to Shanghai Creative, a company whose principal shareholder was also a Director of JZPTD, on December 31, 2006. The advance was fully repaid on January 1, 2007.

JZPTD paid handling fees to Shanghai Creative of $0.4 million for the year ended December 31, 2007 for acquisition of machinery and equipment on behalf of Jiangsu Zhongneng. As of December 31, 2006 and 2007 and June 30, 2008, outstanding amounts of $36.9 million, $4.1 million and $0, deposited with Shanghai Creative, respectively, were included in deposits for acquisition of machinery and equipment. Shanghai Creative shared its expertise in international equipment purchases that assisted us in developing our production facilities.

During the period from March 7, 2006 to December 13, 2006, JZPTD paid a consultancy fee of $1.5 million to Shanghai Creative. Under the consultancy agreement between us and Shanghai Creative, Shanghai Creative provided us with assistance in the procurement of polysilicon production technology, including the import and sourcing of equipment and technical support by overseas experts.

Shanghai Creative has paid certain administrative expenses on behalf of JZPTD as advances. As of December 31, 2007 and June 30, 2008, the outstanding balance was $0.8 million and $0.4 million, respectively.

During the year ended December 31, 2007, JZPTD made a short-term advance of $0.1 million to Xuzhou Economic Development Zone Electricity Company Limited, a company controlled by Mr. Zhu Gongshan. As of December 31, 2007, the outstanding amount of this advance was $0.1 million, which was fully repaid in March 2008.

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We have entered into an option agreement with an affiliate of Mr. Zhu Gongshan as described under “Business—Polysilicon Production—Production Capacity”. No payments are to be made in connection with the exercise of such option.

We intend to enter into an agreement with Tongxiang Puyuan Xiexin Environmental Protection Cogeneration Co., Ltd., a subsidiary of GCL-Poly in October 2008 for the operation and maintenance of boilers for our operations in Xuzhou. We would be obligated to pay RMB10.0 million ($1.5 million) a year for a term of two years pursuant to this contract.

Loans and other Amounts Due to Affiliated Companies

In September 2007, amounts due for the acquisition of JZPTD of $13.8 million and $2.6 million was paid to Guotai and Beijing Zhongneng, respectively, companies under the common control of Mr. Zhu Gongshan, our chairman.

Golden Concord Holdings (Cayman) Limited, whose principal shareholder is Mr. Zhu Gongshan, has paid certain administrative expenses on our behalf in the past, including other corporate expenses of $0.5 million, payroll expenses of $0.2 million, travel expenses of $0.2 million and other expenses of $0.1 million. As of December 31, 2007, there was no outstanding reimbursement balance due to Golden Concord Holdings (Cayman) Limited for such expense payments.

We paid management fees of $1.4 million and $0.8 million in the year ended December 31, 2007 and for the six months ended June 30, 2008, respectively, to Golden Concord (Hong Kong) Holdings Limited, whose principal shareholder is Mr. Zhu Gongshan. Such management fees included payroll of $0.7 million, property management fees of $0.3 million and other fees of $0.4 million in the year ended December 31, 2007 and payroll of $0.4 million, property management fees of $0.1 million and other fees of $0.3 million for the six months ended June 30, 2008. The Golden Concord Group provides us with management services and office facilities in Hong Kong. On a monthly basis, the Golden Concord Group charges us a management fee of an agreed allocation percentage to share the expenses incurred by the Golden Concord Group’s offices in Hong Kong. Golden Concord (Hong Kong) Holdings Limited has also paid certain expenses on our behalf in the past that we have subsequently reimbursed, including payroll of $0.1 million. The outstanding balances as of December 31, 2006, December 31, 2007 and June 30, 2008 were $0, approximately $0.2 million and $0.8 million respectively.

We have borrowed funds from Taicang Harbour Golden Concord Electric-Power Generation Co., Ltd., or Taicang Electric, a company of which Mr. Zhu Gongshan is a shareholder, to fund a portion of the construction of the production facilities. These borrowings bear interest at an average rate of 6.49% and mature in November 2008. As of December 31, 2007, the outstanding principal amount payable to Taicang Electric was $13.8 million. We repaid the entire loan amount of $14.3 million in January 2008. During the year ended December 31, 2007 and the six month period ended June 30, 2008, interest paid or payable to Taicang Electric amounted to $0.1 million and $0.1 million, respectively.

In September 2007, JZPTD repaid the amount payable of $12.3 million to Guotai for the purchase of JSJST.

In June 2008, we issued a promissory note to Happy Genius, our controlling shareholder. The note was unsecured, interest-free and repayable at the earlier of the listing date and June 20, 2009. We are required to pay the costs incurred by Happy Genius in connection with the negotiation, preparation and execution of the promissory note. As of June 30, 2008, the outstanding balance was $15.0 million.

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In June 2008, we borrowed funds from Zibo Baokai Trading Company Limited, a minority shareholder of our Taixing joint venture. The advance was unsecured, interest-free and repayable on demand. As of June 30, 2008, the outstanding balance was $1.3 million.

In the six months ended June 30, 2007, we paid management fees to Golden Concord (Hong Kong) Limited of $0.4 million. Also in the same period, Golden Concord Holdings (Cayman) Limited, Shanghai Creative and Nanjing Linyang paid various operating expenses on our behalf amounting to $0.4 million, $1.1 million and $1.4 million, respectively.

Shanghai Office Rental

JZPTD rents office space from Shanghai Yueyuan Machinery Company Limited, a company affiliated with Mr. Zhu Gongshan, our chairman, at an annual rental of RMB798,000 ($0.1 million). We believe that the rental is on arm’s-length terms. At December 31, 2007 and June 30, 2008, the outstanding balance owed by JZPTD was $0.1 million and $0, respectively.

Sales to a Minority Shareholder of JZPTD

In the year ended December 31, 2007, sales by JZPTD to Hebei Jinglong, one of its minority shareholders, amounted to $0.6 million. As at December 31, 2007, JZPTD received a sales advance of $0.1 million from Hebei Jinglong. The advance has been included under accrued expenses and other current liabilities. Hebei Jinglong ceased to be a related party on June 10, 2008 upon the completion of the acquisition by entities affiliated with Mr. Zhu Gongshan and Moonchu of the 36% of JZPTD that we currently do not own.

Onshore Loan Guarantees

A portion of JZPTD’s onshore loans are guaranteed by entities that at the time of such loans were shareholders of JZPTD, including certain companies otherwise affiliated with us and prior onshore shareholders. Although we have made no payments in connection with these guarantees and have not agreed to make any payment, we cannot assure you that the guarantors on these onshore loan facilities will not request fees in connection with these guarantees or otherwise demand payment from us in connection with their obligations pursuant to these guarantees.

Acquisition of 36% JZPTD Onshore Equity Interests

In December 2007 Sun Wave and Greatest Joy, entities owned by Mr. Zhu Gongshan and Moonchu, agreed to acquire 20% and 16% of JZPTD, respectively, from the remaining minority shareholders, for an aggregate purchase price of $430.5 million. These purchases were completed in early May and early June 2008. Concurrently with the closing of this offering, we will acquire Sun Wave and Greatest Joy, which hold the remaining 36% of JZPTD. As a result, JZPTD will become our wholly-owned indirect subsidiary.

In May and June 2008, to raise sufficient funds to pay the final amounts in partial satisfaction of the obligation to purchase the 36% of JZPTD that is not owned by us, Happy Genius, our controlling shareholder wholly-owned by Mr. Zhu Gongshan, issued $550 million exchangeable bonds to certain investors. Happy Genius, together with Moonchu, holds such interest through Sun Wave and Greatest Joy.

Immediately upon the completion this offering, we will use $240.6 million of the proceeds from this offering, together with $446.9 million aggregate principal amount of the 2008 Convertible Bonds and 270,322,853 of our ordinary shares, to purchase from Happy Genius and Moonchu the 36% equity interest in JZPTD they hold through Sun Wave and Greatest Joy. Happy Genius in turn will use the cash it will receive from us to redeem 35% of the aggregate outstanding amount of the exchangeable bonds. The purchase price and form of consideration were established through negotiations involving the sellers, our shareholders and holders of the

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exchangeable bonds issued by Happy Genius and were approved by our shareholders in July 2008. The cash portion of the consideration was determined to allow Happy Genius to have sufficient cash to pay the redemption amount required on a qualified initial public offering to redeem its outstanding exchangeable bonds. The convertible bond portion of the consideration and its related terms were negotiated with the holders of the exchangeable bonds issued by Happy Genius to provide a value to such holders equal to $558.2 million, which is fair value of the 2008 Convertible Bonds. The number of shares issued as part of the purchase price will be reduced in the event that the initial public offering price in this offering is below $             per ADS. The number will be reduced by the percentage the initial public offering price is below such price. The aggregate value of the cash, the 2008 Convertible Bonds and the 270,322,853 ordinary shares valued at the mid-point of the range of the estimated initial public offering price to be paid for the 36% interest in JZPTD will be $            . From the ordinary shares to be issued to Happy Genius, it has agreed to cause 12,634,490 ordinary shares to be transferred to TB Silicon Limited, 1,105,540 ordinary shares to be transferred to TB ZN Silicon Limited and 3,316,620 ordinary shares to be transferred to Balderton Capital III, L.P. from the ordinary shares to the issued in connection with the acquisition of the 36% equity interest in JZPTD at the closing of this offering. The number of shares transferred by Happy Genius to TB Silicon Limited, TB ZN Silicon Limited and Balderton Capital III, L.P. will be reduced proportionately to any reduction in the number issued as part of the purchase price for the JZPTD interest. These shares are consent fees in connection with earlier rounds of financing for Happy Genius.

Happy Genius intends to use the 2008 Convertible Bonds it receives from us to exchange for 65% of the aggregate principal amount of the exchangeable bonds to the extent that certain conditions to exchange are satisfied. For a description of the 2008 Convertible Bonds, see “Description of Share Capital — Ownership of Our Business and Securities Issuances — 2008 Convertible Bonds” and “Description of Share Capital — Registration Rights.” The holders of our 2008 Convertible Bonds will hold an aggregate of             % of our total outstanding ordinary shares on an as-converted basis immediately upon the completion of this offering.

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DESCRIPTION OF SHARE CAPITAL

Set forth below is information concerning our share capital and a brief summary of the material provisions of our memorandum and articles of association and of the material applicable laws of the Cayman Islands.

We were incorporated in the Cayman Islands on May 9, 2007 under the Companies Law (2004 Second Revision) Cap. 22 of the Cayman Islands, or Companies Law. As of the date hereof, our authorized share capital is 100,050,000,000 shares divided into 100,000,000,000 ordinary shares and 50,000,000 Series A Convertible preferred shares, or the preferred shares.

Upon the closing of this offering, we will adopt an amended and restated memorandum and articles of association, which will replace the current memorandum and articles of association in its entirety. The following are summaries of material provisions of our proposed amended and restated memorandum and articles of association and the Companies Law insofar as they relate to the material terms of our ordinary shares that we expect will become effective upon the closing of this offering.

Ordinary Shares

Our ordinary shares are divided into 100,000,000,000 ordinary shares, of which 978,333,000 are issued and outstanding as of June 30, 2008. All ordinary shares have the same voting and other rights. All of our outstanding ordinary shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in registered form. Our shareholders who are nonresidents of the Cayman Islands may freely hold and vote their shares. None of our ordinary shares are held by residents of the Cayman Islands.

Preferred Shares

Our preferred shares are divided into 50,000,000 preferred shares, of which 16,667,000 are issued and outstanding as of June 30, 2008. All outstanding preferred shares will convert automatically into ordinary shares immediately on the closing of this offering or on the election of all holders of the preferred shares.

Meetings

An annual general meeting and any extraordinary general meeting shall be called by not less than five days notice in writing. Notice of every general meeting shall be given to all our members other than such as, under the provisions of the articles of association or the terms of issue of the ordinary shares they hold, are not entitled to receive such notices from us, and also to our auditors for the time being.

Notwithstanding that a meeting is called by shorter notice than that mentioned above, it shall be deemed to have been duly called, if it is so agreed (i) in the case of a meeting called as an annual general meeting, by all our members entitled to attend and vote at the meeting; or (ii) in the case of any other meeting, by a majority of the members having a right to attend and vote at the meeting, being a majority together holding not less than 75% in nominal value of the ordinary shares giving that right.

No business shall be transacted at any general meeting unless a quorum is present at the commencement of business.

Two of our members present in person or by proxy representing (i) each holder of preferred shares, and (ii) in excess of 50% of the total issued voting shares in our company shall be a quorum.

The quorum for a separate general meeting of the holders of a separate class of our shares is described in “Modification of Rights” below.

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Voting Rights Attaching to the Shares

At any general meeting every holder of ordinary shares who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative) shall have one vote, and on a poll every holder of ordinary shares present in person or by proxy (or, in the case of a member being a corporation, by its duly appointed representative) shall have one vote for each ordinary share of which such shareholder is the holder.

No shareholder shall be entitled to vote in respect of any share unless such shareholder is registered as our shareholder at the applicable record date for that meeting and all calls due by such member to us have been paid.

If a recognized clearing house (or its nominee(s)) is our member it may authorize such person or persons as it thinks fit to act as its representative(s) at any meeting or at any meeting of any class of members, provided that, if more than one person is so authorized, the authorization shall specify the number and class of shares in respect of which each such person is so authorized. A person authorized pursuant to this provision is entitled to exercise the same powers on behalf of the recognized clearing house (or its nominee(s)) as if such person was the registered holder of our shares held by that clearing house (or its nominee(s)) including the right to vote individually on a show of hands.

Protection of minorities and shareholders’ suits

It can be expected that the Cayman Islands courts will ordinarily follow English case law precedents (particularly the rule in the case of Foss v. Harbottle and the exceptions thereto) which permit a minority member to commence a representative action against or derivative actions in the name of a company to challenge:

(i) an act which is ultra vires of the company or illegal;

(ii) an act which constitutes a fraud against the minority and the wrongdoers are themselves in control of the company; and

(iii) an irregularity in the passing of a resolution the passage of which requires a qualified (or special) majority which has not been obtained.

Where a company (not being a bank) is one which has a share capital divided into shares, the court may, on the application of members thereof holding not less than one-fifth of the shares of the company in issue, appoint an inspector to examine the affairs of the company and, at the direction of the court, to report thereon.

Moreover, any member of a company may petition the court which may make a winding up order if the court is of the opinion that it is just and equitable that the company should be wound up.

In general, claims against a company by its members must be based on the general laws of contract or tort applicable in the Cayman Islands or be based on potential violation of their individual rights as members as established by a company’s memorandum and articles of association.

Pre-emption Rights

There are no pre-emption rights applicable to the issue of new ordinary shares under either Cayman Islands law.

Procedures on liquidation

A resolution that our company be wound up by the court or be wound up voluntarily is a special resolution.

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Subject to any special rights, privileges or restrictions as to the distribution of available surplus assets on liquidation for the time being attached to any class or classes of shares:

(i) if we are wound up and the assets available for distribution amongst our shareholders are more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, then the excess will be distributed pari passu amongst such members in proportion to the amount paid up on the shares held by them; and

(ii) if we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the paid-up capital, such assets will be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up, on the shares held by them.

In the event that we are wound up (whether the liquidation is voluntary or compelled by the court) the liquidator may, with the sanction of a special resolution and any other sanction required by the Cayman Companies Law divide among the members in specie or kind the whole or any part of our assets whether the assets shall consist of property of one kind or shall consist of properties of different kinds and the liquidator may, for such purpose, set such value as he deems fair upon any one or more class or classes of property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members and the members within each class. The liquidator may, with the like sanction, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator shall think fit, but so that no member shall be compelled to accept any shares or other property upon which there is a liability.

Calls on Shares and Forfeiture of Shares

Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares. The shares that have been called upon and remain unpaid on the specified time are subject to forfeiture.

Issue of Redeemable Shares

Subject to the Companies Law and our memorandum and articles of association, the directors shall not issue redeemable shares without the sanction of an ordinary resolution.

Variation of Rights of Shares

Any amendment to or changes in the rights, privileges, preferences or powers of , or restrictions provide for the benefit of holders of the preferred shares shall require, inter alia, prior written approval of all holders of preferred shares.

Inspection of Books and Records

Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide our shareholders with annual audited financial statements.

Ownership of Our Business and Securities Issuances

In March 2006, our operating subsidiary in China, JZPTD, was formed as a limited liability company in China by Guotai, Suyuan, Xuzhou Suyuan, Nanjing Linyang and Hebei Jinglong. At JZPTD’s inception, Guotai, Suyuan, Beijing Zhongneng, Xuzhou Suyuan, Nanjing Linyang and Hebei Jinglong originally held 55%, 15%, 10%, 10%, 5% and 5%, respectively, of JZPTD. Guotai and Beijing Zhongneng were originally owned by Mr. Zhu Gongshan, who later became our controlling shareholder, chairman and chief executive officer.

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In November 2006, GCL HK was formed as a limited liability company in Hong Kong. Mr. Zhang Songyi owned a controlling interest in GCL HK through Happy Genius. GCL HK agreed to purchase 64% of JZPTD from Guotai and Beijing Zhongneng on November 29, 2006 and completed the purchase on December 13, 2006. In May 2007, our company was formed in the Cayman Islands and held by Mr. Zhang Songyi through Happy Genius.

From December 2006 to April 2007, Mr. Zhang Songyi sold shares of Happy Genius to various individuals and institutional investors aggregating approximately 10% of the outstanding equity interests in Happy Genius, a substantial majority of the proceeds of which were downstreamed through Happy Genius and GCL HK to JZPTD to finance our Xuzhou Phase I production facility and provide working capital. On August 10, 2007, Mr. Zhang Songyi agreed to sell the remaining shares of Happy Genius held by him, after completion of the reorganization discussed below, to Boulina, a company owned by Mr. Zhu Gongshan. On August 21, 2007, as part of the reorganization, the shareholders of Happy Genius exchanged approximately 25% of the ownership interest of Happy Genius for approximately 25% of our Company. Also, Happy Genius exchanged all the ownership interest in GCL HK for approximately 75% of our shares. In September 2007, the previously agreed transfer of ownership of Happy Genius was completed from Mr. Zhang Songyi to Boulina. As a result of these transactions, Mr. Zhu Gongshan became the indirect holder of all the outstanding shares of Happy Genius, which owned approximately 75% of our ordinary shares, Mr. Zhang Songyi became the indirect owner of approximately 15% of our ordinary shares and other shareholders became the owners of approximately 10% of our shares. We owned 64% of the equity in JZPTD indirectly through GCL HK.

Pursuant to agreements entered into in December 2007, Sun Wave and Greatest Joy acquired 20% and 16% of JZPTD, respectively, from our remaining PRC shareholders for $430.5 million in early May and early June 2008. As consideration for our acquisition of Sun Wave and Greatest Joy, we intend to: (1) pay $240.6 million to entities affiliated with Mr. Zhu Gongshan, in cash using a portion of the proceeds from the offering which will be used to partially redeem the exchangeable bonds issued by Happy Genius; (2) issue the 2008 Convertible Bonds to entities affiliated with Mr. Zhu Gongshan in the aggregate principal amount of $446.9 million; and (3) issue 270,322,853 of our shares to entities affiliated with Mr. Zhu Gongshan and Moonchu. See “Related Party Transactions—Acquisition of 36% JZPTD Onshore Equity Interests”.

The following is a summary of our securities issuances since our inception.

Ordinary Shares

• On May 9, 2007, we issued one ordinary share to Happy Genius in connection with our incorporation at par. On June 13, 2007, we completed a 100 to one share split.

• On August 21, 2007, we issued 769,309 ordinary shares, 225,591 ordinary shares and 5,000 ordinary shares to Happy Genius, Mandra Materials and Positive Rise, respectively, at par.

• On February 21, 2008, we completed a 100 to one share split.

• On February 25, 2008, we repurchased and cancelled 5,000,000 ordinary shares.

• On July 18, 2008, we completed a 10 to one share split.

Series A Convertible Redeemable Preferred Shares

• On August 29, 2007, we redesignated 16,667 ordinary shares held by Happy Genius into the same number of Series A Convertible Redeemable Preferred Shares, which Happy Genius immediately transferred to certain institutional investors.

• On February 21, 2008, we completed a 100 to one share split of the Series A Convertible Preferred Shares.

• On July 18, 2008 we completed a 10 to one share split of the Series A Convertible Preferred Shares.

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Tranche A Floating Rate Secured Redeemable Bonds due 2009 and Tranche B Floating Rate Secured Convertible Bonds due 2009

• On September 10, 2007, we issued floating rate redeemable bonds and floating rate convertible bonds, or together, the floating rate bonds, in the aggregate principal amount of $60.0 million at an issue price equal to their principal amount. The Tranche A Floating Rate Secured Redeemable Bonds in the principal amount of $20.0 million are required to be redeemed at their principal amount upon the completion of this offering. The Tranche B Floating Rate Secured Convertible Bonds with the principal amount of $40.0 million are required to be converted into ordinary shares equal to 3.0% of our ordinary shares prior to (1) our acquisition of the 36% interest in JZPTD and (2) the completion of this offering. If our market capitalization at conversion is less than $2.56 billion based on 64% ownership of JZPTD, we must pay the holders of the convertible portion of our floating rate bonds 3.0% of the difference between $2.56 billion and our market capitalization prior to the conversion and the offering. The net proceeds from these bonds were used to (1) deposit $4.2 million into an interest reserve account, (2) pay the $17.0 million balance of the purchase price owed to the acquisition of 64% of our equity interests in JZPTD and (3) make an equity contribution of $28.0 million to the increased registered capital of JZPTD.

Employee Share Options

We adopted the 2007 Plan in August 2007. As of June 30, 2008, we had granted options to purchase all 50,000,000 ordinary shares subject to the 2007 Plan to directors, employees and consultants. See “Management—2007 Share Incentive Plan.”

We adopted the 2008 Restricted Share Plan in July 2008. Pursuant to such plan we can issue up to 15,000,000 restricted shares to directors, employees, consultants and anyone deemed eligible by the senior management under guideline set forth by the compensation committee. We have agreed to issue 1,600,000 restricted shares to Mr. Jason Li immediately after the completion of this offering.

2008 Convertible Bonds

In connection with our acquisition of Sun Wave and Greatest Joy, we will issue the $446.9 million principal amount of 2008 Convertible Bonds to Happy Genius. Such 2008 Convertible Bonds will be used together with cash received in such acquisition by Happy Genius to partially redeem the $550 million principal amount of exchangeable bonds issued by Happy Genius and will therefore be held as of the closing of this offering by current holders of such exchangeable bonds. The 2008 Convertible Bonds will be convertible into our ADSs representing ordinary shares at a conversion price equivalent to the initial public offering price per ADS in this offering. The 2008 Convertible Bonds will become convertible by the bondholders at six months, nine months and 12 months subsequent to the closing of this offering with respect to 50%, 25% and 25% of the original principal amount of such convertible bonds, respectively. The 2008 Convertible Bonds will pay interest semi-annually in arrears at 3% per annum. If not converted, they will mature 18 months after the closing of this offering. Any dividends or other capital distributions to holders of ordinary shares and ADSs are payable to the holders of the 2008 Convertible Bonds on an as converted basis. The 2008 Convertible Bonds will benefit from standard covenants as well as a negative pledge covenant applicable to us and our offshore subsidiaries and a covenant that our consolidated net debt will not exceed 4.0 times our consolidated earnings before interest, tax, depreciation and amortization for the first three consecutive quarters following this offering and 3.75 times our consolidated earnings before interest, tax, depreciation and amortization for the second three consecutive quarters following this offering. We will agree to repurchase the 2008 Convertible Bonds at the option of the holders at a premium on certain fundamental events, including change of control. The holders of the 2008 Convertible Bonds and ordinary shares or ADSs issued on conversion will have rights to cause the registration of sales of the ordinary shares or ADSs issued on conversion of the 2008 Convertible Bonds. The holders of our 2008 Convertible Bonds will hold an aggregate of         % of our total outstanding ordinary shares on an as-converted basis immediately upon the completion of this offering. See “Description of Share Capital—Registration Rights” and “Related Party Transactions—Acquisition of 36% JZPTD Onshore Equity Interests.”

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Differences in Corporate Law

The Companies Law is modeled after that of the United Kingdom but does not follow recent United Kingdom statutory enactments. In addition, the Companies Law differs from laws applicable to the United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Law applicable to us and the laws applicable to the companies incorporated in the United States and their shareholders.

Mergers and Similar Arrangements

Cayman Islands law does not provide for mergers as that expression is understood under United States corporate law. However, there are statutory provisions that facilitate the reconstruction and amalgamation of companies. Reconstructions and amalgamations are governed by specific statutory provisions under the Cayman Companies Law whereby such arrangements may be approved by a majority in number representing 75% in value of members or creditors, depending on the circumstances, as are present at a meeting called for such purpose and thereafter sanctioned by the courts. While a dissenting member would have the right to express to the court his view that the transaction for which approval is being sought would not provide the members with a fair value for their shares, nonetheless the courts are unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of management. If the transaction were approved and consummated the dissenting member would have no rights comparable to the appraisal rights (i.e. the right to receive payment in cash for the judicially determined value of their shares) ordinarily available, for example, to dissenting members of a United States corporation.

Where an offer is made by a company for the shares of another company and, within four months of the offer, the holders of not less than 90% of the shares which are the subject of the offer accept, the offeror may at any time within two months after the expiration of the said four months, by notice require the dissenting members to transfer their shares on the terms of the offer. A dissenting member may apply to the court of the Cayman Islands within one month of the notice objecting to the transfer. The burden is on the dissenting member to show that the court should exercise its discretion, which it will be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority members.

If the arrangement and reconstruction or takeover offer is thus approved or accepted, the dissenting shareholders are unlikely to have any rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

Indemnification of Directors and Executive Officers and Limitation of Liability

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association permit indemnification of officers and directors for losses, damages, charges and expenses incurred in their capacities as such unless such losses or damages arise from willful neglect or default of such directors or officers. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable as a matter of United States law.

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Anti-takeover Provisions in the Amended and Restated Memorandum and Articles of Association

Subject to the Companies law, our company can adopt a wide range of defensive measures, such as staggered boards, blank check preferred shares, removal of directors only for cause and provisions that restrict the rights of shareholders to call meetings, act by written consent and submit shareholder proposals. Our amended memorandum and articles of incorporation provide for, among others, a staggered board, blank check preferred stock and provisions that restrict the rights of shareholders to call shareholders’ meetings and eliminate their right to act by written consent.

Directors’ Fiduciary Duties

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

Under Cayman Islands law, at common law, members of a board of directors owe a fiduciary duty to the company to act in good faith in their dealings with or on behalf of the company and exercise their powers and fulfill the duties of their office honestly. This duty has four essential elements:

• a duty to act in good faith in the best interests of the company;

• a duty not to personally profit from opportunities that arise from the office of director;

• a duty to avoid conflicts of interest; and

• a duty to exercise powers for the purpose for which such powers were intended.

In general, the Companies Law imposes various duties on officers of a company with respect to certain matters of management and administration of the company. The Companies Law contains provisions, which impose default fines on persons who fail to satisfy those requirements. However, in many circumstances, an individual is only liable if he knowingly is guilty of the default or knowingly and willfully authorizes or permits the default.

Shareholder Action by Written Consent

Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. The Companies Law allows a special resolution to be passed in writing if signed by all the shareholders and authorized by the articles of association, which ours do.

Shareholder Proposals

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

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The Companies Law does not provide shareholders any right to bring business before a meeting or requisition a general meeting. However, these rights may be provided in articles of association. Our amended and restated articles of association allow our shareholders holding not less than 75% of our paid-up voting share capital to requisition a shareholder’s meeting. As an exempted Cayman Islands company, we are not obliged by law to call shareholders’ annual general meetings. However, our amended and restated articles of association require us to call such meetings unless otherwise determined by the shareholders by way of an ordinary resolution.

Cumulative Voting

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. While there is nothing under the Companies Law which specifically prohibits or restricts the creation of cumulative voting rights for the election of directors of a Company, our amended and restated articles of association do not provide for cumulative voting.

Removal of Directors

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our amended and restated articles of association, directors may be removed, by way of ordinary resolution of the shareholders and by the affirmative vote of the group of shareholders entitled to designate such director.

Transactions with Interested Shareholders

The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.

A Cayman company may enter into some business transactions with significant shareholders, including asset sales, in which a significant shareholder receives, or could receive, a financial benefit that is greater than that received, or to be received, by other shareholders with prior approval from the board of directors but without prior approval from the shareholders.

Sale of Assets

Contrary to the general practice in most corporations incorporated in the United States, the Companies Law does not require that shareholders approve sales of all or substantially all of a company’s assets. However pursuant to our memorandum and articles of association, inter alia, prior consent from holders of preferred shares is required for any sale of whole or substantial part of the business of the Company.

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Dissolution; Winding up

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. If the dissolution is approved by the board of directors, it must be approved by a simple majority of the corporation’s outstanding shares; or if so provided in its certificate of incorporation, a supermajority of shareholders. Under the Companies Law of the Cayman Islands and our amended and restated articles of association, our company may be dissolved, liquidated or wound up by, inter alia, prior written approval of the holders of the preferred shares.

Variation of Rights of Shares

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. As permitted by Cayman Islands law, our amended and restated articles of association provides that, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the vote at a class meeting of holders of the shares of such class.

Amendment of Governing Documents

Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by the Companies Law, our amended and restated memorandum and articles of association may only be amended with, inter alia, a special resolution of the Company.

Rights of Non-resident or Foreign Shareholders

There are no limitations imposed by our amended and restated memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our amended and restated memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.

Registration Rights

Pursuant to an investors’ rights agreement dated August 29, 2007 which was amended on September 7, 2007, or the August 2007 agreement, a registration rights agreement dated September 10, 2007, or the September 2007 agreement, and a registration rights agreement dated June 5, 2008, or the June 2008 agreement, we have granted certain registration rights with respect to our shares to holders of registrable securities including holders of our convertible redeemable preferred shares, holders of 202,758,000 of our ordinary shares and holders of convertible debt. Pursuant to a registration rights agreement to be entered into at the closing of this offering, or the August 2008 agreement, we will grant holders of the 2008 Convertible Bonds registration rights with respect to shares to be issued on conversion. Set forth below is a description of the registration rights granted under these agreements.

Demand Registration Rights

At any time after six months following the closing of our initial public offering, holders of at least 25% of registrable securities (in the case of the August 2007 agreement and the September 2007 agreement) have the right to demand that we file a registration statement covering the offer and sale of their securities. However, we are not obligated to effect more than two such demand registrations. We have the ability to defer the filing of a registration statement not more than once in any 12 month period for up to 120 days if we furnish to holders of the registrable securities a certificate signed by our president or chief executive officer (in the case of the August 2007 agreement) or a director of the company (in the case of the September 2007 agreement) stating that the board of directors has determined that it would be seriously detrimental to us or our shareholders for a registration statement to be filed at such time.

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Piggyback Registration Rights

If we propose to file a registration statement with respect to an offering of securities of our company, then we must offer each holder of registrable securities the opportunity to include their shares in the registration statement. Such requests for registrations are not counted as demand registrations.

Form F-3 Registration Rights

Upon our company becoming eligible for Form F-3 (and, in the case of the August 2007 agreement, upon the request of holders of at least 25% of registrable securities), holders of the registrable securities have the right to request that we file a registration statement on Form F-3 so long as the aggregate amount of securities to be sold under the registration statement is no less than $4 million (in the case of the August 2007 agreement) or $1 million (in the case of the September 2007 agreement). Such requests for registration are not counted as demand registrations.

Shelf Registration

The August 2008 agreement requires that we: (1) file within 60 days of this offering and (2) maintain the effectiveness beginning six months after the closing of this offering, a shelf registration statement that will allow public resales of shares in the form of ADSs issued on conversion of the 2008 Convertible Bonds. If we are unable to achieve effectiveness by the date six months after the closing of this offering or are unable to maintain effectiveness, we will be required to pay monetary penalties to the holders of the 2008 Convertible Bonds or registrable securities. Pursuant to our lock-up agreement, we will need consent from the representatives of the underwriters to file a registration statement prior to 180 days following the date of this prospectus.

Expenses of Registration

We will pay all expenses relating to any demand or piggyback registration, whether or not such registrations become effective; however, shareholders shall bear the expense of any broker’s commission or underwriter’s discount or commission relating to registration and sale of their shares.

Expiration of Registration Rights

All registration rights pursuant to the August 2007 agreement and the September 2007 agreement expire three years after the closing of this offering. The registration rights pursuant to the August 2008 agreement expire when shares in the form of ADSs issued on conversion can be freely sold without a registration statement, which we expect will be no later than one year after the closing of this offering.

Modification of Rights

Except with respect to share capital (as described below) and the location of the registered office, alterations to our memorandum and articles of association may only be made by special resolution.

Subject to the Companies Law of the Cayman Islands, all or any of the special rights attached to shares or any class (unless otherwise provided for by the terms of issue of the shares of that class) may be varied, modified or abrogated either with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. The provisions of the Articles of Association relating to general meetings shall apply mutatis mutandis to every such separate general meeting, but so that the quorum for the purposes of any such separate general meeting other than an adjourned meeting shall be a person or persons together holding (or represented by proxy) on the date of the relevant meeting not less than fifty percent in nominal value of the issued shares of that class, every holder of shares of the class shall be entitled on a poll to one vote for every such share held by such holder and that any holder of shares of that class present in person or by proxy may demand a poll.

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The special rights conferred upon the holders of any class of shares shall not, unless otherwise expressly provided in the rights attaching to or the terms of issue of such shares, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

Alteration of Capital

We may from time to time by ordinary resolution:

• increase our capital by such sum, to be divided into shares of such amounts, as the resolution shall prescribe;

• consolidate and divide all or any of our share capital into shares of larger amount than our existing shares;

• cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled subject to the provisions of the Companies Law; and

• sub-divide our shares or any of them into shares of smaller amount than is fixed by the Memorandum of Association, subject nevertheless to the Companies Law.

We may, by special resolution, subject to any confirmation or consent required by the Companies Law, reduce our share capital, share premium account or any capital redemption reserve in any manner authorized by law.

Transfer of Shares

Subject to the restrictions of the articles of association as may be applicable, any of our shareholders may transfer all or any of his or her shares by an instrument of transfer in the form prescribed by our memorandum and articles of association.

Our directors may decline to register any transfer of any share unless the instrument of transfer is lodged with us accompanied by the certificate for the shares to which it relates and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer.

Share Repurchase

We are empowered by the Companies Law and the articles of association to purchase our own shares subject to certain restrictions. Our directors may only exercise this power on our behalf, subject to the Companies Law, our memorandum and articles of association and to any applicable requirements imposed from time to time by the New York Stock Exchange, the U.S. Securities and Exchange Commission, or the SEC, or by any other recognized stock exchange.

Dividends

Subject to the Companies Law and our memorandum and articles of association, in a general meeting of the shareholders of our Company we may declare dividends but no dividends shall exceed the amount recommended by our directors. Dividends may be declared and paid out of our profits, realized or unrealized, or from any reserve set aside from profits which our directors determine is no longer needed. With the sanction of an ordinary resolution, dividends may also be declared out of the share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Law.

Our directors may also pay any dividend which is payable on any shares half-yearly or on any other dates, whenever our profits, in the opinion of the directors, justifies such payment.

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Our directors may deduct from any dividend or distributions payable to any shareholder all sums of money (if any) presently payable by him to us on account of calls, installments or otherwise.

No dividend or other monies payable by us on or in respect of any share shall bear interest against us.

Subject to our memorandum and articles of association, with the sanction of an ordinary resolution (or, with regarding to a dividend payable in respect of a class of shares, an ordinary resolution passed at a class meeting) the directors may determine that (i) the persons entitled to participate in the dividend shall have a right of election to accept shares of our company credited as fully paid up in satisfaction of all or (if the directors so specify or permit) part of their dividend entitlement or (ii) a dividend shall be satisfied in whole or specified part by an issue of shares of our company credited as fully paid up, subject to a right of election on the part of persons entitled to participate in the dividend to receive their dividend entitlement wholly or (if the directors so permit) partly in cash. In either event, the directors may determine all questions concerning the right of election, notification thereof to shareholders, the basis and terms of issue of shares of our company and otherwise.

Any dividend interest or other sum payable in cash to the holder of shares may be paid by cheque or draft sent by mail addressed to the holder at his address, or addressed to such person and at such addresses as the holder may direct. Every such check or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the register in respect of such shares, and shall be sent at his or their risk and payment of the check or warrant by the bank on which it is drawn shall constitute a good discharge to us.

Any dividend unclaimed after a period of six years from the date of declaration of such dividend may be forfeited by our board of directors and, if so forfeited, shall revert to us.

Subject to our memorandum and articles of association, with the sanction of an ordinary resolution, the directors may determine that a dividend shall be paid wholly or partly by the distribution of specific assets (which may consist of the shares or securities of any other company) and may settle all questions concerning such distribution. Without limiting the generality of the foregoing, the directors may fix the value of such specific assets, may determine that cash payment shall be made to some shareholders in lieu of specific assets and may vest any such specific assets in trustees on such terms as the directors think fit.

Board of Directors

We are managed by a board of directors which may consist of up to seven members. Our board of directors currently consists of three members and another three members have agreed to join the board of directors upon the closing of this offering. An appointment of a director may be in terms that the director shall automatically retire at the next or a subsequent annual general meeting.

Meetings of the board of directors may be convened at any time deemed necessary by any members of the board of directors in accordance with our memorandum and articles of association.

A meeting of the board of directors shall be competent to make lawful and binding decisions if any two members of the board of directors (or either 3 or 4 directors in accordance with our memorandum and articles of association) are present or represented. At any meeting of the directors, each director, be it by his presence or by his alternate, is entitled to one vote.

Questions arising at a meeting of the board of directors are required to be decided by simple majority votes of the members of the board of directors present or represented at the meeting. In the case of a tie vote, the resolution shall fail. Our board of directors may also pass resolutions without a meeting by unanimous written consent.

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DESCRIPTION OF AMERICAN DEPOSITARY SHARES

American Depositary Shares

JPMorgan Chase Bank, N.A., as depositary, will register and deliver American Depositary Shares, also referred to as ADSs. Each ADS will represent four shares (or a right to receive four shares) deposited with principal office of Hong Kong and Shanghai Banking Corp., as custodian for the depositary. Each ADS will also represent other securities, cash or other property which may be held by the depositary.

You may hold ADSs either (A) directly (i) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (ii) by having ADSs registered in your name in the Direct Registration System, or (B) indirectly by holding a security entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered holder. This description assumes you are a registered holder of ADSs. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of registered holders of ADSs described in this section. You should consult with your broker or financial institution to find out what those procedures are.

The Direct Registration System, or DRS, is a system administered by DTC pursuant to which the depositary may register the ownership of uncertificated ADSs, which ownership shall be evidenced by periodic statements sent by the depositary to the registered holders of uncertificated ADSs.

As a registered holder of ADSs, we will not treat you as one of our shareholders and you will not have shareholder rights. The laws of the Cayman Islands govern shareholder rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have certain rights. A deposit agreement among us, the depositary and you, as a registered holder of ADSs, and all other persons indirectly holding ADSs sets out rights of registered holders of ADSs as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADSs.

The following is a summary of the material provisions of the deposit agreement. For more complete information, you should read the entire deposit agreement and the form of ADR. Directions on how to obtain copies of those documents are provided in “Where You Can Find More Information”.

Dividends and Other Distributions

How will you receive dividends and other distributions on the shares?

The depositary has agreed to pay to registered holders the cash dividends or other distributions it or the custodian receives on shares or other deposited securities, after deducting its fees and expenses. You will receive these distributions in proportion to the number of shares your ADSs represent.

• Cash. The depositary will convert any cash dividend or other cash distribution we pay on the shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those registered holders of ADSs to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the registered holders of ADSs who have not been paid. It will not invest the foreign currency and it will not be liable for any interest.

Before making a distribution, any withholding taxes, or other governmental charges that must be paid will be deducted. See “Taxation — Material United States Tax Considerations — Information Reporting and Back Up Withholding”. It will distribute only whole U.S. dollars and cents and will

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round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the distribution.

• Shares. The depositary may distribute additional ADSs representing any shares we distribute as a dividend or free distribution. The depositary will only distribute whole ADSs. It will sell shares which would require it to deliver a fractional ADS and distribute the net proceeds in the same way as it does with cash. If the depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new shares. The depositary may sell a portion of the distributed shares sufficient to pay its fees and expenses in connection with that distribution.

• Rights to purchase additional shares. If we offer holders of our securities any rights to subscribe for additional shares or any other rights, the depositary may make these rights available to registered holders of ADSs. If the depositary decides it is not legal and practical to make the rights available but that it is practical to sell the rights, the depositary will use reasonable efforts to sell the rights and distribute the proceeds in the same way as it does with cash. The depositary will allow rights that are not distributed or sold to lapse. In that case, you will receive no value for them.

If the depositary makes rights available to registered holders of ADSs, it will exercise the rights and purchase the shares on your behalf. The depositary will then deposit the shares and deliver ADSs to the persons entitled to them. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay.

U.S. securities laws may restrict transfers and cancellation of the ADSs represented by shares purchased upon exercise of rights. For example, you may not be able to trade these ADSs freely in the United States. In this case, the depositary may deliver restricted depositary shares that have the same terms as the ADSs described in this section except for changes needed to put the necessary restrictions in place.

• Other Distributions. The depositary will send to registered holders of ADSs anything else we distribute on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, the depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property. However, the depositary is not required to distribute any securities (other than ADSs) to registered holders of ADSs unless it receives satisfactory evidence from us that it is legal to make that distribution. The depositary may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any registered holders of ADSs. We have no obligation to register ADSs, shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADSs, shares, rights or anything else to ADS holders. This means that you may not receive the distributions we make on our shares or any value for them if it is illegal or impractical for us to make them available to you.

Deposit, Withdrawal and Cancellation

How are ADSs issued?

The depositary will deliver ADSs if you or your broker deposit shares or evidence of rights to receive shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ADSs in the names you request and will deliver the ADSs to or upon the order of the person or persons that made the deposit.

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How can ADS holders withdraw the deposited securities?

You may surrender your ADSs at the depositary’s principal office. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the shares and any other deposited securities underlying the ADSs to the ADS registered holder or a person the ADS registered holder designates at the office of the custodian. Or, at your request, risk and expense, the depositary will deliver the deposited securities at its principal office, if feasible.

How do ADS holders interchange between certificated ADSs and uncertificated ADSs?

You may surrender your ADR to the depositary for the purpose of exchanging your ADR for uncertificated ADSs. The depositary will cancel that ADR and will send to the ADS registered holder a statement confirming that the ADS registered holder is the registered holder of uncertificated ADSs. Alternatively, upon receipt by the depositary of a proper instruction from a registered holder of uncertificated ADSs requesting the exchange of uncertificated ADSs for certificated ADSs, the depositary will execute and deliver to the ADS registered holder an ADR evidencing those ADSs.

Voting Rights

How do you vote?

Registered holders of ADSs may instruct the depositary to vote the number of deposited shares their ADSs represent. The depositary will notify registered holders of ADSs of shareholders’ meetings and arrange to deliver our voting materials to them if we ask it to. Those materials will describe the matters to be voted on and explain how registered holders of ADSs may instruct the depositary how to vote. For instructions to be valid, they much reach the depositary by a date set by the depositary.

Otherwise, you won’t be able to exercise your right to vote unless you withdraw the shares. However, you may not know about the meeting enough in advance to withdraw the shares.

The depositary will try, as far as practical, subject to the laws of the Cayman Islands and of our articles of association or similar documents, to vote or to have its agents vote the shares or other deposited securities as instructed by registered holders of ADSs. The depositary will only vote or attempt to vote as instructed.

We can not assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote and there may be nothing you can do if your shares are not voted as you requested.

In order to give you a reasonable opportunity to instruct the depositary as to the exercise of voting rights relating to your shares, if we request the depositary to act, we agree to give the depositary notice of any such meeting and details concerning the matters to be voted upon at least 45 days in advance of the meeting date.

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Fees and Expenses

Persons depositing or withdrawing shares must pay:	For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	•        Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property •        Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
$.02 (or less) per ADS	•        Any cash distribution to registered holders of ADSs
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs	•        Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to registered holders of ADSs
$.02 (or less) per ADSs per calendar year	•        Depositary services
Registration or transfer fees	•        Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares
Expenses of the depositary	•        Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) •        converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes	•        As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities	•        As necessary

JPMorgan Chase Bank, N.A., as depositary, has agreed to reimburse us for expenses we incur that are related to establishment and maintenance of the ADS program, including investor relations expenses and stock market application and listing fees. There are limits on the amount of expenses for which the depositary will reimburse us, but the amount of reimbursement available to us is not related to the amount of fees the depositary collects from investors.

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

Payment of Taxes

You will be responsible for any taxes or other governmental charges payable on your ADSs or on the deposited securities represented by any of your ADSs. The depositary may refuse to register any transfer of your ADSs or allow you to withdraw the deposited securities represented by your ADSs until such taxes or other charges are paid. It may apply payments owed to you or sell deposited securities represented by your ADSs

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to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to registered holders of ADSs any proceeds, or send to registered holders of ADSs any property, remaining after it has paid the taxes.

Reclassifications, Recapitalizations and Mergers

If we:

Then:

•        Change the nominal or par value of our shares •        Reclassify, split up or consolidate any of the deposited securities •        Distribute securities on the shares that are not distributed to you •        Recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar action

The cash, shares or other securities received by the depositary will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities. The depositary may, and will if we ask it to, distribute some or all of the cash, shares or other securities it received. It may also deliver new ADRs or ask you to surrender your outstanding ADRs in exchange for new ADRs identifying the new deposited securities.

Amendment and Termination

How may the deposit agreement be amended?

We may agree with the depositary to amend the deposit agreement and the ADRs without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of registered holders of ADSs, it will not become effective for outstanding ADSs until 30 days after the depositary notifies registered holders of ADSs of the amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended.

How may the deposit agreement be terminated?

The depositary will terminate the deposit agreement at our direction by mailing notices of termination to the registered holders of ADSs then outstanding at least 30 days prior to the date fixed in such notice for such termination. The depositary may also terminate the deposit agreement by mailing notice of termination to us and the registered holders of ADSs if 60 days have passed since the depositary told us it wants to resign but a successor depositary has not been appointed and accepted its appointment.

After termination, the depositary and its agents will do the following under the deposit agreement but nothing else: collect distributions on the deposited securities, sell rights and other property, and deliver shares and other deposited securities upon cancellation of ADSs. Six months or more after termination, the depositary may sell any remaining deposited securities by public or private sale. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the deposit agreement for the pro rata benefit of the registered holders of ADSs that have not surrendered their ADSs. It will not invest the money and has no liability for interest. The depositary’s only obligations will be to account for the money and other cash. After termination our only obligations will be to indemnify the depositary and to pay fees and expenses of the depositary that we agreed to pay.

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Limitations on Obligations and Liability

Limits on our Obligations and the Obligations of the Depositary; Limits on Liability to Holders and Owners of ADSs

The deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary. We and the depositary:

• are only obligated to take the actions specifically set forth in the deposit agreement without gross negligence or bad faith;

• are not liable if by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by reason of any provision, present or future, of our articles of association or similar document, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, we are or it is prevented, delayed or forbidden from, or is subject to any civil or criminal penalty on account of, doing or performing any act or thing which by the terms of the deposit agreement or the shares it is provided shall be done or performed;

• are not liable if we or it exercises discretion permitted under the deposit agreement;

• are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the deposit agreement, or for any indirect, special, consequential or punitive damages;

• have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the deposit agreement on your behalf or on behalf of any other person;

• may rely upon any documents we or the depositary believe in good faith to be genuine and to have been signed or presented by the proper person.

In the deposit agreement, we and the depositary agree to indemnify each other under certain circumstances.

Requirements for Depositary Actions

Before the depositary will deliver or register a transfer of an ADS, make a distribution on an ADS, or permit withdrawal of shares, the depositary may require:

• payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any shares or other deposited securities;

• satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

• compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.

The depositary may refuse to deliver ADSs or register transfers of ADSs generally when the transfer books of the depositary or our transfer books are closed or at any time if the depositary or we think it advisable to do so.

The depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the deposit agreement, any registered holder of ADSs or owner of an interest in ADSs, or any ADRs to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators.

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Your Right to Receive the Shares Underlying your ADRs

Registered holders of ADSs have the right to cancel their ADSs and withdraw the underlying shares at any time except:

• When temporary delays arise because: (i) the depositary has closed its transfer books or we have closed our transfer books; (ii) the transfer of shares is blocked to permit voting at a shareholders’ meeting; or (iii) we are paying a dividend on our shares.

• When you owe money to pay fees, taxes and similar charges.

• When it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of shares or other deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.

Pre-release of ADSs

The deposit agreement permits the depositary to deliver ADSs before deposit of the underlying shares. This is called a pre-release of the ADSs. The depositary may also deliver shares upon cancellation of pre-released ADSs (even if the ADSs are canceled before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying shares are delivered to the depositary. The depositary may receive ADSs instead of shares to close out a pre-release. The depositary may pre-release ADSs only under the following conditions: (1) before or at the time of the pre-release, the person to whom the pre-release is being made represents to the depositary in writing that it or its customer owns the shares or ADSs to be deposited; (2) the pre-release is fully collateralized with cash or other collateral that the depositary considers appropriate; and (3) the depositary must be able to close out the pre-release on not more than five business days’ notice. In addition, the number of shares not deposited but represented by ADSs outstanding at any time as a result of pre-release will not normally exceed 30% of the shares deposited, although the depositary may disregard the limit from time to time, if it thinks it is appropriate to do so.

Direct Registration System

In the Deposit Agreement, all parties to the Deposit Agreement acknowledge that the DRS and Profile Modification System, or Profile, will apply to uncertificated ADSs upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the depositary may register the ownership of uncertificated ADSs, which ownership shall be evidenced by periodic statements sent by the depositary to the registered holders of uncertificated ADSs. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of a registered holder of ADSs, to direct the depositary to register a transfer of those ADSs to DTC or its nominee and to deliver those ADSs to the DTC account of that DTC participant without receipt by the depositary of prior authorization from the ADS registered holder to register that transfer.

In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties to the Deposit Agreement understand that the depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an ADS registered holder in requesting registration of transfer and delivery described in the paragraph above has the actual authority to act on behalf of the ADS registered holder (notwithstanding any requirements under the Uniform Commercial Code). In the Deposit Agreement, the parties agree that the depositary’s reliance on and compliance with instructions received by the depositary through the DRS/Profile System and in accordance with the Deposit Agreement, shall not constitute negligence or bad faith on the part of the Depositary.

Shareholder communications; inspection of register of holders of ADSs

The depositary will make available for your inspection at its office all communications that it receives from us as a holder of deposited securities that we make generally available to holders of deposited securities. The

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depositary will send you copies of those communications if we ask it to. You have a right to inspect the register of holders of ADSs, but not for the purpose of contacting those holders about a matter unrelated to our business or the ADSs.

Appointment

You and all holders of interests in ADSs from time to time are deemed parties to the deposit agreement and will be bound by all of the terms and conditions thereof and of the Receipts by acceptance of ADSs or any interest therein issued in accordance with the terms and conditions of the deposit agreement and will be deemed for all purposes to (a) be a party to and bound by the terms of the deposit agreement and the applicable ADRs, and (b) appoint the depositary your or its attorney-in-fact, with full power to delegate, to act on your or its behalf and to take any and all actions contemplated in the deposit agreement and the applicable ADRs, to adopt any and all procedures necessary to comply with applicable law and to take such action as the depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the deposit agreement and the applicable ADRs, the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have outstanding ADSs representing approximately     % of our ordinary shares issued and outstanding. All of the ADSs sold in this offering will be freely transferable by persons other than our “affiliates” without restriction or further registration under the Securities Act. Sales of substantial amounts of our ADSs in the public market could adversely affect prevailing market prices of our ADSs. Prior to this offering, there has been no public market for our ordinary shares or the ADSs, and while our ADSs have been approved for listing on the New York Stock Exchange, we cannot assure you that a regular trading market will not develop in the ADSs. We do not expect that a trading market will develop for our ordinary shares not represented by the ADSs.

Lock-Up Agreements

Each of the selling shareholders, our directors, executive officers and     % of our other holders and beneficial owners of our ordinary shares (other than the holders of the exchangeable bonds issued by Happy Genius who will receive our 2008 Convertible Bonds concurrently with the closing of this offering, who will be restricted as set forth in the following paragraph) has agreed, subject to some exceptions, not to transfer or dispose of, directly or indirectly, any of our ordinary shares or ADSs or any securities convertible into or exchangeable or exercisable for our ordinary shares or ADSs, for a period of 180 days after the date this prospectus becomes effective. In this prospectus, we refer to these lock-up agreements as the “180-day lock-up agreements.” After the expiration of the 180-day period, the ordinary shares or ADSs held by the selling shareholders, our directors, executive officers and our existing holders and beneficial owners of our ordinary shares may be sold subject to the restrictions under Rule 144 under the Securities Act or by means of registered public offerings.

In addition, holders and owners of economic and beneficial interests of the 2008 Convertible Bonds, in exchange for exchangeable bonds of Happy Genius concurrently with the closing of this offering, are expected to agree with the underwriters, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of the 2008 Convertible Bonds or enter into certain hedging transactions with respect to the 2008 Convertible Bonds for a period of 130 days following the date of this prospectus. The hedging transactions that are restricted include any swap or other arrangement that would have the same consequences as a sale or contract to sell the 2008 Convertible Bonds and any arrangement that involves the sale or short sale of the ADSs or the ordinary shares for the purpose of hedging the ownership of the 2008 Convertible Bonds. Pursuant to this agreement, the holders are allowed to conduct hedging activities in specified limited amounts in the event that the ADSs are traded above 130% of the initial public offering price for specified periods. Holders are also generally allowed to conduct hedging transactions in greater amounts commencing after the first 30 days after the offering.

Each of the 180-day and 130-day periods are subject to adjustment under certain circumstances. Except as described below, the 180-day restricted period will be extended if (1) during the last 17 days of the 180-day restricted period, we issue an earnings release or material news or a material event relating to us occurs; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day, the restrictions will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. The 130-day restricted period, and the 180-day restricted period with respect to Deutsche Bank AG and D. E. Shaw Composite Investments Asia 5 (Cayman) Ltd. under their respective 180-day lock-up agreements, will be extended if (1) during the last 17 days of the 130-day or 180-day restricted period, as the case may be, we issue an earnings release or announce material news or a material event relating to our company; or (2) prior to the expiration of the 130-day or 180-day restricted period, as the case may be, we announce that we will release earnings results during the 16-day period beginning on the last day of the 130-day or 180-day restricted period, as the case may be, the restrictions will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the material news or material event.

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The Bank of New York Mellon has agreed that it will assist us in ensuring that deposits are not made for 180 days after the date of this prospectus.

Rule 144

In general, under Rule 144, a person who has beneficially owned the ordinary shares, whether in the form of restricted ADSs or otherwise, for a minimum of six months and who is not, and for three months prior to the sale of those ADSs has not been, one of our affiliates is free to sell those ADSs immediately following this offering without complying with the volume, manner-of-sale, public notice and other limitations contained in Rule 144, provided that current public information about us is available.

On the other hand, an affiliate of us who has beneficially owned restricted ADSs for at least six months would be entitled to sell, within any three-month period, a number of ADSs or ordinary shares that does not exceed the greater of:

• one percent of the then outstanding ordinary shares, in the form of ADSs or otherwise, which will equal approximately          ordinary shares immediately after this offering; or

• the average weekly reported trading volume of our ADSs on the New York Stock Exchange during the four calendar weeks preceding a sale by such person.

Sales made by affiliate of us under Rule 144 are also subject to certain manner-of-sale provisions, notice requirements, and the availability of current public information about us.

Rule 701

In general, under Rule 701, any of our employees, directors, officers, or consultants who purchase ADSs from us in connection with a compensatory stock or option plan or other written agreement before the effective date of this offering is entitled to sell these ADSs 180 days after the effective date of this offering in reliance on Rule 144. Rule 701 provides that affiliates may sell their Rule 701 ADSs under Rule 144 without having to comply with the holding period and notice filing requirements of Rule 144, and that non-affiliates may sell those ADSs in reliance on Rule 144 without having to comply with the holding period, public information, volume limitation or notice filing requirements under Rule 144.

Registration Rights

Upon completion of this offering, certain holders of our ordinary shares or their transferees will be entitled to request that we register their shares under the Securities Act, following the expiration of the lock-up agreements described above. See “Description of Share Capital—Registration Rights.”

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TAXATION

The following summary of the material Cayman Islands, PRC and United States federal tax consequences of an investment in the ordinary shares or ADSs is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in the shares or ADSs, such as the tax consequences under U.S. state, local and other tax laws. To the extent that the discussion relates to matters of Cayman Islands tax law, it represents the opinion of Appleby, our Cayman Islands counsel, and to the extent that the discussion relates to matters of PRC tax law, it represents, the opinion of Grandall Legal Group, our PRC counsel.

Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands except for stamp duties which may be applicable, from time to time, on certain instruments executed in, or brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not a party to any double tax treaties. There are no exchange control regulations or currency restrictions in effect in the Cayman Islands.

People’s Republic of China Taxation

In 2007, the PRC government promulgated the new EIT Law and the relevant implementation rules, which became effective on January 1, 2008. Under the new EIT Law and its implementation rules, all domestic and foreign invested companies that are considered PRC resident enterprises are subject to a uniform enterprise income tax at the rate of 25% and dividends from PRC resident enterprises to their foreign shareholders are subject to a withholding tax at a rate of 10%. Under the new EIT Law, enterprises organized under the laws of jurisdictions outside China with their “de facto management bodies” located within China may be considered PRC resident enterprises and therefore subject to PRC enterprise income tax at the rate of 25% on their worldwide income. Under the implementation rules of the PRC Income Tax Law, “de facto management bodies” is defined as the bodies that have material and overall management and control over the business, personnel, accounts and properties of the enterprise. It is unclear whether we and our Hong Kong subsidiary would be considered PRC resident enterprises under the new EIT Law. If we and our Hong Kong subsidiary are not considered PRC resident enterprises under the new EIT Law, then because JZPTD is owned directly by our Hong Kong subsidiary and Hong Kong has an arrangement with the PRC under which the tax rate for income from dividends paid by a PRC resident enterprise is 5%, dividends paid by JZPTD to our Hong Kong subsidiary will be subject to a 5% withholding tax. If, however, we and our Hong Kong subsidiary were considered PRC resident enterprises, we and our Hong Kong subsidiary would be subject to the PRC enterprise income tax at the rate of 25% on our worldwide income. Dividend income received from JZPTD, however, would be exempt from PRC tax since such income is exempted under the new EIT Law as dividend income paid to a PRC resident recipient. Dividends distributed to our foreign investors by us, as a PRC resident enterprise, would be subject to the 10% PRC withholding tax. There will be no capital gains tax payable in the PRC in connection with sales of the ordinary shares or ADSs by persons who are not PRC residents.

Material United States Federal Tax Considerations

This section describes the material United States federal tax consequences of the acquisition, ownership and disposition of our shares or ADSs. It applies to U.S. holders (as defined below) that hold the shares or ADSs as capital assets and that have the U.S. dollar as their functional currency. This discussion is based on the tax laws of the United States as in effect on the date of this prospectus and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this prospectus, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change

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could apply retroactively and could affect the tax consequences described below. This section does not apply to you if you are a member of a special class of holders subject to special rules, including:

• a bank;

• a dealer in securities or currencies;

• a broker dealer;

• a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings;

• a tax-exempt organization;

• an insurance company;

• a person liable for alternative minimum tax;

• a person that actually or constructively owns 10% or more of our voting stock;

• a person who acquired ADSs or ordinary shares pursuant to the exercise of any employee stock options or otherwise as compensation;

• a person that holds shares or ADSs that are a hedge or that are hedged against currency risks or as part of a straddle or a conversion transaction;

• a person holding ADSs or ordinary shares through partnerships or other pass-through entities; or

• a U.S. holder (as defined below) whose functional currency is not the U.S. dollar.

This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations, published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis. In addition, this section is based in part upon the representations of the depositary and the assumption that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms.

You are a “U.S. holder” if you are a beneficial owner of shares or ADSs and you are:

• a citizen or resident of the United States;

• a domestic corporation;

• an estate whose income is subject to United States federal income tax regardless of its source; or

• a trust if (1) a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust or (2) you have a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

A “non-U.S. holder” is a beneficial owner of shares or ADSs that is not a United States person for United States federal income tax purposes.

If you are a partner in a partnership or other entity taxable as a partnership for U.S. federal income tax purposes that holds ADSs or ordinary shares, your tax treatment depends on your status and the activities of the partnership.

You should consult your own tax advisor regarding the United States federal, state and local tax consequences of owning and disposing of the shares or ADSs in your particular circumstances, as well as regarding the state and local and foreign tax consequences to you of the purchase, ownership and disposition of ADSs or ordinary shares.

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The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement will be complied with in accordance with their terms. In general, and taking into account the earlier assumptions, for United States federal income tax purposes, if you hold ADRs evidencing ADSs, you will be treated as the owner of the shares represented by those ADRs. Exchange of shares for ADRs, and ADRs for shares, generally will not be subject to United States federal income tax.

Taxation of Dividends

Subject to the passive foreign investment company (“PFIC”) rules discussed below, a U.S. holder generally will be required to treat distributions received with respect to the shares or ADSs as dividend income to the extent of our earnings and profits (computed using U.S. federal income tax principles), with the excess treated as a non-taxable return of capital to the extent of the holder’s adjusted tax basis in the shares or ADSs and, thereafter, as capital gain. We do not intend to calculate our earnings and profits under United States federal income tax principles. Therefore, a U.S. holder should expect that a distribution will generally be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. Dividends will not be eligible for the dividends received deduction allowable to corporations. Dividends will constitute income from sources outside the United States for foreign tax credit limitation purposes.

Current tax law provides for a maximum 15% U.S. tax rate on the dividend income of an individual U.S. holder with respect to dividends paid by a domestic corporation or “qualified foreign corporation” if certain holding period requirements are met. A qualified foreign corporation generally includes a foreign corporation (other than a PFIC) if (i) its ordinary shares or ADSs, as applicable, are readily tradable on an established securities market in the United States or (ii) it is eligible for benefits under a comprehensive United States income tax treaty. Our ADSs are expected to be readily traded on the New York Stock Exchange. As a result, assuming we are not treated as a PFIC, we should be treated as a qualified foreign corporation with respect to dividends paid on our ordinary shares and, therefore, dividends paid to an individual U.S. holder with respect to ordinary shares on which the requisite holding period is satisfied should be taxed at a maximum federal tax rate of 15%. The maximum 15% federal tax rate is scheduled to expire for taxable years commencing after December 31, 2010.

Dividends will constitute income from sources outside the United States for foreign tax credit limitation purposes. If the dividends qualify for the reduced rate of taxation (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to the ADSs or ordinary shares generally will constitute “passive category income” but could, in the case of certain U.S. holders, constitute “general category income.” If PRC withholding taxes apply to dividends paid to you with respect to the ADSs or ordinary shares (see “—Peoples Republic of China Taxation”), you may be able to obtain a reduced rate of PRC withholding taxes under the income tax treaty between the United States and the PRC if certain requirements are met. In addition, subject to certain conditions and limitations, PRC withholding taxes on dividends may be treated as foreign taxes eligible for credit against your U.S. federal income tax liability. U.S. holders should consult their own tax advisors regarding the creditability of any PRC tax.

Non-U.S. Holders. If you are a non-U.S. holder, dividends paid to you in respect of the shares or ADSs will not be subject to United States federal income tax unless the dividends are effectively connected with your conduct of a trade or business within the United States, and the dividends are attributable to a permanent establishment that you maintain in the United States if that is required by an applicable income tax treaty as a condition for subjecting you to United States taxation on a net income basis. In such cases you will be taxed in the same manner as a U.S. holder. If you are a corporate non-U.S. holder, effectively connected dividends may,

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under certain circumstances, be subject to an additional branch profits tax at a 30% rate or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate.

Taxation of Capital Gains

U.S. Holders. Subject to the PFIC rules discussed below, if you are a U.S. holder and you sell or otherwise dispose of your shares or ADSs, you will recognize capital gain or loss for United States federal income tax purposes equal to the difference between the U.S. dollar value of the amount that you realize and your tax basis, determined in U.S. dollars, in your shares or ADSs. Capital gain of a non-corporate U.S. holder that is recognized before January 1, 2011 is generally taxed at a maximum rate of 15% where the holder has a holding period greater than one year. The gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. Your ability to deduct capital losses is subject to limitations.

Non-U.S. Holders. If you are a non-U.S. holder, you will not be subject to United States federal income tax on gain recognized on the sale or other disposition of your shares or ADSs unless:

• the gain is effectively connected with your conduct of a trade or business in the United States and is attributable to a permanent establishment that you maintain in the United States if that is required by an applicable income tax treaty as a condition for subjecting you to United States taxation on a net income basis; or

• if you are an individual, you are present in the United States for 183 or more days in the taxable year of the sale and certain other conditions exist.

If you are a corporate non-U.S. holder, effectively connected gains that you recognize, under certain circumstances, may also be subject to an additional branch profits tax at a 30% rate or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate.

PFIC Rules. We believe that shares and ADSs should not be treated as stock of a PFIC for United States federal income tax purposes for the tax year ending December 31, 2008 or for the foreseeable future, but this conclusion is a factual determination that is made annually and thus may be subject to change. Our expectation for our current taxable year ending December 31, 2008 is based in part on our estimates of the value of our assets, as determined by our current plans, expectations and projections regarding the value and nature of our assets and the sources and nature of our income, and the expected price of the ADSs and our ordinary shares following this offering. Our actual PFIC status for the taxable year ending December 31, 2008 will not be determinable until the close of the taxable year ending December 31, 2008 and, accordingly, there is no guarantee that we will not be a PFIC for 2008 or any future taxable year. However, the determination as to whether a foreign corporation is a PFIC is a complex determination that is based on all of the relevant facts and circumstances and that depends on the classification of various assets and income under the rules that apply in determining whether a foreign corporation is a PFIC. It is unclear how some of these rules apply to us, particularly in light of our having been in a development-stage. Further, this determination must be tested annually and a change in our circumstances or our business plan may result in our engaging in activities that could cause us to become a PFIC. Accordingly, there can be no assurance that we will not be classified as a PFIC for the current taxable year or any future taxable year.

In general, if you are a U.S. holder, we will be a PFIC with respect to you if for any taxable year in which you held your shares or ADSs:

• at least 75% of our gross income for the taxable year is passive income; or

• at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for the production of passive income.

Passive income generally includes dividends, interest, royalties, and rents (not including certain rents and royalties derived in the active conduct of a trade or business annuities), and gains from assets that produce

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passive income. If a foreign corporation owns directly or indirectly at least 25% by value of the stock of another corporation, the foreign corporation is treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation, and as receiving directly its proportionate share of the other corporation’s income.

If we are treated as a PFIC, and you are a U.S. holder that does not make a mark-to-market election, as described below, you will be subject to special rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the ADSs or ordinary shares, unless you make a “mark-to-market” election as discussed below. Generally, any distributions to you during a single taxable year that are greater than 125% of the average annual distributions received by you in respect of the shares or ADSs during the three preceding taxable years or, if shorter, your holding period for the shares or ADSs will be treated as excess distributions.

Under these rules:

• the gain or excess distribution will be allocated ratably over your holding period for the shares or ADSs;

• the amount allocated to the taxable year in which you realized the gain or excess distribution will be taxed as ordinary income;

• the amount allocated to each prior year, with certain exceptions, will be taxed at the highest tax rate in effect for that year; and

• the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such year.

Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC. Furthermore, the tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ADSs or ordinary shares cannot be treated as capital, even if you hold the ADSs or ordinary shares as capital assets.

Alternatively if you own shares or ADSs in a PFIC that are treated as “marketable stock” (as defined below), you may make a mark-to-market election. If you make this election, you will not be subject to the PFIC rules described above. Instead, in general, you will include as ordinary income each year the excess, if any, of the fair market value of your shares or ADSs at the end of the taxable year over your adjusted basis in your shares or ADSs. These amounts of ordinary income will not be eligible for the favorable tax rates applicable to qualified dividend income or long-term capital gains. You will also be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of your shares or ADSs over their fair market value at the end of the taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). Your basis in the shares or ADSs will be adjusted to reflect any such income or loss amounts. Your gain, if any, recognized upon the sale of your shares or ADSs will be taxed as ordinary income.

The mark-to-market election is available only for “marketable stock,” which is stock that is traded in other than de minimus quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market, as defined in applicable U.S. Treasury regulations. We expect that the ADSs will be listed on the New York Stock Exchange and, consequently, if you are a U.S. holder of ADSs and the ADSs are regularly traded on the New York Stock Exchange, the mark-to-market election would be available to you were we to be or become a PFIC.

U.S. holders of shares in a PFIC may avoid taxation under the rules described above by making a “qualified electing fund” election to include its share of the corporation’s income on a current basis, or a “deemed sale” election once the corporation no longer qualifies as a PFIC. However, you can make a qualified electing fund

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election with respect to your ADSs or ordinary shares only if we agree to furnish you annually with certain tax information, and we do not presently intend to prepare or provide such information.

In addition, notwithstanding any election you make with regard to the shares or ADSs, dividends that you receive from us will not constitute qualified dividend income to you if we are a PFIC either in the taxable year of the distribution or the preceding taxable year. Dividends that you receive that do not constitute qualified dividend income are not eligible for taxation at the 15% maximum rate applicable to qualified dividend income. Instead, you must include the gross amount of any such dividend paid by us out of our accumulated earnings and profits (as determined for United States federal income tax purposes) in your gross income, and it will be subject to tax at rates applicable to ordinary income.

If you own shares or ADSs during any year that we are a PFIC, you must file Internal Revenue Service Form 8621 regarding distributions received on the ADSs or ordinary shares and any gain realized on the disposition of the ADSs or ordinary shares.

You are urged to consult your tax advisor regarding the application of the PFIC rules to your investment in ADSs or ordinary shares.

Information Reporting and Backup Withholding

Information reporting to the United States Internal Revenue Service generally will be required with respect to payments on the ADSs or ordinary shares and proceeds of the sale of the ADSs or ordinary shares paid to holders that are United States taxpayers, other than corporations and other exempt recipients. A 28% “backup” withholding tax may apply to those payments if such a holder fails to provide a taxpayer identification number to the paying agent and to certify that no loss of exemption from backup withholding has occurred. Holders that are not subject to United States taxation may be required to comply with applicable certification procedures to establish that they are not United States taxpayers in order to avoid the application of such information reporting requirements and backup withholding. The amounts withheld under the backup withholding rules are not an additional tax and may be refunded, or credited against the holder’s United States federal income tax liability, if any, provided the required information is furnished to the United States Internal Revenue Service.

THE ABOVE DISCUSSION IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE INVESTOR IS STRONGLY URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE ADSS OR ORDINARY SHARES.

Material Estate and Gift Tax Considerations

ADSs or ordinary shares owned by an individual U.S. Holder at the time of death will be included in the individual U.S. Holder’s gross estate for United States federal estate tax purposes. In addition, a U.S. Holder may be subject to tax on a transfer of the ADSs or ordinary shares by gift for United States federal gift tax purposes.

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UNDERWRITING

Under the terms and conditions contained in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Morgan Stanley & Co. International plc and Credit Suisse Securities (USA) LLC are acting as representatives, have severally agreed to purchase, and we and the selling shareholders have agreed to sell to them, severally, the number of ADSs indicated below:

Name	Number of ADSs
Morgan Stanley & Co. International plc.
Credit Suisse Securities (USA) LLC
HSBC Securities (USA) Inc.
Cowen and Company, LLC
Piper Jaffray & Co.
Total

The underwriters are offering the ADSs subject to their acceptance of the ADSs from us and subject to prior sale. The underwriting agreement provides that the obligations of the underwriters to pay for and accept delivery of the ADSs offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated, severally and not jointly, to take and pay for all of the ADSs offered by this prospectus if any such ADSs are taken. However, the underwriters are not required to take or pay for the ADSs covered by the underwriters’ over-allotment option to purchase additional ADSs described below.

The underwriters initially propose to offer part of the ADSs directly to the public at the public offering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of $             per ADS under the public offering price. Any underwriter may allow, and such dealer may reallow, a concession not in excess of $             per ADS to other underwriters or to certain dealers. After the initial public offering, the representatives may change the public offering price and concession and discount to broker/dealers.

The selling shareholders have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of              additional ADSs at the public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the ADSs offered by this prospectus. To the extent the option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the additional ADSs as the number listed next to the underwriter’s name in the preceding table bears to the total number of ADSs listed next to the names of all underwriters in the preceding table.

If the underwriters’ option is exercised in full, the total price to the public of all the ADSs sold would be $             million, the total underwriting discounts and commissions would be $             million, the net proceeds to us would be $             (after deducting the estimated offering expenses payable by us), and the net proceeds to the selling shareholders would be $             million. We will not receive any of the proceeds from the sale of the ADSs by the selling shareholders.

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The following table shows the per ADS and total public offering price, underwriting discounts and commissions to be paid by us and the selling shareholders, and proceeds before expenses to us. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional ADSs.

	Per ADS	Without Exercise of Option to Purchase Additional ADSs	With Full Exercise of Option to Purchase Additional ADSs
Public offering price	$	$	$
Underwriting discounts and commissions to be paid by us
Proceeds, before expenses, to us
Proceeds, before expenses, to selling shareholders

The estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are approximately $             million.

The underwriters have informed us and the selling shareholders that they do not intend sales to discretionary accounts to exceed 5% of the total number of ADSs offered by them.

Our ADSs have been approved for listing on the New York Stock Exchange under the symbol “GCL.”

The offering is being conducted in accordance with the applicable provisions of Rule 2720 of the NASD Conduct Rules of The Financial Industry Regulatory Authority because an affiliate of Morgan Stanley & Co. International plc, one of the underwriters, owns 10% or more of our ordinary shares. Rule 2720(c) requires, among other things, that the price at which an equity issue is to be distributed to the public be established at a price no higher than that recommended by a “qualified independent underwriter,” as defined by the Financial Industry Regulatory Authority Conduct Rules. Accordingly, HSBC Securities (USA) Inc. is serving in that capacity and has performed due diligence investigations and reviewed and participated in the preparation of the registration statement of which this prospectus forms a part. HSBC Securities (USA) Inc. is not entitled to any compensation in its capacity as the qualified independent underwriter.

We have agreed that, without the prior written consent of the representatives on behalf of the underwriters, we will not, for a period of 180 days after the date of this prospectus:

• offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any ADSs, ordinary shares or any securities convertible into or exercisable or exchangeable for such ADSs or ordinary shares, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the ADSs or ordinary shares, whether any such transaction described above is to be settled by delivery of ordinary shares or ADSs or such other securities, in cash or otherwise; or

• publicly disclose the intention to make any such offer, pledge, sale or disposition, or enter into any such transaction, swap, hedge or other arrangement.

The restrictions described in the preceding paragraph do not apply to:

(a) the sale of ordinary shares or ADSs to the underwriters;

(b) the issuance of ordinary shares or ADSs upon the exercise of warrant or the conversion of a security outstanding on the date of this prospectus to which the underwriters have given prior written consent;

(c) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Ordinary Shares, provided that such plan does not provide for the transfer of Ordinary Shares during the 180 day restricted period; or

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(d) the issuance of ordinary shares in connection with the acquisition of, or a joint venture with, another company if the aggregate number of ordinary shares issued in such transactions, taken together, does not exceed 2% of the aggregate number of ordinary shares represented by ADSs in the offering, provided that in the case of any issuance pursuant to clause (d), (i) each distributee or grantee shall enter into a written agreement substantially in the form of Exhibit I hereto and (ii) no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of Ordinary Shares; provided that in the case of any issuance pursuant to clause (d), (i) each distributee or grantee will enter into a lock-up agreement with the same restrictions and (ii) no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of Ordinary Shares, will be required or will be voluntarily made during the lock-up period.

We are obligated to file a registration statement for resales of ADSs issued on conversion of our 2008 Convertible Bonds within 60 days of the closing of this offering. The registration statement will allow such sales only after six months from the closing of this offering. We intend to ask the representatives of the underwriters for their agreement to file such registration statement as an exception to the lock-up.

Each of the selling shareholders, our directors, executive officers and     % of our other existing holders or beneficial owners of our ordinary shares, not including holders of the exchangeable bonds issued by Happy Genius, who have entered into separate lock-up agreements discussed below, have agreed that, without the prior written consent of the representatives on behalf of the underwriters, it will not, for a period of 180 days after the date of this prospectus:

• offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any ADSs, ordinary shares or any securities convertible into or exercisable or exchangeable for such ADSs or ordinary shares, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the ADSs or ordinary shares, whether any such transaction described above is to be settled by delivery of ordinary shares or ADSs or such other securities, in cash or otherwise; or

• publicly disclose the intention to make any such offer, pledge, sale or disposition, or enter into any such transaction, swap, hedge or other arrangement.

The restrictions described in the preceding paragraphs do not apply to:

(a) transactions relating to the ADSs, ordinary shares or other securities acquired in open market transactions after the completion of this offering, provided that no filing under Section 16(a) of the Exchange Act will be required or will be voluntarily made in connection with subsequent sales of ADSs, ordinary shares or other securities acquired in such transactions;

(b) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of ADSs or ordinary shares, provided that such plan does not provide for the transfer of ADSs or ordinary shares during the 180-day restricted period;

(c) transfers of ADSs or ordinary shares as a bona fide gift; or

(d) distributions of ADSs or ordinary shares to any partners, members or affiliates,

provided that in the case of any transfer or distribution pursuant to (c), (d) or (e) above, (i) each donee or distribute will sign and deliver a lock up agreement with the same restrictions and (ii) no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of ordinary shares, will be required or will be voluntarily made during the lock-up period.

In addition, each of the selling shareholders, our directors, executive officers and all of our other existing shareholders or beneficial owners of our ordinary shares have entered into a 180-day lock-up agreement, under

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which they have agreed that, without the prior written consent of the representatives on behalf of the underwriters, it will not, for a period of 180 days after the date of this prospectus, make any demand for, or exercise any right with respect to, the registration of any ADSs, ordinary shares or any securities convertible into or exercisable or exchangeable for ADSs or ordinary shares.

In addition, we have agreed not to facilitate any conversion or exchange of ordinary shares into ADSs for 180 days after the date of this prospectus without prior written consent of the representatives. The Bank of New York Mellon has agreed that it will assist us in ensuring that deposits are not made for 180 days after the date of this prospectus.

Holders and owners of economic or beneficial interests of exchangeable bonds issued by Happy Genius that will receive our 2008 Convertible Bonds concurrently with the closing of this offering have agreed that, without the prior written consent of the representatives on behalf of the underwriters, it will not, for a period of 130 days after the date of this prospectus:

• offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, the 2008 Convertible Bonds;

• enter into a swap or other arrangement that would have the same consequences as the point above or the effect of transferring another party any of the economic consequences of ownership of ADSs or ordinary shares, for the purpose of hedging economic or beneficial ownership in, or holdings of, the 2008 Convertible Bonds;

• enter into any arrangement that involves any sale or short sale of the ADSs or the ordinary shares for the purpose of hedging the beneficial ownership in, or holdings of, the 2008 Convertible Bonds (the second and third points above are collectively referred to as hedging transactions) whether any such transaction described in the first, second or third points is to be settled by delivery of the 2008 Convertible Bonds, in cash or otherwise; or

• publicly disclose the intention to make any such offer, pledge, sale or disposition, or enter into any such transaction, swap, hedge or other arrangement,

The restrictions described in the preceding paragraph do not apply to:

(a) transactions relating to the ADSs purchased in open market transactions not through any hedging transaction after the completion of the IPO;

(b) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of ADSs or ordinary shares, provided that such plan does not provide for the transfer of ADSs, ordinary shares or the economic consequences of ownership of the ADSs or ordinary shares during the 130-day period;

(c) transfers of ADSs or ordinary shares as a bona fide gift;

(d) transfers or distributions of ADSs or ordinary shares to any partners, members or affiliates;

(e) hedging transactions that are conducted to strictly comply with the following requirements:

(1) if the (A) the underwriters shall have exercised their over-allotment option in relation to this offering, and (B) the weighted average price of the ADSs on each of seven or more trading days in a period of ten consecutive trading days during the first month of trading of ADSs on the New York Stock Exchange shall have exceeded 130% of the initial public offering price ((A) and (B) together are referred to as a triggering event);

(i) hedging transactions may be conducted during such first month involving not exceeding 11.25% of the ordinary shares into which the 2008 Convertible Bonds are convertible

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provided that at the time of a hedging transaction the trading price of the ADSs is at least 130% of the initial public offering price;

(ii) during the period from the 31^st day after the first trading date and the 63^rd day after the first trading date, hedging transactions may be undertaken involving not exceeding 18.75% of the ordinary shares into which the 2008 Convertible Bonds are convertible plus any unused portion of the 11.25% provided above;

(iii) during the period from the 64^th day after the first trading date and the 96^th day after the first trading date, hedging transactions may be undertaken involving not exceeding 22.5% of the ordinary shares into which the 2008 Convertible Bonds are convertible plus any unused portion of the 18.75% and 11.25% provided above; and

(iv) after the 96^th day after the first trading date there are no restrictions on hedging transactions;

(2) if no triggering event occurs during the first trading month;

(i) during the period from the 31^st day after the first trading date and the 63^rd day after the first trading date, hedging transactions may be undertaken involving not exceeding 25% of the ordinary shares into which the 2008 Convertible Bonds are convertible;

(ii) during the period from the 64^th day after the first trading date and the 96^th day after the first trading date, hedging transactions may be undertaken involving not exceeding 25% of the ordinary shares into which the 2008 Convertible Bonds are convertible plus any unused portion of the 25% provided above; and

(iii) after the 96^th day after the first trading date there are no restrictions on hedging transactions,

(f) offers, pledges, sales, contracts to sell, sales of any options or contracts to purchase, purchases of any options or contracts to sell, grants of any options, rights or warrants to purchase, lending, or otherwise transfers or disposes of the 2008 Convertible Bonds; or

(g) sales or purchases of the ADSs in the ordinary course of business at the instruction of its clients in compliance with relevant laws and regulations.

Notwithstanding the above, in the case of any transfer or distribution pursuant to clause (c), (d) or (f), each donee, distributee or transferee (i) shall not have engaged in or entered into any hedging transaction at or prior to the effectiveness time of such transfer or distribution, and (ii) shall sign and deliver to the representatives of the underwriters a lock up agreement with substantially the same terms described above.

Notwithstanding any to the contrary above, each holder of exchangeable bonds issued by Happy Genius is permitted to enter into credit default swaps, interest rate swaps, or other similar arrangements with respect to the 2008 Convertible Bonds that do not directly or indirectly involve the hedging of any of the exchangeable bondholders’ economic or beneficial ownership in the equity component of the 2008 Convertible Bonds so long as such holder receives, orally or otherwise, confirmation from the counterparty of such arrangement prior to entering into such arrangement that the counterparty shall not sell or short sell any of the ADSs and/or the ordinary shares or enter into a transaction that will result in another party selling or short selling the ADSs or ordinary shares to manage its exposure or otherwise. In the event that such counterparty does not provide such confirmation, such bondholder agrees not to enter into such arrangement.

Except as described below, the 180-day restricted period described in the preceding paragraphs will be extended if:

• during the last 17 days of the 180-day restricted period, we issue an earnings release or material news or a material event relating to our company occurs; or

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• prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day restricted period.

In each of the cases described immediately above, the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

The 130-day restricted period described in the preceding paragraphs, and the 180-day restricted period with respect to Deutsche Bank AG and D. E. Shaw Composite Investments Asia 5 (Cayman) Ltd. under their respective 180-day lock-up agreements, will be extended if:

• during the last 17 days of the 130-day or 180-day restricted period, as the case may be, we issue an earnings release or announce material news or a material event relating to our company; or

• prior to the expiration of the 130-day or 180-day restricted period, as the case may be, we announce that we will release earnings results during the 16-day period beginning on the last day of the 130-day or 180-day restricted period, as the case may be.

In each of the cases described immediately above, the restrictions described in the preceding paragraphs will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the material news or material event. We also agreed to provide these parties and the representatives with prior notice of any such announcement that gives rise to such extension of the restricted period.

In order to facilitate the offering of the ADSs, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the ADSs. Specifically, the underwriters may sell more ADSs than they are obligated to purchase under the underwriting agreement, creating a short position in the ADSs for their own account. A short sale is covered if the short position is no greater than the number of ADSs available for purchase by the underwriters under their over-allotment option. The underwriters can close out a covered short sale by exercising their over-allotment option or purchasing ADSs in the open market. In determining the source of ADSs to close out a covered short sale, the underwriters will consider, among other things, the open-market price of ADSs compared to the price available under their over-allotment option. The underwriters may also sell ADSs in excess of their over-allotment option, creating a naked short position. The underwriters must close out any naked short position by purchasing ADSs in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the ADS in the open market after pricing that could adversely affect investors who purchase in this offering. As an additional means of facilitating this offering, the underwriters may bid for, and purchase, ADSs in the open market to stabilize the price of the ADSs. The underwriting syndicate may also reclaim selling concessions allowed to an underwriter or a dealer for distributing the ADSs in the offering, if the syndicate repurchases previously distributed ADSs to cover syndicate short position in stabilization transactions or otherwise. Any of these activities may raise or maintain the market price of the ADS above independent market levels. The underwriters are not required to engage in these activities and may end any of these activities at any time.

We, the selling shareholders and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.

A prospectus in electronic format may be made available on the websites maintained by one or more underwriters. The representative may agree to allocate a number of ADSs to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representative to underwriters that may make Internet distributions on the same basis as other allocations. In addition, ADSs may be sold by the underwriters to securities dealers who resell ADSs to online brokerage account holders. Other than the prospectus in electronic format, the information on any underwriter’s or selling shareholder’s website and any information contained in any other website maintained by any underwriter or selling shareholder is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or

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endorsed by us or any underwriter or selling shareholder in its capacity as underwriter or selling shareholder and should not be relied upon by investors.

Some of the underwriters are expected to make offers and sales both inside and outside the United States through their respective selling agents. Any offers or sales in the United States will be conducted by broker- dealers registered with the SEC. We and the selling shareholders have been advised by the underwriters that Morgan Stanley & Co. International plc expects to make offers and sales in the United States through its registered broker-dealer affiliate in the United States, Morgan Stanley & Co. Incorporated.

The address of Morgan Stanley & Co. International plc is 25 Cabot Square, Canary Wharf, London E14 4QA, United Kingdom. The address of Credit Suisse Securities (USA) LLC is Eleven Madison Avenue, New York, NY 10010-3629, United States. The address of HSBC Securities (USA) Inc. is 452 Fifth Avenue, New York, NY 10018, United States. The address of Cowen and Company, LLC is 1221 Avenue of the Americas, New York, NY 10020, United States. The address of Piper Jaffray & Co. is 800 Nicollet Mall, Suite 800, Minneapolis, MN 55402, United States.

Other Relationships

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking, commercial banking and other commercial dealings in the ordinary course of business with us. An affiliate of Credit Suisse Securities (USA) LLC, or the CS affiliate, purchased US$50 million aggregate principal amount of the exchangeable bonds issued by Happy Genius in connection with the purchase of 36% of equity interest in JZPTD interest through Sun Wave, a portion of which is subject to hedging arrangements. Happy Genius intends to use the 2008 Convertible Bonds it will receive from us in conjunction with the completion of the offering to exchange for 65% of the aggregate outstanding amount of the exchangeable bonds to the extent that certain conditions to exchange are satisfied. For a description of the 2008 Convertible Bonds, see “Description of Share Capital — Ownership of Our Business and Securities Issuances — 2008 Convertible Bonds.” As a result of this and part of the use of proceeds from this offering being used to pay Happy Genius for 36% of JZPTD, the CS affiliate will receive indirectly a portion of the proceeds of this offering through the redemption of 35% of the exchangeable bonds by Happy Genius and will be a holder of our 2008 Convertible Bonds. After the CS affiliate exchanges the remaining exchangeable bonds it holds, after the redemption of 35% of such exchangeable bonds, for the 2008 Convertible Bonds, and subsequently elects to convert all of the 2008 Convertible Bonds it holds to our ordinary shares, it will become an owner of our ordinary shares.

Selling Restrictions

No action has been taken in any jurisdiction (except in the United States) that would permit a public offering of the ADSs, or the possession, circulation or distribution of this prospectus or any other material relating to us or the ADSs in any jurisdiction where action for that purpose is required. Accordingly, the ADSs may not be offered or sold, directly or indirectly, and neither this prospectus nor any other offering material relating to the ADSs may be distributed or published, in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof.

Cayman Islands

This prospectus does not constitute an invitation or offer to the public in the Cayman Islands of the ADSs, whether by way of sale or subscription. The underwriters have not offered or sold, and will not offer or sell, directly or indirectly, any ADSs in the Cayman Islands.

European Economic Area

In relation to each member state of the European Economic Area which has implemented the Prospectus Directive, which we refer to as a Relevant Member State, with effect from and including the date on which the

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Prospectus Directive is implemented in that Relevant Member State, which we refer to as the Relevant Implementation Date, no offer of ADSs has been made and or will be made to the public in that Relevant Member State prior to the publication of a prospectus in relation to the ADSs which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that, with effect from and including the Relevant Implementation Date, an offer of ADSs may be made to the public in that Relevant Member State at any time: (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than €43,000,000; and (iii) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; (c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the representative of the underwriters; or (d) in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an “offer of ADSs to the public” in relation to any ADSs in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the ADSs to be offered so as to enable an investor to decide to purchase or subscribe for the ADSs, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

United Kingdom

No offer of ADSs has been made or will be made to the public in the United Kingdom within the meaning of Section 102B of the Financial Services and Markets Act 2000, as amended, or FSMA, except to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities or otherwise in circumstances which do not require the publication by us of a prospectus pursuant to the Prospectus Rules of the Financial Services Authority, or FSA. Each underwriter: (i) has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) received by it in connection with the issue or sale of any ADS in circumstances in which Section 21 of FSMA does not apply to us; and (ii) has complied with, and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the ADSs in, from or otherwise involving the United Kingdom. The foregoing shall apply in addition to the restrictions set out under the heading “European Economic Area” above.

Hong Kong

The ADSs may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), and no advertisement, invitation or document relating to the ADSs may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to ADSs which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

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Japan

The ADSs have not been and will not be registered under the Financial Instruments and Exchange Law of Japan, or the Financial Instruments and Exchange Law, and ADSs will not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to any exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the ADSs may not be circulated or distributed, nor may the ADSs be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Each of the following relevant persons specified in Section 275 of the SFA which has subscribed or purchased the ADSs, namely a person who is:

(a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor,

should note that shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the ADSs under Section 275 of the SFA except:

(i) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions, specified in Section 275 of the SFA;

(ii) where no consideration is given for the transfer; or

(iii) by operation of law.

People’s Republic of China

This prospectus may not be circulated or distributed in the PRC and the ADSs may not be offered or sold to any person for re-offering or resale, directly or indirectly, to any resident of the PRC except pursuant to applicable laws and regulations of the PRC. For the purpose of this paragraph, PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.

Republic of China

The ADSs may not be offered or sold, directly or indirectly, in the Republic of China.

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United Arab Emirates

This prospectus is not intended to constitute an offer, sale or delivery of shares or other securities under the laws of the United Arab Emirates, or the UAE. The ADSs have not been and will not be registered under Federal Law No. 4 of 2000 Concerning the Emirates Securities and Commodities Authority and the Emirates Security and Commodity Exchange, or with the UAE Central Bank, the Dubai Financial Market, the Abu Dhabi Securities Market or with any other UAE exchange. The offering, the ADSs and interests therein have not been approved or licensed by the UAE Central Bank or any other relevant licensing authorities in the UAE, and do not constitute a public offer of securities in the UAE in accordance with the Commercial Companies Law, Federal Law No. 8 of 1984 (as amended) or otherwise. In relation to its use in the UAE, this prospectus is strictly private and confidential and is being distributed to a limited number of investors and must not be provided to any person other than the original recipient, and may not be reproduced or used for any other purpose. The interests in the ADSs may not be offered or sold directly or indirectly to the public in the UAE.

Pricing of the Offering

Prior to this offering, there was no public market for our ordinary shares or ADSs. The initial public offering price will be determined by negotiations between us and the representatives. Among the factors to be considered in determining the initial public offering price will be our future prospects and those of our industry in general, our sales, earnings and certain other financial and operating information in recent periods, and the price-earnings ratios, price-sales ratios, market prices of securities, and certain financial and operating information of companies engaged in activities similar to ours. The estimated initial public offering price range set forth on the cover page of this preliminary prospectus is subject to change as a result of market conditions and other factors.

Directed Share Program

At our request, the underwriters have reserved for sale, at the initial public offering price, up to an aggregate of              ADSs, to certain of our directors, officers, employees or their friends and families, business associates and other persons associated with us who have expressed an interest in purchasing our ADSs in this offering. The number of ADSs available for sale to the general public will be reduced to the extent that these persons purchase such reserved ADSs. Any reserved ADSs that are not purchased will be offered by the underwriters to the general public on the same basis as the other ADSs offered by this prospectus.

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LEGAL MATTERS

The validity under New York law of the ADSs offered hereby will be passed upon for us by Milbank, Tweed, Hadley & McCloy LLP. Certain legal matters relating to this offering as to United States federal and New York law will be passed upon for the underwriters by Simpson Thacher & Bartlett LLP. The validity of the issuance of the ordinary shares under Cayman Islands law will be passed upon for us by Appleby. Certain legal matters as to PRC law will be passed upon for us by Grandall Legal Group and for the underwriters by Jun He Law Offices.

EXPERTS

The consolidated financial statements of Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (Predecessor) for the period from March 7, 2006 to December 13, 2006, and the consolidated financial statements of GCL Silicon Technology Holdings Inc. (Successor) as of December 31, 2006 and December 31, 2007, and for the period from November 13, 2006 to December 31, 2006 and the year ended December 31, 2007 and the related financial statement schedule included in this prospectus have been audited by Deloitte Touche Tohmatsu, an independent registered public accounting firm, as stated in their report appearing herein and have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The offices of Deloitte Touche Tohmatsu are located at 35^th Floor, One Pacific Place, 88 Queensway, Hong Kong.

The statements included in this prospectus under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and notes to our audited consolidated financial statements beginning on page F-1, to the extent they relate to the determination of the fair values of our ordinary shares, preferred shares, warrants and stock options, have been reviewed and confirmed by Jones Lang Lasalle Sallmans Limited, an independent third-party valuation firm, as expert on such matters, and are included in this prospectus in reliance upon such review and confirmation. The offices of Jones Lang LaSalle Sallmans Limited are located at 22/F, Siu On Centre, 188 Lockhart Road, Wan Chai, Hong Kong.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form F-1 (No. 333-152425) under the Securities Act with respect to underlying ordinary shares represented by the ADSs. We have also filed with the SEC a related registration statement on F-6 to register the ADSs. This prospectus does not contain all of the information in the registration statements and their exhibits. We have omitted certain portions of these registration statements from this prospectus in accordance with the rules and regulations of the SEC. You should read the registration statement on Form F-1 and its exhibits and schedules for further information with respect to us and our ADSs.

Upon completion of this offering, we will become subject to the periodic reporting and other informational requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, applicable to a foreign private issuer. In accordance with these requirements, we will file annual reports on Form 20-F within six months of our fiscal year end and we will submit other reports and information under cover of Form 6-K with the SEC. These reports and other information can be inspected and copied at the public reference room at the SEC. The public reference facilities maintained by the SEC are located at 100 F. Street, N.E., Washington, D.C. 20549. You can also obtain copies, upon payment of a prescribed fee, of such material from the public reference room and the regional offices, or by calling or writing to the SEC. You can call the SEC at 1-800-SEC-0330 for additional information, or visit their website at http://www.sec.gov. As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements and annual reports to shareholders and requiring reporting of insider purchases and sales, as well as Section 16 short swing profit reporting for our officers and directors and for holders of more than 10% of our ordinary shares.

169

We intend to provide to our shareholders proxy statements and annual reports prepared in accordance with applicable laws. Our annual reports will contain audited consolidated financial statements following the end of each fiscal year, and we will make available semi-annual reports containing unaudited summary consolidated financial information.

170

GCL SILICON TECHNOLOGY HOLDINGS INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2006 and December 31, 2007 (Successor)	F-3
Consolidated Statements of Operations for the Period from March 7, 2006 to December  13, 2006 (Predecessor), November 13, 2006 to December 31, 2006 (Successor) and for the year ended December 31, 2007 (Successor)	F-4
Consolidated Statements of Changes in Shareholders’ Equity for the Period from March  7, 2006 to December 13, 2006 (Predecessor), November 13, 2006 to December 31, 2006 (Successor) and for the year ended December 31, 2007 (Successor)	F-5
Consolidated Statements of Cash Flows for the Period from March 7, 2006 to December  13, 2006 (Predecessor), November 13, 2006 to December 31, 2006 (Successor) and for the year ended December 31, 2007 (Successor)	F-6
Notes to Consolidated Financial Statements	F-7
Schedule 1-GCL Silicon Technology Holdings Inc. Condensed Financial Statements as of December  31, 2006 and 2007 and for the period from November 13, 2006 to December 31, 2006 and for the year ended December 31, 2007	F-23
Unaudited Condensed Consolidated Balance Sheets as of December 31, 2007 and June 30, 2008	F-28
Unaudited Condensed Consolidated Statements of Operations for the Six Months Ended June 30, 2007 and 2008	F-29
Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the Six Months Ended June  30, 2007 and 2008	F-30
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2008	F-31
Notes to Unaudited Condensed Consolidated Financial Statements	F-32

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of GCL Silicon Technology Holdings Inc. (successor company) and Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (predecessor company):

We have audited the accompanying consolidated balance sheets of GCL Silicon Technology Holdings Inc. and its subsidiaries (referred to as the “Group”) as of December 31, 2006 and 2007, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the period from November 13, 2006 to December 31, 2006 and for the year ended December 31, 2007. Our audits also included the financial statement schedule included as Schedule 1. We have also audited the consolidated statements of operations, shareholders’ equity and cash flows of Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and its subsidiary (predecessor company) for the period from March 7, 2006 to December 13, 2006. These consolidated financial statements and the financial statement schedule are the responsibility of the Group’s management. Our responsibility is to express an opinion on the consolidated financial statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing the audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements of the successor company present fairly, in all material respects, the financial position of GCL Silicon Technology Holdings Inc. and its subsidiaries as of December 31, 2006 and 2007, and the results of their operations and cash flows for the period from November 13, 2006 to December 31, 2006 and for the year ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. Further, in our opinion, the predecessor company’s financial statements referred to above present fairly, in all material respects, the results of operations and cash flows of Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and its subsidiary for the period from March 7, 2006 to December 13, 2006 in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects the information set forth therein.

As discussed in Note 2 to the financial statements, the Group was in the development stage at December 31, 2006; during the year ended December 31, 2007, the Group completed its development activities and commenced its planned principal operations.

/s/ Deloitte Touche Tohmatsu

Certified Public Accountants

Hong Kong

April 25, 2008 (July 18, 2008 as to the effects of the share splits described in Note 9)

F-2

GCL SILICON TECHNOLOGY HOLDINGS INC.

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share and per share data)

	December 31, 2006			December 31, 2007
	(Successor)			(Successor)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	5,033		$	40,067
Restricted cash		—			13,802
Accounts receivable		—			6,333
Inventories		—			916
Prepaid expenses and other current assets		24			2,468
Amount due from an affiliated company		16,783			138
Total current assets		21,840			63,724
Property, plant and equipment, net		18,909			141,731
Deposits for purchase of plant and equipment		39,655			16,677
Deposit for purchase of land use right		—			390
Land use right		13,887			8,163
Deferred financing costs		—			2,140
Deferred tax assets		—			145
TOTAL ASSETS	$	94,291		$	232,970
LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	—		$	1,608
Accrued expenses and other current liabilities		1,520			15,135
Advances from customers		—			2,927
Bank borrowings		—			22,028
Other borrowings		31,364			—
Income taxes payable		—			4,359
Amounts due for acquisition of JZPTD		16,374			—
Loans from and other amounts due to affiliated companies		—			14,891
Total current liabilities		49,258			60,948
Deferred tax liabilities		1,954			—
Floating rate bonds		—			62,099
Bank borrowings		31,468			58,650
TOTAL LIABILITIES		82,680			181,697
Commitments and contingencies (note 13)
MINORITY INTEREST		9,823			34,935
Series A convertible redeemable preferred shares ($0.00001 par value; no shares authorized and issued as of December 31, 2006 and 50,000,000 shares authorized and 16,667,000 issued and outstanding as of December 31, 2007)		—			21,111
SHAREHOLDERS’ EQUITY (DEFICIT)
Ordinary shares ($0.00001 par value; 1,000,000,000 shares authorized and 1,000,000,000 issued as of December 31, 2006; 100,000,000,000 shares authorized and 983,333,000 issued as of December 31, 2007)		10			10
Additional paid-in capital		1,990			15,009
Accumulated deficit		(212	)		(23,119	)
Accumulated other comprehensive income		—			3,327
Total shareholders’ equity (deficit)		1,788			(4,773	)
TOTAL LIABILITIES, MINORITY INTEREST, CONVERTIBLE REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY	$	94,291		$	232,970

See notes to the consolidated financial statements.

F-3

GCL SILICON TECHNOLOGY HOLDINGS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except share and per share data)

	March 7, 2006 to December 13, 2006			November 13, 2006 to December 31, 2006			For the year ended December 31, 2007
	(Predecessor)			(Successor)			(Successor)
REVENUES
Third party sales	$	—		$	—		$	33,378
Related party sales		—			—			7,470
Total revenues		—			—			40,848
Cost of revenues		—			—			(10,996	)
Gross profit		—			—			29,852
OPERATING EXPENSES
General and administrative		(2,776	)		(239	)		(17,836	)
OPERATING INCOME (LOSS)		(2,776	)		(239	)		12,016
NON-OPERATING INCOME (EXPENSE)
Interest income		58			54			376
Interest expense		(743	)		(147	)		(6,097	)
Other income		12			2			6
Gain on disposal of JSJST		—			—			566
Total non-operating expenses		(673	)		(91	)		(5,149	)
(LOSS) INCOME BEFORE INCOME TAX AND MINORITY INTEREST		(3,449	)		(330	)		6,867
Income tax expense		—			—			(3,123	)
(LOSS) INCOME BEFORE MINORITY INTEREST		(3,449	)		(330	)		3,744
Minority interest		—			118			(5,540	)
NET LOSS		(3,449	)		(212	)		(1,796	)
Deemed distribution on convertible redeemable preferred shares—accretion of redemption premium		—			—			(1,111	)
NET LOSS ATTRIBUTABLE TO HOLDERS OF ORDINARY SHARES	$	(3,449	)	$	(212	)	$	(2,907	)
ORDINARY SHARES USED IN LOSS PER ORDINARY SHARE CALCULATION
Basic and diluted					1,000,000,000			994,292,123
EARNINGS (LOSS) PER ORDINARY SHARE
Basic and diluted				$	(0.0002	)	$	(0.0029	)

See notes to the consolidated financial statements.

F-4

GCL SILICON TECHNOLOGY HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands of U.S. dollars, except share data)

	Ordinary Shares				Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income		Total Shareholders’ Equity			Total Comprehensive (Loss) Income
	Shares		Amount
Predecessor—Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.:
Contributions from shareholders upon inception	—		$	—	$	24,967		$	—		$	—	$	24,967		$
Foreign currency translation adjustment	—			—		—			—			552		552			552
Net loss	—			—		—			(3,449	)		—		(3,449	)		(3,449	)
BALANCE AT DECEMBER 13, 2006	—		$	—	$	24,967		$	(3,449	)	$	552	$	22,070		$	(2,897	)
Successor—GCL Silicon Technology Holdings Inc.:
Shares at inception	1,000,000,000		$	10	$	(10	)	$	—		$	—	$	—		$
Contributions from shareholders	—			—		2,000			—			—		2,000
Net loss	—			—		—			(212	)		—		(212	)		(212	)
BALANCE AT DECEMBER 31, 2006	1,000,000,000			10		1,990			(212	)		—		1,788			(212	)
Foreign currency translation adjustment	—			—		—			—			3,327		3,327			3,327
Contributions from shareholders	—			—		13,019			—			—		13,019
Ordinary shares redesignated as Series A convertible redeemable preferred shares (Note 10)	(16,667,000	)		—		—			(20,000	)		—		(20,000	)
Deemded distribution on Series A convertible redeemable preferred shares				—		—			(1,111	)		—		(1,111	)
Net loss	—			—		—			(1,796	)		—		(1,796	)		(1,796	)
BALANCE AT DECEMBER 31, 2007	983,333,000		$	10	$	15,009		$	(23,119	)	$	3,327	$	(4,773	)	$	1,531

See notes to the consolidated financial statements.

F-5

GCL SILICON TECHNOLOGY HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

	March 7, 2006 to December 13, 2006			November 13, 2006 to December 31, 2006			For the year ended December 31, 2007
	(Predecessor)			(Successor)			(Successor)
OPERATING ACTIVITIES
Net loss	$	(3,449	)	$	(212	)	$	(1,796	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Land use right expense		46			15			215
Depreciation of property, plant and equipment		17			6			2,366
Amortization of discount and deferred financing costs on floating rate bonds		—			—			2,487
Gain on disposal of JSTST		—			—			(566	)
Minority interest		—			(118	)		5,540
Deferred taxes		—			—			(1,163	)
Changes in operating assets and liabilities:
Increase in accounts receivable		—			—			(6,227	)
Increase in inventories		—			—			(916	)
Increase in amount due to affiliated companies		—			—			1,231
(Increase) decrease in prepaid expenses and other current assets		(54	)		91			(2,522	)
Increase (decrease) in accrued expenses and other current liabilities		658			(624	)		8,072
Increase in advances from customers		—			—			2,927
Increase in accounts payable		—			—			1,581
Increase in income taxes payable		—			—			4,286
Net cash (used in) provided by operating activities		(2,782	)		(842	)		15,515
INVESTING ACTIVITIES
Purchase of property, plant and equipment		(6,415	)		(1,473	)		(80,548	)
Deposits for purchase of property, plant and equipment		(34,513	)		(5,089	)		(15,477	)
Deposit for purchase of land use right		—			—			(390	)
Cash acquired in acquisition of JSJST and JZPTD		6			24,484			—
Acquisition of JSJST and JZPTD		(12,152	)		—			(16,374	)
Increase in restricted cash		—			—			(13,802	)
Disposal of JSJST (net of cash equivalents disposed of $908)		—			—			12,034
Purchase of land use right		(6,929	)		—			(84	)
(Advance to) repayment from an affiliated company		(854	)		(16,057	)		17,925
Net cash provided by (used in) investing activities		(60,857	)		1,865			(96,716	)
FINANCING ACTIVITIES
Proceeds from issuance of floating rate bonds		—			—			60,000
Proceeds from bank borrowings		31,468			—			46,809
Proceeds from other borrowings		31,235			14			—
Repayments of other borrowings		—			—			(19,234	)
Contributions from shareholders		24,967			2,000			13,019
Capital contributed to a subsidiary by minority shareholders		—			1,996			18,054
Financing costs incurred for floating rate bonds		—			—			(2,528	)
Net cash provided by financing activities		87,670			4,010			116,120
NET INCREASE IN CASH AND CASH EQUIVALENTS		24,031			5,033			34,919
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		—			—			5,033
Effect of foreign exchange on cash and cash equivalents		453			—			115
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	24,484		$	5,033		$	40,067
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
Interest paid (net of interest capitalized)	$	(272	)	$	(79	)	$	(3,285	)
NON-CASH INVESTING ACTIVITIES
Purchase of property, plant and equipment	$	237		$	374		$	6,330
Acquisition of JZPTD	$	—		$	16,374		$	—

See notes to the consolidated financial statements.

F-6

GCL SILICON TECHNOLOGY HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of U.S. dollars, except share and per share data)

1. Organization and nature of operations

The consolidated financial statements include the financial statements of GCL Silicon Technology Holdings Inc. (formerly named Asia Silicon Technology Holdings Inc. and known as “the Company” or “Successor”), its wholly owned subsidiary GCL Silicon Technology Holdings Limited (“GCL HK”) and Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (“JZPTD” or “Predecessor”) (formerly known as Jiangsu Zhongneng Photovoltaic Industry Development Co., Ltd.).

The Company was incorporated on May 9, 2007 in the Cayman Islands. GCL HK was incorporated on November 13, 2006 in Hong Kong, and JZPTD was incorporated on March 7, 2006 in the People’s Republic of China (“PRC”).

The Company and its subsidiaries (hereinafter collectively referred to as the “Group”) are engaged in the manufacture and sale of polysilicon. In the periods presented, substantially all of the Group’s business was conducted through JZPTD.

Reorganization

On December 13, 2006, GCL HK acquired 64% ownership interest in JZPTD and its subsidiary Jiangsu Yangguang Jingyuan Science and Technology Co., Ltd. (“JSJST”) for a consideration of $16,374. On December 6, 2006, JZPTD acquired JSJST for a consideration of $12,152. The consideration was paid on behalf of JZPTD by Guotai Energy Investments Limited, the then majority shareholder of JZPTD. JZPTD and JSJST were development stage companies as of December 13, 2006.

Subsequently, on June 20, 2007, JSJST was sold for a consideration of $12,942 and a gain of $566 was realized.

As part of a restructuring process in August 2007, all the owners of GCL HK exchanged their equity interest in GCL HK for shares in the Company in proportion of their interest in GCL HK. As a result GCL HK became a wholly owned subsidiary of the Company. The restructuring process has been accounted for as recapitalization of the Company and accordingly the assets and liabilities of GCL HK and its subsidiaries have been transferred at historical cost. The consolidated financial statements have been presented as if the Company owned JZPTD throughout the successor periods presented from November 13, 2006.

JZPTD has been presented as the predecessor entity as the operations of GCL HK prior to the succession was insignificant relative to the operations of JZPTD.

2. Development Stage

The Group was in the development stage at December 31, 2006. The Group completed its development activities and commenced its planned principal operations in October 2007.

3. Summary of significant accounting policies

(a) Basis of presentation and consolidation

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

F-7

The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated on consolidation. The Group did not have any variable interest entity during the periods presented.

(b) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities as at the date of the financial statements, and the reported amounts of income and expenses for the periods presented. Actual results could differ from those estimates. Material estimates in these financial statements that are susceptible to change as more information becomes available include valuation allowance on deferred tax assets, useful lives of property, plant and equipment and valuation of derivative financial instruments.

(c) Concentrations of credit risk

Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and amount due from an affiliated company.

The Group places its cash and cash equivalents in various financial institutions in the PRC. The Group believes that no significant credit risk exists as these banks are principally government-owned financial institutions with high credit ratings and quality.

Accounts receivable represent those receivables derived in the ordinary course of business. The Group conducts credit evaluations of customers and its affiliated companies and generally requires advance payments from customers. The Group establishes an allowance for doubtful accounts mainly based on age of the receivables and other factors surrounding the credit risk of specific customers and affiliated companies.

(d) Fair value of financial instruments

The Group’s financial instruments include cash and cash equivalents, accounts receivable, other current assets, amount due from an affiliated company, accounts payable, accrued expenses and other current liabilities, short-term bank borrowings, amounts due to and loans from affiliated companies. As of December 31, 2006 and 2007, the carrying amounts approximate the fair values due to the short-term nature of these instruments. The carrying value of the long-term bank borrowings approximate their fair values as they carry market interest rates.

The floating rate bonds (“the bonds”) are initially recorded at their fair value and are subsequently measured at their accreted value, which approximates the cash outlay that would be due upon settlement, if not converted into ordinary shares. As the bonds are not publicly traded, the Group relied on valuations to determine the fair value as at the balance sheet date. The valuation model includes assumptions regarding discount rates, market and other factors that are subjective and judgmental. Changes to any assumptions used in the valuation model would materially impact the results.

(e) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and demand deposits which are unrestricted as to withdrawal and use, and which have maturities of three months or less when purchased.

(f) Restricted cash

Restricted cash consists of an amount $2,901 placed in bank accounts which are restricted for use to make interest payments on floating rate bonds and an amount of $10,901 placed in bank accounts as deposits for short-term letters of credit issued by a bank for purchase of plant and machinery.

F-8

(g) Inventories

Inventories are stated at lower of cost or market. Cost is determined using the weighted average method. Cost comprises direct materials, direct labor and those overhead costs that have been incurred in bringing the inventories to their present location and conditions. The Group writes down the cost of excess and slow moving inventories to the estimated market value based on historical and forecast demand. As at December 31, 2007, there were no inventories written down.

(h) Property, plant and equipment, net

Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line basis over the following estimated useful lives:

	Years
Buildings	lesser of 20 years or lease term
Plant and machinery	15
Furniture, fixtures and equipment	5
Motor vehicles	5

Construction in progress represents construction of production facilities. Costs incurred on construction is capitalized and transferred to property, plant and equipment upon completion, at which time depreciation commences.

Interest expense incurred for construction of property, plant, and equipment is capitalized as part of the cost of such assets. Interest expense capitalized for the period from March 7, 2006 to December 13, 2006 (predecessor), November 13, 2006 to December 31, 2006 (successor) and for the year ended December 31, 2007 (successor), were $193, $32 and $3,936, respectively.

(i) Impairment of long-lived assets

The Group evaluates the recoverability of long-lived assets with finite lives whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Group assesses recoverability by a comparison of the carrying amount of the long-lived asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recognized as the difference between the carrying amount and fair value.

(j) Land use right

Land use right represents prepayments made to obtain land under operating lease arrangements. Land use right is recognized as an expense on a straight-line basis over the lease period of 50 years. Land use right expense for the period from March 7, 2006 to December 13, 2006 (predecessor), November 13, 2006 to December 31, 2006 (successor) and for the year ended December 31, 2007 (successor), were $46, $15 and $215, respectively.

(k) Deferred financing costs

Direct and incremental costs incurred in issuance of the bonds are amortized as interest expense over the terms of the related debt agreements.

(l) Series A convertible redeemable preferred shares

The Series A convertible redeemable preferred shares (“preferred shares”) have been initially recorded at their fair value upon issuance. The difference between the carrying value and the redemption value is being accreted through retained earnings as deemed distribution over a period of three years, which represents the period from the date of issuance to the earliest possible date of redemption.

F-9

(m) Revenue recognition

The Group manufactures and sells polysilicon. The Group recognizes revenue when all of the following conditions are met: price to the buyer is fixed and determinable, products are delivered and title has passed to customers and collectability is reasonably assured. Sales agreements typically do not contain customary product warranties except for return and replacement of defective products within a period of 30 days from delivery. Sales agreements do not contain any post-shipment obligations or any other return or credit provisions.

A majority of the sales contracts provide that customers must arrange for the shipping of goods and bear all the costs of such shipping and the risks associated with loss or damage of the goods from the Group’s manufacturing premises. Thus, the Group fulfills its obligation of delivery when the goods are shipped. The Group required and received cash on delivery for a majority of its sales transactions. The Group extended a credit term to only one customer since commencement of operations and has assessed a number of factors to determine whether collection was reasonably assured including the customer’s credit worthiness.

(n) Employee welfare benefits

Full time employees of the Group in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, and other welfare benefits are provided to the employees. Chinese labor regulations require the Group to accrue for these defined contribution plans based on certain percentages of the employees’ salaries.

Contributions to defined contribution plans have been expensed as incurred. During the period from March 7, 2006 to December 13, 2006 (predecessor), November 13, 2006 to December 31, 2006 (successor) and for the year ended December 31, 2007 (successor), the Group incurred an expense of $22, $5 and $350, respectively.

(o) Income taxes

Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, and unutilized tax loss carryforwards. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be received or settled. The effect on deferred tax assets and liabilities of change in tax rates has been recognized in the statement of operations in the period of the enactment of the change.

(p) Share-based compensation

The Group measures the cost of employee or director services received in exchange for share-based compensation at the grant date fair value of the award. The Group recognizes the compensation costs on a straight-line basis over the vesting terms.

(q) Earnings (loss) per share

Basic loss per ordinary share has been computed by dividing the net loss attributable to ordinary shares by the weighted average number of ordinary shares outstanding during the period.

The convertible redeemable preferred shares participate in the dividends of the Company. The convertible redeemable preferred shares have not been included in the computation of basic loss per share as the holders do not have any contractual obligation to share in the Company’s loss.

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The share options, convertible redeemable preferred shares and floating rate bonds were excluded from the computation of diluted loss per share as their effects would have been antidilutive.

(r) Foreign currency

The functional currency of the Company and GCL HK is U.S. dollars and the functional currency of JZPTD is Renminbi (“RMB”).

Foreign currency transactions have been converted into the functional currency at the exchange rates prevailing on transaction dates. Foreign currency denominated monetary assets and liabilities have been translated at the exchange rates prevailing on the balance sheet date. Exchange differences have been included in the statement of operations.

For the purposes of consolidation, assets and liabilities of foreign subsidiaries have been translated into U.S. dollars at the exchange rates prevailing at the balance sheet date and all income and expense items have been translated at the average rate of exchange prevailing during the periods presented. Exchange differences arising from the translation have been reported in comprehensive income (loss).

(s) Comprehensive loss

Comprehensive loss includes all changes in equity from transactions and other events and circumstances from non-shareholder sources. The Group’s comprehensive loss consists of net loss and the foreign exchange differences arising from the translation of foreign subsidiaries.

(t) Segment information

The Group’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group is a single segment entity whose business is the manufacturing and sale of polysilicon. Substantially all of its revenues are derived in the PRC. The Group’s long-lived assets and operations are substantially located in the PRC.

Revenues from sales transactions with customers A and B were 28% and 17% of the total revenues in the year ended December 31, 2007. No other customer contributed in excess of 10% of the total revenues.

(u) Recent accounting pronouncements

In September 2006 the FASB issued Statement No. 157, “Fair Value Measurement” (“SFAS 157”). SFAS 157 addresses standardizing the measurement of fair value for companies who are required to use a fair value measure for recognition or disclosure purposes. The FASB defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” SFAS 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Group does not expect a material effect on its financial statements on adoption of SFAS 157.

In February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities, Including an amendment of SFAS 115” (“SFAS 159”). SFAS 159 provides companies with the option to report selected financial assets and liabilities at fair value. SFAS 159 requires companies to provide additional information that will help investors and other users of financial statements to more easily understand the effect of the Group’s choice to use fair value on its earnings. It also requires entities to display the fair value of those assets and liabilities for which the Group has chosen to use fair value on the face of the balance sheet. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Group does not expect a material effect on its financial statements on adoption of SFAS 159.

F-11

In December 2007, the FASB issued SFAS No. 141R, “Business Combination” (“SFAS No. 141R”). The statement requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS No. 160”) to improve the relevance, comparability, and transparency of financial information provided to investors by requiring all entities to report net income attributable to both the parent and noncontrolling (minority) interests in subsidiaries in the consolidated financial statements. Moreover, SFAS No. 160 eliminates the diversity that currently exists in accounting for transactions between an entity and noncontrolling interests by requiring they be treated as equity transaction. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Group is currently evaluating whether the adoption of SFAS No. 160 will have a significant effect on its consolidated financial position, results of operations or cash flows.

In March 2008, the FASB issued SFAS No. 161, “Disclosures About Derivative Instruments and Hedging Activities”, an amendment of FASB Statement No. 133. The new standard requires enhanced disclosures to help investors better understand the effect of an entity’s derivate instruments and related hedging activities on its financial position, financial performance, and cash flows. Statement No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Group will adopt SFAS No. 161 on January 1, 2009.

4. Property, plant, and equipment, net

	December 31, 2006			December 31, 2007
	(Successor)			(Successor)
Cost
Buildings	$	—		$	20,834
Plant and machinery		—			105,599
Furniture, fixtures and equipment		201			2,950
Motor vehicles		296			679
		497			130,062
Less: Accumulated depreciation		(6	)		(2,424	)
		491			127,638
Construction in progress		18,418			14,093
Property, plant and equipment, net	$	18,909		$	141,731

Depreciation expense for the period from March 7, 2006 to December 13, 2006 (predecessor), November 13, 2006 to December 31, 2006 (successor) and for the year ended December 31, 2007 (successor) were $17, $6 and $2,366, respectively. No impairment loss was recognized in any of the periods presented.

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5. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities are as follows:

	December 31, 2006		December 31, 2007
	(Successor)		(Successor)
Accrued interest	$	68	$	393
Accrued employee benefits		113		1,416
Payables for purchase of property, plant and equipment		1,164		6,330
Value-added tax payable		—		5,846
Others		175		1,150
Total	$	1,520	$	15,135

6. Bank borrowings

Bank borrowings consists of the following:

	December 31, 2006		December 31, 2007
	(Successor)		(Successor)
Short-term bank borrowings
Term loans (maturity in 2008)	$	—	$	8,260
Long-term bank borrowings
Term loans (maturity by 2010)		31,468		72,418
Less: current portion		—		(13,768	)
Total long-term borrowings	$	31,468	$	58,650

Short-term bank borrowings were unsecured and were denominated in Renminbi. The weighted average interest rate was approximately 0% and 6.82% as of December 31, 2006 and 2007.

Long-term bank borrowings were unsecured, denominated in Renminbi and had a weighted average interest rate of approximately of 6.63% and 7.47% as of December 31, 2006 and 2007, respectively. According to the laws of the PRC, rates may be adjusted annually based on the interest rates determined by the People’s Bank of China.

As of December 31, 2007, bank borrowings of $51,766 are guaranteed by Guotai Energy Investments Limited, an affiliated company of the Group; and $14,869 and $9,913 are guaranteed by Suyuan Group Limited and Xuzhou Heibun Group Company Limited (formerly known as Xuzhou Suyuan Group Limited), respectively, both of which are minority shareholders of JZPTD.

Bank borrowings are repayable as follows:

2008	$	22,028
2009		50,390
2010		8,260
		80,678
Current portion		(22,028	)
Non-current portion	$	58,650

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7. Other Borrowings

Other borrowings consist of the following:

	December 31
	2006		2007
	(Successor)		(Successor)
Advances received from the PRC government	$	6,248	$	—
Loan for acquisition of JSJST		12,298		—
Other loans		12,818		—
Total other borrowings	$	31,364	$	—

The amount of advances received from the PRC government for JZPTD operations was unsecured, interest-free and was fully repaid on December 24, 2007.

The Group borrowed funds from Guotai Energy and Taicang Harbour Golden Concord Electric-Power Generation Co., Ltd. (“Taicang Electric”), for the purposes of acquisition of JSJST and to fund the construction of the production facilities, respectively. The outstanding loans payable to Guotai Energy and Taicang Electric as of December 31, 2006 were $12,298 and $12,818, respectively. As of December 31, 2007, the outstanding loans payable to Guotai Energy and Taicang Electric were $0 and $13,789, respectively. The Chairman of the Company is also a shareholder of Taicang Electric and accordingly the payable due as of December 31, 2007 was reclassified as a loan from an affiliated company. The loans were unsecured, carried interest of approximately 6.49% per annum and were repayable on demand. During the period March 7, 2006 to December 13, 2006 (predecessor), November 13, 2006 to December 31, 2006 (successor) and the year ended December 31, 2007, interest paid or payable to these companies amounted to $155, $75 and $1,225, respectively.

8. Floating rate bonds

On September 10, 2007, the Group issued floating rate bonds in two tranches for a principal amount of $60,000 to an independent third-party (the “Bond Holder”), of which $20,000 is redeemable but not convertible (“Tranche A”) and the remaining $40,000 was either convertible into the Company’s shares or redeemable (“Tranche B”). Tranche A and Tranche B were issued simultaneously and can only be transferred together in equal proportion and may ultimately be terminated by either redemption or conversion simultaneously, including upon an IPO event. Since Tranche A and Tranche B cannot exist independently, they have been considered as a single instrument (“the bonds”).

The floating rate bonds are secured by the Company’s 64% equity interest in JZPTD.

Maturity Date—The floating rate bonds will mature on September 10, 2009.

Interest—The Bond Holder is entitled to an interest at the three months Libor deposit rate plus 3% per annum in the first year and three months Libor deposit rate plus 5% per annum in the second year. Interest is payable in arrears each quarter.

Covenants—The following covenants are applicable for the period ending March 31, 2008 and quarterly thereafter unless otherwise indicated:

(a) Consolidated cash flow from operations under U.S. GAAP shall be at least four times the finance costs;

(b) For the period ending June 30, 2008 and each quarter thereafter, net operating cash flow of JZPTD shall be at least three times the total debt service of JZPTD;

(c) Consolidated debt shall not exceed annualized consolidated earnings before income tax, depreciation and amortization at the end of each quarterly period ending June 30, 2008 and thereafter; and

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(d) JZPTD debt to equity ratio shall not exceed 2.5 times for the quarterly period ending March 31, 2008 and 2.0 thereafter.

If the covenants are not met, the trustee at its sole discretion may, and if so instructed by the bondholders the floating rate bonds become immediately due and payable at 125% of the principal amount plus any accrued and unpaid interest.

Conversion—Tranche B is convertible into 2.732% of outstanding ordinary shares immediately prior to a qualifying IPO if a qualifying IPO occurs prior to October 1, 2008. Tranche B is convertible into 3% of outstanding ordinary shares if a qualifying IPO occurs after October 1, 2008, but prior to September 10, 2009.

Strike Adjustment—Upon exercise of the conversion feature of Tranche B, if the market capitalization of the Company at conversion is less than $2,560,000, the Group must pay the Bond Holder 2.732% of the difference between $2,560,000 and the market capitalization of the Company at conversion if prior to October 1, 2008 (3% if conversion occurs subsequent to October 1, 2008, but prior to September 10, 2009).

Redemption—

(a) In the event the Group is obligated to pay additional amounts related to withholding tax or other taxation amounts that would otherwise reduce the yield of Bond Holders, subject to agreement by the Bond Holder, the Group may redeem the bonds. If the Bond Holder decides not to have the Group redeem the bonds, the Group will no longer be obligated to gross up the payments to the Bond Holder;

(b) The Group shall redeem the floating rate bonds that have not been converted at 100% plus accrued interest upon a qualifying IPO. Under the terms of the floating rate bonds, bondholders waive the right to redemption if they have not provided notice of redemption by January 31, 2008. The bondholders have not provided such notice of redemption and as a result the bonds will automatically convert upon a qualifying IPO.

(c) The Group shall redeem the floating rate bonds at 125% of the outstanding principal amount of the floating rate bonds plus accrued interest at maturity on September 10, 2009 or upon disposal of the Group; and

(d) The Bond Holder may cause the floating rate bonds to be redeemed at 125% of the outstanding principal amount of the bonds plus accrued interest in instances of default under the subscription agreement.

The $60,000 principal of the floating rate bonds was recorded as debt at issuance and has been subsequently accreted to $62,099 as of December 31, 2007. The bifurcated embedded strike adjustment and redemption puts and calls were not allocated a portion of the purchase price as the Group has determined there was no value to these features at issuance.

The fair value of the floating rate bonds was approximately $61,786, as of December 31, 2007, which included the fair values of the conversion option of $721 and other embedded derivatives of $0, respectively. The fair value was determined by the Group with assistance from an unrelated valuation specialist.

The assumptions adopted for the contemporaneous valuation of the floating rate bonds as of December 31, 2007 under the Black-Scholes model are as follows:

(1) Risk Free Interest Rate—3.29% was used by reference to the yield of a 1 year U.S. Treasury Bond;

(2) Volatility—47.61% for the underlying share price has considered the historical price movements of comparable companies;

(3) Dividend Yield—assumed to be 0% per annum;

F-15

(4) The probability of the exercise of other call/put options including the strike adjustment are insignificant.

The issuance cost of the floating rate bonds of $2,528 is reported as a deferred financing charge and is being amortized using the effective interest method to the maturity date of the floating rate bonds.

9. Capital structure

On November 13, 2006, GCL HK was incorporated with 10,000 authorized ordinary shares and one issued share of HK$1.

In May 2007, the Company was incorporated with 1,000,000 authorized ordinary shares and one issued share of $1. In June 2007, the Company approved a share split on a 100 to 1 basis for all outstanding shares resulting in an authorized share capital of 10,000,000 ordinary shares and issued share capital of 100 shares.

As described in Note 1, in August 2007, equity interest in GCL HK was exchanged for equal proportions of equity in the Company. As a result, the Company issued an additional 999,900 ordinary shares with $0.01 par value.

In August 2007, 16,667 shares were repurchased, retired and redesignated as Series A redeemable convertible redeemable preferred shares (Note 10).

On February 21, 2008, the outstanding ordinary shares were split on the basis of 100 shares for every 1 share. On July 18, 2008, the outstanding ordinary shares were further split on the basis of 10 shares for every 1 share. These share splits resulted in 983,333,000 issued shares. The share splits have been retroactively adjusted in the consolidated balance sheets and the statements of changes in shareholders’ equity. Basic and diluted earnings per share for all the periods presented have been retroactively adjusted to reflect the change in the number of shares resulting from the share splits.

10. Convertible redeemable preferred shares

On August 29, 2007, a shareholder transferred 16,667,000 ordinary shares of the Company to certain investors for a cash consideration of $20,000. These shares were immediately redesignated as 16,667,000 Series A convertible redeemable preferred shares (“the preferred shares”). The preferred shares have been recognized at their initial fair value of $20,000 with a per share value of $1.20. The retirement of the ordinary shares and the excess of fair value of the preferred shares over ordinary shares has been charged to the accumulated deficit, as there are no restrictions of such charge under the laws of the Cayman Islands.

The preferences and privileges related to the preferred shares are as follows:

Conversion—The preferred shares are convertible into ordinary shares at any time at the option of the holder at a conversion ratio of one-to-one and will automatically convert upon a qualifying IPO. The fair value of the ordinary shares on August 29, 2007 was $1.12 per share as determined by the Group with the assistance from an unrelated valuation specialist.

Dividends—The preferred shareholders participate in cash and non-cash dividends on a pro rata basis to all ordinary shares on an as-converted basis.

Liquidation preference—The preferred shares carry liquidation preference to receive, prior to any distribution to the holders of ordinary shares or any class of shares, an amount per share equal to 100% of the preferred shares issue price plus all accrued or declared but unpaid dividends (the “Preference Amount”). If the Group has insufficient assets, it is required to distribute its assets ratably to the preferred shareholders. The

F-16

preferred shareholders, after receiving their proportional amount are entitled to further participate in the distribution of the remaining assets of the Group ratably among all the holders of outstanding ordinary shares and preferred shares on an as-converted basis.

Performance adjustment—In the event the Group’s audited consolidated net income under U.S. GAAP is lower than 95% of the 2008 profit target of $150,000 (the “2008 Profit Target”), Happy Genius Holdings Ltd. (“HG”), the immediate holding company, is required transfer an additional number of shares to the holder so that the shareholding percentage of each preferred shareholder equals the product of (a) initial shareholding percentage and (b) the quotient of the 2008 Profit Target divided by the audited consolidated net income. To the extent that HG does not have sufficient ordinary shares to fulfill the performance adjustment, the Company is required make up for the difference by issuing additional ordinary shares to the preferred shareholders. In the event that, as a result of the performance adjustment, the shareholding percentage of the preferred shareholders combined exceeds 10% of total issued shares of the Company, the preferred shareholders will have the right to request the Company to redeem the outstanding preferred shares at 150% of the preferred shares issue price. If the Company does not have sufficient cash legally available to redeem the shares, HG shall purchase the shares.

Put Options:

(a) In the event of a breach of covenants by HG or the Company, the preferred shareholders have the right to put their preferred shares at 100% of the preferred share issue price plus any accrued and unpaid dividends of the preferred shares either to the Company or to HG.

(b) If the consolidated earnings before interest and income tax for the period from January 1, 2007 to March 31, 2008 is less than $20,000; the preferred shareholders have a right to put the preferred shares for redemption at 150% of the preferred share issue price plus any accrued and unpaid dividends to the Company or to HG. If upon exercise of this put right by the preferred shareholders, the Company and HG do not have sufficient funds to redeem or purchase the shares, HG will pledge a number of ordinary shares to the preferred shareholders to make up the difference in price. If the ordinary shares so pledged are not redeemed or repurchased within a 12 month period, the preferred shareholders will become the owner of the ordinary shares and all obligations under the preferred share agreement will thereby be fulfilled.

(c) If the Group does not effect a qualifying IPO by August 2010, the preferred shareholders have a right to put the preferred shares at 150% of the preferred shares issue price plus any accrued and unpaid dividends of the Series A Shares either to the Company or to HG. If upon exercise of this put right, the Company and HG do not have sufficient funds to redeem or purchase the shares, HG will pledge a number of ordinary shares to the preferred shareholders to make up the difference in price. If the ordinary shares are not redeemed or repurchased within a 12 month period, the preferred shareholders will become the owner of the pledged ordinary shares and all obligations under the preferred share agreement will thereby be fulfilled.

These put options are considered embedded derivatives but were not bifurcated because these are clearly and closely related to the host contract and the preferred shares have been classified in its entirety as mezzanine equity on the balance sheet.

The preferred shares were initially recorded at fair value consideration of $20,000 and is being accreted, based on the effective interest method to the redemption amount (150%) over the period from the issuance date to the first redemption date, which is the third anniversary of the issuance date.

11. Income taxes

The Company is tax exempt under the laws of the Cayman Islands. GCL HK is subject to Hong Kong profit tax rate of 17.5% on profits earned in Hong Kong. JZPTD is subject to PRC Enterprise Income Tax (“EIT”). During the reporting periods, the Group’s EIT rate is 33% less a 3% exemption of local income tax.

F-17

JZPTD is a foreign invested enterprise in PRC. It is entitled to full tax exemption for two years and 50% reduction in the following three years. The exemption commences in the first profitable year after offsetting all unexpired tax losses carried forward. As there were less than six months operations in 2007, JZPTD elected to defer the commencement of the tax exemption period to 2008.

In 2007, JZPTD purchased plant and machinery manufactured in the PRC. In accordance with the PRC tax regulations, JZPTD received 40% of the purchased amount as an investment tax credit resulting in a tax deduction of $3,518.

Under the newly promulgated PRC income tax laws which are effective January 1, 2008, the effective EIT rate will be 25%.

	March 7, 2006 to December 13, 2006			November 13, 2006 to December 31, 2006			For the year ended December 31, 2007
	(Predecessor)			(Successor)			(Successor)
(Loss) income before income tax:
PRC	$	(3,449	)	$	(2	)	$	18,815
Other jurisdiction		—			(328	)		(11,948	)
	$	(3,449	)	$	(330	)	$	6,867
Income tax expense:
PRC current tax	$	—		$	—		$	4,286
Deferred tax benefit		—			—			(1,163	)
	$	—		$	—		$	3,123
Deferred tax benefit:
Pre-operating costs	$	—		$	—		$	(603	)
Land use right		—			—			(36	)
Property, plant and equipment, net		—			—			(524	)
	$	—		$	—		$	(1,163	)

Reconciliation between income tax benefit computed by applying the EIT rate to (loss) income before tax and minority interest and the actual tax expense:

	March 7, 2006 to December 13, 2006			December 14, 2006 to December 31, 2006			For the year ended December 31, 2007
	(Predecessor)			(Successor)			(Successor)
(Loss) income before income tax and minority interest	$	(3,449	)	$	(330	)	$	6,867
PRC EIT rate		33	%		33	%		33	%
Expected income tax (benefit) expenses		(1,138	)		(109	)		2,266
Non-tax deductible expenses		—			—			1,431
Non-taxable income		—			—			(159	)
Increase in valuation allowance		1,035			99			555
Effect of tax exemption		103			10			(571	)
Effect of change in tax rate		—			—			382
Effect of tax benefits on PRC local machinery purchase		—			—			(3,518	)
Effect of income tax rate differences and tax exempt jurisdictions		—			—			2,737
Income tax expense	$	—		$	—		$	3,123

F-18

The deferred income tax assets and liabilities as of December 31, 2007, consisted of the following:

	December 31, 2006			December 31, 2007
	(Successor)			(Successor)
Deferred tax assets
Tax loss carryforwards	$	1,153		$	—
Pre-operating costs		—			1,817
Others		—			514
Valuation allowance		(1,153	)		(1,798	)
Total deferred tax assets	$	—			533
Deferred tax liabilities
Land use right	$	(397	)	$	(174	)
Property, plant and equipment, net		(1,557	)		(214	)
Total deferred tax liabilities		(1,954	)		(388	)
Non-current deferred tax (liabilities) assets	$	(1,954	)	$	145

Valuation allowance has been recorded to the extent deferred tax assets are expected to expire in JZPTD’s tax exemption period.

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (FIN 48), which clarifies the accounting and disclosure for uncertainty in tax positions, as defined in that statement. FIN 48 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods in income tax disclosures.

The Group adopted the provisions of FIN 48 effective January 1, 2007. The Group has made its assessment for each tax position and determined there are no unrecognized tax benefits associated with its tax positions. For the year ended December 31, 2007, the adoption of FIN 48 did not have a material impact on the Group’s consolidated financial statements and its policy for classification of interest and penalties related to uncertain tax positions as a component of loss before income tax. There was no interest and penalty recorded in the balance sheet and statement of operations was $0 for the year ended December 31, 2007.

The tax position for 2006 and 2007 remains subject to examination by the Hong Kong and PRC tax authorities.

12. Share-based compensation

On August 15, 2007, the directors of the Company approved a share option plan (“Plan”) to grant options to its employees and directors to purchase ordinary shares of the Company subject to vesting requirements. The total number of ordinary shares which may be issued upon exercise of all options shall not exceed 5% of the total number of issued ordinary shares as of August 15, 2007. The options have an exercise price of $0.5 per share.

The options can only be exercised after either (i) a public listing of the Company; or (ii) certain events constitute a change in control of the Company prior to public listing of the Company and the management has elected to accelerate the exercisability of the options. If either of the foregoing conditions are not satisfied, the options will lapse.

F-19

The exercise period may not commence earlier than the first day immediately following the expiry of six months after the public listing of the Company and may not end on a date later than the expiry of 10 years from the date of grant. In any event, the options, in the absence of acceleration by the board of directors prior to the listing date, will vest over four-year period, with 25% of the options vesting upon each of six months, 18 months, 30 months and 42 months following the public listing.

On August 15, 2007, the Company granted two options to one of the Company’s directors and one employee to purchase 2,000 ordinary shares of the Company. The fair value of the options at the grant date was $2 and determined by a retrospective valuation using the binomial options pricing model with assistance from an unrelated valuation specialist. No compensation cost related to the options grant has been recognized in the year ended December 31, 2007, as the vesting period is based on occurrence of events stated above. Subsequent to the balance sheet date, the granted options were cancelled (Note 16).

The assumptions used in determining the fair value of the options were as follows:

(1)        Risk Free Interest Rate	4.85%
(2)        Volatility	43.9%
(3)        Dividend Yield	0%
(4)        Sub-optimal factor	1.5

Expected volatility is estimated based on daily stock prices of comparable listed companies. Risk free interest rate was referenced to the yield of a ten year U.S. Treasury Bond and annual dividend was assumed to be zero. The sub-optimal factor indicates the correlation between the employees exercise behaviour and the underlying share price. It is expected that the employees may exercise the options when the share price is 1.5 times the exercise price.

13. Commitments

Capital commitments

As of December 31, 2007, the Group has capital commitments totaling $60,109 related to construction of its production facilities and purchase of plant and machinery.

Lease commitments

The Group leases certain office premises and buildings under non-cancelable leases. Rental expenses under operating lease for the period from March 7, 2006 to December 13, 2006 (predecessor), November 13, 2006 to December 31, 2006 (successor), and for the year ended December 31, 2007 (successor) were $0, $0 and $110, respectively.

As of December 31, 2007, future minimum lease payments under non-cancelable operating leases agreements were as follows:

Within 1 year	$	170
Between 1 and 2 years		110
Total	$	280

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14. Related parties transactions

(a) Transactions with an affiliated companies

The Group made a short-term advance in December 2006 to Shanghai Creative Energy Company Limited (“Shanghai Creative”), a company whose principal shareholder is also a Director of JZPTD. As of December 31, 2006, the outstanding amount was $16,783, which was fully repaid in January 2007.

The Group also paid handling fees to Shanghai Creative of $0, $0 and $352 for the periods from March 7, 2006 to December 13, 2006 (predecessor), November 13, 2006 to December 31, 2006 (successor) and the year ended December 31, 2007 (successor), respectively, for acquisition of property, plant and equipment on behalf of the JZPTD. As of December 31, 2006 and 2007, outstanding amounts of $36,866 and $4,148 deposited with Shanghai Creative were included in deposits for purchase of plant and equipment.

During the period from March 7, 2006 to December 13, 2006 (predecessor), the Group paid consultancy fees to Shanghai Creative of $1,455. Under the consultancy agreement between the Company and Shanghai Creative, Shanghai Creative provided the Group with assistance in the procurement of polysilicon production technology, including the import and sourcing of equipment and technical support by overseas experts.

Shanghai Creative paid certain administrative expenses on behalf of the Group. The outstanding balances as of December 31, 2006 and 2007 were $0 and $827, respectively.

During the year ended December 31, 2007, the Group made a short-term advance to Xuzhou Economic Development Zone Electricity Company Limited, a company controlled by the Chairman. As of December 31, 2007, the outstanding amount was $138.

(b) Loans and other amounts due to affiliated companies

Golden Concord Holdings (Cayman) Limited, whose principal shareholder is Mr. Zhu Gongshan, has paid certain administrative expenses on behalf of the Group, including other corporate expenses of $465, payroll expenses of $156, travel expenses of $146 and other expenses of $88. As of December 31, 2007, there was no outstanding reimbursement balance due to Golden Concord Holdings (Cayman) Limited for such expense payments.

The Group paid management fees to Golden Concord (Hong Kong) Holdings Limited, an affiliate company controlled by the Chairman, amounting to $0, $0 and $1,383 for the periods from March 7, 2006 to December 13, 2006 (predecessor), November 13, 2006 to December 31, 2006 (successor) and for the year ended December 31, 2007 (successor), respectively. The Golden Concord Group provides management services and office facilities in Hong Kong for the Company. On a monthly basis, the Golden Concord Group charges the Company a management fee of an agreed allocation percentage to share the expenses incurred by the Golden Concord Group’s offices in Hong Kong. Golden Concord (Hong Kong) Holdings Limited also paid certain administrative expenses on behalf of the Group. The outstanding balances as of December 31, 2006 and 2007 were $0 and $165, respectively.

During the year ended December 31, 2007, the Group incurred rental expenses of $110 to Shanghai Yueyuan Machinery Company Limited, an affiliate company controlled by the Chairman, and the outstanding balance as of December 31, 2007 is $110.

The Group borrowed funds from Taicang Electric, a company which our Chairman is a principal shareholder, to fund the construction of the production facilities. As of December 31, 2007, the outstanding loans payable to Taicang Electric of $13,789 has been reclassified from other borrowings (see note 7).

In June 2007, the Group entered into a share purchase agreement with two minority shareholders of JZPTD to dispose the interest in JSJST at a consideration of $12,942. JSJST was intended to produce monosilicon while JZPTD’s intended business is to produce polysilicon. Both types of silicon are used to manufacture solar panels.

F-21

Management believed that profit margin of monosilicon production was low as compared to polysilicon and thus disposed of JSJST. At the time of disposal, JSJST was a development stage company with no operations.

JZPTD also contracted with JSJST to supply to JSJST, subject to agreement on definitive terms and conditions, a minimum quantity of polysilicon from 2007 to 2009. The purchase price will be determined on a quarterly basis and be equal to 97% of the average market price for the comparable product during the preceding quarter. In the year ended December 31, 2007, sales to JSJST amounted to $6,901.

In the year ended December 31, 2007, sales by JZPTD to one of its minority shareholder amounted to $569. As at December 31, 2007, JZPTD received a sales advance of $110 from the minority shareholder. The advance has been included under accrued expenses and other current liabilities.

In September 2007, amounts due for acquisition of JZPTD of $13,816 and $2,558 were paid to Guotai Energy Investments Limited (“Guotai Energy”) and Beijing Zhongneng Renewable Energy Investments Limited, respectively, companies majority owned by our Chairman.

In September 2007, JZPTD repaid the amount payable of $12,298 to Guotai for the purchase of JSJST.

15. Restricted assets

Relevant PRC laws and regulations permit payments of dividends by the Company’s subsidiaries only out of their retained earnings, if any, as determined by PRC accounting standards and regulations. Approvals from relevant governmental authorities are required for capital reduction or payments out of capital. In addition, the relevant regulations of PRC require annual appropriations of 10% of net after-tax income to be set aside to statutory reserves prior to payment of any dividends. During the year ended December 31, 2007, the Group made total appropriations of $1,852 to the statutory reserve.

As a result of these restrictions and the pledge of JZPTD for the floating rate bonds, JZPTD is restricted in its ability to transfer a portion of its net assets to the Company either in the form of dividends, loans or advances.

As of December 31, 2006 and 2007, the restricted portion in aggregate amounted to approximately $16,472 and $62,107 respectively.

The Group also had restricted cash of $13,802 as at December 31, 2007.

16. Subsequent events

(a) On February 25, 2008, the Company repurchased 5,000,000 ordinary shares for a total consideration of $7,000. The repurchased shares have been cancelled.

(b) Pursuant to the Company’s resolution dated on February 29, 2008, the two share options granted by the Company on August 15, 2007 have been cancelled (Note 12). On the same date, the Company granted additional 5,000,000 share options to its directors, consultants and employees with exercise price of $0.5 per share.

The options can only be exercised after either (i) a public listing of the Company; or (ii) certain events constitute a change in control of the Company prior to public listing of the Company and the management has elected to accelerate the exercisability of the options. If either of the foregoing conditions are not satisfied, the options will lapse.

The options granted are exercisable following the expiry of one year after the public listing of the Company and may not end on a date later than the expiry of 10 years from the date of grant. The options vest 25% each year over a period of four years.

The fair value of the options as of grant date is in the process of determination by the Company.

F-22

GCL SILICON TECHNOLOGY HOLDINGS INC.

SCHEDULE 1

These financial statements have been prepared in conformity with accounting principles generally accepted in the United States.

BALANCE SHEET

(In thousands of U.S. dollars, except share and per share data)

	December 31, 2006			December 31, 2007
	(Successor)			(Successor)
CURRENT ASSETS
Cash and cash equivalents	$	2		$	—
Restricted cash		—			2,901
Prepaid expenses and other current assets		—			472
		2			3,373
Investments in subsidiaries, net		18,164			73,237
Deferred financing costs		—			2,140
TOTAL ASSETS	$	18,166		$	78,750
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accrued expenses and other current liabilities	$	4		$	313
Amounts due for acquisition of JZPTD		16,374			—
Total current liabilities		16,378			313
Floating rate bonds		—			62,099
		16,378			62,412
Series A convertible redeemable preferred shares ($0.00001 par value; no shares authorized and issued as of December 31, 2006 and 50,000,000 shares authorized and 16,667,000 issued and outstanding as of December 31, 2007)		—			21,111
SHAREHOLDERS’ EQUITY (DEFICIT)
Ordinary shares ($0.00001 par value; 1,000,000,000 shares authorized and 1,000,000,000 issued as of December 31, 2006 and 100,000,000,000 and 983,333,000 shares authorized and issued as of December 31, 2007)		10			10
Additional paid-in capital		1,990			15,009
Accumulated deficit		(212	)		(23,119	)
Accumulated other comprehensive income		—			3,327
Total shareholders’ equity (deficit)		1,788			(4,773	)
TOTAL LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY	$	18,166		$	78,750

F-23

GCL SILICON TECHNOLOGY HOLDINGS INC.

SCHEDULE 1

STATEMENT OF OPERATIONS

(In thousands of U.S. dollars, except share data)

	From November 13, 2006 (date of inception) to December 31, 2006			For the year ended December 31, 2007
	(Successor)			(Successor)
REVENUE	$	—		$	—
OPERATING EXPENSES
General and administrative		(3	)		(919	)
Total operating expenses		(3	)		(919	)
OPERATING LOSS		(3	)		(919	)
NON-OPERATING EXPENSE
Interest income		1			25
Interest expenses		—			(3,167	)
Total non-operating expenses		1			(3,142	)
NET LOSS BEFORE SHARE OF RESULTS OF SUBSIDIARIES		(2	)		(4,061	)
Share of results of subsidiaries		(210	)		2,265
NET LOSS		(212	)		(1,796	)
Deemed distribution on convertible redeemable preferred shares—accretion of redemption premium		—			(1,111	)
NET LOSS ATTRIBUTABLE TO HOLDERS OF ORDINARY SHARES	$	(212	)	$	(2,907	)

F-24

GCL SILICON TECHNOLOGY HOLDINGS INC.

SCHEDULE 1

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands of U.S. dollars, except share data)

	Ordinary Shares				Additional Paid-in Capital			Accumulated Deficit			Other Comprehensive Income		Accumulated Total Shareholders’ Equity			Total Comprehensive (Loss)/Income
	Shares		Amount
Shares at inception	1,000,000,000		$	10	$	(10	)	$	—		$	—	$	—		$
Contributions from shareholders	—			—		2,000			—			—		2,000
Net loss	—			—		—			(212	)		—		(212	)		(212	)
BALANCE AT DECEMBER 31, 2006	1,000,000,000			10		1,990			(212	)		—		1,788			(212	)
Foreign currency translation adjustment from a subsidiary	—			—		—			—			3,327		3,327			3,327
Contributions from shareholders	—			—		13,019			—			—		13,019
Ordinary shares redesignated as Series A convertible redeemable preferred shares	(16,667,000	)		—		—			(20,000	)		—		(20,000	)
Deemded distribution on Series A convertible redeemable preferred shares	—			—		—			(1,111	)		—		(1,111	)
Net loss	—			—		—			(1,796	)		—		(1,796	)		(1,796	)
BALANCE AT DECEMBER 31, 2007	983,333,000		$	10	$	15,009		$	(23,119	)	$	3,327	$	(4,773	)	$	1,531

F-25

GCL SILICON TECHNOLOGY HOLDINGS INC.

SCHEDULE 1

STATEMENT OF CASH FLOWS

(In thousands of U.S. dollars)

	From November 13, 2006 (date of inception) to December 31, 2006			For the year ended December 31, 2007
	(Successor)			(Successor)
OPERATING ACTIVITIES
Net loss	$	(212	)	$	(1,796	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of discount and deferred financing costs on floating rate bonds		—			2,487
Share of results of subsidiaries		210			(2,265	)
Changes in operating assets and liabilities:
Accrued expenses and other current liabilities		4			309
Prepaid expenses and other current assets		—			(472	)
Net cash provided by (used in) operating activities		2			(1,737	)
INVESTING ACTIVITIES
Capital contribution to JZPTD		(2,000	)		—
Capital contributed to a subsidiary		—			(49,481	)
Acquisition of JZPTD		—			(16,374	)
Increase in restricted cash		—			(2,901	)
Cash used in investing activities		—			(68,756	)
FINANCING ACTIVITIES
Proceeds from issuance of floating rate bonds		—			60,000
Contribution from shareholders		2,000			13,019
Financing costs incurred for floating rate bonds		—			(2,528	)
Net cash provided in financing activities		2,000			70,491
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS		2			(2	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		—			2
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	2		$	—
NON-CASH INVESTING ACTIVITIES
Acquisition of JZPTD	$	16,374			—

F-26

GCL SILICON TECHNOLOGY HOLDINGS INC.

SCHEDULE 1

NOTE TO SCHEDULE 1

1. Schedule 1 has been provided pursuant to the requirements of Rule 12-04(a) and 4-08(e)(3) of Regulation S-X, which require condensed financial information as to financial position, changes in financial position and results and operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of the consolidated and unconsolidated subsidiaries together exceed 25 percent of consolidated net assets as of end of the most recently completed fiscal year. As of December 31, 2006 and 2007, $16,472 and $62,107, respectively of the restricted capital and reserves are not available for distribution, and as such, the condensed financial information of the Company has been presented for the period from November 13, 2006 (date of inception) to December 31, 2006 and the year ended December 31, 2007.

2. Basis of preparation

The condensed financial information has been prepared using the same accounting policies as set out in the Group’s consolidated financial statements except that the parent company has used equity method to account for its investment in JZPTD and its subsidiary JSJST.

F-27

GCL SILICON TECHNOLOGY HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share and per share data)

	December 31, 2007			June 30, 2008		June 30, 2008 Pro Forma (Note 16)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	40,067		$	151,661	$	132,439
Restricted cash		13,802			54,486		53,708
Accounts receivable		6,333			287
Inventories		916			6,556
Prepaid expenses and other current assets		2,468			8,548
Amount due from an affiliated company		138			—
Total current assets		63,724			221,538		201,538
Property, plant and equipment, net		141,731			306,975
Deposits for purchase of plant and equipment		16,677			131,381
Deposit for purchase of land use right		390			2,449
Land use right		8,163			7,940
Deferred financing costs		2,140			1,497		—
Deferred tax assets		145			12
TOTAL ASSETS	$	232,970		$	671,792	$	650,295
LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	1,608			3,345
Accrued expenses and other current liabilities		15,135			33,680
Advances from customers		2,927			36,590
Bank borrowings		22,028			95,847
Other deferred income		—			478
Income taxes payable		4,359			—
Loans from and other amounts due to affiliated companies		14,891			17,471
Distribution payable		—			—		240,625
Total current liabilities		60,948			187,411		428,036
Floating rate bonds		62,099			65,789		—
Convertible bonds		—			—		446,875
Bank borrowings		58,650			110,219
Advance from customers under long-term sales arrangements		—			113,743
Deferred revenues		—			23,495
Other deferred income		—			6,458
TOTAL LIABILITIES		181,697			507,115		1,128,826
Commitments and contingencies (note 14)
MINORITY INTEREST		34,935			81,150		81,150
Series A convertible redeemable preferred shares ($0.00001 par value; 50,000,000 shares authorized and 16,667,000 shares issued and outstanding as of December 31, 2007 and June 30, 2008; no shares outstanding on a pro-forma basis as of June 30, 2008)		21,111			22,778		—
SHAREHOLDERS’ EQUITY (DEFICIT)
Ordinary shares ($0.00001 par value; 100,000,000,000 shares authorized and 983,333,000 shares issued as of December 31, 2007; 100,000,000,000 shares authorized and 978,333,000 shares issued as of June 30, 2008; 1,024,850,000 shares outstanding on a pro-forma basis as of June 30, 2008)		10			10		10
Additional paid-in capital		15,009			8,009		76,576
(Accumulated deficit) retained earnings		(23,119	)		43,287		(645,710	)
Accumulated other comprehensive income		3,327			9,443		9,443
Total shareholders’ (deficit) equity		(4,773	)		60,749		(559,681	)
TOTAL LIABILITIES, MINORITY INTEREST, CONVERTIBLE REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY	$	232,970		$	671,792	$	650,295

See notes to the unaudited condensed consolidated financial statements.

F-28

GCL SILICON TECHNOLOGY HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except share and per share data)

	For the six months ended June 30,
	2007			2008
REVENUES
Third party sales	$	—		$	153,690
Related party sales					19,917
Total revenues		—			173,607
Cost of revenues		—			(48,730	)
GROSS PROFIT		—			124,877
OPERATING EXPENSES
General and administrative		(8,978	)		(6,640	)
OPERATING (LOSS) INCOME		(8,978	)		118,237
NON-OPERATING (EXPENSES) INCOME
Interest income		109			582
Amortization of other deferred income		—			232
Interest expenses		(1,482	)		(7,042	)
Other non-operating income (expenses)		1			(747	)
Gain on disposal of JSJST		566			—
Total non-operating expenses		(806	)		(6,975	)
(LOSS) INCOME BEFORE INCOME TAX AND MINORITY INTEREST		(9,784	)		111,262
Income tax credit (expenses)		2			(297	)
(LOSS) INCOME BEFORE MINORITY INTERESTS		(9,782	)		110,965
Minority interest		1,336			(42,892	)
NET (LOSS) INCOME		(8,446	)		68,073
Deemed distribution on convertible redeemable preferred shares—accretion of redemption premium		—			(1,667	)
NET (LOSS) INCOME ATTRIBUTABLE TO HOLDERS OF ORDINARY SHARES	$	(8,446	)	$	66,406
(LOSS) EARNINGS PER SHARE:
Basic—ordinary share	$	(0.0084	)	$	0.0666
Basic—convertible redeemable preferred share		—		$	0.1667
Diluted—ordinary share	$	(0.0084	)	$	0.0665
WEIGHTED AVERAGE SHARES USED IN (LOSS) EARNINGS PER SHARE CALCULATION
Basic—ordinary share		1,000,000,000			979,843,989
Basic—convertible redeemable preferred share		—			16,667,000
Diluted—ordinary share		1,000,000,000			981,436,130
PRO FORMA (LOSS) EARNINGS PER ORDINARY SHARE
Basic				$	[	]
Diluted				$	[	]
WEIGHTED AVERAGE SHARES USED IN PRO FORMA (LOSS) EARNING PER ORDINARY SHARE
Basic				$	[	]
Diluted				$	[	]

See notes to the unaudited condensed consolidated financial statements.

F-29

GCL SILICON TECHNOLOGY HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands of U.S. dollars, except share and per share data)

	Ordinary Shares				Additional Paid-in Capital			(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive Income		Total Shareholders’ Equity			Total Comprehensive Income (Loss)
	Shares		Amount
BALANCE AT JANUARY 1, 2007	1,000,000,000		$	10	$	1,990		$	(212	)	$	—	$	1,788
Foreign currency translation adjustment	—			—		—			—			735		735			735
Contributions from shareholders	—			—		13,009			—			—		13,009
Net loss	—			—		—			(8,446	)		—		(8,446	)		(8,446	)
BALANCE AT JUNE 30, 2007	1,000,000,000		$	10	$	14,999		$	(8,658	)	$	735	$	7,086		$	(7,711	)
BALANCE AT JANUARY 1, 2008	983,333,000		$	10	$	15,009		$	(23,119	)	$	3,327	$	(4,773	)
Foreign currency translation adjustment	—			—		—			—			6,116		6,116			6,116
Repurchase of shares	(5,000,000	)		—		(7,000	)		—			—		(7,000	)
Deemed distribution on Series A convertible redeemable preferred shares	—			—		—			(1,667	)		—		(1,667	)
Net income	—			—		—			68,073			—		68,073			68,073
BALANCE AT JUNE 30, 2008	978,333,000		$	10	$	8,009		$	43,287		$	9,443	$	60,749		$	74,189

See notes to the unaudited condensed consolidated financial statements.

F-30

GCL SILICON TECHNOLOGY HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

	Six Months Ended June 30
	2007			2008
OPERATING ACTIVITIES
Net (loss) income	$	(8,446	)	$	68,073
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Land use right expense		127			83
Depreciation of property, plant and equipment		52			4,626
Amortization of discount and deferred financing costs on floating rate bonds		—			4,371
Amortization of other deferred income		—			(232	)
Gain on disposal of JSJST		(566	)		—
Minority interest		(1,336	)		42,892
Deferred taxes		(2	)		138
Changes in operating assets and liabilities:
Decrease in accounts receivable		—			6,419
Increase in inventories		—			(5,586	)
Increase in prepaid expenses and other current assets		(599	)		(5,319	)
Increase in accounts payable		—			1,642
Increase (decrease) in accrued expenses and other current liabilities		1,740			(5,381	)
Increase in advances from customers		—			147,233
Increase in deferred revenues		—			23,495
Decrease in income tax payables		—			(4,511	)
Increase (decrease) in amounts due to affiliated companies		3,349			(8	)
Net cash (used in) provided by operating activities		(5,681	)		277,935
INVESTING ACTIVITIES
Purchase of property, plant and equipment		(35,158	)		(119,259	)
Deposits for purchase of plant and equipment		(14,044	)		(130,642	)
Deposit for purchase of land use right		—			(2,059	)
Increase in restricted cash		—			(40,041	)
Proceeds from government subsidy		—			6,890
Purchase of land use right		(84	)		—
Disposal of land use right		—			595
Disposal of JSJST (net of cash equivalents disposed of $908)		12,034			—
Repayment received from an affiliated company		17,925			138
Net cash used in investing activities		(19,327	)		(284,378	)
FINANCING ACTIVITIES
Proceeds from bank borrowings		38,906			130,837
Repayment of bank borrowings		—			(10,205	)
Repayment of other borrowings		(12,557	)		—
Advances from affiliated companies		—			16,312
Repayment of loans from affiliated companies		—			(14,269	)
Contributions from shareholders		13,009			—
Repurchase of shares		—			(7,000	)
Cash contributed to a subsidiary by minority shareholders		3,565			—
Net cash provided by financing activities		42,923			115,675
NET INCREASE IN CASH AND CASH EQUIVALENTS		17,915			109,232
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		5,033			40,067
Effect of foreign exchange on cash and cash equivalents		134			2,362
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	23,082		$	151,661
SUPPLEMENT DISCLOSURES OF CASH FLOWS
Interest paid (net of interest capitalized)	$	1,482		$	2,146
Income tax paid		—			4,670
NON-CASH INVESTING ACTIVITIES
Purchase of property, plant and equipment	$	8,729		$	21,432

See notes to the condensed unaudited consolidated financial statements.

F-31

GCL SILICON TECHNOLOGY HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of U.S. dollars, except share and per share data)

1. Basis of Preparation

The accompanying unaudited condensed consolidated financial statements include the financial information of GCL Silicon Technology Holdings Inc. (the “Company”), its subsidiaries and its variable interest entity (“VIE”) Taixing Zhongneng Far East Polysilicon Technology Development Co., Ltd. (“Taixing”), (collectively, the “Group”). Taixing, a development stage enterprise, was incorporated in the People’s Republic of China (“PRC”) on June 12, 2008 by the Company and an independent third party. Although the Company owns a majority of the equity ownership of Taixing, the voting rights are disproportionately lower than its share of residual return in Taixing. Taixing will produce trichlorosilane, a raw material for producing polysilicon, exclusively to the Company. As a result, the Company is determined to be the primary beneficiary of Taixing and has consolidated Taixing since its establishment.

The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and the accounting principles generally accepted in the United States of America for interim financial reporting. The results of operations for the six months ended June 30, 2007 and 2008 are not necessarily indicative of the results for the full year.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Group’s audited consolidated financial statements for the fiscal years ended December 31, 2006 and 2007. In the opinion of the management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair representation of financial results for the interim periods presented.

2. Summary of significant accounting policies

(a) Revenue recognition

In the period ended June 30, 2008, the Group entered into supply arrangements for the sales of polysilicon and wafers. These contracts provide for supply of specified volumes and pre-set pricing that decreases over the terms of the arrangements. Revenues under long-term arrangements have been recognized in the statement of operations using the weighted average price over the contractual term. Revenues relating to future price decreases under these arrangements have been classified as a liability on the balance sheet and reported as deferred revenues.

(b) Other deferred income

Other deferred income represents non-refundable cash subsidy received by Jiangsu Zhongneng Polysilicon Technology Development Co. Ltd. (“JZPTD”) from the local PRC government. The subsidy was received as compensation for interest costs incurred in the construction of the manufacturing facility. The subsidy is allocated to income over the useful lives of plant and equipment.

(c) Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. The Group has determined that its convertible redeemable preferred shares participate in undistributed earnings on the same basis as the ordinary shares. Accordingly, the Group has used the two-class method of computing earnings per share. Under this method, net income applicable to holders of ordinary shares is allocated on a pro rata basis to the ordinary and convertible redeemable preferred shares to the extent that each

F-32

class may share in income for the period had it been distributed. Losses are not allocated to the participating securities. Diluted earnings per share is computed using the more dilutive of (a) the two-class method and (b) the if-converted method.

(d) Derivative financial instruments

The Company has entered into derivative financial instruments such as foreign currency forward contracts to manage its risks on foreign currency borrowings. Derivative financial instruments are initially recognized at fair value and subsequently remeasured at their fair values with changes in fair value included in determination of net income. Net loss of $78 on change in fair value of forward contracts has been recognized in determination of net income.

As of June 30, 2008, the Company has two US dollar and two Euro forward contracts outstanding with aggregate notional amounts of $11,433 and Euro12,269, respectively.

(e) Information on major customers

Revenue from sales transactions with the Group’s three largest customers were 19%, 12% and 11% of the total revenues for the six month period ended June 30, 2008. No other customer contributed in excess of 10% of total revenues.

(f) Recent accounting pronouncements

In September 2006 the FASB issued Statement No. 157, “Fair Value Measurement” (“SFAS 157”). SFAS 157 addresses standardizing the measurement of fair value for companies who are required to use a fair value measure for recognition or disclosure purposes. The FASB defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” SFAS 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The adoption of SFAS 157 did not have a material effect on the financial statements.

In February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities, Including an amendment of SFAS 115” (“SFAS 159”). SFAS 159 provides companies with the option to report selected financial assets and liabilities at fair value. SFAS 159 requires companies to provide additional information that will help investors and other users of financial statements to more easily understand the effect of the Group’s choice to use fair value on its earnings. It also requires entities to display the fair value of those assets and liabilities for which the Group has chosen to use fair value on the face of the balance sheet. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The adoption of SFAS 159 did not have a material effect on the financial statements.

In December 2007, the FASB issued SFAS No. 141R, “Business Combination” (“SFAS No. 141R”). The statement requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS No. 160”) to improve the relevance, comparability, and transparency of financial information provided to investors by requiring all entities to report net income attributable to both the parent and noncontrolling (minority) interests in subsidiaries in the consolidated financial statements. Moreover, SFAS

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No. 160 eliminates the diversity that currently exists in accounting for transactions between an entity and noncontrolling interests by requiring they be treated as equity transaction. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Group is currently evaluating whether the adoption of SFAS No. 160 will have a significant effect on its consolidated financial position, results of operations or cash flows.

In March 2008, the FASB issued SFAS No. 161, “Disclosures About Derivate Instruments and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No. 161”). The new standard requires enhanced disclosures to help investors better understand the effect of an entity’s derivate instruments and related hedging activities on its financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Group will adopt SFAS No. 161 on January 1, 2009.

3. Inventories

Inventories are as follows:

	December 31, 2007		June 30, 2008
Raw materials	$	270	$	1,158
Work-in-progress		561		3,395
Finished goods		85		2,003
	$	916	$	6,556

4. Prepaid expenses and other current assets

Prepaid expenses and other current assets are as follows:

	December 31, 2007		June 30, 2008
Deferred offering costs	$	472	$	3,116
Prepayment for purchase of raw materials		1,563		3,611
Others		433		1,821
Total	$	2,468	$	8,548

5. Property, plant and equipment, net

	December 31, 2007			June 30, 2008
Cost
Buildings	$	20,834		$	46,716
Plant and machinery		105,599			212,692
Furniture, fixtures and equipment		2,950			4,586
Motor vehicles		679			1,214
		130,062			265,208
Less: Accumulated depreciation		(2,424	)		(7,308	)
Sub-total		127,638			257,900
Construction in progress		14,093			49,075
Property, plant and equipment, net	$	141,731		$	306,975

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Depreciation expense for the six months ended June 30, 2007 and 2008 were $52 and $4,626, respectively. No impairment loss was recognized in any of the periods presented.

6. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities are as follows:

	December 31, 2007		June 30, 2008
Accrued interest	$	393	$	918
Accrued employee benefits		1,416		717
Payables for purchase of property, plant and equipment		6,330		21,432
Wafer processing fee payable		—		1,629
Valued-added tax payable		5,846		4,636
Others		1,150		4,348
Total	$	15,135	$	33,680

7. Bank borrowings

Bank borrowings consist of the following:

	December 31, 2007			June 30, 2008
Short-term bank borrowings
Term loans	$	8,260		$	76,895
Long -term bank borrowings
Term loans (maturity by 2010)		72,418			129,171
Less: current portion		(13,768	)		(18,952	)
Total long-term borrowings	$	58,650		$	110,219

Short-term bank borrowings had a weighted average interest rate of approximately 6.82% and 7.62% as of December 31, 2007 and June 30, 2008, respectively. As of December 31, 2007, short-term bank borrowings were denominated in Renminbi. As of June 30, 2008, short-term bank borrowings of $47,674, $18,304 and $10,917 were denominated in Renminbi, Euro and US dollars, respectively. As of June 30, 2008, short-term bank borrowings were unsecured except for amounts of $29,220 which were secured by JZPTD’s restricted cash.

Long-term bank borrowings were denominated in Renminbi and had a weighted average interest rate of approximately of 7.47% and 8.00% as of December 31, 2007 and June 30, 2008, respectively. According to the laws of the PRC, rates may be adjusted annually based on the interest rates determined by the People’s Bank of China. Long-term bank borrowings were unsecured except for amounts of $58,317 which were secured by JZPTD’s plant and machinery.

As of June 30, 2008, bank borrowings of $50,444 are guaranteed by Guotai Energy Investments Limited, a company controlled by the Chairman of the Company.

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Bank borrowings are repayable as follows:

Due by June 30, 2009	$	95,847
Due by June 30, 2010		100,013
Due by December 31, 2010		10,206
		206,066
Current portion		(95,847	)
Non-current portion	$	110,219

8. Floating rate bonds

On September 10, 2007, the Group issued floating rate bonds for a principal amount of $60,000 (“floating rate bonds”) to an independent third-party (the “Bond Holder”).

Covenants—The following covenants are applicable as of June 30, 2008:

(a) Consolidated cash flow from operations under U.S. GAAP, at the end of each quarter from March 31, 2008 and thereafter, shall be at least four times the finance costs. During the three months period ended March 31, 2008 and June 30, 2008, the consolidated cash flow from operations was approximately 25 and 53 times the finance costs, respectively;

(b) For the six months period ended June 30, 2008 and each quarter thereafter, the operating cash flow of JZPTD shall be at least three times the total debt service of JZPTD. During the six months period ended June 30, 2008, the operating cash flow of JZPTD was approximately 16 times the total debt of JZPTD;

(c) Consolidated debt shall not exceed annualized consolidated earnings before interest, income tax, depreciation and amortization (“EBITDA”) by three times at the end of each quarter from June 30, 2008 and thereafter. During the three months period ended June 30, 2008, the consolidated debt was approximately two times the annualized EBITDA as of June 30, 2008; and

(d) JZPTD’s debt to equity ratio shall not exceed 2.5 times for the three months period ended March 31, 2008 and 2.0 in each quarter thereafter; As of March 31, 2008 and June 30, 2008, JZPTD’s debt to equity ratio was approximately 0.6 and 0.9 times, respectively.

The $60,000 principal of the floating rate bonds was recorded as debt at issuance and has been subsequently accreted to $65,789 as of June 30, 2008.

The fair value of the floating rate bonds was approximately $70,496, as of June 30, 2008, which included the fair values of the conversion option of $5,257 and other embedded derivatives of $0, respectively. The fair value was determined by the Group with assistance from an independent valuation specialist.

The assumptions adopted for the contemporaneous valuation of the floating rate bonds as of June 30, 2008 under the Black-Scholes model are as follows:

(1) Risk Free Interest Rate—2.34% was used by reference to the yield of a 1 year U.S. Treasury Bond;

(2) Volatility—65.56% for the underlying share price has considered the historical price movements of comparable companies;

(3) Dividend Yield- assumed to be 0% per annum;

(4) The probability of the exercise of other call/put options including the strike adjustment is insignificant.

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9. Capital structure

On February 25, 2008, the Company repurchased 5,000,000 ordinary shares for a total consideration of $7,000. The repurchased shares have been cancelled.

10. Convertible redeemable preferred shares

On August 29, 2007, a shareholder transferred 16,667,000 ordinary shares of the Company to certain investors that were immediately redesignated as 16,667,000 Series A convertible redeemable preferred shares (“the preferred shares”).

Under the terms of the preferred shares agreement, if the consolidated earnings before interest and income tax for the period from January 1, 2007 to March 31, 2008 is less than $20,000, the preferred shareholders have a right to put the preferred shares for redemption at 150% of the preferred share issue price plus any accrued and unpaid dividends to the Company or to Happy Genius Holdings Limited (“HG”), the immediate holding company of the Company. For the period from January 1, 2007 to March 31, 2008, the consolidated earnings before interest and income tax was $45,158.

11. Income taxes

The Company is tax exempt under the laws of the Cayman Islands. GCL HK is subject to Hong Kong profit tax rate of 17.5% on profits earned in Hong Kong. JZPTD and Taixing are subject to PRC Enterprise Income Tax (“EIT”). During the six months period ended June 30, 2007 and 2008, the Group’s EIT rate is 33% less a 3% exemption of local income tax and 25%, respectively.

JZPTD is a foreign invested enterprise in PRC. It is entitled to full tax exemption for two years and 50% reduction in the following three years. The exemption commences in the first profitable year after offsetting all unexpired tax losses carried forward. As there were less than six months operations in 2007, JZPTD elected to defer the commencement of the tax exemption period to 2008.

The Company’s income tax (benefit) expenses represents:

	Six Months Ended June 30
	2007			2008
Underprovision of PRC EIT in prior years	$	—		$	159
Deferred tax (benefit) expenses		(2	)		138
	$	(2	)	$	297

The deferred income tax assets and liabilities as of June 30, 2008, consisted of the following:

	December 31, 2007			June 30, 2008
Deferred tax assets
Pre-operating costs	$	1,817		$	1,725
Others		514			390
Valuation allowance		(1,798	)		(1,550	)
Total deferred tax assets		533			565
Deferred tax liabilities
Land use right	$	(174	)	$	(182	)
Property, plant and equipment, net		(214	)		(371	)
Total deferred tax liabilities		(388	)		(553	)
Non-current deferred tax assets	$	145		$	12

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Valuation allowance has been recorded to the extent deferred tax assets are expected to expire in JZPTD’s tax exemption period.

12. Share-based compensation

On August 15, 2007, the directors of the Company approved a share option plan (“Plan”) to grant options to its employees and directors to purchase ordinary shares of the Company subject to vesting requirements. The total number of ordinary shares which may be issued upon exercise of all options shall not exceed 5% of the total number of issued ordinary shares as of August 15, 2007. The options have an exercise price of $0.5 per share. The options can only be exercised after either (i) a public listing of the Company; or (ii) on occurrence of certain events which constitute a change in control of the Company prior to public listing of the Company and the management has elected to accelerate the exercisability of the options. If either of the foregoing conditions are not satisfied, the options will lapse.

On August 15, 2007, the Company granted two options to one of the Company’s directors and one employee to purchase 2,000 ordinary shares of the Company. On February 29, 2008, the two options were cancelled. On the same date, the Company granted additional five million share options to its directors, consultants and employees to purchase 50,000,000 ordinary shares of the Company with exercise price of $0.5 per share. Each option is exercisable into 10 ordinary shares. The options granted become exercisable following the expiry of one year after the public listing of the Company and must be exercised within 10 years from the date of grant. The options vest each year over a period of four years. The total fair value of the options at the grant date was $69,442 and has been determined by a contemporaneous valuation using the binomial options pricing model with assistance from an independent valuation specialist. No compensation cost related to the options grant has been recognized for the six months period ended June 30, 2008, as the vesting period is based on occurrence of events stated above.

A summary of option activity as of June 30, 2008 is presented below:

	Number of options		Weighted average exercise price		Weighted average remaining Contractual life	Weighted average fair value of share options at grant date		Aggregate intrinsic value
OUTSTANDING AT JANUARY 1, 2008	2		$	0.5
Granted on February 29, 2008	5,000,000			0.5		$	13.89
Cancelled on February 29, 2008	(2	)		0.5
OUTSTANDING AT JUNE 30, 2008	5,000,000		$	0.5	9.7			90,765

As of June 30, 2008, none of the outstanding options were vested and no option was available for future grant.

The assumptions used in determining the fair value of the options were as follows:

(1) Risk Free Interest Rate—3.71%

Risk free interest rate was referenced to the yield of a ten year U.S. Treasury Bond and annual dividend was assumed to be zero.

(2) Volatility—60.65%

Expected volatility is estimated based on daily stock prices of comparable listed companies.

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(3) Dividend Yield—0%

The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options.

(4) Sub-optimal factor—1.5

The sub-optimal indicates the correlation between the employees exercise behaviour and the underlying share price. It is expected that the employees may exercise the options when the share price is 1.5 times the exercise price.

12. (Loss) earnings per share

The calculation of (loss) earnings per share is as follows:

	Six Months Ended June 30,
	2007			2008
Net (loss) income	$	(8,446	)	$	68,073
Deemed distribution to Series A convertible redeemable preferred shares—accretion of redemption premium		—			(1,667	)
Net (loss) income attributable to holders of ordinary shares	$	(8,446	)	$	66,406
Numerator used in basic and diluted (loss) earnings per share:
Net (loss) income allocated for computing (loss) earnings per ordinary share—basic		(8,446	)(i)		65,295
Net (loss) income allocated for computing (loss) earnings per Series A convertible redeemable preferred share—basic		—	(i)		2,778
Net (loss) income allocated for computing (loss) earnings per ordinary share—diluted		(8,446	)		65,255
Denominator used in basic and diluted (loss) earnings per share:
Weighted average ordinary shares outstanding used in computing (loss) earnings per ordinary share—basic		1,000,000,000			979,843,989
Weighted average shares outstanding used in computing (loss) earnings per series A convertible redeemable preferred share—basic		N/A			16,667,000
Weighted average ordinary shares outstanding used in computing (loss) earnings per ordinary share—diluted		1,000,000,000	(ii)		981,436,130
(Loss) earnings per ordinary share—basic		(0.0084	)		0.0666
(Loss) earnings per Series A convertible redeemable preferred shares—basic		N/A			0.1667
(Loss) earnings per ordinary share—diluted		(0.0084	)		0.0665

(i) The net income attributable to holders of ordinary shares was allocated between ordinary shares and Series A convertible redeemable preferred shares in a pro rata basis on the dividend participating right. The net income allocated for computing net income per Series A convertible redeemable preferred share—basic also contained the deemed dividend for accretion of the redemption premium

(ii) The Group has securities outstanding which could potentially dilute basic earnings per share in the future, but which were excluded from the computation of diluted net income per share in the six-months ended June 30, 2008 as their effects would have been anti-dilutive. Such outstanding securities consisted of floating rate bonds convertible into a weighted average number of 30,000,000 ordinary shares. There is no

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potential dilutive securities for the six-months period ended June 30, 2007. The calculation of the weighted average number of ordinary shares for the six-months period ended June 30, 2008 for the purpose of diluted earnings per ordinary share has included the effect of share options of a weighted average number of 33,516,484, which results in an incremental weighted average number of 1,592,141 ordinary shares from the assumed conversion of these share options using the treasury stock method.

14. Commitments

Capital commitments

As of June 30, 2008, the Group has capital commitments totalling $392,226 related to construction of its production facilities and purchase of plant and machinery.

Lease commitments

The Group leases certain office premises and buildings under non-cancellable leases. Rental expenses under operating lease for the six months period ended June 30, 2007 and 2008 were $27 and $99, respectively.

As of June 30, 2008, future minimum lease payments under non-cancellable operating leases agreements were as follows:

Within 1 year	$	160
Between 1 and 2 years		58
Total	$	218

Other commitments

During the six month period ended June 30, 2008, the Group entered into long-term polysilicon and wafer supply agreements under which the Group contracted to supply specified volumes of polysilicon and wafers during the period commencing April 2008 to December 2015. The selling price declines over the agreement period and is not subject to renegotiation. The customers are required to make an interest-free advance. Such advance is deductible from payment for sales starting from January 2010. As of June 30, 2008, $113,743 of such amount was received and was recorded as advances from customers under non-current liabilities.

15. Related parties transactions

(a) Transactions with affiliated companies

The Group has made advances to Shanghai Creative Energy Company Limited (“Shanghai Creative”), a company whose principal shareholder is also a director of JZPTD, for acquisition of property, plant and equipment on behalf of the JZPTD. As of December 31, 2007 and June 30, 2008, outstanding amounts of $4,148 and $0 deposited with Shanghai Creative, respectively, were included in deposits for purchase of plant and equipment.

Shanghai Creative has also paid certain administrative expenses on behalf of the Group. The outstanding balance as of December 31, 2007 and June 30, 2008 were $827 and $379, respectively.

The Group paid management fees to Golden Concord (Hong Kong) Holdings Limited, an affiliate company controlled by the Chairman, amounting to $360 and $816 for the six months period ended June 30, 2007 and 2008, respectively.

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As of December 31, 2007, there was a short-term advance from the Group to Xuzhou Economic Development Zone Electricity Company Limited, a company controlled by the Chairman. The outstanding balance as of December 31, 2007 was $138 and was repaid during the six months period ended June 30, 2008.

(b) Loans and other amounts due to affiliated companies

The Group borrowed funds from Taicang Harbour Golden Concord Electric-Power Generation Co., Ltd. (“Taicang Electric”), a company of which our Chairman is a principal shareholder, to fund the construction of the production facilities. The loan was unsecured, carried interest of approximately 6.49% per annum and was repayable on demand. During the six months period ended June 30, 2007 and 2008, interest paid or payable to Taicang Electric was $417 and $54, respectively. As of December 31, 2007, the outstanding loans payable to Taicang Electric was $13,789 and was repaid in January 2008.

Golden Concord (Hong Kong) Holdings Limited, a company controlled by the Chairman of the Company paid certain administrative expenses on behalf of the Group. The outstanding balances as of December 31, 2007 and June 30, 2008 was $165 and $780, respectively.

During the six months period ended June 30, 2007 and 2008, the Group incurred rental expenses of $54 and $56, respectively, to Shanghai Yueyuan Machinery Company Limited, an affiliate company controlled by the Chairman. The outstanding balance as of December 31, 2007 and June 30, 2008 were $110 and $0, respectively.

JZPTD contracted to supply JSJST a minimum quantity of polysilicon from 2007 to 2009. The contract was subsequently cancelled in June 2008. JSJST ceased to be an affiliated company of the Company on June 10, 2008. During the period from January 1, 2008 to June 10, 2008, sales to JSJST amounted to $19,917.

During the six months period ended June 30, 2008, the Group borrowed funds from Zibo Baokai Trading Company Limited, a minority shareholder of Taixing. The advance was unsecured, interest free and repayable on demand. As of June 30, 2008, the outstanding balance was $1,312.

During the six months period ended June 30, 2008, the Group entered into a promissory note with HG, the immediate holding company of the Company. The note was unsecured, interest free and repayable at the earlier of the listing date and June 20, 2009. The Company is required to pay HG’s costs incurred in connection with the negotiation, preparation and execution of the promissory note. As of June 30, 2008, the outstanding balance was $15,000.

16. Pro forma information

The pro forma balance sheet information as of June 30, 2008 assumes (i) the redemption and conversion upon completion of the initial public offering (“IPO”) of the convertible redeemable preferred shares and floating rate bonds into ordinary shares and (ii) distribution to shareholders of (a) cash payment of $240,625 and (b) issuance of convertible bonds with principal value of $446,875.

Pro forma basic and diluted income per ordinary share for the six months period ended June 30, 2008 is computed by dividing income attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding for the period plus (i) the number of ordinary shares resulting from the assumed conversion of the outstanding convertible redeemable preferred shares, floating rate bonds and the convertible bonds; (ii) the number of shares whose proceeds would be necessary to pay the cash dividend in excess of the

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current period’s earnings; and (iii) share distributions to be made to shareholders (see note 18) as of January 1, 2008. Floating rate bonds are assumed to be converted into ordinary shares using a rate of 3% on the aggregate number of outstanding ordinary shares and convertible redeemable preferred shares as of January 1, 2008. Shares used in determining pro forma basic and diluted earnings per shares for the six months period ended June 30, 2008 are as follows:

Shares used in calculating basic earnings per share on a pro forma basis:

Weighted average shares outstanding in computing basic earnings per share	979,843,989
Ordinary shares as a result of redeemable preferred shares and floating rate bonds conversion	46,667,000
Issuance of ordinary shares for distribution proceeds	[	]
Issuance of ordinary shares as share distribution	270,322,853
	[	]

Shares used in calculating diluted earnings per share on a pro forma basis:

Weighted average shares outstanding in computing diluted earnings per share	981,436,130
Ordinary shares as a result of redeemable preferred shares and floating rate bonds conversion	46,667,000
Issuance of ordinary shares for distribution proceeds	[	]
Issuance of ordinary shares as share distribution	270,322,853
	[	]

Income used in determining pro forma income per share for the six months period ended June 30, 2008 is as follows:

Net income attributable to holders of ordinary shares	$	66,406
Plus: Deemed distribution to convertible preferred shares
— accretion of redemption premium		1,667
Interest expense related to floating rate bonds		4,564
Less: Deferred financing costs		(1,497	)
Total pro forma net income	$	71,140

17. Restricted assets

Relevant PRC laws and regulations permit payments of dividends by the Company’s subsidiaries only out of their retained earnings, if any, as determined by PRC accounting standards and regulations. Approvals from relevant governmental authorities are required for capital reduction or payments out of capital. In addition, the relevant regulations of PRC require annual appropriations of 10% of net after-tax income should be set aside to statutory reserves prior to payment of any dividends. As of June 30, 2008, the balance of statutory reserve was $1,916.

As a result of these restrictions and the pledge of JZPTD for the floating rate bonds, JZPTD is restricted in its ability to transfer a portion of its net assets to the Company either in the form of dividends, loans or advances.

As of June 30, 2008, the restricted portion in aggregate amounted to approximately $144,344.

The Group also had restricted cash of $54,486 as at June 30, 2008. This amount consists of $778 placed in bank accounts which are restricted solely for the interest payments on floating rate bonds and an amount of

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$53,708 placed in bank accounts as deposits for short-term letters of credit issued by a bank for purchase of plant machinery.

18. Subsequent events

(a) On July 18, 2008, the Company and its principal shareholders entered into an agreement under which concurrent with the initial public offering, the principal shareholders will transfer to the Company 100% ownership interest in Sun Wave Group Ltd. (“Sun Wave”) and Greatest Joy International Limited (“Greatest Joy”), entities which together own the 36% interest in JZPTD. Sun Wave and Greatest Joy are under the common control of the Chairman and were created for the sole purpose of holding their respective ownership interests in JZPTD. The transfer consideration will consist of (i) $240,625 in cash, (ii) the issue of bonds with a principal value of $446,875 and convertible into the Company’s ordinary shares and (iii) issue of 268,537,970 ordinary shares of the Company which has been subsequently increased to 270,322,853 shares in accordance with an agreement dated September 30, 2008 between the Company and the principal shareholders. The consideration will be settled concurrent with the closing of the IPO.

(b) In July 2008, JZPTD obtained certain Renminbi-denominated, unsecured and interest bearing bank borrowings of $77,707 of which $9,185, $53,943 and $14,579 are repayable in 2008, 2009 and 2010, respectively. These borrowings carry a weighted average interest rate at approximately 7.16%, which may be adjusted annually based on the interest rates determined by the People’s Bank of China.

(c) On September 23, 2008, JZPTD entered into an agreement for a Renminbi-denominated and interest bearing bank borrowing of $291,583 of which $116,634 and $174,949 will be repayable in 2010 and 2011, respectively. The borrowing carries an interest rate of approximately 7.29%, which may be adjusted annually based on the interest rates determined by the People’s Bank of China. The borrowing will be secured against the property, plant and equipment to be constructed using the loan proceeds. As of September 30, 2008, JZPTD has drawn $233,267 of the amount available under the agreement.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

EXPENSES RELATED TO THIS OFFERING

The following table sets forth the main estimated expenses in connection with this offering, other than the underwriting discounts and commissions, which we and the selling shareholders will be required to pay.

U.S. Securities and Exchange Commission registration fee	$	33,896.25
FINRA filing fee		75,500.00
New York Stock Exchange listing fee
Legal fees and expenses
Accounting fees and expenses		900,000.00
Printing fees and expenses
Registered transfer agent fees
Miscellaneous
Total	$

All amounts are estimated, except the U.S. Securities and Exchange Commission registration fee, the New York Stock Exchange listing fee and the FINRA filing fee.

Item 6. Indemnification of Directors and Officers

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the courts of the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences or committing a crime. Our articles of association provide for indemnification of officers and directors for losses, damages, charges and expenses incurred in their capacities as such, except through their own willful neglect or default.

Pursuant to the form of indemnification agreements filed as Exhibit 10.2 to this Registration Statement, we will agree to indemnify our directors and officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer.

The form of Underwriting Agreement to be filed as Exhibit 1.1 to this Registration Statement will also provide for indemnification of us and our officers and directors.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”) may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

II-1

Item 7. Recent Sales of Unregistered Securities

During the past three years, we have issued the following securities (including options to acquire our ordinary shares). We believe that each of the following issuances was exempt from registration under the Securities Act in reliance on Regulation S under the Securities Act or under Section 4(1) or 4(2) of the Securities Act regarding transactions not involving a public offering.

Purchaser	Date of Sale or Issuance	Number of Securities	Consideration in U.S. dollars	Underwriting Discount and Commission
Deutsche Bank AG	September 11, 2007	Mandatory redeemable bonds with the principal amount of $20,000,000	$20,000,000	None
Deutsche Bank AG	September 11, 2007	Convertible bonds with the principal amount of $40,000,000	$40,000,000	None
Happy Genius Holdings Limited	August 21, 2007	769,309 ordinary shares	No dollar consideration(1)	None
Mandra Materials Limited	August 21, 2007	225,591 ordinary shares	No dollar consideration(1)	None
Positive Rise Group Ltd.	August 21, 2007	5,000 ordinary shares	No dollar consideration(1)	None
Issuance under the 2007 share incentive plan	August 15, 2007	Options to purchase 200 ordinary shares	No dollar consideration	None
Issuance under the 2007 share incentive plan	February 29, 2008	Options to purchase 5,000,000 ordinary shares	No dollar consideration	None

(1) The ordinary shares were issued in exchange for: (i) the transfer of a loan receivable in the amount of $15 million from Happy Genius Holdings Limited and (ii) the transfer of 1 share of Asia Silicon Technology Holdings Limited to us.

Item 8. Exhibits and Financial Statement Schedules

(a) Exhibits

See Exhibit Index beginning on page II-5 of this registration statement.

(b) Financial Statement Schedules

Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the Consolidated Financial Statements or the Notes thereto.

Item 9. Undertakings

(1) The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

(2) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 6, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by a registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or

II-2

proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(3) The undersigned Registrant hereby undertakes that:

(a) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424 (b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(b) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) For the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(4) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if securities are offered or sold to such purchaser by means of any of the following communication, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hong Kong, S.A.R on October 2, 2008.

GCL SILICON TECHNOLOGY HOLDINGS INC.
By:	/s/ HUNTER JIANG
	Name: Hunter Jiang
	Title: Chief Executive Officer

Pursuant to the requirements of the Securities Act, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ ZHU GONGSHAN Zhu Gongshan	Chairman	October 2, 2008
* Zhang Songyi	Director	October 2, 2008
/s/ HUNTER JIANG Hunter Jiang	Chief Executive Officer (Principal Executive Officer) and Director	October 2, 2008
* Jason Li	Chief Financial Officer (Principal Financial Officer)	October 2, 2008
* Jason Li	Chief Accounting Officer (Principal Accounting Officer)	October 2, 2008
* Donald J. Puglisi Puglisi & Associates	Authorized Representative in the United States	October 2, 2008

* By:	/s/ ZHU GONGSHAN
	Name: Zhu Gongshan
	Attorney-in-fact

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EXHIBIT INDEX

Exhibits	Description
1.1(2)	Form of Underwriting Agreement
3.1(2)	First Amended and Restated Memorandum and Articles of Association
3.2(2)	Second Amended and Restated Memorandum and Articles of Association
3.3(2)	Form of Third Amended and Restated Memorandum and Articles of Association
4.1(2)	Specimen Certificate for Ordinary Shares
4.2(2)	Share Purchase Agreement among TB Silicon Ltd., Benchmark Europe III, L.P. (as nominee for Benchmark Europe III, L.P., Benchmark Europe Founders’ Fund III L.P. and related individuals, acting by its manager Balderton Capital Management (UK) LLP), Asia Silicon Technology Holdings Inc. and Happy Genius Holdings Limited dated August 29, 2007
4.3(2)	Share Purchase Agreement by and among Guotai Energy Investment Ltd., Xuzhou Suyuan Group Ltd., Suyuan Group Ltd., Beijing Zhongneng Renewable Energy Investment Ltd., Asia Silicon Technology Holdings Inc. and Lianyungang Suyuan Group Ltd. dated November 29, 2006
4.4(2)	Share Purchase Agreement by and among Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., Nanjing Linyang Electric Investment Co., Ltd. and Lianyungang Suyuan Group, Ltd. dated June 6, 2007
4.5(2)	Investors’ Rights Agreement among Asia Silicon Technology Holdings Inc., Happy Genius Holdings Limited, TB Silicon Ltd. and Benchmark Europe III, L.P. (as nominee for Benchmark Europe III, L.P., Benchmark Europe Founders’ Fund III L.P. and related individuals, acting by its manager Balderton Capital Management (UK) LLP) dated August 29, 2007
4.6(2)	Preferred Share Rights Agreement among Asia Silicon Technology Holdings Inc., Happy Genius Holdings Limited, TB Silicon Ltd. and Benchmark Europe III, L.P. (as nominee for Benchmark Europe III, L.P., Benchmark Europe Founders’ Fund III L.P. and related individuals, acting by its manager Balderton Capital Management (UK) LLP) dated August 29, 2007
4.7(2)	Amended Investors’ Rights Agreement among Asia Silicon Technology Holdings Inc., Happy Genius Holdings Limited, TB Silicon Ltd. and Benchmark Europe III, L.P. (as nominee for Benchmark Europe III, L.P., Benchmark Europe Founders’ Fund III L.P. and related individuals, acting by its manager Balderton Capital Management (UK) LLP) dated September 7, 2007
4.8(2)	Trust Deed constituting Tranche A U.S.$20,000,000 Floating Rate Secured Bonds due 2009 and Tranche B U.S.$40,000,000 Floating Rate Secured Convertible Bonds due 2009 convertible into shares of Asia Silicon Technology Holdings Inc. between Asia Silicon Technology Holdings Inc. and DB Trustees (Hong Kong) Limited dated September 10, 2007
4.9(2)	Subscription Agreement relating to Tranche A U.S.$20,000,000 Floating Rate Secured Bonds due 2009 and Tranche B U.S.$40,000,000 Floating Rate Secured Convertible Bonds due 2009 between Asia Silicon Technology Holdings Inc. and Deutsche Bank AG dated September 7, 2007
4.10(2)	Paying and Conversion Agency Agreement relating to Tranche A U.S.$20,000,000 Floating Rate Secured Bonds due 2009 and Tranche B U.S.$40,000,000 Floating Rate Secured Convertible Bonds due 2009 among Asia Silicon Technology Holdings Inc., Deustche Bank AG, Hong Kong Branch, Deutsche Bank Luxembourg S.A. and DB Trustees (Hong Kong) Limited dated September 10, 2007
4.11(2)	Security Agreement relating to Tranche A U.S.$20,000,000 Floating Rate Secured Bonds due 2009 and Tranche B U.S.$40,000,000 Floating Rate Secured Convertible Bonds due 2009 between Asia Silicon Technology Holdings Inc. and DB Trustees (Hong Kong) Limited dated September 10, 2007
4.12(2)	Security Agreement relating to Tranche A U.S.$20,000,000 Floating Rate Secured Bonds due 2009 and Tranche B U.S.$40,000,000 Floating Rate Secured Convertible Bonds due 2009 between Asia Silicon Technology Holdings Limited and DB Trustees (Hong Kong) Limited dated September 10, 2007

II-5

Exhibits		Description
4.13	(2)	English Translation of Agreement of Pledge Over Shares between Asia Silicon Technology Holdings Limited and DB Trustees (Hong Kong) Limited dated September 10, 2007
4.14	(2)	Registration Rights Agreement between Asia Silicon Technology Holdings Inc., Mandra Materials Limited and Deutsche Bank AG dated September 10, 2007
4.15		Form of Deposit Agreement among the Registrant, JPMorgan Chase Bank, N. A., as depositary, and Holders and Beneficial Holders of American Depositary Shares evidenced by American Depositary Receipts issued thereunder, including the form of American Depositary Receipt
4.16	(2)	Amended and Restated Registration Rights Agreement among GCL Silicon Technology Holdings, Inc., Deutsche Bank AG, Credit Suisse International, Asia Debt Management Hong Kong Limited and RCG Asia Opportunity Fund, Ltd. dated June 5, 2008
4.17	(2)	English Translation of Supplementary Agreement I to the Share Transfer Agreement among Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., Nanjing Linyang Power Investment Co., Ltd. and Jiangsu Qitian Group Co., Ltd. dated June 22, 2008
4.18	(2)	Form of Indenture between GCL Silicon Technology Holdings Inc. and Deutsche Bank Trust Company Americas, with respect to the 3% Convertible Senior Notes due 2010.
4.19	(2)	Form of Conversion Registration Rights Agreement among GCL Silicon Technology Holdings Inc., Deutsche Bank AG and the Holders of the 3% Convertible Senior Notes due 2010
4.20	*	English Translation of a Syndicated Loan Agreement among Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd and Bank of Xuzhou Branch, China Construction Bank Xuzhou Branch, Bank of China Xuzhou Branch, Industrial and Commercial Bank of China Xuzhou Branch and Bank of Communications Xuzhou Branch dated September 2008.
5.1	(2)	Opinion of Appleby, Cayman Islands counsel to the Registrant, as to the validity of the issuance of the ordinary shares
10.1	(2)	Share Option Scheme adopted by Asia Silicon Technology Holdings Inc. pursuant to board resolutions dated August 15, 2007 and shareholder resolutions dated February 21, 2008
10.2	(2)	English Translation of Form of Employment Contract
10.3	(1)(2)	English Translation of License Agreement for Hydrochlorination Process among Xuzhou Southeast Polysilicon Materials Development & Research Co., Ltd., Hualu Engineering & Technology Co., Ltd. and Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. dated December 20, 2007
10.4	(2)	English Translation of Sino-Foreign Joint Venture Contract between Sun Far East Limited and Zibo Bao Kai Trading Co., Ltd. dated January 11, 2008
10.5	(1)(2)	English Translation of Polysilicon Supply Agreement between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Jiangsu Linyang Solarfun Co., Ltd. dated June 22, 2008
10.6	(1)	General Terms and Conditions of Contract and Appendices between Jiangsu Zhongneng Photovoltaic Industry Development Co., Ltd. and MSA Apparatus Construction for Chemical Equipment Ltd. dated June 27, 2007 and Supplemental Agreement to General Terms and Conditions of Contract and Appendices among Jiangsu Zhongneng Photovoltaic Industry Development Co., Ltd., MSA Apparatus Construction for Chemical Equipment Ltd. and Chemical Equipment Engineering Limited dated January 17, 2008
10.7	(1)	Sales Contract between Jiangsu Zhongneng Photovoltaic Industry Development Co., Ltd. and Tap Mate Limited dated February 4, 2008 and the related Guarantee Agreement among Jiangsu Zhongneng Photovoltaic Industry Development Co., Ltd., Tap Mate Limited and Shanghai Morimatsu Chemical Equipment Engineering Co., Ltd., dated February 4, 2008

II-6

Exhibits	Description
10.8(1)(2)	Sales Contract between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Xi’an Nuclear Equipment Co., Ltd dated January 10, 2008
10.9(1)(2)	Sales Contract between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Kaiyuan Chemical Industry Machine Co., Ltd. dated January 29, 2008
10.10(1)	English Translation of Polysilicon Supply Agreement between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Changzhou Trina Solar Energy Co., Ltd. dated March 29, 2008, the Supplementary Agreement to the Polysilicon Supply Agreement dated August 19, 2008 and the Amendment to the Supplementary Agreement to the Polysilicon Supply Agreement dated September 19, 2008
10.11(1)(2)	English Translation of Wafer Supply Agreement between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Jing Ao Solar Co., Ltd. dated April 7, 2008 and Supplementary Contract I to the Wafer Supply Agreement dated August 17, 2008
10.12(1)(2)	English Translation of Wafer Supply Contract between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Jiangsu AIDE Solar Energy Technology Co., Ltd. dated April 16, 2008
10.13(1)(2)	English Translation of Commissioned Processing Contract between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Changzhou Huasheng Hengneng Optoelectronics Co., Ltd. dated March 21, 2008
10.14(2)	English Translation of Agency Agreement between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Shanghai Creative dated May 12, 2006
10.15(2)	English Translation of Consultancy Agreement between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Shanghai Creative dated July 23, 2006
10.16(2)	English Translation of Office Leasing Agreement between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Shanghai Yueyuan Equipment and Machinery Co., Ltd. dated January 4, 2007
10.17(2)	English Translation of Entrusted Loan Trust Agreement between Taicang Harbour Golden Concord Electric-Power Generation Co., Ltd. and Bank of Jiangsu, Xuanwu Branch dated November 22, 2007
10.18(2)	English Translation of Entrusted Loan Facility Agreement between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Bank of Jiangsu, Xuanwu Branch dated November 22, 2007
10.19(1)(2)	Wafer Supply Agreement between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Solarcell S.p.A. dated June 1, 2008
10.20	Share Purchase Agreement among Happy Genius Holdings Limited, Mandra Silicon Limited and GCL Silicon Technology Holdings Inc. dated July 18, 2008 and Amended Share Purchase Agreement among Happy Genius Holdings Limited, Mandra Silicon Limited and GCL Silicon Technology Holdings Inc. dated September 30, 2008
10.21(1)(2)	Wire Saw Agreement between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Meyer Burger AG dated June 27, 2008
10.22(1)(2)	Wire Saw Agreement, between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Miyamoto Trading Limited and the related Guarantee Agreement among Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., Nippei Toyama Corporation and Miyamoto Trading Limited, each dated June 27, 2008
10.23(2)	2008 Restricted Share Compensation Plan adopted by GCL Silicon Technology Holdings Inc. pursuant to a board resolution dated July 18, 2008 and a shareholder resolution dated July 18, 2008
10.24(2)	Form of Exchange Agreement among GCL Silicon Technology Holdings Inc., Happy Genius Holdings Limited and the EB Holders specified in Schedule I to such Agreement

II-7

Exhibits		Description
10.25	(1)(2)	English Translation of Solar-grade Polysilicon Supply Agreement by and between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and JA Solar Technology Yangzhou Co., Ltd. dated August 17, 2008
10.26	(1)(2)	English Translation of Solar-grade Polysilicon Supply Agreement by and between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Suzhou CSI Solar Power Technology Co., Ltd. dated August 20, 2008
10.27	(1)(2)	English Translation of Solar-grade Wafer Supply Agreement by and between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Suzhou CSI Solar Power Technology Co., Ltd. dated August 20, 2008
10.28	(1)(2)	English Translation of Solar-grade Polysilicon Supply Agreement by and between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Wuxi Suntech Power Co., Ltd. dated August 21, 2008
10.29	(1)(2)	English Translation of Solar-grade Polysilicon and Wafer Supply Agreement by and between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. and Wuxi Suntech Power Co., Ltd. dated August 21, 2008
10.30	(1)	English Translation of the Sales Contract for reactors by and between Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV Inner Mongolia Xilinguole Zhongneng Polysilicon Co., Ltd. (in the process of formation) and Shanghai Morimatsu Mixing Technology Engineering Co., Ltd. dated September 12, 2008
21.1	(2)	Subsidiaries of the Registrant
23.1		Consent of Deloitte Touche Tohmatsu, an Independent Registered Public Accounting Firm
23.2	(2)	Consent of Appleby (included in Exhibit 5.1)
23.3	(2)	Consent of Grandall Legal Group (included in Exhibit 99.5)
23.4	(2)	Consent of Jones Lang LaSalle Sallmans Limited
24.1		Powers of Attorney
99.1	(2)	Code of Business Conduct and Ethics
99.2	(2)	Consent of David Tang
99.3	(2)	Consent of John Koh
99.4	(2)	Consent of Otmar Haas
99.5	(2)	Opinion of Grandall Legal Group regarding certain PRC legal matters

* To be provided by amendment

⁽¹⁾ Certain confidential portions of this exhibit are omitted by means of redacting a portion of the text. A request for confidential treatment of this exhibit has been submitted to the Commission under separate cover.

⁽²⁾ Previously filed

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EX-4.15

Exhibit 4.15

GCL SILICON TECHNOLOGY HOLDINGS INC.

AND

JPMORGAN CHASE BANK, N.A. as Depositary

AND

OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES

Deposit Agreement

Dated as of             , 2008

TABLE OF CONTENTS

ARTICLE 1. DEFINITIONS	1
SECTION 1.01 American Depositary Shares	1
SECTION 1.02 Commission	2
SECTION 1.03 Company	2
SECTION 1.04 Custodian	2
SECTION 1.05 Deliver; Surrender	2
SECTION 1.06 Deposit Agreement	2
SECTION 1.07 Depositary; Depositary’s Office	3
SECTION 1.08 Deposited Securities	3
SECTION 1.09 Dollars	3
SECTION 1.10 DTC	3
SECTION 1.11 Foreign Registrar	3
SECTION 1.12 Holder	3
SECTION 1.13 Owner	3
SECTION 1.14 Receipts	3
SECTION 1.15 Registrar	4
SECTION 1.16 Restricted Securities	4
SECTION 1.17 Securities Act of 1933	4
SECTION 1.18 Shares	4
ARTICLE 2. FORM OF RECEIPTS, DEPOSIT OF SHARES, DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES	4
SECTION 2.01 Form of Receipts; Registration and Transferability of American Depositary Shares	4
SECTION 2.02 Deposit of Shares	5
SECTION 2.03 Delivery of American Depositary Shares	6
SECTION 2.04 Registration of Transfer of American Depositary Shares; Combination and Split-up of Receipts; Interchange of Certificated and Uncertificated American Depositary Shares	6
SECTION 2.05 Surrender of American Depositary Shares and Withdrawal of Deposited Securities	7
SECTION 2.06 Limitations on Delivery, Transfer and Surrender of American Depositary Shares	8
SECTION 2.07 Lost Receipts, etc.	9
SECTION 2.08 Cancellation and Destruction of Surrendered Receipts	9
SECTION 2.09 Pre-Release of American Depositary Shares	9
SECTION 2.10 DTC Direct Registration System and Profile Modification System	10
ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES	10
SECTION 3.01 Filing Proofs, Certificates and Other Information	10

i

SECTION 3.02 Liability of Owner for Taxes	11
SECTION 3.03 Warranties on Deposit of Shares	11
ARTICLE 4. THE DEPOSITED SECURITIES	11
SECTION 4.01 Cash Distributions	11
SECTION 4.02 Distributions Other Than Cash, Shares or Rights	12
SECTION 4.03 Distributions in Shares	12
SECTION 4.04 Rights	13
SECTION 4.05 Conversion of Foreign Currency	14
SECTION 4.06 Fixing of Record Date	15
SECTION 4.07 Voting of Deposited Securities	15
SECTION 4.08 Changes Affecting Deposited Securities	16
SECTION 4.09 Reports	16
SECTION 4.10 Lists of Owners	16
SECTION 4.11 Withholding	17
ARTICLE 5. THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY	17
SECTION 5.01 Maintenance of Office and Transfer Books by the Depositary	17
SECTION 5.02 Prevention or Delay in Performance by the Depositary or the Company	18
SECTION 5.03 Obligations of the Depositary, the Custodian and the Company	18
SECTION 5.04 Resignation and Removal of the Depositary	19
SECTION 5.05 The Custodians	20
SECTION 5.06 Notices and Reports	20
SECTION 5.07 Distribution of Additional Shares, Rights, etc.	21
SECTION 5.08 Indemnification	21
SECTION 5.09 Charges of Depositary	23
SECTION 5.10 Retention of Depositary Documents	23
SECTION 5.11 Exclusivity	24
SECTION 5.12 List of Restricted Securities Owners	24
ARTICLE 6. AMENDMENT AND TERMINATION	24
SECTION 6.01 Amendment	24
SECTION 6.02 Termination	24
ARTICLE 7. MISCELLANEOUS	25
SECTION 7.01 Counterparts	25
SECTION 7.02 No Third Party Beneficiaries	25
SECTION 7.03 Severability	26

ii

SECTION 7.04 Owners and Holders as Parties; Binding Effect	26
SECTION 7.05 Notices	26
SECTION 7.06 Submission to Jurisdiction; Appointment of Agent for Service of Process; Jury Trial Waiver	27
SECTION 7.07 Waiver of Immunities	27
SECTION 7.08 Governing Law	27

iii

DEPOSIT AGREEMENT

DEPOSIT AGREEMENT dated as of     , 2008, among GCL SILICON TECHNOLOGY HOLDINGS INC., a company incorporated under the laws of the Cayman Islands (herein called the Company), JPMORGAN CHASE BANK, N.A., a national banking association organized under the laws of the United States (herein called the Depositary), and all Owners and holders from time to time of American Depositary Shares issued hereunder.

W I T N E S S E T H:

WHEREAS, the Company desires to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of Shares (as hereinafter defined) of the Company from time to time with the Depositary or with the Custodian (as hereinafter defined) as agent of the Depositary for the purposes set forth in this Deposit Agreement, for the creation of American Depositary Shares representing the Shares so deposited and for the execution and delivery of American Depositary Receipts evidencing the American Depositary Shares; and

WHEREAS, the American Depositary Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement;

NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties hereto as follows:

ARTICLE 1.

DEFINITIONS

The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Deposit Agreement:

SECTION 1.01 American Depositary Shares.

The term “American Depositary Shares” shall mean the securities created under this Deposit Agreement representing rights with respect to the Deposited Securities. American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to this Deposit Agreement shall be the prospectus required under the Securities Act of 1933 for sales of both certificated and uncertificated American Depositary Shares. Except for those provisions of this Deposit Agreement that refer specifically to Receipts, all the provisions of this Deposit Agreement shall apply to both certificated and uncertificated American Depositary Shares. Each American Depositary Share shall represent the number of Shares specified in Exhibit A to this Deposit Agreement, until there shall occur a distribution upon Deposited Securities covered by Section 4.03 or a change in Deposited Securities covered by Section 4.08 with respect to which additional American Depositary Shares are not delivered, and thereafter American Depositary Shares shall represent the amount of Shares or Deposited Securities specified in such Sections.

1

SECTION 1.02 Commission.

The term “Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.

SECTION 1.03 Company.

The term “Company” shall mean GCL Silicon Technology Holdings Inc, a company, organized under the laws of the Cayman Islands, and its successors.

SECTION 1.04 Custodian.

The term “Custodian” shall mean the China office of Hong Kong and Shanghai Banking Corp., as agent of the Depositary for the purposes of this Deposit Agreement, and any other firm or corporation which may hereafter be appointed by the Depositary pursuant to the terms of Section 5.05, as substitute or additional custodian or custodians hereunder, as the context shall require and shall also mean all of them collectively.

SECTION 1.05 Deliver; Surrender.

(a) The term “deliver”, or its noun form, when used with respect to Shares or other Deposited Securities, shall mean (i) book-entry transfer of those Shares or other Deposited Securities to an account maintained by an institution authorized under applicable law to effect transfers of such securities designated by the person entitled to that delivery or (ii) physical transfer of certificates evidencing those Shares or other Deposited Securities registered in the name of, or duly endorsed or accompanied by proper instruments of transfer to, the person entitled to that delivery.

(b) The term “deliver”, or its noun form, when used with respect to American Depositary Shares, shall mean (i) book-entry transfer of American Depositary Shares to an account at DTC designated by the person entitled to such delivery evidencing American Depositary Shares registered in the name requested by that person (ii) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (iii) if requested by the person entitled to such delivery, delivery at the Depositary’s Office to the person entitled to such delivery of one or more Receipts.

(c) The term “surrender”, when used with respect to American Depositary Shares, shall mean (i) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (ii) delivery to the Depositary at the Depositary’s Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (iii) surrender to the Depositary at the Depositary’s Office of one or more Receipts evidencing American Depositary Shares.

SECTION 1.06 Deposit Agreement.

The term “Deposit Agreement” shall mean this Agreement, as the same may be amended from time to time in accordance with the provisions hereof.

2

SECTION 1.07 Depositary; Depositary’s Office.

The term “Depositary” shall mean JPMorgan Chase Bank, N.A., a national banking association organized under the laws of the United States, and any successor as depositary hereunder. The term “Depositary’s Office”, when used with respect to the Depositary, shall mean the office of the Depositary, which at the date of this Agreement is 4 New York Plaza, New York, New York 10004.

SECTION 1.08 Deposited Securities.

The term “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement, including without limitation Shares that have not been successfully delivered upon surrender of American Depositary Shares, and any and all other securities, property and cash received by the Depositary or the Custodian in respect thereof and at such time held under this Deposit Agreement, subject as to cash to the provisions of Section 4.05.

SECTION 1.09 Dollars.

The term “Dollars” shall mean United States dollars.

SECTION 1.10 DTC.

The term “DTC” shall mean The Depository Trust Company or its successor.

SECTION 1.11 Foreign Registrar.

The term “Foreign Registrar” shall mean the entity that presently carries out the duties of registrar for the Shares or any successor as registrar for the Shares and any other agent of the Company for the transfer and registration of Shares, including without limitation any securities depository for the Shares.

SECTION 1.12 Holder.

The term “Holder” shall mean any person holding a Receipt or a security entitlement or other interest in American Depositary Shares, whether for its own account or for the account of another person, but that is not the Owner of that Receipt or those American Depositary Shares.

SECTION 1.13 Owner.

The term “Owner” shall mean the person in whose name American Depositary Shares are registered on the books of the Depositary maintained for such purpose.

SECTION 1.14 Receipts.

The term “Receipts” shall mean the American Depositary Receipts issued hereunder evidencing certificated American Depositary Shares, as the same may be amended from time to time in accordance with the provisions hereof.

3

SECTION 1.15 Registrar.

The term “Registrar” shall mean any bank or trust company having an office in the Borough of Manhattan, The City of New York, that is appointed by the Depositary to register American Depositary Shares and transfers of American Depositary Shares as herein provided.

SECTION 1.16 Restricted Securities.

The term “Restricted Securities” shall mean Shares, or American Depositary Shares representing Shares, that are acquired directly or indirectly from the Company or its affiliates (as defined in Rule 144 under the Securities Act of 1933) in a transaction or chain of transactions not involving any public offering, or that are subject to resale limitations under Regulation D under the Securities Act of 1933 or both, or which are held by an officer, director (or persons performing similar functions) or other affiliate of the Company, or that would require registration under the Securities Act of 1933 in connection with the offer and sale thereof in the United States, or that are subject to other restrictions on sale or deposit under the laws of the United States or the Cayman Islands, or under a shareholder agreement or the articles of association or similar document of the Company.

SECTION 1.17 Securities Act of 1933.

The term “Securities Act of 1933” shall mean the United States Securities Act of 1933, as from time to time amended.

SECTION 1.18 Shares.

The term “Shares” shall mean ordinary shares of the Company, that are validly issued and outstanding and fully paid, nonassessable and that were not issued in violation of any pre-emptive or similar rights of the holders of outstanding securities of the Company; provided, however, that, if there shall occur any change in nominal value, a split-up or consolidation or any other reclassification or, upon the occurrence of an event described in Section 4.08, an exchange or conversion in respect of the Shares of the Company, the term “Shares” shall thereafter also mean the successor securities resulting from such change in nominal value, split-up or consolidation or such other reclassification or such exchange or conversion.

ARTICLE 2.

FORM OF RECEIPTS, DEPOSIT OF SHARES,

DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES

SECTION 2.01 Form of Receipts; Registration and Transferability of American Depositary Shares.

Definitive Receipts shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been (i) executed by the Depositary by the manual signature of a duly authorized officer of the Depositary or (ii) executed by the facsimile signature of a duly authorized officer of the Depositary and countersigned by the manual signature of a duly authorized signatory of the Depositary or a Registrar. The

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Depositary shall maintain books on which (x) each Receipt so executed and delivered as hereinafter provided and the transfer of each such Receipt shall be registered and (y) all American Depositary Shares delivered as hereinafter provided and all registrations of transfer of American Depositary Shares shall be registered. A Receipt bearing the facsimile signature of a person that was at any time a proper officer of the Depositary shall, subject to the other provisions of this paragraph, bind the Depositary, notwithstanding that such person was not a proper officer of the Depositary on the date of issuance of that Receipt.

The Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law or regulations thereunder or with the rules and regulations of any securities exchange upon which American Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date of issuance of the underlying Deposited Securities or otherwise.

American Depositary Shares evidenced by a Receipt, when properly endorsed or accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under the laws of New York. American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of New York. The Depositary, notwithstanding any notice to the contrary, may treat the Owner of American Depositary Shares as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes.

SECTION 2.02 Deposit of Shares.

Subject to the terms and conditions of this Deposit Agreement, Shares or evidence of rights to receive Shares may be deposited by delivery thereof to any Custodian hereunder, accompanied by any appropriate instruments or instructions for transfer, or endorsement, in form satisfactory to the Custodian, together with all such certifications as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement, and, if the Depositary requires, together with a written order directing the Depositary to deliver to, or upon the written order of, the person or persons stated in such order, the number of American Depositary Shares representing such deposit.

No Share shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in the Cayman Islands which is then performing the function of the regulation of currency exchange. If required by the Depositary, Shares presented for deposit at any time, whether or not the transfer books of the Company or the Foreign Registrar, if applicable, are closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Shares or to receive other property which any person in whose name the Shares are or have been recorded may thereafter receive upon or in respect of such deposited Shares, or in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.

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At the request and risk and expense of any person proposing to deposit Shares, and for the account of such person, the Depositary may receive certificates for Shares to be deposited, together with the other instruments herein specified, for the purpose of forwarding such Share certificates to the Custodian for deposit hereunder.

Upon each delivery to a Custodian of a certificate or certificates for Shares to be deposited hereunder, together with the other documents specified above, such Custodian shall, as soon as transfer and recordation can be accomplished, present such certificate or certificates to the Company or the Foreign Registrar, if applicable, for transfer and recordation of the Shares being deposited in the name of the Depositary or its nominee or such Custodian or its nominee.

Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or at such other place or places as the Depositary shall determine.

SECTION 2.03 Delivery of American Depositary Shares.

Upon receipt by any Custodian of any deposit pursuant to Section 2.02 hereunder, together with the other documents required as specified above, such Custodian shall notify the Depositary of such deposit and the person or persons to whom or upon whose written order American Depositary Shares are deliverable in respect thereof and the number of American Depositary Shares to be so delivered. Such notification shall be made by letter or, at the request, risk and expense of the person making the deposit, by cable, telex or facsimile transmission (and in addition, if the transfer books of the Company or the Foreign Registrar, if applicable, are open, the Depositary may in its sole discretion require a proper acknowledgment or other evidence from the Company or the Foreign Registrar that any Deposited Securities have been recorded upon the books of the Company or the Foreign Registrar, if applicable, in the name of the Depositary or its nominee or such Custodian or its nominee). Upon receiving such notice from such Custodian, or upon the receipt of Shares or evidence of the right to receive Shares by the Depositary, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall deliver, to or upon the order of the person or persons entitled thereto, the number of American Depositary Shares issuable in respect of that deposit, but only upon payment to the Depositary of the fees and expenses of the Depositary for the delivery of such American Depositary Shares as provided in Section 5.09, and of all taxes and governmental charges and fees payable in connection with such deposit and the transfer of the Deposited Securities.

SECTION 2.04 Registration of Transfer of American Depositary Shares; Combination and Split-up of Receipts; Interchange of Certificated and Uncertificated American Depositary Shares.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register transfers of American Depositary Shares on its transfer books from time to time, upon (i) in the case of certificated American Depositary Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner in person or by a duly authorized attorney, properly endorsed or

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accompanied by proper instruments of transfer or (ii) in the case of uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10), and, in either case, duly stamped as may be required by the laws of the State of New York and of the United States of America. Thereupon the Depositary shall deliver those American Depositary Shares to or upon the order of the person entitled thereto.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.

The Depositary, upon surrender of a Receipt for the purpose of exchanging for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American Depositary Shares, shall execute and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

The Depositary, may appoint one or more co-transfer agents for the purpose of effecting registration of transfers of American Depositary Shares and combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Owners or persons entitled to American Depositary Shares and will be entitled to protection and indemnity to the same extent as the Depositary. The Depositary shall notify the Company in writing of any co-transfer agent that it appoints under this section 2.04.

SECTION 2.05 Surrender of American Depositary Shares and Withdrawal of Deposited Securities.

Upon surrender at the Depositary’s Office of American Depositary Shares for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of the fee of the Depositary for the surrender of American Depositary Shares as provided in Section 5.09 and payment of all taxes and governmental charges payable in connection with such surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of this Deposit Agreement, the Owner of those American Depositary Shares shall be entitled to delivery, to him or as instructed, of the amount of Deposited Securities at the time represented by those American Depositary Shares. Such delivery shall be made, as hereinafter provided, without unreasonable delay.

A Receipt surrendered for such purposes may be required by the Depositary to be properly endorsed in blank or accompanied by proper instruments of transfer in blank. The Depositary may require the surrendering Owner to execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be delivered to or upon the written order of a person or persons designated in such order. Thereupon the Depositary shall direct the Custodian to deliver at the office of such

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Custodian, subject to Sections 2.06, 3.01 and 3.02 and to the other terms and conditions of this Deposit Agreement, to or upon the written order of the person or persons designated in the order delivered to the Depositary as above provided, the amount of Deposited Securities represented by the surrendered American Depositary Shares, except that the Depositary may make delivery to such person or persons at the Depositary’s Office of any dividends or distributions with respect to the Deposited Securities represented by those American Depositary Shares, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.

At the request, risk and expense of any Owner so surrendering American Depositary Shares, and for the account of such Owner, the Depositary shall direct the Custodian to forward any cash or other property (other than rights) comprising, and forward a certificate or certificates, if applicable, and other proper documents of title for, the Deposited Securities represented by the American Depositary Shares (evidenced by such Receipt, if applicable) to the Depositary for delivery at the Depositary’s Office. Such direction shall be given by letter or, at the request, risk and expense of such Owner, by cable, telex or facsimile transmission.

SECTION 2.06 Limitations on Delivery, Transfer and Surrender of American Depositary Shares.

As a condition precedent to the delivery, registration of transfer, or surrender of any American Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, Custodian or Registrar may require payment from the depositor of Shares or the presenter of the Receipt or instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees as herein provided, may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any regulations the Depositary may establish consistent with the provisions of this Deposit Agreement, including, without limitation, this Section 2.06.

The delivery of American Depositary Shares against deposit of Shares generally or against deposit of particular Shares may be suspended, or the transfer of American Depositary Shares in particular instances may be refused, or the registration of transfer of outstanding American Depositary Shares generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of this Deposit Agreement, or for any other reason, subject to the provisions of the following sentence. Notwithstanding anything to the contrary in this Deposit Agreement, the surrender of outstanding American Depositary Shares and withdrawal of Deposited Securities may not be suspended subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the Foreign Registrar, if applicable, or the deposit of Shares in connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American Depositary Shares or to the withdrawal of the Deposited Securities. Without limitation of the foregoing, the

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Depositary shall not knowingly accept for deposit under this Deposit Agreement any Shares which would be required to be registered under the provisions of the Securities Act of 1933 for public offer and sale in the United States, unless a registration statement is in effect as to such Shares for such offer and sale.

SECTION 2.07 Lost Receipts, etc.

In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary shall execute and deliver a new Receipt of like tenor in exchange and substitution for such mutilated Receipt upon cancellation thereof, or in lieu of and in substitution for such destroyed, lost or stolen Receipt. Before the Depositary shall execute and deliver a new Receipt in substitution for a destroyed, lost or stolen Receipt, the Owner thereof shall have (a) filed with the Depositary (i) a request for such execution and delivery before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other reasonable requirements imposed by the Depositary.

SECTION 2.08 Cancellation and Destruction of Surrendered Receipts.

All Receipts surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized to destroy Receipts so cancelled.

SECTION 2.09 Pre-Release of American Depositary Shares.

Notwithstanding Section 2.03 hereof, the Depositary may deliver American Depositary Shares prior to the receipt of Shares pursuant to Section 2.02 (a “Pre-Release”). The Depositary may, pursuant to Section 2.05, deliver Shares upon the surrender of American Depositary Shares that have been Pre-Released, whether or not such cancellation is prior to the termination of such Pre-Release or the Depositary knows that such American Depositary Shares have been Pre-Released. The Depositary may receive American Depositary Shares in lieu of Shares in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation from the person to whom American Depositary Shares or Shares are to be delivered, that such person, or its customer, owns the Shares or American Depositary Shares to be remitted, as the case may be, (b) at all times fully collateralized with cash, U.S. government securities or such other collateral as the Depositary determines, in good faith, will provide substantially similar liquidity and security, (c) terminable by the Depositary on not more than five (5) business days notice, and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The number of Shares represented by American Depositary Shares which are outstanding at any time as a result of Pre-Releases will not normally exceed thirty percent (30%) of the Shares deposited hereunder; provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate, and may, with the prior written consent of the Company, change such limit for purposes of general application.

The Depositary may retain for its own account any compensation received by it in connection with the foregoing.

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SECTION 2.10 DTC Direct Registration System and Profile Modification System

(a) Notwithstanding the provisions of Section 2.04, the parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.

(b) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in subsection (a) has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with this Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

ARTICLE 3.

CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS

OF AMERICAN DEPOSITARY SHARES

SECTION 3.01 Filing Proofs, Certificates and Other Information.

Any person presenting Shares for deposit or any Owner or holder may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper. The Depositary may withhold the delivery or registration of transfer of American Depositary Shares or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. If requested in writing, the Depositary shall, as promptly as practicable, provide the Company, at the expense of the Company, with copies of any such proofs, certificates or other information it receives pursuant to this section, unless prohibited by applicable law.

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SECTION 3.02 Liability of Owner for Taxes.

If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to any American Depositary Shares or any Deposited Securities represented by any American Depositary Shares, such tax or other governmental charge shall be payable by the Owner of such American Depositary Shares to the Depositary. The Depositary may refuse to register any transfer of those American Depositary Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner thereof any part or all of the Deposited Securities represented by those American Depositary Shares, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner of such American Depositary Shares shall remain liable for any deficiency.

SECTION 3.03 Warranties on Deposit of Shares.

Every person depositing Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that such Shares and each certificate therefor, if applicable, are validly issued, fully paid, nonassessable and free of any preemptive rights of the holders of outstanding Shares and that the person making such deposit is duly authorized so to do. Every such person shall also be deemed to represent that the deposit of such Shares and the sale of American Depositary Shares representing such Shares by that person are not restricted under the Securities Act of 1933. Such representations and warranties shall survive the deposit of Shares and delivery of American Depositary Shares.

ARTICLE 4.

THE DEPOSITED SECURITIES

SECTION 4.01 Cash Distributions.

Whenever the Depositary shall receive any cash dividend or other cash distribution on any Deposited Securities, the Depositary shall, subject to the provisions of Section 4.05, convert such dividend or distribution into Dollars and shall distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09) to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively; provided, however, that in the event that the Company or the Depositary shall be required to withhold and does withhold from such cash dividend or such other cash distribution an amount on account of taxes or other governmental charges, the amount distributed to the Owner of the American Depositary Shares representing such Deposited Securities shall be reduced accordingly. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Owner a fraction of one cent. Any such fractional amounts shall be rounded to the nearest whole cent and so distributed to Owners entitled thereto. The Company or its agent will remit to the appropriate governmental agencies in the Cayman Islands and the People’s Republic of China all amounts withheld and owing to such agencies. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies, and the Depositary or the Company or its agent may file any such reports necessary to obtain benefits under the applicable tax treaties for the Owners.

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SECTION 4.02 Distributions Other Than Cash, Shares or Rights.

Subject to the provisions of Sections 4.11 and 5.09, whenever the Depositary shall receive any distribution other than a distribution described in Section 4.01, 4.03 or 4.04, the Depositary shall cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary or any taxes or other governmental charges, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason (including, but not limited to, any requirement that the Company or the Depositary withhold an amount on account of taxes or other governmental charges or that such securities must be registered under the Securities Act of 1933 in order to be distributed to Owners or holders) the Depositary deems such distribution not to be feasible, the Depositary may adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09) shall be distributed by the Depositary to the Owners entitled thereto, all in the manner and subject to the conditions described in Section 4.01. The Depositary may sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this Section 4.02 that is sufficient to pay it fees and expenses in respect of that distribution.

SECTION 4.03 Distributions in Shares.

If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Depositary may deliver to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, an aggregate number of American Depositary Shares representing the amount of Shares received as such dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Shares and after deduction or upon issuance of American Depositary Shares, including the withholding of any tax or other governmental charge as provided in Section 4.11 and the payment of the fees and expenses of the Depositary as provided in Section 5.09 (and the Depositary may sell, by public or private sale, an amount of the Shares received sufficient to pay its fees and expenses in respect of that distribution). The Depositary may withhold any such delivery of American Depositary Shares if it has not received satisfactory assurances from the Company that such distribution does not require registration under the Securities Act of 1933. In lieu of delivering fractional American Depositary Shares in any such case, the Depositary shall sell the amount of Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01. If additional American Depositary Shares are not so delivered, each American Depositary Share shall thenceforth also represent the additional Shares distributed upon the Deposited Securities represented thereby.

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SECTION 4.04 Rights.

In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Shares or any rights of any other nature, the Depositary shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary determines in its discretion that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems appropriate.

In circumstances in which rights would otherwise not be distributed, if an Owner requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.

If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Shares, and the Company shall cause the Shares so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Shares so purchased to be deposited pursuant to Section 2.02 of this Deposit Agreement, and shall, pursuant to Section 2.03 of this Deposit Agreement, deliver American Depositary Shares to such Owner. In the case of a distribution pursuant to the second paragraph of this Section, such deposit shall be made, and Deposited Securities shall be delivered, under depositary arrangements which provide for issuance of Deposited Securities subject to the appropriate restrictions on sale, deposit, cancellation, and transfer under applicable United States laws.

If the Depositary determines that it is not lawful and feasible to make such rights available to all or certain Owners, it may sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of this Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any American Depositary Shares or otherwise.

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The Depositary will not offer rights to Owners unless both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act of 1933 with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in this Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act of 1933, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.

The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.

SECTION 4.05 Conversion of Foreign Currency.

Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted by sale or in any other manner that it may determine such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants and/or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09.

If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary may file such application for approval or license, if any, as it may deem desirable.

If at any time the Depositary shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, or if there are foreign exchange controls in place that prohibit such conversion, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

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If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.

SECTION 4.06 Fixing of Record Date.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date, which date shall be the same date, to the extent practicable, as the record date for the Deposited Securities or if different, as close thereto as practicable (a) for the determination of the Owners who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof, (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) responsible for any fee or charge assessed by the Depositary pursuant to this Deposit Agreement, (b) on or after which each American Depositary Share will represent the changed number of Shares or (c) for any other matter. Subject to the provisions of Sections 4.01 through 4.05 and to the other terms and conditions of this Deposit Agreement, the Owners on such record date shall be entitled, as the case may be, to receive the amount distributable by the Depositary with respect to such dividend or other distribution or such rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively and to give voting instructions and to act in respect of any other such matter.

SECTION 4.07 Voting of Deposited Securities.

Upon receipt of notice of any meeting of holders of Shares or other Deposited Securities, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter, mail to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in such notice of meeting received by the Depositary from the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of law of the Cayman Islands and of the articles of association or similar document of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Shares or other Deposited Securities represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose, the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the amount of Shares or other Deposited Securities represented by the American Depositary Shares in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Shares or other Deposited Securities, other than in accordance with such instructions.

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There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the instruction cutoff date to ensure that the Depositary will vote the Shares or Deposited Securities in accordance with the provisions set forth in the preceding paragraph.

In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company will request the Depositary to act under this Section 4.07, the Company shall give the Depositary notice of any such meeting and details concerning the matters to be voted upon not less than 45 days prior to the meeting date.

SECTION 4.08 Changes Affecting Deposited Securities.

Upon any change in nominal value, change in par value, split-up, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation or sale of assets affecting the Company or to which it is a party, or upon the redemption or cancellation by the Company of the Deposited Securities, any securities, cash or property which shall be received by the Depositary or a Custodian in exchange for, in conversion of, in lieu of or in respect of Deposited Securities, shall be treated as new Deposited Securities under this Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.

SECTION 4.09 Reports.

The Depositary shall make available for inspection by Owners at the Depositary’s Office any reports and communications, including any proxy solicitation material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary shall also, upon written request by the Company, send to the Owners copies of such reports when furnished by the Company pursuant to Section 5.06. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English, to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

SECTION 4.10 Lists of Owners.

Promptly upon request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares by all persons in whose names American Depositary Shares are registered on the books of the Depositary.

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SECTION 4.11 Withholding.

In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes or charges and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively. The Depositary will forward to the Company or its agent, at the expense of the Company, such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies, and the Company or its agent may file any such reports necessary to obtain benefits under the applicable tax treaties for the Owners of Receipts.

ARTICLE 5.

THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY

SECTION 5.01 Maintenance of Office and Transfer Books by the Depositary.

Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain facilities for the execution and delivery, registration, registration of transfers and surrender of Receipts in accordance with the provisions of this Deposit Agreement.

The Depositary shall keep books for the registration of American Depositary Shares and transfers of American Depositary Shares which at all reasonable times shall be open for inspection by the Owners and the Company, provided that such inspection shall not be for the purpose of communicating with Owners in the interest of a business or object other than the business of the Company or a matter related to this Deposit Agreement or the American Depositary Shares.

The Depositary may close the transfer books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder or at the reasonable written request of the Company.

If any American Depositary Shares are listed on one or more stock exchanges in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registry of such American Depositary Shares in accordance with any requirements of such exchange or exchanges. The Depositary shall notify the Company in writing of any Registrar or co-registrar that it appoints under this section 5.01.

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SECTION 5.02 Prevention or Delay in Performance by the Depositary or the Company.

Neither the Depositary nor the Company nor any of their respective directors, officers, employees, agents or affiliates shall incur any liability to any Owner or Holder (i) if by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by reason of any provision, present or future, of the articles of association or similar document of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from, or be subject to any civil or criminal penalty on account of, doing or performing any act or thing which by the terms of this Deposit Agreement or the Deposited Securities it is provided shall be done or performed, (ii) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of this Deposit Agreement it is provided shall or may be done or performed, (iii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement, (iv) for the inability of any Owner or holder to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Owners or holders, or (v) for any indirect, special, consequential or punitive damages. Where, by the terms of a distribution pursuant to Section 4.01, 4.02, or 4.03, or an offering or distribution pursuant to Section 4.04, or for any other reason, such distribution or offering may not be made available to Owners, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse.

SECTION 5.03 Obligations of the Depositary, the Custodian and the Company.

The Company assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Holder, except that the Company agrees to perform its obligations specifically set forth in this Deposit Agreement without gross negligence or bad faith.

The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Holder (including, without limitation, liability with respect to the validity or worth of the Deposited Securities), except that the Depositary agrees to perform its obligations specifically set forth in this Deposit Agreement without gross negligence or bad faith.

Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the American Depositary Shares on behalf of any Owner or Holder or any other person.

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Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Owner or any other person believed by it in good faith to be competent to give such advice or information.

The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without gross negligence or bad faith while it acted as Depositary.

The Depositary shall not be liable for the acts or omissions made by any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of Deposited Securities or otherwise.

The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast (provided that any such action or nonaction is in good faith) or the effect of any such vote.

Notwithstanding anything to the contrary set forth in the Deposit Agreement or any Receipt, the Depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the Deposit Agreement, any Holder(s) or Owner(s), any Receipt or Receipts or otherwise related hereto to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators.

No disclaimer of liability under the Securities Act of 1933 is intended by any provision of this Deposit Agreement.

SECTION 5.04 Resignation and Removal of the Depositary.

The Depositary may at any time resign as Depositary hereunder by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

The Depositary may at any time be removed by the Company by 120 days prior written notice of such removal, to become effective upon the later of (i) the 120^th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its reasonable efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully

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vested with all the rights, powers, duties and obligations of its predecessor; but such predecessor, nevertheless, upon payment of all sums due it and on the written request of the Company shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Deposited Securities to such successor and shall deliver to such successor a list of the Owners of all outstanding Receipts. Any such successor depositary shall promptly mail notice of its appointment to the Owners.

Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

SECTION 5.05 The Custodians.

The Custodian shall be subject at all times and in all respects to the directions of the Depositary and shall be responsible solely to it. Any Custodian may resign and be discharged from its duties hereunder by notice of such resignation delivered to the Depositary at least 30 days prior to the date on which such resignation is to become effective. If upon such resignation there shall be no Custodian acting hereunder, the Depositary shall, promptly after receiving such notice, appoint a substitute custodian or custodians, each of which shall thereafter be a Custodian hereunder. The Depositary in its discretion may appoint a substitute or additional custodian or custodians, each of which shall thereafter be one of the Custodians hereunder. Upon demand of the Depositary any Custodian shall deliver such of the Deposited Securities held by it as are requested of it to any other Custodian or such substitute or additional custodian or custodians. Each such substitute or additional custodian shall deliver to the Depositary, forthwith upon its appointment, an acceptance of such appointment satisfactory in form and substance to the Depositary.

Upon the appointment of any successor depositary hereunder, each Custodian then acting hereunder shall forthwith become, without any further act or writing, the agent hereunder of such successor depositary and the appointment of such successor depositary shall in no way impair the authority of each Custodian hereunder; but the successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to such Custodian all such instruments as may be proper to give to such Custodian full and complete power and authority as agent hereunder of such successor depositary.

SECTION 5.06 Notices and Reports.

On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action in respect of any cash or other distributions or the offering of any rights, the Company agrees to transmit to the Depositary and the Custodian a copy of the notice thereof in the form given or to be given to holders of Shares or other Deposited Securities.

The Company will arrange for the translation into English, if not already in English, to the extent required pursuant to any regulations of the Commission, and the prompt transmittal by the Company to the Depositary and the Custodian of such notices and

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any other reports and communications which are made generally available by the Company to holders of its Shares. If requested in writing by the Company, the Depositary will arrange for the mailing, at the Company’s expense, of copies of such notices, reports and communications to all Owners. The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect such mailings.

SECTION 5.07 Distribution of Additional Shares, Rights, etc.

If the Company or any affiliate of the Company determines to make any issuance or distribution of (1) additional Shares, (2) rights to subscribe for Shares, (3) securities convertible into Shares, or (4) rights to subscribe for such securities (each a “Distribution”), the Company shall notify the Depositary in writing in English as promptly as practicable and in any event before the Distribution starts and, if requested in writing by the Depositary, the Company shall promptly furnish to the Depositary a written opinion from U.S. counsel for the Company that is reasonably satisfactory to the Depositary, stating whether or not the Distribution requires, or, if made in the United States, would require, registration under the Securities Act of 1933. If, in the opinion of that counsel, the Distribution requires, or, if made in the United States, would require, registration under the Securities Act of 1933, that counsel shall furnish to the Depositary a written opinion as to whether or not there is a registration statement under the Securities Act of 1933 in effect that will cover that Distribution.

The Company agrees with the Depositary that neither the Company nor any company controlled by, controlling or under common control with the Company will at any time deposit any Shares, either originally issued or previously issued and reacquired by the Company or any such affiliate, unless a Registration Statement is in effect as to such Shares under the Securities Act of 1933 or the Company delivers to the Depositary an opinion of United States counsel, satisfactory to the Depositary, to the effect that, upon deposit, those Shares will be eligible for public resale in the United States without further registration under the Securities Act of 1933.

SECTION 5.08 Indemnification.

The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliates and any Custodian against, and hold each of them harmless from, any liability or expense (including, but not limited to any fees and expenses incurred in seeking, enforcing or collecting such indemnity and the fees and expenses of counsel) which may arise out of or in connection with (a) any registration with the Commission of American Depositary Shares or Deposited Securities or the offer or sale thereof in the United States or (b) acts performed or omitted, pursuant to the provisions of or in connection with this Deposit Agreement and of the Receipts, as the same may be amended, modified or supplemented from time to time, (i) by either the Depositary or a Custodian or their respective directors, employees, agents and affiliates, except, subject to the third from the last paragraph of this Section 5.08, for any loss, liability or expense directly arising out of the negligence or bad faith of the Depositary or its agents acting hereunder, or (ii) by the Company or any of its directors, employees, agents and affiliates.

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The indemnities set forth in the preceding paragraph shall also apply to any liability or expense which may arise out of any misstatement or alleged misstatement or omission or alleged omission in any registration statement, proxy statement, prospectus (or placement memorandum), or preliminary prospectus (or preliminary placement memorandum) relating to the offer or sale of American Depositary Shares, except to the extent any such liability or expense arises out of information relating to the Depositary or any Custodian (other than the Company), as applicable, furnished in writing by the Depositary and not materially changed or altered by the Company expressly for use in any of the foregoing documents.

Except as provided in the next succeeding paragraph, the Depositary shall indemnify, defend and save harmless the Company against any loss, liability or expense (including reasonable fees and expenses of counsel) incurred by the Company in respect of this Deposit Agreement to the extent such loss, liability or expense is due to the negligence or bad faith of the Depositary or its agents acting hereunder.

Notwithstanding any other provision of this Deposit Agreement or any Receipts to the contrary, neither the Company nor the Depositary, nor any of their agents, shall be liable to the other for any indirect, special, punitive or consequential damages (collectively “Special Damages”) except (i) to the extent such Special Damages arise from the gross negligence or willful misconduct of the party from whom indemnification is sought or (ii) to the extent Special Damages arise from or out of a claim brought by a third party (including, without limitation, Holders) against the Depositary or its agents, except to the extent such Special Damages arise out of the gross negligence or willful misconduct of the party seeking indemnification hereunder

The obligations set forth in this Section 5.08 shall survive the termination of this Deposit Agreement and the succession or substitution of any indemnified person.

If an action or proceeding (including, but not limited to, any governmental investigation, claim or dispute) in respect of which indemnity may be sought by either party is brought or asserted against the other party, the party seeking indemnification (the “Indemnitee”) shall promptly notify the other party (the “Indemnitor”) in writing of such proceeding giving reasonable details thereof. The Indemnitor shall be entitled to participate in such proceeding and, to the extent no conflict of interest exists in the conduct of the defense, to assume the defense thereof with counsel reasonably satisfactory to the Indemnitee. After notice from the Indemnitor to the Indemnitee of its election to assume the defense, and provided no conflict of interest exists, the Indemnitor shall not be liable to the Indemnitee for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by the Indemnitee, in connection with the defense other than reasonable costs of investigation. No compromise or settlement of such action or proceeding may be effected by either party without the other party’s consent (which shall not be unreasonably withheld) unless (i) there is no finding or admission of any violation of law and no effect on any other claims that may be made against such other party and (ii) the sole relief provided is monetary damages that are paid in full by the party seeking such compromise or settlement.

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SECTION 5.09 Charges of Depositary.

The Company agrees to pay the fees and out-of-pocket expenses of the Depositary and those of any Registrar in accordance with agreements in writing entered into between the Depositary and the Company from time to time.

The following charges shall be incurred by any party depositing or withdrawing Shares or by any party surrendering American Depositary Shares or to whom American Depositary Shares are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary Shares pursuant to Section 4.03), or by Owners, as applicable: (1) taxes, stamp duty and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Shares generally on the Share register of the Company or Foreign Registrar and applicable to transfers of Shares to or from the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable, telex and facsimile transmission expenses as are expressly provided in this Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary Shares pursuant to Section 2.03, 4.03 or 4.04 and the surrender of American Depositary Shares pursuant to Section 2.05 or 6.02, (6) a fee of $.02 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to this Deposit Agreement, including, but not limited to Sections 4.01 through 4.04 hereof, (7) a fee for the distribution of securities pursuant to Section 4.02, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Shares) but which securities are instead distributed by the Depositary to Owners, (8) in addition to any fee charged under clause 6, a fee of $.02 or less per American Depositary Share (or portion thereof) per annum for depositary services, which will be payable as provided in clause 9 below, and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 and shall be payable at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).

The Depositary, subject to Section 2.09 hereof, may own and deal in any class of securities of the Company and its affiliates and in American Depositary Shares.

SECTION 5.10 Retention of Depositary Documents.

The Depositary is authorized to destroy those documents, records, bills and other data compiled during the term of this Deposit Agreement at the times permitted by the laws or regulations governing the Depositary unless the Company requests that such papers be retained for a longer period or turned over to the Company or to a successor depositary.

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SECTION 5.11 Exclusivity.

The Company agrees not to appoint any other depositary for issuance of American or global depositary shares or receipts so long as JPMorgan Chase Bank, N.A. is acting as Depositary hereunder.

SECTION 5.12 List of Restricted Securities Owners.

From time to time, the Company shall provide to the Depositary a list setting forth, to the actual knowledge of the Company, those persons or entities who beneficially own Restricted Securities and the Company shall update that list on a regular basis. The Company agrees to advise in writing each of the persons or entities so listed that such Restricted Securities are ineligible for deposit hereunder. The Depositary may rely on such a list or update but shall not be liable for any action or omission made in reliance thereon.

ARTICLE 6.

AMENDMENT AND TERMINATION

SECTION 6.01 Amendment.

The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or holders in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary Shares until the expiration of 30 days after notice of such amendment shall have been given to the Owners of outstanding American Depositary Shares. Every Owner and holder, at the time any amendment so becomes effective, shall be deemed, by continuing to hold such American Depositary Shares or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.

SECTION 6.02 Termination.

The Company may at any time terminate this Deposit Agreement by instructing the Depositary to mail a notice of termination to the Owners of all American Depositary Shares then outstanding at least 30 days prior to the termination date included in such notice. The Depositary may likewise terminate this Deposit Agreement if at any time 60 days shall have expired after the Depositary delivered to the Company a written resignation notice and if a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.04; in such case the Depositary shall mail a notice of termination to the Owners of all American Depositary Shares then outstanding at least 30 days prior to the termination date. On and after the date of termination, the Owner of American Depositary Shares will, upon (a) surrender of such American Depositary Shares, (b) payment of the fee of the Depositary for the surrender of American Depositary Shares referred to in Section 2.05, and (c) payment of any applicable taxes or governmental

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charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by those American Depositary Shares. If any American Depositary Shares shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of American Depositary Shares, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in this Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, upon surrender of American Depositary Shares (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges).

At any time after the expiration of six months from the date of termination, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it under this Deposit Agreement, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American Depositary Shares that have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except for its obligations to the Company under Section 5.08 and to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary under Sections 5.08 and 5.09.

ARTICLE 7.

MISCELLANEOUS

SECTION 7.01 Counterparts.

This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and the Custodians and shall be open to inspection by any Owner or Holder during business hours.

SECTION 7.02 No Third Party Beneficiaries.

This Deposit Agreement is for the exclusive benefit of the parties hereto and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.

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SECTION 7.03 Severability.

In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

SECTION 7.04 Owners and Holders as Parties; Binding Effect.

The Owners and Holders from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance of American Depositary Shares or any interest therein issued in accordance with the terms and conditions of the Deposit Agreement and shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable Receipt(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable Receipt(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable Receipt(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

SECTION 7.05 Notices.

Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to GCL Silicon Technology Holdings Inc., 36/F Two Exchange Square, Central, Hong Kong or any other place to which the Company may have transferred its principal office with notice to the Depositary.

Any and all notices to be given to the Depositary shall be deemed to have been duly given if in English and personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to JPMorgan Chase Bank, N.A., 4 New York Plaza, 13^th Floor, New York, New York 10004, Attention: American Depositary Receipt Administration, or any other place to which the Depositary may have transferred the Depositary’s Office.

Any and all notices to be given to any Owner shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to such Owner at the address of such Owner as it appears on the transfer books for American Depositary Shares of the Depositary, or, if such Owner shall have filed with the Depositary a written request that notices intended for such Owner be mailed to some other address, at the address designated in such request.

Delivery of a notice sent by mail or cable, telex or facsimile transmission shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box. The Depositary or the Company may, however, act upon any cable, telex or facsimile transmission received by it, notwithstanding that such cable, telex or facsimile transmission shall not subsequently be confirmed by letter as aforesaid.

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SECTION 7.06 Governing Law.

This Deposit Agreement and the Receipts shall be interpreted and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by the laws of the State of New York.

SECTION 7.07 Compliance with U.S. Securities Laws.

Notwithstanding anything in this Deposit Agreement to the contrary, the Company and the Depositary each agrees that it will not exercise any rights it has under this Deposit Agreement to permit the withdrawal or delivery of Deposited Securities in a manner which would violate the U.S. securities laws, including, but not limited to, Section I.A.(1) of the General Instructions to the Form F-6 Registration Statement, as amended from time to time, under the Securities Act.

SECTION 7.08 Consent to Jurisdiction.

The Company irrevocably agrees that any legal suit, action or proceeding against the Company brought by the Depositary or any Holder, arising out of or based upon this Deposit Agreement or the transactions contemplated hereby, shall be instituted in any state or federal court in New York, New York, and irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and, subject to the last sentence of this paragraph, irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. The Company also irrevocably agrees that any legal suit, action or proceeding against the Depositary brought by the Company, arising out of or based upon this Deposit Agreement or the transactions contemplated hereby, may only be instituted in a state or federal court in New York, New York and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding and irrevocably waives any objection which it may have or hereinafter have to the laying of venue of any such proceeding. The Company has appointed CT Corporation System, 111 Eighth Avenue, 13^th Floor, New York City, in the State of New York, as its authorized agent (the “Authorized Agent”) upon which process may be served in any such action arising out of or based on this Deposit Agreement or the transactions contemplated hereby which may be instituted in any state or federal court in New York, New York by the Depositary or any Holder, and waives any other requirements of or objections to personal jurisdiction with respect thereto. The Company represents and warrants that the Authorized Agent has agreed to act as said agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Company shall be deemed, in every respect, effective service of process upon the Company. If, for any reason, the Authorized Agent named above or its successor shall no longer serve as agent of the Company to receive service of process in New York, the Company shall promptly appoint a successor acceptable to the Depositary, so as to serve and will promptly advise the Depositary thereof. In the event the Company fails to continue such

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designation and appointment in full force and effect, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices hereunder, and service so made shall be deemed completed five (5) days after the same shall have been so mailed. Notwithstanding the foregoing, the Depositary and Holders may commence actions to enforce judgments issued by New York courts or other orders of such New York courts against the Company in any competent court in the People’s Republic of China, the Cayman Islands or any other jurisdiction in which the Company may be found.

EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH OWNER AND HOLDER) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF, INCLUDING WITHOUT LIMITATION ANY QUESTION REGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

SECTION 7.07 Waiver of Immunities.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

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IN WITNESS WHEREOF, GCL SILICON TECHNOLOGY HOLDINGS INC. and JPMORGAN CHASE BANK, N.A. have duly executed this Deposit Agreement as of the day and year first set forth above and all Owners and Holders shall become parties hereto upon acceptance by them of American Depositary Shares or any interest therein.

GCL SILICON TECHNOLOGY HOLDINGS INC.

By:

Name:

Title:

JPMORGAN CHASE BANK, N.A.,

as Depositary

By:

Name:

Title:

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EXHIBIT A

AMERICAN DEPOSITARY SHARES

(Each American Depositary Share represents four (4) deposited Shares)

JPMORGAN CHASE BANK, N.A.

AMERICAN DEPOSITARY RECEIPT

FOR ORDINARY SHARES

OF

GCL SILICON TECHNOLOGY HOLDINGS INC.

(INCORPORATED UNDER THE LAWS OF the Cayman Islands)

JPMorgan Chase Bank, N.A. as depositary (hereinafter called the “Depositary”), hereby certifies that                                         , or registered assigns IS THE OWNER OF                                         

AMERICAN DEPOSITARY SHARES

representing deposited ordinary shares (herein called “Shares”) of GCL Silicon Technology Holdings Inc., incorporated under the laws of the Cayman Islands (herein called the “Company”). At the date hereof, each American Depositary Share represents four (4) Shares deposited or subject to deposit under the Deposit Agreement (as such term is hereinafter defined) at the office of the Custodian appointed under the Deposit Agreement (herein called the “Custodian”).

THE DEPOSITARY’S OFFICE ADDRESS IS

4 NEW YORK PLAZA, 13^TH FLOOR, NEW YORK, N.Y. 10004

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1. THE DEPOSIT AGREEMENT.

This American Depositary Receipt is one of an issue (herein called “Receipts”), all issued and to be issued upon the terms and conditions set forth in the deposit agreement, dated as of , 2008 (herein called the “Deposit Agreement”), by and among the Company, the Depositary, and all Owners and holders from time to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary Shares agrees to become a party thereto and become bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights of Owners and holders and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other securities, property and cash from time to time received in respect of such Shares and held thereunder (such Shares, securities, property, and cash are herein called “Deposited Securities”). Copies of the Deposit Agreement are on file at the Depositary’s Office in New York City and at the office of the Custodian.

The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. Capitalized terms defined in the Deposit Agreement and not defined herein shall have the meanings set forth in the Deposit Agreement.

2. SURRENDER OF RECEIPTS AND WITHDRAWAL OF SHARES.

Upon surrender at the Depositary’s Office of American Depositary Shares, and upon payment of the fee of the Depositary provided in this Receipt, and subject to the terms and conditions of the Deposit Agreement, the Owner of those American Depositary Shares is entitled to delivery, to him or as instructed, of the amount of Deposited Securities at the time represented by those American Depositary Shares. Such delivery will be made at the option of the Owner hereof, either at the office of the Custodian or at the Depositary’s Office, provided that the forwarding of certificates for Shares or other Deposited Securities for such delivery at the Depositary’s Office shall be at the risk and expense of the Owner hereof.

3. TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

Transfers of American Depositary Shares may be registered on the books of the Depositary upon (i) in the case of certificated American Depositary Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the case of uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10), and, in either case, duly stamped as may be required by the laws of the State of New York and of the United States of America and upon payment of funds for any applicable transfer taxes and the expenses of the Depositary and upon compliance with such regulations, if any, as the Depositary may establish for such purpose. This Receipt may be split into other such Receipts, or may be combined with other such Receipts into one Receipt, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered. The Depositary, upon surrender of a Receipt for the purpose of exchanging for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming

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that the Owner is the Owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10 of the Deposit Agreement) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American Depositary Shares, shall execute and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares. As a condition precedent to the delivery, registration of transfer, or surrender of any American Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, the Custodian, or Registrar may require payment from the depositor of the Shares or the presenter of the Receipt or instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees as provided in the Deposit Agreement, may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any regulations the Depositary may establish consistent with the provisions of the Deposit Agreement.

The delivery of American Depositary Shares against deposit of Shares generally or against deposit of particular Shares may be suspended, or the transfer of American Depositary Shares in particular instances may be refused, or the registration of transfer of outstanding American Depositary Shares generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement, or for any other reason, subject to the provisions of the following sentence. Notwithstanding anything to the contrary in the Deposit Agreement or this Receipt, the surrender of outstanding American Depositary Shares and withdrawal of Deposited Securities may not be suspended subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the Foreign Registrar, if applicable, or the deposit of Shares in connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American Depositary Shares or to the withdrawal of the Deposited Securities. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under the Deposit Agreement any Shares which would be required to be registered under the provisions of the Securities Act of 1933 for public offer and sale in the United States, unless a registration statement is in effect as to such Shares for such offer and sale.

4. LIABILITY OF OWNER FOR TAXES.

If any tax or other governmental charge shall become payable with respect to any American Depositary Shares or any Deposited Securities represented by any American Depositary Shares, such tax or other governmental charge shall be payable by the Owner to the Depositary. The Depositary may refuse to register any transfer of those American Depositary Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner any part or all of the Deposited Securities represented by those

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American Depositary Shares, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner shall remain liable for any deficiency.

5. WARRANTIES ON DEPOSIT OF SHARES.

Every person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant, that such Shares and each certificate therefor, if applicable, are validly issued, fully paid, nonassessable and free of any preemptive rights of the holders of outstanding Shares and that the person making such deposit is duly authorized so to do. Every such person shall also be deemed to represent that the deposit of such Shares and the sale of American Depositary Shares representing such Shares by that person are not restricted under the Securities Act of 1933. Such representations and warranties shall survive the deposit of Shares and delivery of American Depositary Shares.

6. FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

Any person presenting Shares for deposit or any Owner or holder may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper. The Depositary may withhold the delivery or registration of transfer of any American Depositary Shares or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. If requested in writing, the Depositary shall, as promptly as practicable, provide the Company, at the expense of the Company, with copies of any such proofs, certificates or other information it receives pursuant to this section, unless prohibited by applicable law. No Share shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in the Cayman Islands, which is then performing the function of the regulation of currency exchange.

7. CHARGES OF DEPOSITARY.

The following charges shall be incurred by any party depositing or withdrawing Shares or by any party surrendering American Depositary Shares or to whom American Depositary Shares are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary Shares pursuant to Section 4.03 of the Deposit Agreement), or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Shares generally on the Share register of the Company or Foreign Registrar and applicable to transfers of Shares to or from the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals under the terms of the Deposit Agreement, (3) such cable, telex and facsimile transmission expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to

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Section 4.05 of the Deposit Agreement, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary Shares pursuant to Section 2.03, 4.03 or 4.04 of the Deposit Agreement and the surrender of American Depositary Shares pursuant to Section 2.05 or 6.02 of the Deposit Agreement, (6) a fee of $.02 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to the Deposit Agreement, including, but not limited to Sections 4.01 through 4.04 of the Deposit Agreement, (7) a fee for the distribution of securities pursuant to Section 4.02 of the Deposit Agreement, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Shares) but which securities are instead distributed by the Depositary to Owners, (8) in addition to any fee charged under clause 6, a fee of $.02 or less per American Depositary Share (or portion thereof) per annum for depositary services, which will be payable as provided in clause 9 below, and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 of the Deposit Agreement and shall be payable at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).

The Depositary, subject to Article 8 hereof, may own and deal in any class of securities of the Company and its affiliates and in American Depositary Shares.

8. PRE-RELEASE OF RECEIPTS.

Notwithstanding Section 2.03 of the Deposit Agreement, the Depositary may deliver American Depositary Shares prior to the receipt of Shares pursuant to Section 2.02 of the Deposit Agreement (a “Pre-Release”). The Depositary may, pursuant to Section 2.05 of the Deposit Agreement, deliver Shares upon the surrender of American Depositary Shares that have been Pre-Released, whether or not such cancellation is prior to the termination of such Pre-Release or the Depositary knows that such American Depositary Shares have been Pre-Released. The Depositary may receive American Depositary Shares in lieu of Shares in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation from the person to whom American Depositary Shares or Shares are to be delivered, that such person, or its customer, owns the Shares or American Depositary Shares to be remitted, as the case may be, (b) at all times fully collateralized with cash, U.S. government securities or such other collateral as the Depositary determines, in good faith, will provide substantially similar liquidity and security, (c) terminable by the Depositary on not more than five (5) business days notice, and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The number of Shares represented by American Depositary Shares which are outstanding at any time as a result of Pre-Release will not normally exceed thirty percent (30%) of the Shares deposited under the Deposit Agreement; provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate, and may, with the prior written consent of the Company, change such limit for purposes of general application.

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The Depositary may retain for its own account any compensation received by it in connection with the foregoing.

9. TITLE TO RECEIPTS.

It is a condition of this Receipt and every successive Owner and Holder of this Receipt by accepting or holding the same consents and agrees that when properly endorsed or accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under the laws of New York. American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of New York. The Depositary, notwithstanding any notice to the contrary, may treat the Owner of American Depositary Shares as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement and for all other purposes.

10. VALIDITY OF RECEIPT.

This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt shall have been executed by the Depositary by the manual signature of a duly authorized signatory of the Depositary; provided, however that such signature may be a facsimile if a Registrar for the Receipts shall have been appointed and such Receipts are countersigned by the manual signature of a duly authorized officer of the Registrar.

11. REPORTS; INSPECTION OF TRANSFER BOOKS.

The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and, accordingly, files certain reports with the Securities and Exchange Commission. Such materials will either be available for inspection and copying at the public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington, D.C. 20549.

The Depositary will make available for inspection by Owners at the Depositary’s Office any reports, notices and other communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary will also, upon written request by the Company, send to Owners copies of such reports when furnished by the Company pursuant to the Deposit Agreement. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

The Depositary will keep books for the registration of American Depositary Shares and transfers of American Depositary Shares which at all reasonable times shall be open for inspection by the Owners, provided that such inspection shall not be for the purpose of communicating with Owners in the interest of a business or object other than the business of the Company or a matter related to the Deposit Agreement or the American Depositary Shares.

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12. DIVIDENDS AND DISTRIBUTIONS.

Whenever the Depositary receives any cash dividend or other cash distribution on any Deposited Securities, the Depositary will, if at the time of receipt thereof any amounts received in a foreign currency can in the judgment of the Depositary be converted on a reasonable basis into United States dollars transferable to the United States, and subject to the Deposit Agreement, convert such dividend or distribution into dollars and will distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.09 of the Deposit Agreement) to the Owners entitled thereto; provided, however, that in the event that the Company or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes or other governmental charges, the amount distributed to the Owners of the American Depositary Shares representing such Deposited Securities shall be reduced accordingly.

Subject to the provisions of Section 4.11 and 5.09 of the Deposit Agreement, whenever the Depositary receives any distribution other than a distribution described in Section 4.01, 4.03 or 4.04 of the Deposit Agreement, the Depositary will cause the securities or property received by it to be distributed to the Owners entitled thereto, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners of Receipts entitled thereto, or if for any other reason the Depositary deems such distribution not to be feasible, the Depositary may adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.09 of the Deposit Agreement) will be distributed by the Depositary to the Owners of Receipts entitled thereto all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. The Depositary may sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this Article that is sufficient to pay its fees and expenses in respect of that distribution.

If any distribution consists of a dividend in, or free distribution of, Shares, the Depositary may deliver to the Owners entitled thereto, an aggregate number of American Depositary Shares representing the amount of Shares received as such dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Shares and after deduction or upon issuance of American Depositary Shares, including the withholding of any tax or other governmental charge as provided in Section 4.11 of the Deposit Agreement and the payment of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.09 of the Deposit Agreement (and the Depositary may sell, by public or private sale, an amount of Shares received sufficient to pay its fees and expenses in respect of that distribution). In lieu of delivering fractional American Depositary Shares in any such case, the Depositary will sell the amount of Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. If additional American Depositary Shares are not so delivered, each American Depositary Share shall thenceforth also represent the additional Shares distributed upon the Deposited Securities represented thereby.

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The Company or its agent will remit to the appropriate governmental agencies in the Cayman Islands and the People’s Republic of China all amounts withheld and owing to such agencies. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies, and the Depositary or the Company or its agent may file any such reports necessary to obtain benefits under the applicable tax treaties for the Owners of Receipts. In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay any such taxes or charges, and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners of Receipts entitled thereto.

13. RIGHTS.

In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Shares or any rights of any other nature, the Depositary shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary determines in its discretion that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems appropriate.

In circumstances in which rights would otherwise not be distributed, if an Owner requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner under the Deposit Agreement, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.

If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Shares, and the Company shall cause the Shares so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Shares so purchased to be deposited pursuant to Section 2.02 of the Deposit Agreement,

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and shall, pursuant to Section 2.03 of the Deposit Agreement, deliver American Depositary Shares to such Owner. In the case of a distribution pursuant to the second paragraph of this Article 13, such deposit shall be made, and Deposited Securities shall be delivered, under depositary arrangements which provide for issuance of Deposited Securities subject to the appropriate restrictions on sale, deposit, cancellation, and transfer under applicable United States laws.

If the Depositary determines that it is not lawful and feasible to make such rights available to all or certain Owners, it may sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of the Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any American Depositary Shares or otherwise.

The Depositary will not offer rights to Owners unless both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act of 1933 with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in the Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act of 1933, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.

The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.

14. CONVERSION OF FOREIGN CURRENCY.

Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants and/or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09 of the Deposit Agreement.

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If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary may file such application for approval or license, if any, as it may deem desirable.

If at any time the Depositary shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, or if there are foreign exchange controls in place that prohibit such conversion, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.

15. RECORD DATES.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date, which date shall be the same date, to the extent practicable, as the record date for the Deposited Securities or if different, as close thereto as practicable (a) for the determination of the Owners who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof, (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) responsible for any fee or charge assessed by the Depositary pursuant to the Deposit Agreement, (b) on or after which each American Depositary Share will represent the changed number of Shares or (c) for any other matter, subject to the provisions of the Deposit Agreement.

16. VOTING OF DEPOSITED SECURITIES.

Upon receipt of notice of any meeting of holders of Shares or other Deposited Securities, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter, mail to the Owners of Receipts a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in such notice of meeting

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received by the Depositary from the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of law and of the articles of association or similar document of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Shares or other Deposited Securities represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose, the Depositary shall endeavor insofar as practicable to vote or cause to be voted the amount of Shares or other Deposited Securities represented by such American Depositary Shares in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Shares or other Deposited Securities, other than in accordance with such instructions.

There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the instruction cutoff date to ensure that the Depositary will vote the Shares or Deposited Securities in accordance with the provisions set forth in the preceding paragraph.

In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company will request the Depositary to act under this Article, the Company shall give the Depositary notice of any such meeting and details concerning the matters to be voted upon not less than 45 days prior to the meeting date.

17. CHANGES AFFECTING DEPOSITED SECURITIES.

In circumstances where the provisions of Section 4.03 of the Deposit Agreement do not apply, upon any change in nominal value, change in par value, split-up, consolidation, or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation, or sale of assets affecting the Company or to which it is a party, or upon the redemption or cancellation by the Company of the Deposited Securities, any securities, cash or property which shall be received by the Depositary or a Custodian in exchange for, in conversion of, in lieu of or in respect of Deposited Securities shall be treated as new Deposited Securities under the Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.

18. LIABILITY OF THE COMPANY AND DEPOSITARY.

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Holder, (i) if by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority, or by reason of any provision, present or future, of the articles of

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association or similar document of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from or be subject to any civil or criminal penalty on account of doing or performing any act or thing which by the terms of the Deposit Agreement or the Deposited Securities it is provided shall be done or performed; (ii) by reason of any non-performance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of the Deposit Agreement it is provided shall or may be done or performed, (iii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement, (iv) for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Owners or holders, or (v) for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02 or 4.03 of the Deposit Agreement, or an offering or distribution pursuant to Section 4.04 of the Deposit Agreement, such distribution or offering may not be made available to Owners of Receipts, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse. Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the Deposit Agreement to Owners or Holders, except that they agree to perform their obligations specifically set forth in the Deposit Agreement without gross negligence or bad faith. The Depositary shall not be subject to any liability with respect to the validity or worth of the Deposited Securities. Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit, or other proceeding in respect of any Deposited Securities or in respect of the American Depositary Shares, on behalf of any Owner or Holder or any other person. Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Owner or holder, or any other person believed by it in good faith to be competent to give such advice or information. The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without gross negligence or bad faith while it acted as Depositary. The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast( provided that any such action or nonaction is in good faith) or for the effect of any such vote.

Notwithstanding anything to the contrary set forth in the Deposit Agreement or any Receipt, the Depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the Deposit Agreement, any Holder(s) or Owner(s), any Receipt or Receipts or otherwise related hereto to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators. Neither the Company nor the Depositary nor any of their respective agents shall be liable to Holders or Owner for any indirect, special, punitive or consequential damages.

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The Depositary shall not be liable for the acts or omissions made by any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of Deposited Securities or otherwise. No disclaimer of liability under the Securities Act of 1933 is intended by any provision of the Deposit Agreement.

19. RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR CUSTODIAN.

The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by 120 days prior written notice of such removal, to become effective upon the later of (i) the 120^th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary in its discretion may appoint a substitute or additional custodian or custodians.

20. AMENDMENT.

The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or holders in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary Shares until the expiration of thirty days after notice of such amendment shall have been given to the Owners of outstanding American Depositary Shares. Every Owner and holder of American Depositary Shares, at the time any amendment so becomes effective, shall be deemed, by continuing to hold such American Depositary Shares or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.

21. TERMINATION OF DEPOSIT AGREEMENT.

The Company may terminate the Deposit Agreement by instructing the Depositary to mail notice of termination to the Owners of all American Depositary Shares then outstanding at least 30 days prior to the termination date included in such notice. The Depositary may likewise terminate the Deposit Agreement, if at any time 60 days shall have expired after the Depositary delivered to the Company a written resignation notice and if a successor depositary shall not have been appointed and accepted its appointment as provided in the Deposit Agreement; in such case the Depositary shall mail a notice of termination to the Owners of all American

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Depositary Shares then outstanding at least 30 days prior to the termination date. On and after the date of termination, the Owner of American Depositary Shares will, upon (a) surrender of such American Depositary Shares, (b) payment of the fee of the Depositary for the surrender of American Depositary Shares referred to in Section 2.05, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by those American Depositary Shares. If any American Depositary Shares shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of American Depositary Shares, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in the Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, upon surrender of American Depositary Shares (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges). At any time after the expiration of six months from the date of termination, the Depositary may sell the Deposited Securities then held under the Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it thereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American Depositary Shares that have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement, except for its obligations to the Company under Section 5.08 and to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges). Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary with respect to indemnification, charges, and expenses.

22. APPOINTMENT.

Each Owner and Holder, upon acceptance of any American Depositary Share (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable Receipt(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable Receipt(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable Receipt(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

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23. DTC DIRECT REGISTRATION SYSTEM AND PROFILE MODIFICATION SYSTEM (a) Notwithstanding the provisions of Section 2.04 of the Deposit Agreement, the parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.

(b) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in subsection (a) has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 of the Deposit Agreement shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with the Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

24. SUBMISSION TO JURISDICTION; JURY TRIAL WAIVER; WAIVER OF IMMUNITIES

In the Deposit Agreement, the Company has (i) appointed CT Corporation System, 111 Eighth Avenue, 13^th Floor, New York City, in the State of New York, as the Company’s authorized agent upon which process may be served in any suit or proceeding arising out of or relating to the Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Agreement, (ii) consented and submitted to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding.

EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH OWNER AND HOLDER) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF, INCLUDING WITHOUT LIMITATION ANY QUESTION REGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

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To the extent that the Company or any of its properties, assets or revenues may have or hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Shares or Deposited Securities, the American Depositary Shares, the Receipts or the Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

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EX-10.6

Exhibit 10.6

GENERAL TERMS AND CONDITIONS OF CONTRACT

AND APPENDICES

General Terms and Conditions

Table of Content

Contract Form		1
General Terms And Conditions Of Contract		3
Chapter 1	Definitions	3
Chapter 2	Scope of Contract	7
Chapter 3	Contract Price	8
Chapter 4	Terms of Payment	9
Chapter 5	Delivery and Terms of Delivery	12
Chapter 6	Packing and Marking	16
Chapter 7	Documentation	18
Chapter 8	Mistakes in Information	19
Chapter 9	Variations and Omissions	20
Chapter 10	Coordination, Liaison and Project Management	22
Chapter 11	Safety Management and Quality Assurance	24
Chapter 12	Inspection at Manufacturer’s Premises and after Delivery	27
Chapter 13	Erection, Commissioning, Testing and Acceptance	30
Chapter 14	Warranties and Defects After Delivery	32
Chapter 15	Additional Spare and Replacement Parts and Repairs to the Equipment	37
Chapter 16	Liability for Accidents and Damage	39
Chapter 17	Licensing	41
Chapter 18	Insurance	42
Chapter 19	Taxes and Duties	43
Chapter 20	Force Majeure	44
Chapter 21	Vesting of the Equipment and Documentation	45
Chapter 22	Infringement	46
Chapter 23	Assignment and Sub-letting	48
Chapter 24	Supplier’s Default and Damages Payable	49
Chapter 25	Bankruptcy	50
Chapter 26	Suspension and Termination	51
Chapter 27	Statute and Other Regulations	53
Chapter 28	Liens	54
Chapter 29	Independence of the Supplier	55
Chapter 30	Conflict of Interest	56
Chapter 31	Business Ethics	57
Chapter 32	Confidentiality	58
Chapter 33	Availability of Information	59
Chapter 34	Settlement of Disputes	60
Chapter 35	Notices	60
Chapter 36	Construction of Contract	61
Chapter 37	Effectiveness of the Contract and Miscellaneous	62
Chapter 38	Exclusivity	62

i

General Terms and Conditions

Appendix B
Appendix B-1	Scope of Supply
Appendix B-2	Technical Conditions
Appendix B-3	Technical Description
Appendix B-4	Quality Assurance
Appendix B-5	Inspection and Testing in Workshop
Appendix B-6	Performance Guarantees
Appendix B-7	Sub-suppliers
Appendix B-8	Schedule
Appendix B-9	Codes Rules and Guides
Appendix B-10	Project Coordination and Management
Appendix B-11	Dossier of Attachments and Document Requirement
Appendix B-12	Equipment Localization
Appendix B-13	Safety Management Requirements

ii

General Terms and Conditions

Contract Form

Contract No.: JSZN2003

Date of Signing: June 27, 2007

Place of Signing: Xuzhou, Jiangsu, P.R.C.

This Contract is made on the day of June 27, 2007 between Jiangsu Zhongneng Photovoltaic Industry Development Co., Ltd. , a company incorporated and existing under the laws of the PRC with offices at [*], the PRC (hereinafter referred to as the “Purchaser”) as one Party and MSA Apparatus Construction for Chemical Equipment Ltd., a company incorporated and existing under the laws of United Kingdom with offices at 82008 Unterhaching Isartalstr 50, Germany (hereinafter referred to as “MSA”)], (the MSA hereinafter collectively referred to as the “Supplier”) as the other Party.

WHEREAS the Supplier is a manufacturer and supplier of, among other things, the corresponding accessories, software and related engineering and installation services and has the capability and experience of manufacturing, installation, commissioning and starting-up for the Equipment and the provision of the Services.

WHEREAS the Supplier is willing to supply the Purchaser with the Equipment, Engineering, Additional Spare and Replacement Parts, Special Tools, Documentation and Services and to perform the Works associated with the Equipment on the terms and conditions of this Contract;

WHEREAS the Purchaser is willing to purchase the Equipment, Engineering, Documentation and Services and the Works associated with the Equipment to be provided by the Supplier on the terms and conditions of this Contract;

WHEREAS the Supplier shall be and shall be deemed to be, an independent supplier and not the agent or employee of the Purchaser;

NOW THEREFORE, the Parties authorize their respective representatives, following friendly consultations, to agree on the following terms and conditions and to sign this Contract.

1

General Terms and Conditions

The following documents shall be deemed to form the Contract between the Purchaser and the Supplier, and be read and constructed as part of the Contract, and shall be interpreted in the following order in case of discrepancy or ambiguity among the following documents:

Contract Form;

General Terms and Conditions; and

Appendix B

SIGNED BY

2

General Terms and Conditions

General Terms And Conditions Of Contract

Chapter 1 Definitions

In the Contract the following words shall have the meanings herein assigned to them:

1.1 “Actual Delivery Date” shall have the meaning set forth under Clause 5.3 (applicable to Equipment and Special Tools), or Clause 5.14 (applicable to Documentation).

1.2 “Additional Spare and Replacement Parts” shall mean the spare and replacement parts which are not included in the Equipment.

1.3 “China” and “PRC” and “People’s Republic of China” each means the People’s Republic of China excluding, for the purposes of this Contract, Hong Kong, Macao Special Administrative Region and Taiwan.

1.4 “Contract” shall mean the agreement between the Purchaser and the Supplier, howsoever made, for the supply of Equipment, Engineering, Documentation, Additional Spare and Replacement Parts, Special Tools and the provision of Services, including all documents referred to in the said agreement which set out the rights and obligations of the Parties thereunder.

1.5 “Contract Price” shall mean the consideration amount specified in Chapter 3 of the Contract, subject to such additions and deductions as may be made by the Parties in accordance with the Contract, to be paid to the Supplier in consideration for the supply and delivery of Equipment, Engineering, Additional Spare and Replacement Parts, Special Tools, Documentation and the provision of Services and the fulfillment by the Supplier of all its other activities and obligations under the Contract.

1.6 “Delivery Dates” shall mean the applicable dates specified in the Contract for delivery of Equipment, Additional Spare and Replacement Parts, Special Tools and Documentation subject to such adjustments as may be made in accordance with the Contract.

1.7 “Documentation” shall mean calculation notes, drawings, programs, schedules, manuals, erection and commissioning data, acceptance tests procedures, and all other technical information required for the design, manufacture, erection, tests, operation and maintenance of the Equipment as defined in Appendix B-1 of the Contract.

1.8 “Effective Date” or “EOC” shall mean the day when the Contract becomes effective in accordance with the provisions of Clause 38.2 hereof.

1.9 “Engineering” shall mean the engineering set forth in Appendix B.

3

General Terms and Conditions

1.10 “Equipment” shall mean all or any parts of the system, machinery, apparatus, parts, special tools, materials, spare parts, consumables and instrumentation which are to be supplied by the Supplier in accordance with the Contract as set out in Appendix B-1 of the Contract.

1.11 “Final Delivery Date” or “FDD” shall mean, the Actual Delivery Date of the final item of Equipment which is to be delivered to the Purchaser according to the schedule set out in Appendix B-8, providing that such item of Equipment is not delivered in advance of the Delivery Date without the prior approval of the Purchaser, in which case the Delivery Date shall apply.

1.12 “Force Majeure” shall mean an occurrence such as war, serious fire, flood, typhoon, earthquake, which is unavoidable, unforeseeable and insurmountable.

1.12(A) “Hong Kong” shall mean the Hong Kong Special Administrative Region of the PRC.

1.12(B) “Intellectual Property” shall mean all letters patents, trademarks, trade names, brand names, business names, service marks, designs, utility models, copyrights, inventions, know-how, licenses, technical processes, database rights and other forms of intellectual property in connection with the Project.

1.13 “Month/Day” shall mean calendar month/day; “Week” shall mean seven (7) calendar days.

1.14 “Overall Project Schedule” shall have the meaning set forth in Appendix B-8.

1.15 “Parties” shall mean collectively the Purchaser and the Supplier.

1.16 “Party” shall mean either the Purchaser or the Supplier.

1.17 “Project” shall mean the construction of the plant at Site to be developed by the Purchaser or its affiliates.

1.18 “Provisional Acceptance Certificate” and “PAC” shall have the meaning set forth under Clause 13.5.

1.19 “Services” shall mean instruction and services provided by the Supplier at various stages such as licensing, construction, erection, testing, commissioning, operation and maintenance of the Equipment and other services as set out in this Contract up to the [Date].

1.20 “Site” shall mean the place at Xuzhou, Jiangsu Province in the PRC as designated by the Purchaser.

1.21 “Special Tools” shall mean the special tools for the erection, test, commissioning transportation and packing of the Equipment which tools are not included in the Equipment.

1.22 “Specification” shall mean the technical requirements applicable to Appendix B-1 as defined in the Appendices B-2 and B-3 hereto.

4

General Terms and Conditions

1.23 “Sub-supplier” shall mean any person or entity (other than the Supplier) named in the Contract for the provision of any part of the Work thereunder or any person or entity to which any part of the Contract has been sub-let with the prior written consent of the Purchaser.

1.24 “Variation Order” shall mean the serially numbered form issued by the Purchaser to the Supplier in accordance with Chapter 9.

1.25 “Warranty Period” shall mean any of the period commencing on the Actual Delivery Date of the Equipment in question and terminating upon the sooner of the following: *** after Final Delivery Date; or the *** after the issue of PAC.

1.26 “Working Day” means a day other than a Saturday, a Sunday or public holiday declared by Chinese governmental authorities or other day on which commercial banks in the PRC are required to be closed by reason of any tropical cyclone warning.

1.27 “Work” shall mean the supply by the Supplier or the Sub-supplier of all Equipment Additional Spare and Replacement Parts, Documentation, Special Tools, Services and the performance by the Supplier or where applicable, Sub-supplier of all its other activities and obligations under the Contract.

1.28 Where used in these General Terms and Conditions of Contract, “writing” or “written’ shall mean any manuscript, type-written, or printed statement, under seal or hand as appropriate, but shall also include telegraphic, telex and fax communications.

1.29 Words importing persons shall include firms and corporations.

1.30 Words importing the singular only shall include the plural and vice-versa when applicable.

1.31 “CPT”,”DDU”, “EXW” and “CFR” shall be interpreted and governed in accordance with Incoterms 2000 edition of the International Chamber of Commerce, unless otherwise provided in the Contract.

1.32 Headings of this Contract are included for convenience only and shall not affect the construction of any provision of this Contract.

1.33 Terms such as “include”, “including”, “are inclusive of and similar expressions are no expressions of limitation and shall be construed as if followed by the words “without limitation”.

1.34 References to “law” or “laws” shall include all applicable laws, regulations, rules and orders of any Governmental Authority, securities, exchange or other self-regulating body, any common or customary law, constitution, code, ordinance, statute or other: legislative measure and any regulation, rule, treaty, order, decree or judgment; and “lawful” shall be construed accordingly.

1.35 If a period of time is specified and dates from a given day or the day of a given act or: event, such period shall be calculated [exclusive] of that day.

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General Terms and Conditions

Chapter 2 Scope of Contract

2.1 The Supplier shall supply to the Purchaser completely all Engineering, Equipment, Special Tools, Additional Spare and Replacement Parts and Documentation including interfaces, Services and other things of all kinds necessary for the carrying out, completion and maintenance of the Work in accordance with the Contract. The Supplier undertakes that if during the implementation of the Contract, it fails to supply any items which are required for the safe and reliable operation of the Equipment or for achieving the functions and performance as stipulated in the Contract, such items shall be supplied by the Supplier at no additional cost to the Purchaser.

2.2 The Equipment, Engineering, Documentation Services and where applicable, the Special Tools, Additional Spare and Replacement Parts supplied under the Contract shall be in full conformity with the Specifications, conditions, requirements, performance and limits of supply as defined in Appendix B.

2.3 The Equipment to be supplied by the Supplier shall conform to the requirements and the limits of supply stipulated in the Contract. The Supplier shall be responsible for providing the Purchaser or the Design Institute designated by the Purchaser with all the information in accordance with the schedule in Appendix B-8.

2.4 The Supplier shall assign competent personnel with the relevant expertise to carry out on-Site Services if and when requested by the Purchaser and with a week advance notice in order to ensure that the Equipment is appropriately erected, installed, tested, maintained and put into operation correctly, and the personnel dispatched on Site shall abide by the Safety Management Agreement signed by the Parties in conjunction with the Contract.

2.5 The Supplier shall make available Additional Spare and Replacement Parts promptly in accordance with Chapter 15 and, if required to do so by Purchaser, shall carry out repairs to the Equipment in accordance with the provisions of Chapter 15.

2.6 During the course of the Project, the Supplier shall, free of any charge to the Purchaser, provide the Purchaser with new operating information and technical know-how and processes obtained by the Supplier, and at all times keep the Purchaser informed of any identified improvement in relation to the technical and safety aspects of the Equipment.

2.7 The Supplier shall also perform its other obligations under the Contract and shall perform such other obligations from time to time reasonably required by the Purchaser for the purpose of performing this Contract.

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General Terms and Conditions

Chapter 3 Contract Price

3.1 Unless the context otherwise provided or agreed by the Parties in writing, the Contract Price shall constitute the entire consideration amount payable by the Purchaser to the Supplier for the supply of Equipment, Engineering, Additional Spare and Replacement Parts, Special Tools, Documentation, the provision of Services, packing, transportation and the fulfillment by the Supplier of all of its other obligations under the Contract.

3.2 The Contract Price is *** the particulars of which are set out in Clause 3.3 below. Unless otherwise agreed by the Parties in writing, the Contract Price specified herein shall be fixed and final.

3.3 Particulars of the Contract Price are set out as follows:

Sr.	Name of Equipment	Unit Price (EUR)	Q’ty	Remarks
1-17	Reactor (***)	***	17
18	Reactor (***)	***	1	***
	Total Contract Value	***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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General Terms and Conditions

Chapter 4 Terms of Payment

4.1 Payment shall be considered as effected at the time when payment is made by the Purchaser. Original payment document shall be sent by the Supplier directly to the Purchaser.

Should the dates of payment release fall into any of the statutory holiday, the payment shall be effected on the following Working Day, and the deferment shall not be regarded as delay of the payment.

All banking charges incurred in connection with the Purchaser’s Banks shall be borne by the Purchaser otherwise all banking charges incurred shall be borne by the Supplier.

4.2 The Purchaser shall pay the Supplier the Contract Price stated in Chapter 3 in the following manner:

(i) The Purchaser shall open or issue 1^st irrevocable direct letter of credit (“1^st Letter of Credit”) by the bank which is acceptable to the Supplier’s bank (which acceptance shall not be unreasonably withheld) in favor of the Supplier in the sum of *** being *** of the Contract Price to the Supplier within *** from the date of this Contract. 1^st Letter of Credit shall be valid for *** from the issuance date of the 1^st Letter of Credit.

(ii) The Purchaser shall open or issue 2^nd irrevocable direct letter of credit (“2^nd Letter of Credit”) by the bank which is acceptable to the Supplier’s bank (which acceptance shall not be unreasonably withheld) in favor of the Supplier for *** of the Contract Price within *** after the Delivery Date of the first batch of *** Sets and upon the Purchaser receives one (1) original of the valid export license issued by relevant authorities of the Supplier’s and/or manufacturer’s country or a statement of relevant authorities/agency certifying that no export license is required. 2^nd Letter of Credit shall be valid for *** after the Delivery Dates of the 1st batch of *** Sets.

The Supplier may suspend the works in the event that the Supplier does not receive the aforesaid 2 ^nd Letter of Credit within *** after the written notice by the Supplier to the Purchaser of the failure of the receipt of aforesaid 2^nd Letter of Credit in accordance with aforesaid paragraph under this Clause 4.2 (ii).

(iii) The Purchaser shall, within *** after the Delivery Dates of the 2^nd batch of *** Sets, open or issue 3^rd irrevocable direct letter of credit (“3rd Letter of Credit”) by the bank in favor of the Supplier for *** of the Contract Price after the written notice made by the Supplier with respect to the shipment of the Equipment. The 3^rd Letter of Credit shall be valid for *** after the Delivery Dates of the 2nd batch of *** Sets.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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General Terms and Conditions

A retainer fee being *** of the Contract Price shall be paid by telegraphic transfer by the Purchaser through the Purchaser’s Bank, within *** after the Purchaser duly received all of the following documents and fully satisfied the performance of the obligations by the Supplier under this Contract:

(a) A copy of Final Acceptance Certificate issued by the Purchaser in accordance with Clause 14.16; and

(b) One (1) original of commercial invoice or VAT invoice covering the amount of the payment.

4.3 *** of the Contract Price shall be paid against the abovementioned 1^st, 2^nd and 3^rd Letters of Credits, upon presentation of the following documents by the Purchaser to the Supplier in respect of the actual pro rata value of each shipment, which are found in order:

(a) Three (3) originals and three (3) duplicate copies of clean on board ocean Bill of Lading made out to order, blank endorsed, notifying the Purchaser and marked “FREIGHT PREPAID”, or one (1) original and four (4) duplicate copies of airway bill made out to order of the Purchaser;

(b) Five (5) originals of manually signed commercial invoice indicating the amount to be paid and the itemized price;

(c) Two (2) originals and three (3) duplicate copies of detailed packing list indicating the shipping weight, number and the date of the corresponding invoice;

(d) Two (2) originals and three (3) duplicate copies of ex-works quality certificate issued by the manufacturer;

(e) Two (2) copies of sight draft;

(f) One (1) original and four (4) duplicate copies of certificate of origin issued by relevant authorities or agency of the manufacturer’s country;

(g) Five (5) copies of fax advising the Purchaser of the shipment within forty-eight (48) hours after it is made;

(h) One (1) original and four (4) copies of the Quarantine Certificate/Heat Treatment Certificate for the wooden packing materials or non-wooden packing declarations in case of ocean transport, or four (4) copies of the Quarantine Certificate/Heat Treatment Certificate for the wooden packing materials or non-wooden packing declarations in case of air freight.

4.4 Unless otherwise specifically provided in a Variation Order which increases or decreases the Contract Price, the amount thereof shall be added to or deducted from the amount of payment under Clause 4.2 and 4.3 with the same ratio, which are outstanding at the issuance of the Variation Order in question.

4.5 The Purchaser shall effect any payment within *** after receiving the appropriate invoices and supporting documentation in accordance with the provisions of this Chapter, unless the Purchaser considers such documentation is not in conformity with the Contract or disputes the amount of any invoices submitted by the Supplier whereupon the Purchaser shall notify the Supplier in writing stating its reasons within ***.

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General Terms and Conditions

4.6 The Supplier shall be solely responsible for arranging payments to its Sub-suppliers and all other persons as may be engaged by the Supplier in the performance of the Contract.

4.7 If pursuant to Chapter 14, 24 or 34 hereof the Supplier is liable to pay liquidated damages to the Purchaser, the relevant amount of liquidated damages shall be paid by the Supplier to the Purchaser within *** days after receipt of the first written notice from the Purchaser or such other date as specified in the court judgment or order stating the amount payable.

4.8 The amount of liquidated damages which the Supplier is liable to pay to the Purchaser pursuant to the terms of this Contract or following a court judgment or order as provided for in Chapter 34 shall be paid by the Supplier directly to the Purchaser or where applicable, deducted from any remaining payment by the Purchaser.

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General Terms and Conditions

Chapter 5 Delivery and Terms of Delivery

5.1 Subject to Chapter 39 of this Contract, all the Equipment supplied under the Contract shall be delivered by the Supplier under terms of CFR Shanghai port of shipment in accordance with the terms of this Chapter and the Schedule specified in Appendix B-8 hereunder.

5.2 This Clause is intentionally left blank.

5.3 Within two (2) months after the EOC, the Supplier shall provide the Purchaser a forecast delivery schedule which shall fulfill the requirements of the Overall Project Schedule for the approval of the Purchaser. The delivery dates provided in such forecast delivery schedule approved by the Purchaser shall be the Delivery Dates for the Equipment.

In the above-mentioned forecast delivery schedule, the Supplier shall provide the Purchaser with the following updated information:

A. Name of Equipment;

B. Gross Volume;

C. Gross Weight;

D. Respective Delivery Schedule for CFR;

E. Names of respective port of shipment for CFR;

F. Cargo package/packing list;

G. Names, Weight Measurement and Drawings of the over-weight, over-sized Equipment, loose goods and bulk materials;

H. Names, Weight, Measurement and IMCO No. (as per International Maritime Dangerous Goods Code) of dangerous goods.

For the purpose of the Contract, the term “Actual Delivery Date” shall, pursuant to CFR term mean the date of clean on board Bill of Lading.

5.4 Under CFR term, the Supplier shall deliver the Equipment in accordance with the following provisions:

5.4.1 Not later than sixty (60) days before the readiness or delivery to the first carrier for each shipment, the Supplier shall notify the Purchaser and the Purchaser’s shipping agent by fax of the following contents:

a) Contract No.;

b) Date of readiness for the shipments;

c) Total volume;

d) Total gross weight/total number of packages;

e) Contract value of the equipment;

f) Port/Place of Shipment;

g) Name, total gross weight and measurements of each piece exceeding *** metric tons in weight or *** cubic meters in measurement;

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General Terms and Conditions

h) Name, weight, cargo quantity, IMCO No. (as per International Maritime Dangerous Goods Code) of the dangerous and/or inflammable goods; and

i) Export Warning Notice (EWN) serial number, if applicable.

In the meantime the Supplier shall airmail via express mail the following documents in six (6) duplicate copies to the Purchaser:

a) The packing list of the shipment covering Contract No., item No., name of the Equipment, specification, type, quantity, unit/total price, unit/total weight, unit/total volume, the overall dimensions of each package (lengthxwidthxheight), total number of packages and Port of Shipment.

b) Overall packing sketch and drawings for each large piece exceeding twenty (20) metric tons in weight or 9x3 x3 cubic meters in measurement;

c) Description of any dangerous and/or inflammable goods indicating names, properties, special protective measures and handling methods in case of accident;

d) Description of the special precautions for the Equipment that requires special storage and transportation.

Another duplicate copy of the said documents shall be airmailed via express mail to the shipping agent appointed by the Purchaser as the basis for arranging transportation, loading and unloading of the Equipment.

5.4.2  Within twenty-four (24) hours after completion of each loading, the Supplier shall inform the Purchaser by fax of the following information: Contract No., name of Equipment, actual loading quantity, total gross weight, total volume, proforma invoice and the statement of packing without wood or the fumigation certificate issued by concerned inspection organization. In case the Purchaser fails to arrange insurance in time due to the Supplier’s failure to inform it in time, all the losses shall be borne by the Supplier.

5.4.3  Within two (2) days after loading the Equipment onto the carrying vessel designated by the Purchaser, the Supplier shall deliver by express mail one (1) original of the clean on board Bill of Lading, proforma invoice, quality certificate, certificate of origin, the statement of packing without wood or the fumigation certificate issued by concerned inspection organization and packing list to the Purchaser.

5.4.4  The Supplier shall complete the delivery of Equipment in accordance with the Delivery Dates. Any delivery to be made by the Supplier prior to the Delivery Dates shall be subject to the prior written consent of the Purchaser, otherwise all responsibilities and cost and expenses thus incurred shall be borne by the Supplier.

5.4.5  If any Equipment contains dangerous and/or inflammable items, the Supplier shall submit to the Purchaser an English description in one (1) copy indicating the name, characteristics, special handling and protective measures in case of accidents in respect of such items. The Supplier shall instruct the shipping agent to indicate in the Bill of Lading the case No./container No., IMCO No., thereof.

5.4.6  The Supplier/his shipping agent shall book shipping space in advance. The Supplier shall keep close contact with the Purchaser. Should the shipping vessel or the date of arrival be changed, the Supplier/his shipping agent shall inform the Purchaser in time.

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General Terms and Conditions

5.4.7  If the Supplier fails to deliver by express mail, the above-mentioned documents stipulated in 5.4.3 to the Purchaser in due time, all the costs incurred due to delayed customs clearance including but not limited to storage, fumigation and heat treatment expenses shall be borne by the Supplier.

5.4.8  In case the Equipment are lost and/or damaged in the ocean transportation after the transfer of the risk to the Purchaser, the Supplier shall assist the Purchaser to apply to the insurance company for compensation at the Purchaser’s expenses and effect, upon the Purchaser’s request, supplementary supply of the same Equipment and Document at the original Contract Price.

5.5 The Clause 5.5, Clause 5.6, Clause 5.7 and Clause 5.8 are intentionally left blank.

5.6 Documentation provided by the Supplier shall be delivered at the site directed by the Purchaser.

5.7 All Documentation to be supplied by the Supplier shall be delivered in accordance with the Schedule as shown in Appendix B-8 under the Contract. In case the delivery dates are not defined in the Contract, their delivery should comply with the erection, testing, commissioning, operation and maintenance plan of related Equipment.

5.8 The Supplier shall remain responsible for the contents of unopened Documentation packages being in accordance with the Supplier’s appropriate detailed list of Documentation until such packages are opened. In the case of any shortage, loss or damage caused to the Documentation, the Supplier shall make supplementary delivery to the Site of the item or items lost or damaged within *** after receiving notification from the Purchaser, without any charge. Any item or items lost or damaged after transfer of the risk to the Purchaser or due to the Purchaser’s fault shall be replaced by the Supplier at the cost of the Purchaser.

5.9 The Supplier shall, one (1) week prior to the delivery of Documentation, notify the Purchaser and its nominated carrier of the number of cases, gross weight, Contract No. and the expected date of arrival of the Documentation to be delivered.

5.10  Within twenty-four (24) hours after dispatching Documentation, the Supplier shall notify the Purchaser and its nominated carrier by fax of the Contract No., dispatching date, number of parcels, flight No., Airway Bill No., and approximate gross weight, and submit by courier service to the Purchaser and/or its nominated carrier the following documents:

a) Two (2) copies of airway bill (marked with Contract No. and the consignee) or carrier’s receipt;

b) Two (2) copies of detailed list of Documentation;

c) Two (2) copies of detailed packing list; and

d) One (1) original Certificate of fumigation treatment issued by concerned inspection organization or the statement of packing without wood for Document delivered from abroad.

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General Terms and Conditions

5.11  The date of receiving the Documentation at Site shall be deemed as the Actual Delivery Date for Documentation provided by the Supplier within People’s Republic of China.

The delivery date of the final version of the Documentation shall be deemed as the Actual Delivery Date of the Documentation concerned.

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General Terms and Conditions

Chapter 6 Packing and Marking

6.1 The Supplier shall have the Equipment tightly packed and shall take all measures to protect the Equipment from moisture, mould, rain, rust, corrosion, and all forms of damage, etc. taking into account the local climatic conditions and the nature of the Equipment. Such packing shall be suitable to withstand numerous handling, loading and unloading and long-distance air and/or sea and/or inland transportation to ensure the safe arrival of the Equipment at the Site without any damage or corrosion. The Supplier shall also provide all special frames, supports or fixtures necessary for handling and stowing the Equipment, and ensure them to meet the specified requirement of the further transportation, storage, protection and hoisting for the consequent equipment. The Supplier shall take such special measures as may be necessary to protect such things as the welding preparations of high pressure pipes, instrumentation, sockets and other fragile fittings.

6.2 In each package of Equipment a detailed packing list in three (3) copies together with the relevant quality certificate issued by relevant manufacturers shall be enclosed. The packing list shall specify:

(i) for individual equipment:

(a) functional identification of equipment and designation;

(b) reference (coding number and title) of the drawing (assembly drawing or other) identifying the equipment;

(c) quality.

(ii) for bulk material:

(a) coding identification and designation of the relevant item;

(b) references (coding number and title) of the standardized document identifying the item;

(c) quantity and quality.

The packing list shall be presented and coded according to the applicable procedures.

6.3.1  The Supplier shall mark the following on the four (4) adjacent sides of each package with indelible paint in conspicuous printed words:

(i) Contract No.;

(ii) consignee;

(iii) destination;

(iv) shipping mark;

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General Terms and Conditions

(v) gross/net weight (kg);

(vi) measurement (length x width x height in m);

(vii) case No./bale No.;

(viii) name of Equipment;

(ix) consignee code;

(x) Supplier’s name.

6.3.2  In accordance with the characteristics and various requirements in loading, unloading and shipping equipment, the packing shall be conspicuously marked “Handle with care”, “Right side up”, “Keep dry”, etc. in words, or with appropriate international trade practice and illustrations.

6.3.3  Should any packages weight two (2) metric tons or more, its weight and hoisting position and with international trade practice and illustrative marks shall be clearly shown on two (2) adjacent sides of each package so as to facilitate loading, unloading and handling.

6.3.4  Loose accessories in package or bundles shall be labeled by the Supplier, indicating Contract No., names of accessories and their location, number and accessory No. on assembly drawings.

6.3.5  For unpacked pieces of Equipment the above mentioned marking shall be indicated directly on Equipment or on tightly fastened metal labels. For large pieces proper handling frames and supports should be provided.

6.3.6  Should any Equipment be damaged or lost due to improper packing and/or inadequate protective measures, the Supplier shall be responsible for the repair, replacement and/or compensation in accordance with the Contract. If mistake of transportation of Equipment occurs due to wrong/poor packing or ambiguous marking, the Supplier shall bear additional expenses arisen thereof.

6.3.7  The Documentation to be provided by the Supplier shall be properly packed to withstand numerous handling, long-distance transportation and to be protected against damage from moisture and rain.

6.3.8  Three (3) copies of a detailed list marking the Documentation coding number, title designation, revision and status of documents shall be enclosed in each parcel of the Documentation.

6.4 Any item delivered pursuant to or in connection with the Contract and which remains the property of or is rented out by the Supplier shall be marked accordingly.

6.5 The Supplier shall request in due time from the Purchaser the necessary information for marking.

6.6 All mark described in this chapter shall be made in English.

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General Terms and Conditions

Chapter 7 Documentation

7.1 Both Parties shall deliver the Documentation to the other Party in accordance with Appendices B-1 and B-8. Final documentation shall take into account the latest modifications made during on-Site Acceptance tests.

7.2 The Supplier shall submit the Documentation to the Purchaser and the Design Institute designated by the Purchaser for review within the time specified in the Contract or, where there is no specified time, the Supplier shall submit the Documentation to the Purchaser within the time reasonably required by the Purchaser. The review of Documentation by the Purchaser shall not release the Supplier from its any obligation under the Contract.

7.3 If the Supplier in order to comply with its obligations under the Contract shall wish to modify or correct any Documentation which has already been supplied to the Purchaser, it shall submit such modified Documentation or revisions thereof for the review by the Purchaser and the Design Institute designated by the Purchaser.

7.4 The Purchaser and the Purchaser’s representative or any third party appointed or engaged by the Purchaser shall have the right, at all reasonable times to inspect at the premises of the Supplier and where applicable, its Sub-suppliers all Documentation relating to any item of the Equipment.

7.5 Documentation and the Contract are intended to complement each other, so that anything shown in Documentation but not mentioned in the Contract, or vice-versa, is to be supplied as though specifically set forth in both. Any discrepancies in the Documentation or Contract shall be promptly referred to the Purchaser and the Design Institute designated by the Purchaser before the Supplier proceeds with the manufacture of the relevant part of the Equipment.

7.6 Detailed drawings shall take precedence where they differ from general drawings.

7.7 All documents shall be provided in English and shall refer to the metric system, except otherwise stipulated in the Contract.

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General Terms and Conditions

Chapter 8 Mistakes in Information

8.1 The Supplier shall be responsible for any discrepancies, errors or omissions in the Documentation and other information supplied by the Supplier under the Contract, whether such Documentation and other information has been reviewed or approved by the Purchaser or not, provided that such discrepancies, errors or omissions are not due to inaccurate documentation furnished to the Supplier by the Purchaser.

8.2 The Supplier shall at its own expense carry out any alterations or remedial Work necessitated by reason of such discrepancies, errors or omissions and modify Documentation accordingly. In the event that the Supplier fails to carry out such alterations or remedial Work upon the receipt of the notice from the Purchaser, and if such alterations, remedial Work or modifications are done by or on behalf of the Purchaser, the Supplier shall bear all costs reasonably incurred therein. The performance of its obligations under this Chapter shall not relieve the Supplier of its liability under Chapter 14.

8.3 The Purchaser shall be responsible for information supplied to the Supplier in writing by the Purchaser. The Purchaser shall issue a Variation Order in accordance with Chapter 9 for alterations necessitated by reason of inaccurate information so supplied to the Supplier, if the alterations affect the Supplier’s costs.

8.4 The Supplier shall promptly bring to the attention of the Purchaser any matters that appear to be deficiencies, omissions, contradictions or ambiguities, or any doubt about the meaning or correctness of any information supplied to the Supplier by the Purchaser. The Purchaser shall then promptly instruct the Supplier how to proceed.

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General Terms and Conditions

Chapter 9 Variations and Omissions

9.1 The Supplier shall not alter any of the Works except as directed in writing by the Purchaser, but the Purchaser shall have the full power, subject to the provisions hereinafter contained, at any time during the execution of the Contract to alter, amend, omit, add to or otherwise vary any of the Works. The Supplier shall carry out such variations and be bound by the same conditions, so far as applicable, as though the said variations were an integral part of the Contract.

9.2 The Purchaser may from time to time in writing instruct the Supplier to submit, in such detail as the Purchaser may require and within a reasonable period of time, the proposed revision to the Contract Price and Delivery Dates.

9.3 If in the opinion of the Supplier any proposed variation is likely to prevent it from or prejudice it in fulfilling any obligation under the Contract, it shall notify the Purchaser thereof in writing, and a change proposal shall be submitted by the Supplier at the same time, but there shall be no delay on the part of the Supplier in performing its obligations under any Variation Order issued by the Purchaser.

9.4 If the Supplier believes that any direction, instruction, decision or any other act or omission of the Purchaser affects the Supplier’s costs for performing the Works or the time required therefore, the Supplier shall promptly notify the Purchaser in writing, but there shall be no delay on the part of the Supplier in performing its obligations under any Variation Order by the Purchaser. The Purchaser may issue a Variation Order revising the Contract Price and Delivery Dates as required, provided however that no Variation Order shall be allowed if:

a) the act of the Purchaser affected the Supplier’s performance in a manner consistent with the Contract or was necessitated by the Supplier’s failure to comply with the terms of the Contract; or

b) the Supplier’s performance was adversely affected by the Supplier’s fault, negligence or failure to comply with the stipulations of the Contract; or

c) the Supplier did not promptly notify the Purchaser in writing, due to which the Purchaser could not make recourse to the liable third party.

9.5 Such revision to the Contract Price shall be ascertained and determined in the following manner:

(i) where options and alternatives are defined and priced in the Contract, the amounts stated therefore;

(ii) where they are not so defined and priced, the amounts shall be agreed by the Parties in accordance with one or more of the methods stated below:

(a) on a lump-sum basis, determined from an estimate produced by the Supplier on a basis consistent with the Contract;

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General Terms and Conditions

(b) on a lump-sum basis, based on unit prices and/or unit rates which stated in the Contract;

(c) on the basis of costs which the Contract so provides;

where they are not so defined and priced, the amounts shall be discussed and agreed by both Parties in writing.

Due account shall be taken of any partial execution of Work which may be rendered useless by any such variation or omission, and of any sums which may be recoverable by the Supplier from third parties.

Detailed itemized price shall be submitted by the Supplier, and inquiry/quotation documents with its Sub-suppliers shall also be provided to support the related price. All these shall be treated as the supporting documents for the issuance of Variation Order.

Except with the prior agreement of the Purchaser, the Supplier’s submission of change proposal shall be made not later than *** after receipt of the Purchaser’s instruction.

9.6 In case both Parties cannot reach an agreement on commercial issues and delivery schedules of a change proposal within two (2) weeks after the receipt by the Supplier of the notification from the Purchaser, the Supplier shall suspend the Work under the proposed variations of the Purchaser. Both Parties shall continue the discussions on the change proposal mentioned above, and then a final agreement shall be reached under the Contract’s condition.

9.7 If the Supplier fails to carry out the relevant Works under any Variation Order of the Purchaser in order to secure the progress of the Project after the receipt by the Supplier of the notification from the Purchaser, the Purchaser is entitled for a self-execution, and the Supplier will be responsible for any consequences arising from abovementioned self- execution within *** after the receipt by the Supplier of the notification from the Purchaser.

9.8 A Variation Order shall be issued after the Purchaser has agreed the Supplier’s submission and shall be on a standard form entitled “Variation Order” which shall be the sole method for revising Delivery Dates, the Schedule and/or the Contract Price.

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General Terms and Conditions

Chapter 10 Coordination, Liaison and Project Management

10.1 The Supplier shall liaise and work in coordination with the Purchaser’s project management team in the People’s Republic of China and with the representative of the Overall Designer of the Project entrusted by the Purchaser. The procedure for such liaison is outlined in Appendix B-10 and it shall be specified in detail in the Project Procedures Manual according to Appendix B-10.

10.2 Unless specifically stated to the contrary in the Contract, the cost of undertaking such liaison in accordance with Appendix B-10 shall be, and shall be deemed to be, covered by the prices included in the Contract. The Supplier further undertakes that it (and its Sub-suppliers where applicable) shall fulfill its obligations pursuant to Appendix B-10 but it is expressly agreed between the Parties that the Supplier is not liable for any of the obligations of any other suppliers engaged by the Purchaser; in the event that the Supplier considers that its fulfillment of its obligations under Appendix B-10 is being impeded by any other supplier engaged by the Purchaser, it shall promptly bring such matter to the attention of the Purchaser’s Project Director.

10.3 Project Director shall be the person so nominated by the Purchaser from time to time by the issue of a written notice to the Supplier. When issuing any such notice the Purchaser shall also notify the Supplier of the power that it has delegated to its Project Director and all acts, instructions and decisions subsequently given by the Project Director in accordance with such delegated powers shall be deemed to be acts, instructions and decisions of the Purchaser.

10.4 The Purchaser shall have the right to withdraw or amend any delegation given to its Project Director pursuant to Clause 10.3 by the issue of written notice in advance to the Supplier.

10.5 The Project Director shall have the right to re-delegate any of the powers vested in him by the Purchaser (other than the power to approve any variation or to change any previously established date for the fulfillment of an obligation by the Supplier under the Contract) by the issue of written notice to the Supplier and all acts, instructions and decisions subsequently given by any person within the powers delegated to him by the Project Director shall be deemed to be acts, instructions and decisions of the Project Director.

10.6 The Project Director shall have the right to withdraw or amend any re-delegation of his powers pursuant to Clause 10.5 by the issue of written notice in advance to the Supplier.

10.7 Within one (1) month after Signature of Contract, the Supplier shall submit details of its proposed contract management organization for the Project Director’s review. Such details shall consist of an organization chart and a brief job description for key personnel, and show the powers and authorities vested in those shown in the Supplier’s contract management organization as having direct contact with the Purchaser, the Project Director (including his delegates pursuant to Clause 10.5), and the

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Purchaser’s other representatives including the Overall Designer engaged by the Purchaser for the purposes of the Project. In the event of it being agreed that changes should be made to the Supplier’s organization chart, the Supplier shall forthwith submit a modified organization chart to the Project Director.

10.8 Whenever the Supplier considers that the previously reviewed contract management organization should be changed without prejudice to the interests of the Project, or where the need for change has become unavoidable, it shall forthwith submit details of its proposed revised contract management organization to the Project Director for review as if it were the original proposed contract management organization.

10.9 The Purchaser shall have the right to issue copies of the Supplier’s contract management organization details to its other suppliers engaged for the purposes of the Project.

10.10  In order to enable the Purchaser to exercise its rights under the Contract with regards to access relating to the Works being undertaken by the Supplier’s Sub-suppliers, the Supplier shall provide the Project Director with the necessary details of the Sub-suppliers’ organizations.

10.11  The Supplier undertakes that throughout its contract management organization it shall only use suitably qualified and experienced personnel and that where such personnel are a point of direct contact with the Purchaser, including the Project Director and any of his delegates and representatives, they shall be fluent in the English language.

10.12  Each Party shall provide such facilities as is required under the Contract so as to facilitate the coordinated working procedures outlined in Appendix B-10 and each Party shall be responsible for ensuring that the acts of its employees, agents and other representatives under the Contract shall not prejudice the best interests of the Project. In particular, but without limitation, without prior notice to the Purchaser the Supplier shall not enter, nor permit its Sub-suppliers to enter, into any negotiations with any government entity or agency to develop variances or revisions to any law which has direct application to the Contract and which could adversely affect the best interests of the Purchaser.

10.13  The activities required to be provided by the Supplier pursuant to Appendix B-10 include the attendance by the Supplier’s personnel at periodic coordination meetings, monthly progress meetings and meetings on special issues. The host shall provide meeting facilities and prepare meeting documents concerned.

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Chapter 11 Safety Management and Quality Assurance

Part 1: Safety Management

11.1 The Supplier shall abide by the compulsive design standards and codes which shall be noted in the design document and the Contract. In case of no such standards and codes in existence, the Supplier shall make sure as required by the Product Quality Law of People’s Republic of China the design and the product be safe to human health and lives, and property as well.

11.2 Considerations shall be made to ensure the safety and protection of the product in erection and operation. The Supplier shall highlight the safety related information in the design documentation and provide instructions in accident prevention.

11.3 In case the application of new structure, material or state of arts, the Supplier shall provide relevant safety suggestions to the construction personnel.

11.4 The Supplier shall do the best in enhancing the intrinsic safe performance of the product.

11.5 The Supplier shall provide the Purchaser with the information on the hazards and safety instructions in regard of the transport, erection, commissioning, operations and maintenance of the Equipment.

11.6 The manufacturer shall follow the design and make sure the quality and safety performance of the Equipment in operation lifetime.

11.7 Appropriate safety signs and marks on the product and/or the package of the product shall be provided as required by the Product Quality Law of People’s Republic of China.

11.8 The product containing radioactive sources or toxic and hazardous substance (if any) shall bear outstanding warning signs on the surface and the packages, and the Supplier shall make statement on the shipping document and provide safe storage instruction and precautions to the Purchaser.

Part 2: Quality Assurance (hereinafter referred to as the “QA”)

11.9 The Supplier shall establish and implement a Quality Management System which shall comply with ISO9001: 2000 Standard.

11.10 The Supplier shall establish a Project Quality Assurance Program (hereinafter referred to as the “program”) for this Contract after taking into account scope and nature of the Contract, Specifications, quality warranties and quality control requirements and prepare management procedures and work instruction to meet the contract requirements, if necessary.

The detailed requirement for “program” and procedures is specified in Appendix B-4.

11.11 The Supplier shall submit to the Purchaser its generic “quality management manual” for review, and “program” and management procedures specific for the project for approval.

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11.12 The Supplier shall submit to the Purchaser documents and records in line with requirement prescribed in Appendices. And the Supplier shall ensure the validity of these documents and records provided to the Purchaser regardless of the Purchaser’s review. In the event that the Purchaser discovers that any quality related documents do not conform to the requirements of the Contract, the Purchaser shall have the right to require revision by the Supplier.

All quality related documents and records relevant to the contract shall be available to the Purchaser’s representatives for reference and review at the location where the corresponding activity is performed. At the Purchaser’s request, if needed on a case-by-case basis, the Supplier shall provide a copy of such quality-related documents. The Purchaser shall have the right to make copies of all documents and records submitted by the Supplier and distribute such copies to its representatives for their use.

11.13 The Supplier shall evaluate its main Sub-suppliers in line with documented procedure and submit to the Purchaser the qualification report for approval before signature of relevant contracts according to the requirements of Purchaser’s Project Procedures. When it is necessary, the Purchaser shall have right to perform sources evaluation on selected Sub-suppliers with supplier. The Supplier shall establish and maintain up to date the list of qualified Sub-suppliers in which the status of qualification, QA standard applied and scope of contract shall be indicated. The list of qualified Sub-supplier, modification to this list and associated supporting documents shall be submitted to the Purchaser for review.

The Supplier shall strictly supervise the implementation of its Sub-supplier’s QA/QC activities according to the requirements of the applicable QA/QC documents.

11.14 The Quality Plans for this Contract shall be established and implemented by the Supplier in accordance with the requirement of Appendix B-4.

11.15 The Supplier shall handle non-conformance related to this Contract in accordance with the provisions described in Appendix B-4. The non-conformance list of this Contract shall be established and up-dated.

11.16 The Purchaser’s representative has the right to access to the Supplier and its Sub-supplier’s premises for its QA and QC activities. The Supplier shall provide to the Purchaser’s representative with convenience and necessary assistance to carry out such QA and QC activities. The Purchaser reserves the right to stop the Supplier’s activities when significant conditions adverse to quality arise and the Supplier shall take all necessary corrective actions promptly to resolve the conditions into satisfaction of the Purchaser prior to resumption of the activities.

11.17 The Purchaser shall have the right to participate in the internal and external QA audits as observer/auditor and kick-off meetings arranged by the Supplier. The Supplier shall inform the Purchaser of the schedule in advance.

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Conclusions, findings and corrective actions of QA audit report related to this Contract shall be transmitted to the Purchaser.

11.18  The representative of the Purchaser shall have access to the Supplier’s and its Sub-suppliers premises for surveillance and inspection if safety related activities concerned.

11.19  The Supplier shall include in its sub-contracts the necessary provisions to ensure that all Sub-suppliers of this contract comply with the provisions of this chapter, and to entitle the Purchaser with the same right to Sub-suppliers as to the Supplier under this Contract.

11.20  All QA and QC activities carried out by the Purchaser and the inspecting and witnessing safety related activities carried out by the Purchaser to the Supplier and its Sub-suppliers shall not alleviate or free the Supplier from its obligations and legal responsibilities under the Contract.

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Chapter 12 Inspection at Manufacturer’s Premises and after Delivery

12.1 During manufacture, the Supplier shall be responsible for all inspection, examination and testing (“In-factory Acceptance Tests”) of the Equipment to be supplied under the Contract and the costs thereof, including that of its Sub-suppliers, prior to completion. Such inspection and examination shall be according to the standards and codes stipulated in the Contract, or where standards and codes are not specifically defined, in accordance with appropriate and generally accepted practice for the Equipment in question.

12.2 The Purchaser’s involvement in the inspection and test in the supplier’s premise is defined in Appendix B-5. During manufacture, the Purchaser or its representative shall be entitled at all reasonable times to inspect and examine, on the Supplier’s premises, the materials and workmanship of Equipment to be supplied under the Contract and to witness the inspection, examination and tests carried out by the Supplier. If part of the said Equipment is being manufactured on other premises the Supplier shall obtain for the Purchaser equivalent authorization as if the said Equipment were being manufactured on the Supplier’s premises. Such inspection, examination and witnessing shall not release the Supplier from any of its obligation under the Contract.

12.3 During manufacture, the Supplier shall submit manufacture progress reports on forms as approved by the Purchaser at suitable time. Such monthly reports shall show the actual progress completed as of date of the reports plotted against the schedule as given in the Contract, and shall be broken down so as to indicate status of purchased materials, detailed shop schedule, shipping dates, and the like as required in accordance with the Contract.

12.4 For any tests to be performed on the premises of the Supplier or of any Sub-supplier, the Supplier shall provide free of charge such assistance, labor, materials, electricity, fuel stores, apparatus and instruments as may be requisite and as may be reasonably required to carry out such tests efficiently.

12.5 If during manufacture, when inspecting, any Equipment or any part thereof is found to be not in accordance with the Contract, or in any other way defective, then the Supplier shall promptly replace or re-manufacture the Equipment or part thereof so affected, or remedy the defect or non-conformance. Unless otherwise authorized by the Purchaser, the Supplier shall re-perform within a reasonable time and upon the same terms and conditions such inspection, examination or test, at the expense of the Supplier. No such replacement, re-manufacture, remedy and associated inspection, examination or tests shall be regarded as a Force Majeure occurrence.

12.6 Should the Supplier fails to comply with the requirements of Clause 12.5 above the Purchaser shall have the right to remove the portion of the Equipment concerned from the Supplier and to have the defect remedied by and the test re-performed by the means whatever the Purchaser shall decide, all at the Supplier’s expense.

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12.7    The Supplier shall ensure that it and its Sub-suppliers maintain good and clear systems of record so as to be able to store and recover the manufacturing and testing history of the Equipment and of its major components.

12.8    In-factory Acceptance Tests shall be conducted by the Supplier and witnessed by the Purchaser. The Supplier shall provide the Purchaser or its representatives with reasonable working facilities and assist the Purchaser’s inspectors to obtain entry visas and deal with necessary formalities to stay and arrange boarding, lodging, medical care and communication means, etc. in accordance with Appendix B-5.

The final version of the In-factory Acceptance Tests Procedures shall be issued by the Supplier and supplied to the Purchaser prior to the beginning of the In-factory Acceptance tests. The Supplier shall subsequently, after consulting the Purchaser, give the Purchaser notice in writing in advance of the actual date and place at which any Equipment will be ready for In-factory Acceptance Tests as provided in the Contract.

12.9    Except in case of major deficiencies of the Equipment, the In-factory Acceptance Tests should be duly finished in a reasonable time as described in the Appendix B-5 of the Contract.

12.10  After completion of the In-factory Acceptance Tests, if the performance warranties specified in Appendix B and the Acceptance Test Procedures have all been satisfied and the operation of all the Equipment has been normal during the course of the In-factory availability period and, a certificate of In-factory Acceptance Tests in two (2) copies shall be signed and issued by the Purchaser. However, the Supplier shall not deliver the Equipment without In-factory Acceptance certificate and until all recognized defects have been remedied. The certificate shall be deemed as signed and issued by the Purchaser in the event that the Purchaser does not dispatch the technical staffs to participate in aforesaid tests.

12.11  The In-factory Acceptance Tests and the In-factory availability period shall not release the Supplier from its other obligations under the Contract.

12.12  At an appropriate time, after arrival of Equipment at the Site, the Purchaser shall organize the opening of cases, inspection of packing and Equipment and such non-destructive testing as it considers necessary (all being hereinafter referred to as “open-package inspection”), to establish the extent of any shortage or visible damage, to check the Equipment against shipping documentation and to check quality and specifications against the requirements of the Contract. The Supplier is entitled to send its representatives at its own expense to join in the open-package inspection. The Purchaser shall inform the Supplier of the date and nature of inspection or test *** prior to the open-package inspection. If the representatives of the Supplier cannot reach the Site in time, the Purchaser shall have the right to open the package and conduct the inspection independently. After the Supplier has staff on Site, notice of *** in advance shall be given to the Supplier’s Site staff who may join in such inspection.

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12.13  Should any shortage, damage or failure to meet quality standards and specifications stipulated in the Contract, be found affecting the delivered Equipment, during the open-package inspection by the Purchaser and/or the Supplier, a detailed record shall be made and signed by representatives of the Parties. The record shall be sent to the Supplier after the Purchaser conduct the inspection independently as stated in Clause 12.12, if the Supplier disagrees on the record, the comments shall be sent to the Purchaser within *** after receipt, otherwise it shall be deemed that the Supplier accepted the record. This record shall be taken as conclusive evidence for the Purchaser to claim replacement or repair from the Supplier, where the said shortage, defect, damage or failure is due to the fault of the Supplier.

12.14  If the Parties cannot agree on the results of the open-package inspection or on any other means of testing to verify condition of the Equipment as received at Site then either Party may submit the results to the local Branch of General Administration of Quality Supervision, Inspection and Quarantine of China for re-examination and the expenses thereof shall be borne by the liable Party. Any claim against the Supplier by the Purchaser shall then rely upon the certificates issued by the same local Branch of General Administration of Quality Supervision, Inspection and Quarantine of China.

12.15  Where it is found liable therefore under the Contract, the Supplier shall replace missing parts free of charge to the Purchaser, or repair, or if the Purchaser considers the repair might cause potential defects or reduce the integrity of the Equipment, replace damaged parts free of charges to the Purchaser at the Site immediately after receiving the certificate of claim from the Purchaser and shall be responsible for the risk and freight therefore to the erection Site and also the repeat inspection fee of the Purchaser. If the Supplier disputes the claim, its objection shall be raised within *** after receiving the certificate of claim. Consultation shall then take place between the Parties. If the objection is raised later than ***, the Purchaser’s claim shall be upheld.

12.16  Replacement or repair performed by the Supplier under Clause 12.15 shall be carried out as soon as practicable by and at the expense of the Supplier and if replacement or repair is required urgently airfreight shall apply.

12.17  The open-package inspection and tests mentioned above shall not release the Supplier from its liabilities under Chapter 14 of this Contract.

12.18  The lists of standards and codes applicable to the inspection of Equipment to be provided by the Supplier and the delivery dates therefore are set out in the Appendices of the Contract. If the aforementioned standards and codes are not delivered in time or delivered incompletely, the Purchaser shall be entitled to inspect the Equipment according to the existing standards or codes of a third party chosen by the Purchaser.

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Chapter 13 Erection, Commissioning, Testing and Acceptance

13.1 The erection, commissioning and performance test of the Equipment supplied under the Contract shall be organized and executed by the Purchaser. The Supplier shall provide Documentation, technical assistance, advice and supervision at the Site so as to enable the Purchaser to complete the Contract and put it into operation in accordance with the Appendix B-8.

13.2 The responsibilities of the Site Supervision provided by the Supplier at the Site are as follows:

(i) Assist the Purchaser or its erection contractor to review and to prepare its erection procedures and review with the Purchaser or its erection contractor its erection programs and methods, and provide assistance to the erection contractor when required during the execution of the erection activities;

(ii) Supervise mechanical erection and provide surveillance of the erection contractor’s erection quality and where required by the Purchaser certify, that quality of erection conforms to the technical requirements of the Supplier;

(iii) Assist the Purchaser to prepare and perform the correct commissioning and performance test program and procedures;

(iv) Provide advice to the Purchaser on the conduct of start-up activities, to assist where necessary on resolution of technical matters and where required by the Purchaser certify, the compliance with the Supplier’s requirements.

13.3 During the various stages of erection, commissioning and performance test both Parties shall duly cooperate with each other. In case of any technical problems arising, the Supplier shall advise the Purchaser and analyze the causes and find the solution immediately. Additionally, necessary technical documents shall be provided by the Supplier at no cost to the Purchaser.

13.4 After completion of the erection of the Equipment, the commissioning, performance test, pre-operational test, demonstration run, and acceptance under the Appendices of the Contract shall be carried out without unreasonable delay. The purpose of the above activities is to verify whether the Equipment meets the warranties and technical performances specified in the Contract.

13.5 After completion of the commissioning, performance test, pre-operational test, demonstration run, if the operation of all the Equipment is normal and the warranties and technical performances of the Equipment have all been achieved, and all the known defects are remedied, the Equipment shall be deemed acceptable. Then a certificate of provisional acceptance (hereinafter called “Provisional Acceptance Certificate”) in two (2) original copies shall be signed by both Parties and issued by the Purchaser, one (1) original copy to be retained by each Party.

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13.6 Notwithstanding the provisions of Clause 13.3, if the pre-operational test, commissioning, demonstration run and performance test of the Equipment cannot meet the requirements of one (1) or more items of warranties or technical performance due to the Supplier’s fault, the provisions of Chapter 14 shall apply.

13.7 If the commissioning, performance tests pre-operational test, demonstration run are delayed due to Supplier, the Supplier shall fulfill its responsibilities as defined in 13.2 at any time upon the Purchaser’s request. The delay of the tests mentioned above shall not release the Supplier from its obligations under this Chapter.

13.8 The Provisional Acceptance Certificate of the Equipment under this Chapter shall not release the Supplier from its liabilities under the Contract.

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Chapter 14 Warranties and Defects After Delivery

14.1    The Supplier warrants that all Equipment supplied shall be brand-new, of the quality required by the Contract and free from any Intellectual Property claim or other claim from any third party. The Supplier further warrants that the Equipment shall satisfy the requirements of the interfaces and comply with the standards, codes, and Specifications specified in the Contract, with the objective of assuring long term, safe, reliable and efficient operation, and easy maintenance.

14.1(A) The Supplier warrants that all items of Equipment supplied under this Contract shall be free from defects in material and workmanship, conform to the applicable Specifications and drawings and shall be free from design defects and suitable for the purposes intended by the Purchaser.

14.2    Notwithstanding the provisions of Clause 14.1, the Supplier shall promptly notify the Purchaser of any improvement measures related to reliability or efficiency taken or proposed in the light of experience feedback from its own activities or from any other customers. At any time up to the end of the Warranty Period, the Supplier shall be obligated to implement any such improving measures (if required to do so by the Purchaser) free of charge to the Purchaser where such implementation is necessary to ensure reliability of the Equipment to the level envisaged by the Contract or its safe operation.

14.3    The Supplier warrants the timely delivery of the Equipment in compliance with the scope of supply stipulated in Chapter 2. During the implementation of the Contract, if any item is omitted which is required for safe and reliable operation or convenient maintenance or for achieving the performance stipulated in the Contract, the Supplier shall supply such item or make the necessary adjustment at no additional cost to the Purchaser.

14.4    The Supplier warrants that the Documentation shall be complete, clear and correct and shall meet the requirements of transportation, storage, acceptance testing, operation, maintenance, management, quality control etc. under the Contract.

14.5    The Supplier shall be responsible for making good any defect in or damage to any portion of the Equipment which may appear or occur under proper use during the Warranty Period and which arises from defective materials, workmanship, design (other than a design furnished by the Purchaser and for which the Supplier has disclaimed responsibility) or the wrong instructions of the Supplier’s technical personnel or an error in the Documentation.

14.6    If any such defect shall appear or damage occur, for which the Supplier is responsible, the Purchaser shall immediately inform the Supplier thereof stating in writing the nature of the defect or damage. The Supplier shall promptly repair or, if the Purchaser considers that repair might cause potential defects or reduce the integrity of the Equipment, shall replace the defective or

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damaged part of the Equipment, at the Supplier’s expense including all costs of removal, insurance, reinstallation, packing, transportation to and from Site and if required urgently shall be freighted by air. If required by the Supplier, the Purchaser shall provide such labor, tools, materials and workshop facilities as are available at the Site and shall be reimbursed for all reasonable expenses incurred in so doing.

14.7    Where any defect or damage for which the Supplier is responsible under Clause 14.5 arises after the Equipment has been put into service, then for the repaired or replaced parts of the Equipment, together with any other parts which cannot be used as a consequence of the said defect or damage, the Warranty Period shall be extended until *** after the repaired or replaced portion of the Equipment has been put back into service by the Purchaser.

14.8    Upon pursuant to this Chapter the Supplier shall supply a part in replacement of a defective or damaged part, the defective or damaged part shall become the property of the Supplier, and shall be disposed of by the Supplier at its own expense.

14.9    If any defect or damage be not remedied within a reasonable time, the Purchaser may proceed to do the Work at the Supplier’s risk and expense without affecting the Supplier’s other liabilities under the Contract or otherwise.

14.10  The Supplier shall make available the Equipment for delivery by the relevant Delivery Dates therefore stated in the Contract. If the Supplier fails to make available the Equipment or any portion thereof by the relevant Delivery Date therefore it shall pay to the Purchaser as liquidated damages the entire amount of ***

***

The liquidated damages for aforesaid delay shall not exceed ***.

Payment of liquidated damages for delay shall not release the Supplier from its obligations to continuously make the Equipment available and to deliver the Documentation in question.

14.11  In the event of any defect which may delay the safe and reliable erection, commissioning and testing being discovered through an open package inspection for which the Supplier is responsible, then, in addition to its obligation to repair the said defect or to replace the Equipment in question in accordance with Chapter 12, the Supplier shall also be reliable to pay liquidated damages for delay in accordance with Clause 14.10 as if the Delivery Date thereof was the date when the defect was discovered and the Actual Delivery Date thereof was the date of delivery on board the vessel following rectification of the defect (or the date when the Supplier remedied the defect at the Site).

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14.12   If the Supplier fails to perform the Services pertaining to this Contract on time as stipulated in the Contract, the Supplier shall be liable to pay the Purchaser liquidated damages, at the following rate:

***

The liquidated damages for delayed Services paid by the Supplier to the Purchaser shall not release the Supplier from the obligation of performing the delayed Services.

14.13   In the event of the Equipment or any part of it failing to achieve its warranted performance as specified in Appendix B-6 during the acceptance tests carried out pursuant to Chapter 13, the Supplier shall take all steps to correct the deficiencies as soon as possible, and after the Supplier has been allowed to take remedial measures for up to *** after the carrying out of relevant performance test pursuant to Chapter 13, then Appendix B-6 shall apply.

14.14   The Parties may settle the disputes under this Chapter in accordance with the Chapter 34.

14.15   Liquidated damages incurred for delay or failure to achieve warranted performance shall be paid by the Supplier to the Purchaser as stipulated in Clause 4.8.

14.16   Before the expiry of the Warranty Period, the Purchaser shall carry out an overall final inspection of the Equipment. The Supplier shall at its own expense dispatch its personnel to participate in the inspection and the Purchaser shall provide to the Supplier reasonable access to the Equipment. If the overall final inspections of the Equipment are delayed, the Supplier shall fulfill its responsibilities as defined in this Clause 14.16 at any time upon the Purchaser’s request. The Supplier shall deal promptly with any defect that are revealed thereby. As soon as the defects revealed within the Warranty Period have been remedied, the Purchaser shall issue a final acceptance certificate (hereinafter referred to as the “Final Acceptance Certificate”) for the Equipment in two (2) original copies (each Party will hold one (1) original copy), thereby confirming that the Equipment is accepted by the Purchaser.

14.17   The Supplier warrants that it has been duly incorporated and organized, and is validly existing (i) in good standing and (ii) in compliance with all registration and approval requirements. It has the corporate power and authority to own and operate its assets and properties and to carry on its business as currently conducted.

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14.18   The Supplier warrants that it has the power and authority to execute, deliver and perform this Contract to which it has signed as a party. All actions on the part of the Supplier necessary for the authorization, execution, delivery of and the performance of all of its obligations under the Contract have been taken.

14.19   The Supplier has obtained all consents, approvals, orders or authorizations of, or registrations, qualifications, designations, declarations or filings with, any government authority or any other competent corporate authority required in connection with the execution, delivery and performance by the Supplier of the Contract, and to the knowledge of the Supplier, there is no reason to believe any of such consents, approvals, orders or authorizations of, or registrations, qualifications, designations, declarations or filings with, any government authority will be suspended, cancelled or revoked.

14.20   None of the Supplier or its designated agents or where applicable, the Sub-supplier is or has at any time been in violation of any law (including without limitation to, any laws relating to the establishment and the operations), which may have a material adverse effect on the ability of the Supplier to perform its obligations under the Contract.

14.21   Where applicable, each of the Supplier, its designated agents and the Sub-supplier has (i) all the necessary production and work safety facilities and equipment in accordance with the relevant regulatory standards for production safety, (ii) passed all safety inspections conducted by the relevant Government Authorities and (iii) not had any major accidents, fatalities or any serious injuries suffered by its personnel since its establishment and that to the knowledge of the Supplier, there is no reason to believe that is business operation will be subject to any closure order.

14.22   The Supplier warrants that it or any of its affiliates are not a party to any litigation or arbitration proceedings or to any dispute and no litigation or arbitration proceedings are threatened or pending either by or against the Supplier or any of its affiliates or any person for whose acts or defaults the Supplier may be variously liable and there are no facts known to the Supplier or any of its directors or officers which might give rise to any such proceedings or to any dispute or to any payment that will affect the performance of this Contract by the Supplier.

14.23   The Supplier is not subject to any order or judgment given by any court or governmental agency and has not been a party to any undertaking or assurance given to any court or governmental agency which is still in force nor are there any facts or circumstances which would be likely to result in the Supplier becoming subject to any such order or judgment or being required to be a party to any such undertaking or assurance that will affect the performance of this Contract by the Supplier.

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Chapter 15 Additional Spare and Replacement Parts and Repairs to the Equipment

15.1   The Supplier shall upon the Purchaser’s request at any time and from time to time promptly sell and supply to the Purchaser at reasonable prices derived from the prices quoted in the Contract Price, Additional Spare and Replacement Parts for the Equipment during the operation life of the Project, subject to the provisions of this Chapter.

15.2   If before the expiry of the period referred to in Clause 15.1 the Supplier intends to discontinue the supply of Additional Spare or Replacement Parts for the Equipment or any portion thereof, it shall forthwith give notice to the Purchaser of such intention and either:

(i) afford the Purchaser the opportunity (which shall be exercised within *** of ordering at reasonable prices such quantities of Additional Spare or Replacement Parts as the Purchaser shall reasonably require in relation to the anticipated life of such Equipment or portion thereof; or

(ii) deliver to the Purchaser free of charge within the above said period of *** such drawings, documentation, software, patterns, tools, moulds, specifications and such other information and equipment as it may have in its possession and as the Purchaser shall require to enable the Purchaser to make or have made such Additional Spare or Replacement Parts, thereby ensuring as good a performance as initially planned and the Supplier shall grant to the Purchaser without payment of any royalty or charge full right and liberty to make or have made such Additional Spare or Replacement Parts as aforesaid.

15.3   If during the period referred to in Clause 15.1 the Supplier fails to fulfill the responsibilities in Clause 15.1 and 15.2, or becomes insolvent or commences to be wound up (not being a member’s voluntary winding up for the purpose of re-construction), then the Supplier shall, so far as it is legally entitled so to do and if so required by the Purchaser, as soon as reasonably practicable deliver to the Purchaser free of charge such drawings, documentation, software, patterns, tools, moulds, specifications and other information as are referred to in Clause 15.2 and the Purchaser shall be entitled to retain the same information for such time only as necessary for the exercise by the Purchaser of its rights under this Chapter and if the Supplier so requires the same shall be returned by the Purchaser to the Supplier in good order and condition (fair wear and tear excepted) and at the Purchaser’s cost and expense.

15.4   If the Purchaser shall exercise its right under Clause 15.3, the Supplier shall also grant to the Purchaser without payment of any royalty or charge full right and liberty to make or have made Additional Spare or Replacement Parts as aforesaid and for such purposes only to use, make and have made copies of all drawings, patterns, specifications and other information supplied by the Supplier to the Purchaser pursuant to the Contract.

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15.5   In entering into the Contract, the Supplier undertakes to carry out such repairs to the Equipment as the Purchaser may require during the period referred to in Clause 15.1 and, other than in respect of repairs for which the Supplier may be liable under the Contract, under separate orders from the Purchaser on commercial terms to be agreed and based on the following principles:

(i) prices will not include more than the Supplier’s normal overhead recovery and margin for the type of Work in question;

(ii) such prices will be presented to the Purchaser in such a manner as will clearly identify the various elements thereof, and

(iii) the right of the Purchaser under Chapter 31 will be extended to cover agreements for repair to Equipment however made.

15.6   The Supplier shall ensure that its Sub-suppliers comply with the provisions of this Chapter.

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Chapter 16 Liability for Accidents and Damage

16.1   The Supplier shall fully indemnify, defend and hold harmless the Purchaser, the Purchaser’s affiliates, officers, directors, agents and employees from and against any and all actual, direct or indirect losses, damages, liabilities, injury, actions, claims, costs and expenses (including the fees, disbursements and other charges of counsel reasonably incurred by the Purchaser in any action between the Supplier and the Purchaser or between the Purchaser and any third party in connection with any investigation or evaluation of a claim or otherwise) resulting from or arising out of any breach by the Supplier of any warranties, covenants or agreements in this Contract or other agreements in connection with this Contract, provided always that the same is due to any negligent act or omission of the Supplier or its Sub-suppliers and their respective servants or agents or materials or workmanship, subject to the followings:

(i) In the event of loss of or damage to the Equipment which is due to the negligence, breach of statutory duty, omission or default of the Supplier’s or its Sub-supplier’s personnel whilst on Site the Supplier shall be liable to remedy such loss or damage in accordance with the provisions of Clauses 14.5 – 14.9 as if it was the result of defective materials, workmanship or design.

(ii) Subject to the provisions of Clause 16.2 the Supplier shall not be liable to the Purchaser for any loss, damage or injury to the extent that it is caused by or arise from the negligent act or omission of the Purchaser.

(iii) In the event of any claim being made against the Purchaser for which the Supplier may be liable under the provisions of this Clause 16.1, the Supplier shall be promptly notified thereof, and may at its own expense conduct all negotiations for the settlement of the same and any litigation that may arise therefrom.

(iv) This clause is intentionally left blank.

(v) In the case of loss of or damage to the Equipment in transit in the place of storage or on the Site arising from or occasioned by causes for which the Supplier is not responsible under the Contract, in accordance with Clause 9.1 the Purchaser may instruct the Supplier to make good the same by repair or replacement. The price of such variation shall be determined in accordance with the provisions of Clause 15.5 and shall be revised to credit the Purchaser with all insurance (if any) recoveries for such loss or damage to the Equipment, to the extent that such recoveries have been received by the Supplier.

(vi) This clause is intentionally left blank.

(vii) The insurance and other protections provided or to be provided to the Supplier pursuant to Chapter 18 remaining in full force and effect

39

General Terms and Conditions

16.2   The liability of the Supplier to the Purchaser under Clause 16.1 shall terminate on the expiry of the period specified in Clauses 14.5-14.7.

16.3   Unless caused through the act, default or neglect of the Purchaser, the Purchaser shall have no liability whatsoever in respect of any damages or losses suffered by the Supplier, its employees, designated agent or Sub-supplier during the course of performing this Contract.

40

General Terms and Conditions

Chapter 17 Licensing

17.1   The Supplier warrants that the Works carried out by the Supplier, its designated agents or where applicable, the Sub-supplier will have a level of safety consistent with the regulations established and approved by the appropriate authorities in the People’s Republic of China as included in the Contract and the safety standards issued by the country of origin of the Supplier.

If certain parts of the Works do not fully comply with the above regulations or safety standards, the Supplier should promptly remedy any defect and justify the adequacy of safety level of the Works and make appropriate proposal for solving this issue to the Purchaser.

17.2   Should the licensing authorities in the People’s Republic of China request the Purchaser to provide information, the Purchaser will notify the Supplier, and the Supplier shall, free of charge, provide the information requested in relation to the Works carried out by the Supplier. If new studies under this Contract are required for safety justification, the cost shall be borne by the Supplier.

17.3   The Supplier shall, at its own expense, provide the Purchaser with the services of any relevant qualified specialists who are required for the due performance of this Contract and assisting the Purchaser in submitting the applications for the regulatory construction permits and operating licenses for the Project.

41

General Terms and Conditions

Chapter 18 Insurance

18.1   This section is intentionally left blank.

42

General Terms and Conditions

Chapter 19 Taxes and Duties

19.1   All taxes and duties in connection with and in the performance of the Contract levied by Chinese government on the Purchaser in accordance with the tax laws of People’s Republic of China and local laws/statutes and the agreement between the government of the People’s Republic of China and the government of the country which the foreign member of the Supplier or its Sub-suppliers is from for the reciprocal avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income shall be borne by the Purchaser.

19.2   All taxes and duties in connection with and in the performance of the Contract levied by Chinese government on the Supplier and its Sub-suppliers, in accordance with Chinese tax laws of People’s Republic of China, local laws/statutes and the agreement between the government of the People’s Republic of China and the government of the country which the foreign member of the Supplier is from for the reciprocal avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, shall be borne by the Supplier and where applicable, its Sub-suppliers.

The Supplier shall be obliged to pay the relevant taxes directly to the Chinese tax authorities. In case as required by Chinese tax laws, the Purchaser is legally obliged to withhold, certain amount of taxes under this Contract and pay them to the relevant Chinese tax authorities, the Purchaser has the right to withhold and pay such amount of taxes to the relevant Chinese tax authorities. After receiving the tax receipts issued by the relevant Chinese tax authorities for the aforesaid taxes, the Purchaser shall submit them to the Supplier without undue delay. The Supplier shall take necessary measures to facilitate the withholding and payment of such taxes.

19.3   All taxes and duties arising outside PRC in connection with and in performance of the Contract shall be borne by the Supplier.

43

General Terms and Conditions

Chapter 20 Force Majeure

20.1   Should either Party be prevented from performing any of its obligations under this Contract due to the event of Force Majeure (as defined in Clause 1.13), the time for performing those obligations under the Contract shall be extended by a period equivalent to the effect of such Force Majeure. The affected Party shall immediately notify the other Party of occurrence of such an event by fax and send by registered airmail a certificate issued by competent authorities or agency confirming the event of the Force Majeure within *** following its occurrence.

Upon occurrence of Force Majeure, the affected Party shall make his utmost efforts to take immediate and reasonable actions in order to minimize such effects and damages.

The Parties shall continue the performance of their other obligations under the Contract insofar as these are not directly affected by the event of Force Majeure occurrence.

20.2   The affected Party shall not be liable for any delay or failure in performing any of its obligations due to the event of Force Majeure. However, the affected Party shall inform the other Party by fax the termination or elimination of the event of Force Majeure as soon as possible.

20.3   Both Parties shall proceed with their obligations immediately upon the cease of the event of Force Majeure or the removal of the effects and the Delivery Date and the Schedule shall be extended correspondingly. Should the effect of the event of Force Majeure last for more than ***, both Parties shall promptly meet and discuss methods to resolve the difficulties arising from the event of Force Majeure.

44

General Terms and Conditions

Chapter 21 Vesting of the Equipment and Documentation

21.1 Equipment supplied or intended to be supplied pursuant to the Contract shall become the property of the Purchaser at whichever is the earliest one of the following events:

(i) when in accordance with the provisions of Chapter 5 the Equipment has been delivered;

(ii) when in the event of termination pursuant to Chapter 26, all amounts due and payable to the Supplier in respect thereof have been received by the Supplier.

21.2 In the event of any Equipment becoming the property of the Purchaser pursuant to the Contract and subsequently being rejected by the Purchaser pursuant to Clause 14.14 such Equipment shall forthwith upon such rejection cease to be the property of the Purchaser and become the property of the Supplier.

21.3 All Documentation used for the purpose of the Contract and other documents which are the property of the Supplier and are additional to the Documentation to be submitted in accordance with the Contract (and which shall include but not be limited to shop drawings) shall immediately vest in and become the property of the Purchaser upon an event of bankruptcy or in the event the Work on the Equipment is terminated in accordance with Chapter 24. The Purchaser shall be entitled to use any such designs, Documentation and other documents for the purpose of procuring Equipment not delivered in accordance with the Contract or for any other reasonable purpose.

45

General Terms and Conditions

Chapter 22 Infringement

22.1 The Supplier warrants that it has the legal right and authority and has obtained all necessary permissions to supply to the Purchaser the Equipment, Documentation and Services in accordance with the terms of the Contract. The Supplier shall indemnify the Purchaser against all actions, claims, demands, costs, charges, and expenses arising from or incurred by reason of any infringement or alleged infringement of Intellectual Property rights by any third party for use of any Equipment supplied by the Supplier, but such indemnity shall not cover any use of the Equipment otherwise than for the purpose indicated by or reasonably to be inferred from the Contract or any infringement which is due to the use of any Equipment in association or combination with any other Equipment not supplied by the Supplier.

22.2 In the event of any claim being made or action brought against the Purchaser arising out of the matters referred to in the Clause 22.1, the Supplier shall be promptly notified thereof and shall at its own expense conduct all negotiations for the settlement of such claim or action, and any litigation that may arise therefore. The Purchaser shall have the right to be represented in any such action by advisory counsel of its own selection and at its own expense. The conduct by the Supplier of such negotiations or litigation shall be conditional upon the Supplier having first given to the Purchaser such reasonable security or collateral as shall from time to time be required by the Purchaser to cover the amount, as the case may be, of any compensation, damages, expenses, and costs for which the Purchaser may become liable. The Purchaser shall, at the request of the Supplier, afford all available assistance for the purpose of contesting any such claim or action, and shall be repaid all reasonable expenses incurred in so doing.

22.3 In the event that the Purchaser should at any time be of the opinion that the security or collateral provided pursuant to Clause 22.2 is inadequate or should the Purchaser reasonably be dissatisfied with the conduct by the Supplier of such litigation involving the Purchaser, the Purchaser shall have the right to assume responsibility for defense of such litigation at the expense of the Supplier without waiver of any rights and benefits provided under the Contract.

22.4 If the Supplier shall be prevented from carrying out its obligations under the Contract due to any infringement or alleged infringement of Intellectual Property rights, the Purchaser may treat such inability as a default by the Supplier.

22.5 The Purchaser on its part warrants that any design or instructions furnished or given by the Purchaser to the Supplier shall not be such as will cause the Supplier to infringe any letters patent, registered design, copyright, trade mark or trade name in the performance of the Contract.

46

General Terms and Conditions

22.6 The Supplier shall promptly give notice to the Purchaser if the Supplier has or acquires knowledge of any Intellectual Property rights under which a suit for infringement could reasonably be brought because of the use by the Purchaser of components, machinery, materials, compositions, process or methods, or their incorporation by the Supplier in the Equipment. Following notification to the Purchaser, the Supplier shall not incorporate in the Equipment, any such components, machinery, materials, compositions, processes or methods without the prior written approval of the Purchaser.

47

General Terms and Conditions

Chapter 23 Assignment

23.1 The Parties agree that the benefits, rights and obligations of any Party under this Contract can be assigned to any third party, subject to the prior written approval by the other party and such approval shall not be unreasonably withheld.

23.2 Notwithstanding the Supplier assigning all or part of its rights and obligations under this Contract to any third party, the Supplier shall assume the full, overall and ultimate responsibility for the due performance of its obligations under this Contract.

48

General Terms and Conditions

Chapter 24 Supplier’s Default

24.1 Without prejudice to any rights and remedies to which the Purchaser may be entitled, if Supplier neglects to perform the Contract with due diligence and expedition, or refuses or neglects to comply with any reasonable orders given to the Supplier in writing by the Purchaser in connection with the performance of the Contract, or contravenes the provisions thereof, or any stipulation in the Contract, the Purchaser may give notice in writing to the Supplier to make good the neglect, refusal, or contravention complained of.

24.2 Should the Supplier fail to comply with a notice given by the Purchaser in accordance with Clause 24.1 within *** from the date of service thereof in the case of a failure, neglect or contravention capable of being made good within that time, or otherwise within such time as may be reasonably necessary for making it good, then, and in such case the Purchaser may forthwith suspend, or terminate the Contract or any part thereof by notice in writing to the Supplier.

49

General Terms and Conditions

Chapter 25 Bankruptcy

25.1 Without prejudice to any other rights or remedies to which the Purchaser may be entitled, if the Supplier become bankrupt or insolvent, or have a receiving order made against it, or compound with its creditors, or be a corporation commence to be wound up (not being a member’s voluntary winding up for the purpose of amalgamation or reconstruction) or have a receiver or manager of its business appointed, the Purchaser may either:

i) terminate the Contract forthwith by notice in writing to Supplier or to the receiver or liquidator or to any person in whom the Contract may become vested; or

ii) give such receiver, liquidator, or other person the option of carrying out the Contract subject to his providing a guarantee for the due and faithful performance of the Contract up to an amount to be agreed.

50

General Terms and Conditions

Chapter 26 Suspension and Termination

26.1 The Purchaser may, at any time, suspend the Work on the Equipment or any part thereof for any reason whatsoever on giving notice in writing to the Supplier specifying that portion of the Work to be suspended and the effective date of suspension. The Supplier shall suspend such Work on the effective date but it shall continue to carry out all other Work under the Contract.

26.2 In the event that the Purchaser suspends any Work in accordance with Clause 26.1 it shall then issue a Variation Order in accordance with Chapter 9 to amend the Contract Price and Delivery Dates of the supply so as to reflect the effects of such suspension, if any. The Contract Price revision shall be limited to the actual extra cost incurred and paid by the Supplier resulting from the said suspension, provided that the Supplier has taken all necessary steps to mitigate such cost.

26.3 Notwithstanding the foregoing, if the Purchaser suspends Work on the Equipment or any part thereof pursuant to Chapter 24, no Variation Order shall be issued and no revision of or adjustment to the Contract Price or Delivery Date shall be allowed.

26.4 The Purchaser may at any time authorize resumption of all or any portion of Work suspended as aforesaid by giving notice in writing to the Supplier specifying the Work to be resumed and the effective date of resumption.

26.5 The Purchaser may, at any time, terminate Work on the Equipment or any portion thereof for any reason whatsoever by giving written notice to the Supplier specifying the extent and the effective date of such termination. The Supplier shall terminate such Work on the effective date but it shall continue to carry out all other Work under the Contract.

26.6 In the event of the Purchaser terminating Work on the Equipment or any portion thereof (otherwise than in consequence of default or bankruptcy on the part of the Supplier), the Supplier shall be entitled to the payment to the extent of the followings:

i) the Contract Price for the Equipment which is the subject of the notice of termination and calculated at the effective date of such notice;

ii) the actual reasonable and necessary net cost of materials (or cancellation charges in respect thereof) unused and ordered for the Equipment which shall have been delivered to the Supplier or of which the Supplier is legally liable to accept delivery, such materials becoming the property of the Purchaser upon such payment being made by the Purchaser to the Supplier; and

iii) any other actual reasonable and necessary net costs incurred and paid by the Supplier as a direct consequence of termination and approved by the Purchaser.

51

General Terms and Conditions

The above sum shall be offset by the outstanding balances, if any, due from the Supplier for advances previously paid by the Purchaser.

The Purchaser shall issue a Variation Order pursuant to Chapter 9 reducing the Contract Price in accordance with this Clause.

26.7 In the event of termination of Work on the Equipment or any portion thereof in accordance with Clause 26.5, the Supplier shall in respect of any undelivered Equipment, whether fully manufactured or is in the course of manufacturing and which is the subject of the termination, make such arrangements on behalf of the Purchaser as in all the circumstances may be reasonable to deliver to the Purchaser or its nominee or to store and insure in the name and to the reasonable satisfaction of the Purchaser such items of Equipment for their full replacement value against such risks as is practicable.

26.8 In the event of the Purchaser terminating Work on the Equipment or any portion thereof in accordance with the provisions of Chapter 24 or Chapter 25, the Purchaser, in addition to its rights under those Clauses, shall be entitled to take possession of and remove from the Supplier’s premises as and when it shall be convenient for the Purchaser so to do, all Equipment, Documentation, drawings and specifications, the property in which has passed to the Purchaser pursuant to the Contract and the Supplier shall afford to the Purchaser all rights of access and all reasonable facilities to enable it to remove such Equipment, Documentation, drawings, and specifications as aforesaid. The Purchaser shall have the right to carry out the Work terminated as aforesaid by whatever means it deems most expedient and the Supplier shall be liable for and shall pay to the Purchaser the additional cost, if any, which the Purchaser may incur as a result of carrying out and completing such Work including all costs of removal as aforesaid.

26.9 In the event of any termination mentioned above:

(i) the Supplier shall execute and deliver to the Purchaser all Documentation required by the Purchaser and take all reasonable steps to fully vest in the Purchaser the rights and benefits of the Supplier under existing agreements with vendors, Sub-suppliers and others related to the Contract;

(ii) the applicable provisions of the Contract shall continue in full force and effect as to all Work which is not terminated.

52

General Terms and Conditions

Chapter 27 Statute and Other Regulations

27.1 The Supplier shall comply, and require compliance by its Sub-suppliers, with all applicable laws in all jurisdictions in connection with the Contract and in this context law includes any law (national, state, municipal, local or other) and any requirement, ordinance, rule or regulation of any governmental authority or agency.

27.2 Except as otherwise provided in the Contract, the Supplier shall obtain at its own expense all licenses to do business in the country or countries wherein any Work required by the Contract is performed and shall obtain all temporary permits and authorizations required by law for prosecution of such Work and shall give all required notices.

53

General Terms and Conditions

Chapter 28 Liens

28.1 If at any time during the performance of the Contract there should be evidence of any lien or claim to which the Purchaser’s property might be subject and which arises from failure of the Supplier, the Supplier shall maintain the Project schedule, defend or protect the title or supply to the Purchaser a replacement for the item of Equipment affected by the lien or claim. Such replacement by the Supplier shall in no way limit the Purchaser’s rights under Chapter 14 in respect of delay and performance.

28.2 If any such lien or claim remains undischarged after completion or termination of the Works, the Supplier shall promptly refund to the Purchaser all amounts that the Purchaser may be compelled to pay in discharging such lien or claims, including all costs and reasonable legal fees.

54

General Terms and Conditions

Chapter 29 Independence of the Supplier

29.1 Neither the Purchaser nor the Purchaser’s representatives shall have authority to supervise the employees, representatives or Sub-suppliers of the Supplier. The Supplier shall have no authority to make any statements, representations or commitments of any kind or to take any action that shall be binding upon the Purchaser, except as provided for in the Contract.

55

General Terms and Conditions

Chapter 30 Conflict of Interest

30.1 This Chapter is intentionally left blank.

56

General Terms and Conditions

Chapter 31 Business Ethics

31.1 The Supplier and its agents are not expected or authorized to take any action on behalf of the Purchaser that would violate applicable laws. All financial statements, reports and invoices rendered shall properly reflect the facts about all activities and transactions handled for the account of the Purchaser. The Supplier shall immediately notify the Purchaser of any and all violations of this Clause upon becoming aware of such violation.

57

General Terms and Conditions

Chapter 32 Confidentiality

32.1 Save as agreed by the Purchaser in writing, the Supplier, its designated agents and its Sub-suppliers shall, except as may be reasonably necessary for the Supplier to carry out the Work under the Contract, at all times keep confidential (i) the terms of this Contract and any other ancillary agreements or documents; (ii) the Purchaser’s Intellectual Property rights including without limitation to the Purchaser’s inventions, know-how and technical processes; (iii) any information concerning the organization, business, technology, safety records, investment, finance, transactions or affairs of the Purchaser or its directors, officers or employees (whether conveyed in writing, oral or in any other form and whether such information is furnished before, on or after the date of this Contract); and (iv) any other information or materials prepared by the Purchaser or its representatives that contains or otherwise reflects, or is generated from the above mentioned confidential information. In particular the Supplier shall not publish any information, drawing or photographs concerning the Equipment, the Project or the Contract except with the written consent of the Purchaser and subject to such reasonable conditions as the Purchaser may prescribe. The Supplier shall procure that each of its affiliates, designated agents, Sub-supplier shall comply with the obligations hereunder.

32.2 With regard to any software developed by the Supplier specifically for the Contract, the title thereto shall vest in the Supplier but the Supplier shall grant to the Purchaser the free and unfettered right to use and modify such software for its own use.

32.3 With regard to any software supplied under the Contract over which the Supplier or third parties hold title or other rights, the Supplier shall permit or procure for the Purchaser (as the case may require) the right to use and apply that software free of additional charge (together with any modifications, improvements or developments thereof) in the operation of the Equipment and in the operation of other equipment owned or used by the Purchaser.

32.4 With regard to any software such as is referred to in Clause 32.3, the Purchaser undertakes not to disclose or make available any part or parts thereof to any third party without the prior written consent of the Supplier.

32.5 The Supplier’s permission referred to in Clause 32.3 shall be given (inter alias) to enable the Purchaser to disclose (under conditions of confidentiality satisfactory to the Supplier) programs and documentation for a third party to undertake the performance of services for the Purchaser in respect of such programs and documentation.

58

General Terms and Conditions

Chapter 33 Availability of Information

33.1 The Purchaser’s duly authorized representatives shall have, during the performance of the Contract and for *** thereafter, access at all reasonable times to all the Supplier’s and its Sub-suppliers’ personnel, accounts and records of all description, including but not limited to computer files, pertaining to the Contract to verify or review the quantity, quality, work program and progress of the Equipment, reimbursable costs, amounts claimed by the Supplier, estimates for proposed variations, and for any other reasonable purposes. The Supplier and its Sub-suppliers shall preserve all such accounts and records for a period of ***. The Purchaser’s duly authorized representatives shall have the right to reproduce any such accounts and records.

33.2 This Clause is intentionally left blank.

33.3 The Supplier shall include the necessary provisions in its sub-contracts to ensure that its Sub-suppliers comply with the provisions of this Chapter.

59

General Terms and Conditions

Chapter 34 Settlement of Disputes

34.1 This Contract shall be governed by and construed in accordance with the laws of Hong Kong and any dispute or claim arising out of or in connection with or relating to the terms of this Contract, or the breach, termination or invalidity hereof shall be subject to the non-exclusive jurisdiction of the Courts of Hong Kong.

60

General Terms and Conditions

Chapter 35 Notices

35.1 Except as otherwise provided in the Contract or agreed by the Parties during the performance thereof, all notices required by the Contract shall be in writing and shall be delivered to the Purchaser or the Supplier as appropriate at their office addresses as agreed by the Parties:

Each Party shall promptly notify the other Party of any modification to the above details.

35.2 The date of any notice shall be the date it is first received by the addressee or the office of the addressee, whichever is the earlier.

Chapter 36 Construction of Contract

36.1 The construction, validity, interpretation, performance, implementation and all matters relating to this Contract and any amendment thereto shall be governed by the United Nation Convention for the International Sale of Goods. However, to the extent the United Nation Convention for the International Sale of Goods does not cover, the law of Hong Kong shall apply.

61

ITT No.:ITTSPK00026

Appendices

Appendix B

Appendix B-1 Scope of Supply

Appendix B-2 Technical Conditions

Appendix B-3 Technical Description

Appendix B-4 Quality Assurance

Appendix B-5 Inspection and Testing in Workshop

Appendix B-6 Performance Warranties

Appendix B-7 Sub-suppliers

Appendix B-8 Schedule

Appendix B-9 Codes Rules and Guides

Appendix B-10 Project coordination and management

Appendix B-11 Dossier of Attachments and Document Requirement

Appendix B-12 Equipment Localization

Appendix B-13 Safety Management Requirements

Remark: Appendices B shall form integral parts of the Contract.

63

Appendix B-1

Scope of Supply

Equipment

Each of the following equipment forms a complete system necessary for the normal operation of the Reactor. The system includes but not limited to the followings:

Name of Equipment		Q’ty	Remarks
1.	Reactors (*** electrodesdesign)* (each set includes the following parts)	***	*with complete accessories
	2.1    Reactor cylinder		Refer to the drawing for details
	2.2    Base-plate
	2.3    Electrodes		Refer to the schematic drawing provided by the purchaser; parts connected with the working media inside the Reactor will be silver-plated.
	2.4    Initial Electrodes
	2.5    Mixed gas supply pipe
	2.6    Mixed gas exhaust pipe
	2.7    Reactor rack
	2.8    Leading poles
	2.9    The shielding cover of the reactor rack
	2.10 Lifting equipment specially designed for the reactor		[Total: *** pcs for *** reactors]
	2.11 The ceramic insulation ring
3.	Reactor (*** electrodes design)	***	*with complete accessories

1

1. Seals, heat and electrical insulation will be provided for all the equipment parts. All the external connected flanges will be provided in companion.

2. Valves: *** valves to be equipped on the bottom of reactor, specifications and suppliers of the valves should be provided by MSA, the purchaser make the choice and pay for it.

3. MSA provides all the civil engineering and installation conditions of the reactor

4. MSA provides full set of drawings of reactor, (include full set of the part, accessory, assembling drawings.) and the full set of technical document of design etc.

Spare parts

***

4. The Purchaser will buy the following spare parts for *** from the

2

Supplier:

***

The Supplier will quote the prices for this lot of spare parts within *** from the date of this Contract.

5. The Supplier will provide the shop drawings of all the seals.

Documents

The following technical manuals and documents will be written in English, provided in one (1) copy in print together with two (2) electronic edition in CD ROM. Metric systems will be used in the technical documentation. English will be the working language.

1. Technical documentation to be provided

***

3

***

4

Services

***

Onsite Service Schedule

Equipment	Description	Persons xdays	Staff make-up
			Title	persons	Days
Reactor-set	Installation	***	Engineer	***	***
	Supervision		Technician	***	***
Reactor-set	Commissioning	***	Expert	***	***
			Engineer	***	***

5

Appendix B-2

Technical Conditions

1. Equipment parameters

    Reactor

Number of doubles: ***

Length of doubles: ***

External diameter of Reactor-cylinder: ***

***

External diameter of the cooling cabinet: ***

Working media inside the reactor: ***

Working media inside the cooling cabinet: ***

Interior working pressure: ***

Interior working temperature: ***

Working pressure inside the cooling cabinet: ***

Working temp. in the cooling cabinet: ***

Design temperature inside cooling cabinet: ***

Number of power supply connections: ***

Number of material gas inlet jets: ***

Number of show windows: ***

2. Reactor Material Supply Data (for reference)

	beginning	ending	average
SiHCl3 kg/h	***	***	***
H2 Nm3/h	***	***	***
Mixed gas Nm3/h	***	***	***

6

3. Material list

Stainless Steel Reactor

Material List

***

Electrode

Material List

***

8

Appendix B-3

Technical Description

1. Deposition Reactors

The Reactor consists of a cylinder type case and a base-plate. Cylinder-case and the base-plate are surrounded with a cooling cabinet.

All surfaces, which are in direct contact with the process are stainless-steel, electropolished.

The following parameters and data have been considered:

1.1 Concept and capacity

***

1.2 Dimension

***

9

1.3 Design data

1. The design should meet both the current German/Europe standards and Chinese standards for manufacturing and import pressure vessel to China.

2. Design of pipes and flanges should conform to the metric system.

1.4 Reactor functionality

***

Notice:  Above mentioned time frame may be reduced by experienced operating parameters and well-trained operators

10

Reactor-Construction

1.5 Base-plate

***

Reactor Armatures

1.6 Electrodes/Initial electrodes (designed by the purchaser)

***

11

The filaments are put into this device with square connection.

1.7 Mixed-gas supply pipes

***

1.8 Exhaust-gas pipe

***

1.9 Heat insulation

The Reactor will be completely insulated with a heat protection system. The supplier shall provide design for the system.

This system will be provided by the purchaser

2. Design basis

***

12

Standards:

The whole set of reactor and documentation, should adopt current German / Europe standards and current Chinese standards, required for manufacturing and import of pressure vessels to China. The reactors are made in Germany.

The standards adopted during the inspection and acceptance will be the current German / Europe standards and the above mentioned Chinese standards.

Technical standards of manufacture are specified as follows:

1. Manufacturing specification acc.to AD-2000 rules (DIN ISO) and EPD 97/23 EG

2. General technical conditions of welded pressure Vessel AD2000 and DIN ISO

3. Welding technology acc.to DIN ISO

4. Filler material acc.to DIN ISO

13

5. Material standards acc.to DIN ISO

Stainless-steel	DIN 17 440
C-steel	DIN 17 155
Screw	DIN 267/13
Nuts	DIN 267/11
Flanges	DIN 2505

6. Testing and Inspection

Ultrasonic test	acc.to DIN ISO
Radiographic test	acc.to DIN ISO
Color test	acc.to DIN ISO
Hydraulic test	acc.to DIN ISO

14

Appendix B-4

Quality Assurance

This section is intentionally left blank

Appendix B-5

Inspection and Testing in Workshop

After the equipment being manufactured, representatives from both parties will attend the inspection and acceptance of equipment at the work shop of the Supplier. The Supplier will provide an Inspection and testing manual which is evaluated by the purchaser.

Before packing and delivery, the Purchaser will dispatch a group of inspectors to inspect the equipment at the workshop of the Supplier.

The Supplier shall be responsible for the charge of transportation (including round trip air tickets), accommodations and staying in Germany for *** for a *** person inspection group dispatched by the Purchaser.

15

Appendix B-6

Performance Warranties

1. Warranties values for technological performance .

Average deposition rate (diameter): ***

Deposition diameter: ***

1 working cycle: ***

Polysilicon output of one reactor per working cycle: ***

Polysilicon production capacity of one reactor per year: ***

Warranties values for equipment performance

Reactor uptime: ***

Working time: ***

Working cycle: ***

Lifetime of the whole set: approx. ***, depending on professional operation and maintenance

2. The Performance Test will be carried out on worksite of the Purchaser, according to the items specified in Appendices 2 and 3.

3. Method of the Performance Test

3.1 Testing Plans

Within *** after the contract becomes effective, the Supplier will make out the plans for system commissioning and performance test. These plans will specify the analysis, and inspection, and the principles of the test, etc. These plans will be submitted to the Purchaser for approval before enforcement.

3.2 Performance Test

3.2.1  The test will be carried out according to the warranties values.

3.2.2  All the parameters collected during the performance test will be counted, calculated, and appraised.

3.2.3  Measures taken when the performance test fails

In case the warranties values are not fulfilled during the performance test, the Purchaser has the right to require the Supplier to repair the equipment and/or pay a penalty,

3.2.3.1 Polysilicon output of one reactor per working cycle (the warranted Values and related parameters are specified in Clause 1 of Appendix 2).

16

With *** continuous working cycles (*** deposition time) of one Reactor, the average output of the *** working cycles will be regarded as the tested production value.

3.2.3.2  For a decrease of *** (including ***), the Supplier shall be obligated to pay *** as the liquidated damages; for a decrease of *** (including ***), the Supplier shall be obligated to pay *** as the liquidated damages; for a decrease exceeding *** (including ***), the Purchaser has the right to demand the Supplier to pay *** as the liquidated damages, or to reject the equipment and meanwhile the Supplier is obliged to pay *** as the liquidated damages and refund the money.

3.2.4  The Supplier is not responsible for any interruption or delay, caused by Force Majeure as defined in Contract.

3.2.5  The Supplier is also not responsible for any non-performance , interruption or delay, caused by the followings:

(1) if the Purchaser does not supply sufficient and qualified mixed-gas for the deposition process; and

(2) if the Purchaser fails to provide sufficient and qualified utilities, like power-supply, thyristor power, process control, cooling-water, process exhaust-gas discharge.

Additional costs and expenses born by the Supplier by aforesaid 3.2.5.(1) and (2) will be reimbursed by the Purchaser.

17

Appendix B-8

Schedule

1. Equipment delivery schedule [to be confirmed]

(a) The Supplier shall complete the basic design and calculation of the new reactor *** by no later than end -*** and that the Supplier will provide the relevant design details and drawings to the Purchaser for necessary evaluation and reference. The Parties agree that the *** reactors for phase *** of the Purchaser’s silicon project shall adopt the design of *** and the *** reactor shall use the new design of ***.

(b) The Supplier shall provide an update from time to time in respect of the design and technical details of the new reactors for phase *** of the Purchaser’s silicon project.

(g) The Supplier shall deliver the first batch of *** Sets (i.e. *** to *** unit of *** design reactors with complete accessories by no later than ***, CFR Shanghai Seaport (or no later than ***, Ex Germany).

(h) The Supplier shall deliver the second batch of *** Sets (i.e. *** to *** unit of *** design reactors with complete accessories by no later than ***, CFR Shanghai Seaport (or no later than ***, Ex Germany).

(i) The Supplier shall deliver the third batch of *** Sets (i.e. *** to *** unit of *** design reactors with complete accessories by *** week of ***, CFR Shanghai Seaport, (or no later than ***, Ex Germany).

(j) The Supplier shall deliver the *** design reactor together with complete accessories by no later than ***, CFR Shanghai Seaport (or no later than ***, Ex Germany).

2. Technical Documentation delivery schedule

(a) Items from 1.1 to 1.8/1.14/1.17 mentioned in Documents of Appendix B-l shall be delivered to the Purchaser within four (4) weeks after the Contract Signing Date.

19

(b) For item 1.24 Assembly Drawings, preliminary version of the assembly drawings (with necessary revisions needed to be discussed in the first design meeting) will be delivered *** in advance of the first design meeting by email in pdf format, including reference drawing for the reactor platform.

(c) Items from 1.15/1.16/1.18/1.19/1.20/1.22/1.32/ mentioned in Documents of Appendix B-1 shall be delivered to the Purchaser within *** after the Contract Signing Date.

(d) The shop drawings of equipment (as-build) accord to item 1.23 will be delivered together with the reactor.

(e) All the remaining items in Documents of Appendix B-1 shall be delivered *** advanced the delivery time.

20

Appendix B-9 Codes Rules and Guides

This section is intentionally left blank

21

Appendix B-10 [to be updated]

Project Coordination and Management

Design Liaison Meetings to be Held in Shanghai

Description				Participants
Topic		Week No.*	Days Duration	The purchaser	MSA
	Preliminary Assembly	Within 6	Ca. 1	X	X
No.1	Drawing & “kick-off”	weeks	week
	specification
	Final Assembly	To be determined	Ca. 1	X	X
No.2	Drawing &	by the first	week
	Specification	meeting
	Final & Detail Drawing	To be		X	X
No.3	& Specification	defined by	Ca. 1
	Client Acceptance	the second	week
		meeting
No.x	If there’s a need	To be	—	X	X
		determined

* From the Contract Signing Date.

22

Appendix B-11 Dossier of Attachments and document Requirement

This section is intentionally left blank

23

Appendix B-12 Equipment Localization

This section is intentionally left blank

Appendix B-13 Safety Management Requirements

This section is intentionally left blank

Appendix B-14 *** Design Reactors

All the sections of Appendix B for *** Design Reactor shall be furnished by the Supplier on a progressive basis and the last required document shall be provided by no later than ***.

24

DATED 17. Jan. 2008

JIANGSU ZHONGNENG PHOTOVOLTAIC INDUSTRY

DEVELOPMENT CO., LTD.

( )

and

MSA APPARATUS CONSTRUCTION FOR CHEMICAL EQUIPMENT LTD.

and

CHEMICAL EQUIPMENT ENGINEERING LIMITED

*********************************************

SUPPLEMENTAL AGREEMENT

TO

GENERAL TERMS AND CONDITIONS OF CONTRACT

AND APPENDICES

(CONTRACT NO. : JSZN2003)

*********************************************

THIS SUPPLEMENTAL AGREEMENT is made the 17 day of January 2008.

BETWEEN :-

(1) JIANGSU ZHONGNENG PHOTOVOLTAIC INDUSTRY DEVELOPMENT CO., LTD. ( ) a company incorporated in the People’s Republic of China whose registered office is at [*] (the “Purchaser”);

(2) MSA APPARATUSCONSTRUCTION FOR CHEMICAL EQUIPMENT LTD. a company incorporated in the United Kingdom whose principal place of business is at 82008 Unterhaching Isartalstr 50, Germany (the “Supplier”); and

(3) CHEMICAL EQUIPMENT ENGINEERING LIMITED a company incorporated in [*] whose registered office is at [*] (“CEE”).

RECITALS :-

(a) The Purchaser and the Supplier have executed a general terms and conditions of contract and appendices (Contract No.:JSZN2003) on 27 June 2007 in relation to the supply of the Equipment, Engineering, Additional Spare and Replacement Parts, Special Tools, Documentation and Services and the Works associated with the Equipment by the Supplier to the Purchaser (the “Contract”).

(b) CEE is an associated company of the Supplier. The Supplier has appointed CEE as its agent to receive any payments payable by the Purchaser to the Supplier under the Contract and CEE has accepted such appointment.

(b) The parties hereto have agreed to vary the terms of the Contract by executing this Supplemental Agreement.

NOW IT IS AGREED as follows :-

1. INTERPRETATION

1.1 Unless the context requires otherwise, words and expressions defined in the Contract shall have the same meanings when used in this Supplemental Agreement.

1.2 References herein to Clauses are to clauses in this Supplemental Agreement unless the context requires otherwise.

2. PAYMENT UNDER THE CONTRACT

2.1 The Supplier hereby appoints CEE as its agent to receive any payments payable by the Purchaser to the Supplier under the Contract and CEE hereby accepts such appointment at no cost.

2.2 The Supplier and the Purchaser hereby agree that any payments made by the Purchaser to CEE shall be deemed to be made to the Supplier in discharge of the Purchaser’s payment obligations under the Contract.

3. AMENDMENTS TO THE CONTRACT

3.1 Clause 4.2 of the Contract shall be deleted and replaced with the following :-

“4.2 The Purchaser shall pay CEE (acting as an agent of the Supplier) the Contract Price stated in Chapter 3 in the following manner:

(i) The Purchaser shall pay a sum of no more than *** to CEE by telegraphic transfer within *** from the date of the Purchaser’s receipt of the relevant invoices from the Supplier.

(ii) The Purchase shall open and issue an irrevocable direct letter of credit by the bank in favor of CEE for the balance of the Contract Price.

3.2 Clause 4.3 of the Contract shall be deleted and replaced with the following :-

“4.3 The balance of the Contract Price shall be paid against the abovementioned letters of credit, upon presentation of the following documents by the Purchaser to CEE in respect of the actual pro rata value of each shipment, which are found in order:

(a) Three (3) originals and three (3) duplicate copies of clean on board ocean Bill of Lading made out to order, blank endorsed, notifying the Purchaser and marked “FREIGHT PREPAID”, or one (1) original and four (4) duplicate copies of airway bill made out to order of the Purchaser;

(b) Five (5) originals of manually signed commercial invoice indicating the amount to be paid and the itemized price;

(c) Two (2) originals and three (3) duplicate copies of detailed packing list indicating the shipping weight, number and the date of the corresponding invoice;

(d) Two (2) originals and three (3) duplicate copies of ex-works quality certificate issued by the manufacturer;

(e) Two (2) copies of sight draft;

(f) One (1) original and four (4) duplicate copies of certificate of origin issued by relevant authorities or agency of the manufacturer’s country;

(g) Five (5) copies of fax advising the Purchaser of the shipment within forty-eight (48) hours after it is made;

(h) One (1) original and four (4) copies of the Quarantine Certificate/Heat Treatment Certificate for the wooden packing materials or non-wooden packing declarations in case of ocean transport, or four (4) copies of the Quarantine Certificate/Heat Treatment Certificate for the wooden packing materials or non-wooden packing declarations in case of air freight.”

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

3.3 Clause 4.4 of the Contract shall be deleted and replaced with the following :-

“4.4 Unless otherwise specifically provided in a Variation Order which increases or decreases the Contract Price, the amount thereof shall be added to or deducted from the amount of payment under Clause 4.2(ii), which are outstanding at the issuance of the Variation Order in question.”

3.4 Clause 4.6 of the Contract shall be deleted and replaced with the following :-

“4.6 The Supplier shall be solely responsible for arranging payments to its Sub-suppliers and all other persons as may be engaged by the Supplier in the performance of the Contract. The Supplier shall transfer payment to its Sub-suppliers within *** after CEE’s receipt of the payment from the Purchaser pursuant to Clause 4.2(i). The Supplier agrees that the Purchaser shall have the right to contact any of its Sub-suppliers directly at any time in order to check the validity of all invoices issued to the Purchaser and the status of production. In the case of any invalid invoice is found by the Purchaser, the Purchaser shall have the right to reject any payments and to make claims against the Supplier.”

4. GOVERNING LAW

4.1 This Supplemental Agreement shall be governed by and construed in accordance with the laws of the Hong Kong Special Administrative Region of the People’s Republic of China.

5. MISCELLANEOUS

5.1 This Agreement is supplemental to and amends the Contract and, save as expressly provided herein, all provisions in the Contract shall remain in full force and effect.

5.2 If any provision of the Contract is inconsistent with the changes contemplated hereunder or provided herein, the provisions of this Supplemental Agreement shall prevail to the extent contemplated hereunder.

THIS AGREEMENT has been signed on the day and year first above written.

EX-10.7

Exhibit 10.7

Contract

GENERAL TERMS AND CONDITIONS OF CONTRACT

AND APPENDICES

General Terms and Conditions

Table of Content

Contract Form		1
General Terms And Conditions Of Contract		3
Chapter 1	Definitions	3
Chapter 2	Scope of Contract	6
Chapter 3	Contract Price	7
Chapter 4	Terms of Payment	8
Chapter 5	Delivery and Terms of Delivery	10
Chapter 6	Packing and Marking	14
Chapter 7	Documentation	17
Chapter 8	Mistakes in Information	18
Chapter 9	Variations and Omissions	19
Chapter 10	Coordination, Liaison and Project Management	21
Chapter 11	Safety Management and Quality Assurance	23
Chapter 12	Inspection at Manufacturer’s Premises and after Delivery	26
Chapter 13	Erection, Commissioning, Testing and Acceptance	29
Chapter 14	Warranties and Defects After Delivery	31
Chapter 15	Additional Spare and Replacement Parts and Repairs to the Equipment	34
Chapter 16	Liability for Accidents and Damage	36
Chapter 17	Licensing	38
Chapter 18	Insurance	39
Chapter 19	Taxes and Duties	41
Chapter 20	Force Majeure	42
Chapter 21	Vesting of the Equipment and Documentation	43
Chapter 22	Infringement	44
Chapter 23	Assignment and Sub-letting	46
Chapter 24	Supplier’s Default	47
Chapter 25	Bankruptcy	48
Chapter 26	Suspension and Termination	49
Chapter 27	Statute and Other Regulations	51
Chapter 28	Liens	52
Chapter 29	Independence of the Supplier	53
Chapter 30	Conflict of Interest	54
Chapter 31	Business Ethics	55
Chapter 32	Confidentiality	56
Chapter 33	Availability of Information	57
Chapter 34	Settlement of Disputes	58
Chapter 35	Notices	59
Chapter 36	Construction of Contract	60
Chapter 37	Security for Due Performance	61
Chapter 38	Effectiveness of the Contract and Miscellaneous	62

i

General Terms and Conditions

Appendix A
Appendix A-1	Price Breakdown
Appendix A-2	Bank Guarantee for Advance Payment ***
Appendix A-3	“Delivery Schedule”
Appendix B
Appendix B-1	“Technical Agreement”

ii

General Terms and Conditions

Contract Form

Contract No.: ZNSH3001

Date of Signing: 2008.02.4

Place of Signing: Shanghai

This Contract is made on the day of 2008.02.4 between Jiangsu Zhongneng Photovoltaic Industry Development Co, Ltd, with offices at North of the 310 national highway, economic development zone, Xuzhou, China (hereinafter referred to as the “Purchaser”) as one Party and Tap Mate Limited (hereinafter referred to as the “Supplier”) with offices at Flat 1/E, Block 6, Kornhill Gardens, 1120 King’s Road, Quarry Bay, Hong Kong as the other Party.

WHEREAS the Supplier has the capability and experience of manufacturing for 144 reactorsets (stainless steel).

WHEREAS the Supplier is willing to supply the Purchaser with the Equipment, Engineering, Documentation and Services and to perform the Works associated with the Equipment;

WHEREAS the Purchaser is willing to purchase the Equipment, Engineering, Documentation and Services and the Works associated with the Equipment to be provided by the Supplier;

WHEREAS the Supplier shall be and shall be deemed to be, an independent supplier and not the agent or employee of the Purchaser;

NOW THEREFORE, the two Parties authorize their representatives, following friendly consultations, to agree on the following terms and conditions and to sign this Contract.

The following documents shall be deemed to form the Contract between the Purchaser and the Supplier, and be read and constructed as part of the Contract, and shall be interpreted in the following order in case of discrepancy or ambiguity among the following documents:

Contract Form;

General Terms and Conditions;

Appendix A and B

1

General Terms and Conditions

SIGNED BY

For and on behalf of The Purchaser

Jiangsu Zhongneng Photovoltaic Industry Development Co, Ltd

2

General Terms And Conditions Of Contract

Chapter 1 Definitions

In the Contract the following words shall have the meanings herein assigned to them:

1.1 “ATP” shall mean the starting date for the Project Schedule.

1.2 “Actual Delivery Date” shall have the meaning set forth under Clause 5.3 (applicable to Equipment and Special Tools), or Clause 5.14 (applicable to Documentation).

1.3 “Additional Spare and Replacement Parts” shall mean the spare and replacement parts which are not included in the Equipment.

1.4 “China” and “PRC” and “People’s Republic of China” each means the People’s Republic of China excluding, for the purposes of this Contract, Hong Kong, Macao Special Administrative Region and Taiwan.

1.5 “Contract” shall mean the agreement between the Purchaser and the Supplier, howsoever made, for the supply of Equipment, Engineering, Works, Documentation, Additional Spare and Replacement Parts, and the provision of Services, including all documents referred to in the said agreement which set out the rights and obligations of the Parties thereunder.

1.6 “Contract Price” shall mean the sum named in the Contract as the Contract Price, subject to such additions and deductions, as may be made in accordance with the Contract, to be paid to the Supplier in consideration for the supply and delivery of Equipment, Additional Spare and Replacement Parts, Documentation and the provision of Services and the fulfillment by the Supplier of all its other activities and obligations under the Contract.

1.7 “Delivery Dates” shall mean the applicable dates specified in the Contract for delivery of Equipment, Additional Spare and Replacement Parts and Documentation subject to such adjustments as may be made in accordance with the Contract.

1.8 “Documentation” shall mean calculation notes, drawings, programs, schedules, manuals, erection and commissioning data, acceptance tests procedures, and all other technical information required for the design, manufacture, erection, tests, operation and maintenance of the Equipment as defined in Appendix B-1 of the Contract.

1.9 “Effective Date” or “EOC” shall mean the day when the Contract becomes effective in accordance with the provisions of Clause 38.2 hereof.

1.10 “Engineering” shall mean the engineering set forth in Appendix B-1.

3

1.11 “Equipment” shall mean all or any parts of the system, machinery, apparatus, parts, materials, spare parts, consumables which are to be supplied by the Supplier in accordance with the Contract as defined in Appendix B-1 of the Contract.

1.12 “Final Delivery Date” or “FDD” shall mean, the Actual Delivery Date of the item of Equipment which is the last to be shipped according to the Appendix A-3, providing such Equipment is not shipped in advance of the Delivery Date without the prior approval of the Purchaser, in which case the Delivery Date shall apply. When the Final Delivery Date has been achieved, the Supplier shall request the Purchaser to issue a certificate of Final Delivery Date.

1.13 “Force Majenre” shall mean an occurrence such as war, serious fire, flood, typhoon, earthquake, which is unavoidable, unforeseeable, insurmountable.

1.14 “Month/Day” shall mean calendar month/day; “Week” shall mean seven calendar days.

1.15 “Overall Project Schedule” shall have the meaning set forth in Appendix B-1.

1.16 “Parties” shall mean collectively the Purchaser and the Supplier.

1.17 “Party” shall mean the Purchaser or the Supplier.

1.18 “Project” shall mean the project developed by the Supplier in the People’s Republic of China.

1.19 “Provisional Acceptance Certificate” and “PAC” shall have the meaning set forth under Clause 13.5.

1.20 “Purchaser” shall mean the Jiangsu Zhongneng Photovoltaic Industry Development Co, Ltd the registered address of which is at Xuzhou, Jiangsu Province.

1.21 “Services” shall mean instruction and services provided by the Supplier at various stages under this Contract and within the scope of Supply.

1.22 “Site” shall mean the place at north of the 310 national highway, economic development zone, Xuzhou, Jiangsu Province in the People’s Republic of China selected by the Purchaser.

1.23 “Specification” shall mean the technical requirements as defined in the Appendix B-1.

1.24 “Sub-supplier” shall mean any entity (other than the Supplier) named in the Contract for any part of the Work thereunder or any entity to whom any part of the Contract has been sub-let with the consent in writing of the Purchaser.

1.25 “Supplier” shall mean Tap Mate Limited, the registered address of which is at Flat 1/F., Block 6, Kornhill Gardens, 1120 King’s Road, Quarry Bay, Hong Kong.

1.26 “Variation Order” shall mean the serially numbered form issued by the Purchaser to the Supplier in accordance with Chapter 9.

1.27 “Warranty Period” shall mean the period within *** commencing on the Actual Delivery Date of the Equipment or *** after the issuance of PAC whichever is earlier.

4

1.28 “Working Day” means a day (other than a Saturday, a Sunday or public holiday declared by Chinese governmental authorities.

1.29 “Work” shall mean the supply by the Supplier or the Sub-supplier of all Equipment, Documentation, Services and the performance by the Supplier or Sub-supplier of all its other activities and obligations under the Contract.

1.30 Where used in these General Terms and Conditions of Contract, “writing” or “written” shall mean any manuscript, type-written, or printed statement, under seal or hand as appropriate, but shall also include telegraphic, telex and fax communications which shall be submitted in the form of singed or sealed copies.

1.31 Words importing persons shall include firms and corporations.

1.32 Words importing the singular only shall include the plural and vice-versa where applicable.

1.33 “CFR” shall be interpreted and governed in accordance with Incoterms 2000 edition of the International Chamber of Commerce, unless otherwise provided in the Contract.

5

Chapter 2 Scope of Contract

2.1 The Supplier shall supply to the Purchaser completely all Engineering, Equipment, Special tools, Additional Spare and Replacement Parts and Consumable, Documentation including interfaces, Services and other things of all kinds necessary for the carrying out, completion and maintenance of the Work in accordance with the Contract. The Supplier undertakes that if during the implementation of the Contract, it fails to supply any items caused by the Supplier’s fault(s) which are required for the safe and reliable operation of the Equipment or for achieving the functions and performance as stipulated in the Contract, such items shall be supplied by the Supplier at no additional cost to the Purchaser.

2.2 The Equipment, Engineering, Documentation and Services supplied under the Contract shall be in full conformity with the Specifications, conditions, requirements, performance and limits of supply as defined in Appendix B-1.

2.3 The Equipment to be supplied by the Supplier shall conform to the requirements and the limits of supply stipulated in the Contract The Supplier shall be responsible for providing the Purchaser with all the information in accordance with the schedule in Appendix B-1.

2.4 The Supplier shall send suitably experienced, healthy and competent personnel for on-Site Services specified in Appendix B-1 in order to ensure that the Equipment is erected correctly, and the dispatched personnel on Site shall abide by the Safety Management Agreement signed by the Parties in parallel with the Contract.

2.5 The Supplier shall make available Additional Spare and Replacement Parts in accordance with Chapter 15 and, if required to do so by Purchaser, shall carry out repairs to the Equipment in accordance with the provisions of Chapter 15.

2.6 Throughout the operation lifetime of the Project, the Supplier shall, free of any charge to the Purchaser, provide the Purchaser with new operating experience information obtained by the Supplier, and inform the Purchaser of any decided improvement in the technical and safety aspects where such improvement is applicable to the Equipment.

2.7 The Special Tools supplied by the Supplier shall meet the requirement for Site transportation, storage, protection, hoisting, erection, commissioning and maintenance of the concerned Equipment.

2.8 The Supplier shall also perform his other responsibilities and liabilities under the Contract.

6

Chapter 3 Contract Price

3.1 The Contract Price, made up as shown hereunder and broken down as shown in Appendix A-1 to these General Terms and Conditions of Contract, unless the context otherwise provided, forms the sole basis of the compensation to be paid to the Supplier by the Purchaser in consideration for the supply of Equipment, Engineering, Work, Special Tools, Documentation, the provision of Services, packing, transportation and insurance and the fulfillment by the Supplier of all of its other obligations under the Contract.

3.2 The Contract Price is: USD*** (Say *** US DOLLARS ONLY), until price is: USD*** (Say *** US DOLLARS ONLY), which is broken down as shown in Appendix A-1 to these General Terms and Conditions of Contract. The Contract Price is subject only to such changes thereto as are specifically provided for under these General Terms and Conditions of Contract but is otherwise fixed and firm.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

7

Chapter 4 Terms of Payment

4.1. In accordance with the following provisions of this Chapter, the Purchaser shall make payment to the Supplier. Such payments shall be made in USD (currency) by telegraphic transfer (T/T) through the Purchaser’s Bank respectively to the account nominated by the Supplier. Payment shall be considered as effected at the date of making the payment by the Purchaser. Original payment document shall be sent by the Supplier directly to the Purchaser.

Should the dates of payment release fall into the legal holiday, the payment shall be effected on the following working day, and the deferment shall not be regarded as delay of the payment.

All banking charges incurred in the Purchaser’s Bank shall be borne by the Purchaser. All banking charges incurred in the Supplier’s Bank shall be borne by the Supplier.

4.2. The Purchaser shall make payment to the Supplier of the Contract Price stated in Clause 3.2 as follows:

(i) *** of the Contract Price shall be paid as an Advance Payment (*** is for procuring materials) by the Purchaser to the Supplier within *** after the Contract’s coming into effectiveness and after the Purchaser has received all the following documents from the Supplier and found them in order:

(a) One bank guarantee for the advance payment issued by the Supplier’s Bank to the Purchaser’s Bank for a total amount of *** of the Contract Price stated in Clause 3.2 and in the forms of Appendix A-2.

(b) One original of commercial invoice covering the amount of the payment.

(ii) *** of the Contract Price shall be paid by the Purchaser to the Supplier *** before the Supplier makes the delivery in accordance with Appendix A-3, and within *** after the Purchaser has received all of the following documents:

One original of pro forma invoice covering the amount of the payment due.

(iii) *** of the Contract Price for Equipment and Documentation shall be paid in respect of the Equipment, within *** after the Purchaser commissioning or within *** after the Supplier making delivery whichever is earlier, and after the Purchaser has received all of the following documents from the Supplier and found them in order:

(a) The relevant copy of Provisional Acceptance Certificate issued by the Purchaser in accordance with Clause 13.5;

(b) One original of commercial invoice covering the amount of the payment.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

8

(iv)             *** of the Contract Price shall be paid , within *** after the issuance of PAC or *** commencing on the Actual Delivery Date of the Equipment whichever is earlier, and the Purchaser has received all of the following documents and found them in order from the Supplier:

(a) The copy of Final Acceptance Certificate issued by the Purchaser in accordance with Clause 14.16;

(b) One originals of commercial invoice covering the amount of the payment.

4.3. This clause is intentionally left blank.

4.4. Unless otherwise specifically provided in a Variation Order which increases or decreases the Contract Price, the amount thereof shall be added to or deducted from the amount of payment under Clause 4.2 with the same ratio, which are outstanding at the issuance of the Variation Order in question.

4.5. The Purchaser shall effect any payment within *** after receiving the appropriate invoices and supporting documentation in accordance with the provisions of this Chapter, unless the Purchaser considers such documentation is not in conformity with the Contract or disputes the amount of any invoices submitted by the Supplier whereupon the Purchaser shall notify the Supplier in writing stating its reasons within ***.

4.6. The Supplier shall be responsible for arranging payments to its Sub-suppliers and all other persons as may be engaged by the Supplier in the performance of the Contract.

4.7. If in accordance with the stipulations of Chapter 14 the Supplier is liable to pay liquidated damages to the Purchaser, the corresponding amounts shall be paid by the Supplier to the Purchaser within *** after receipt of the first written notice from the Purchaser stating the amount due or deducted from any remaining payment by the Purchaser.

9

Chapter 5 Delivery and Terms of Delivery

5.1 All the Equipment supplied under the Contract shall be delivered by the Supplier under terms of CFR Site in accordance with the terms of this Chapter and the Schedule specified in Appendix A-3 hereunder.

5.2 The Equipment (single) is approximately *** metric tons in net weight, *** metric tons in gross weight and *** cubic meters in total volume.

5.3 Within two months after the EOC, the Supplier shall provide the Purchaser a forecast delivery schedule which shall meet the requirements of the Overall Project Schedule for the approval of the Purchaser. The delivery dates provided in such forecast delivery schedule approved by the Purchaser shall be the Delivery Dates for the Equipment.

In the above-mentioned forecast delivery schedule, the Supplier shall provide the Purchaser with the following updated information:

A. Name of Equipment;

B. Gross Volume;

C. Gross Weight;

D. Respective Delivery Schedule for the Equipment;

E. Place of loading for CFR;

F. Cargo package/packing list;

G. Names, Weight Measurement and Drawings of the over-weight, over-sized Equipment, loose goods and bulk materials;

Whenever used in the Contract, the term Actual Delivery Date shall mean:

—Under CFR term: the date of unloading the Equipment from the carrying vehicle by the Supplier to the destination with the address as below:

Address: Jiangsu Zhongneng Photovoltaic Industry Development Co, Ltd, North of the 310 national highway, economic development zone, Xuzhou

5.4 This clause is intentionally left blank.

5.5 Under CFR term, the Supplier shall deliver the Equipment in accordance with the following provisions:

5.5.1. Not later than thirty (30) days before the readiness for delivery, the Supplier shall notify the Purchaser by fax of the following contents:

a) Contract No.;

b) Date of readiness for the delivery;

c) Total volume;

d) Total gross weight / total number of packages;

e) Contract value of the equipment;

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

10

f) Place of loading;

g) Name, total gross weight and measurements of each piece exceeding *** metric tons in weight or *** meters in measurement;

h) Name, weight of the dangerous and/or inflammable goods.

In the meantime the Supplier shall airmail via express mail the following documents in two (2) duplicate copies to the Purchaser:

a) The packing list of the shipment covering Contract No., item No., name of the Equipment, specification, type, quantity, unit/total price, unit/total weight, unit/total volume, the overall dimensions of each package (length x width x height), total number of packages and Place of Loading.

b) Overall packing sketch and drawings for each large piece exceeding *** metric tons in weight or *** meters in measurement;

c) Description of any dangerous and/or inflammable goods indicating names, properties, special protective measures and handling methods in case of accident;

d) Description of the special precautions for the Equipment that requires special storage and transportation.

5.5.2. Within two (2) hours after completion of each loading, the Supplier shall inform the Purchaser by fax of the following information: Contract No., name of Equipment, value of Equipment, actual loading quantity, total gross weight, total volume and the insurance policy number.

5.5.3. Before 7 working days of delivery the Equipment to the nominated destination described in Clause 5.3, the Supplier shall deliver by express mail one (1) original of the Cargo Receipt, quality certificate issued by relevant governmental authorities and packing list to the Purchaser.

5.5.4. The Supplier shall complete the delivery of Equipment in accordance with the Delivery Dates. Any delivery to be made by the Supplier prior to the specified time shall be subject to the prior written consent of the Purchaser, otherwise all responsibilities and cost and expenses thus incurred shall be borne by the Supplier.

5.5.5. If any Equipment contains dangerous and/or inflammable items, the Supplier shall submit to the Supplier’s carrier a Chinese description in one (1) copy indicating the name, characteristics, special handling and protective measures in case of accidents in respect of such items. The Supplier shall instruct the carrier to indicate in the case No./container No., thereof.

5.5.6. The Supplier shall arrange the transportation, and inform the Purchaser. The Supplier shall keep close contact with the Supplier’s carrier. Should the carrying vehicle or the date of arrival be changed, the Supplier shall inform the Purchaser in time.

5.5.7. This clause is intentionally left blank.

5.5.8. At the latest 7 (7) working days before the arrival of the carrying vehicle, the Supplier shall advise the Purchaser by fax of the expected date of arrival, name of carrier and other information necessary for the delivery.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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5.5.9 Provided that the Purchaser is not ready for delivery of the Equipment by the expected arrival date of the delivery, the Purchaser shall give notice to the Supplier before *** of the expected delivery date in written. The Supplier shall store such Equipment, and insure it against, and take reasonable measures to protect and preserve it from loss and damage. And within *** after the expected date of delivery, the storage charges, insurance premium and other costs thus incurred within the said *** shall be for the Supplier’s account. However, the storage charges and insurance premium from the *** day shall be borne by the Purchaser against the original documents issued by the relevant authority and being found in order. Nevertheless, the Supplier shall still be obliged to transport the Equipment at the Supplier’s own expense and risk according to the Purchaser’s notification of readiness for the delivery of the Equipment. In this case the Supplier shall bear no liquidated damage for delayed delivery.

5.5.10 Whatever the stipulation is in Incoterms 2000, the Supplier shall be responsible for the Equipment unloading from the carrying vehicle at the destination described in this contract.

5.5.11 If the Equipment is lost or damaged after the transfer of the risk to the Purchaser, the Supplier shall assist the Purchaser to apply to the insurance company for compensation and effect, upon the Purchaser’s request, the supplementary supply of the same Equipment and Document at the price derived from the Contract Price.

5.6 This clause is intentionally left blank.

5.7 This clause is intentionally left blank.

5.8 Documentation provided by the Supplier outside of People’s Republic of China shall be delivered under CFR Site terms.

5.9 Documentation provided by the Supplier within People’s Republic of China shall be delivered under CFR Site terms.

5.10 All Documentation to be supplied by the Supplier shall be delivered in accordance with the Schedule as shown in Appendix A-3 and B-1 under the Contract. In case the delivery dates are not defined in the Contract, their delivery should comply with the erection, test, commissioning, operation and maintenance plan of related Equipment.

5.11 The Supplier shall remain responsible for the contents of unopened Documentation, packages being in accordance with the Supplier’s appropriate detailed list of Documentation until such packages are opened. In the case of any shortage, loss or damage caused to the Documentation, the Supplier shall make supplementary delivery to the Site of the item or items lost or damaged within *** after receiving notification from the Purchaser, without any charge. Any item or items lost or damaged after transfer of the risk to the Purchaser or due to the Purchaser’s fault shall be replaced by the Supplier at the cost of the Purchaser.

5.12 The Supplier shall, one (1) week prior to the delivery of Documentation, notify the Purchaser of the number of cases, gross weight, Contract No. and the expected date of arrival of the Documentation to be delivered.

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5.13 Within twenty four (24) hours after dispatching Documentation, the Supplier shall notify the Purchaser and its nominated carrier by fax of the Contract No., dispatching date, number of parcels, flight No., Airway Bill No., and approximate gross weight, and submit by courier service to the Purchaser and/or its nominated carrier the following documents:

a) Two (2) copies of airway bill (marked with Contract No. and the consignee) or carrier’s receipt;

b) Two (2) copies of detailed list of Documentation;

c) Two (2) copies of pro-forma Invoice;

d) Two (2) copies of detailed packing list;

e) One original Certificate of fumigation treatment issued by concerned inspection organization or the statement of packing without wood for •Document delivered from abroad.

5.14 The date of receiving the Documentation at Site shall be deemed as the Actual Delivery Date for Documentation provided by the Supplier within People’s Republic of China.

The delivery date of the final version of the Documentation shall be deemed as the Actual Delivery Date of the Documentation concerned.

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Chapter 6 Packing and Marking

6.1 The Supplier shall have Equipment strongly packed and shall take measures to protect the Equipment from moisture, mould, rain, rust, corrosion and shock, etc. taking into account the local climatic conditions and the nature of the Equipment. Such packing shall be suitable to withstand numerous handling, loading and unloading and long-distance air and/or sea and/or inland transportation to ensure the safe arrival of the Equipment at the Site without any damage or corrosion. The Supplier shall also provide all special frames, supports or fixtures necessary for handling and stowing the Equipment, and ensure them to meet the specified requirement of the further transportation, storage, protection and hoisting for the consequent equipment. The Supplier shall take such special measures as may be necessary to protect such things as the welding preparations of high pressure pipes, instrumentation, sockets and other fragile fittings if any.

6.2 In each package of Equipment a detailed packing list in 3 copies together with quality certificate issued by the Supplier and relevant administration shall be enclosed. The packing list shall specify:

(i) for individual equipment:

(a) functional identification of equipment and designation;

(b) reference (coding number and title) of the drawing (assembly drawing or other) identifying the equipment;

(c) quality.

(ii) for bulk material:

(a) coding identification and designation of the relevant item;

(b) references (coding number and title) of the standardized document identifying the item;

(c) quantity and quality.

The packing list shall be presented and coded according to the applicable procedures.

6.3.1  The Supplier shall mark the following on the four adjacent sides of each package with indelible paint in conspicuous printed words:

(i) Contract No.;

(ii) consignee;

(iii) destination;

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(iv) shipping mark;

(v) gross/net weight (kg);

(vi) measurement (length X width X height in m);

(vii) case No./bale No.;

(viii) name of Equipment;

(ix) consignee code;

(x) Supplier’s name.

6.3.2 In accordance with the characteristics and various requirements in loading, unloading and shipping equipment, the packing shall be conspicuously marked “Handle with care”, “Right side up”, “Keep dry”, etc. in words, or with appropriate international trade practice and illustrations.

6.3.3 Should any packages weight 2 metric tons or more, its weight and hoisting position and with international trade practice and illustrative marks shall be clearly shown on two adjacent sides of each package so as to facilitate loading, unloading and handling.

6.3.4 Loose accessories in package or bundles shall be labeled by the Supplier, indicating Contract No., names of accessories and their location, number and accessory No. on assembly drawings.

6.3.5 For unpacked pieces of Equipment the above mentioned marking shall be indicated directly on Equipment or on tightly fastened metal labels. For large pieces proper handling frames and supports should be provided.

6.3.6 Should any Equipment be damaged or lost due to improper packing and/or inadequate protective measures, the Supplier shall be responsible for the repair, replacement and/or compensation in accordance with the Contract. If mistake of transportation of Equipment occurs due to wrong/poor packing or ambiguous marking, the Supplier shall bear additional expenses arisen thereof.

6.3.7 The Documentation to be provided by the Supplier shall be properly packed to withstand numerous handling, long-distance transportation and to be protected against damage from moisture and rain.

6.3.8 Three copies of a detailed list marking the Documentation coding number, title designation, revision and status of documents shall be enclosed in each parcel of the documentation.

6.4 Any item delivered pursuant to or in connection with the Contract and which remains the property of or is rented out by the Supplier shall be marked accordingly.

6.5 The Supplier shall request in due time from the Purchaser the necessary information for marking.

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6.6 All mark described in this chapter shall be made in English.

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Chapter 7 Documentation

7.1 Both Parties shall deliver the Documentation to the other Party in accordance with Appendix A-3 and B-1. Final Documentation shall take into account the latest modifications made during on-Site Acceptance tests.

7.2 The Supplier shall submit Documentation to the Purchaser for review within the time specified in the Contract or, if no time is specified, then a reasonable time, such Documentation as may be called for therein. The review of Documentation by the Purchaser shall not release the Supplier from its any obligation under the Contract.

7.3 If the Supplier in order to comply with its obligations tinder the Contract shall wish to modify or correct any Documentation, which has already been supplied to the Purchaser, it shall submit for the review of the Purchaser, the revisions thereof.

7.4 The Purchaser and the Purchaser’s Representative or the third party appointed or engaged by the Purchaser shall have the right, at all reasonable times to inspect at the premises of the Supplier and its Sub-suppliers all Documentation relating to any portion of the Equipment. All of the relevant people mentioned this paragraph shall be subject to the confidential obligations under this contract.

7.5 Documentation and the Contract are intended to complement each other, so that anything shown in Documentation but not mentioned in the Contract, or vice-versa, is to be supplied as though specifically set forth in both. Any discrepancies in the Documentation or Contract shall be referred to the Purchaser before the Supplier proceeds with the manufacture of the relevant part of the Equipment. And in any time the Purchaser’s decision or requirement shall prevail.

7.6 This clause is intentionally left blank.

7.7 All documents shall be provided in Chinese and shall refer to the metric system, except otherwise stipulated in the Contract.

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Chapter 8 Mistakes in Information

8.1 The Supplier shall be responsible for any discrepancies, errors or omissions in the Documentation and other information supplied by the Supplier under the Contract, whether such Documentation and other information has been reviewed or approved by the Purchaser or not, provided that such discrepancies, errors or omissions be not due to inaccurate documentation furnished to the Supplier by the Purchaser.

8.2 The Supplier shall at its own expense carry out any alterations or remedial Work necessitated by reason of such discrepancies, errors or omissions and modify Documentation accordingly. If such alterations, remedial Work or modifications are done by or on behalf of the Purchaser, the Supplier shall bear all costs reasonably incurred therein. The performance of its obligations under this Chapter shall not relieve the Supplier of its liability under Chapter 14.

8.3 The Purchaser shall be responsible for information supplied to the Supplier in writing by the Purchaser. The Purchaser shall issue a Variation Order in accordance with Chapter 9 for alterations necessitated by reason of inaccurate information so supplied to the Supplier, if the alterations affect the Supplier’s costs.

8.4 The Supplier shall promptly bring to the attention of the Purchaser any matters that appear to be deficiencies, omissions, contradictions or ambiguities, or any doubt about the meaning or correctness of any information supplied to the Supplier by the Purchaser. The Purchaser shall then promptly instruct the Supplier how to proceed.

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Chapter 9 Variations and Omissions

9.1 The Supplier shall not alter any of the Works except as directed in writing by the Purchaser, but the Purchaser shall have the full power, subject to the provisions hereinafter contained, at any time during the execution of the Contract to alter, amend, omit, add to or otherwise vary any of the Works. The Supplier shall carry out such variations and be bound by the same conditions, so far as applicable, as though the said variations were an integral part of the Contract.

9.2 The Purchaser may from time to time in writing instruct the Supplier to submit, in such detail as the Purchaser may require and within a reasonable period of time, the proposed revision to the Contract Price and Delivery Dates.

9.3 If in lie opinion of the Supplier any proposed variation is likely to prevent it from or prejudice it in fulfilling any obligation under the Contract, it shall notify the Purchaser thereof in writing, and a change proposal shall be submitted by the Supplier at the same time, but none delay in performing any obligation under the variation issued by the Purchaser.

9.4 If the Supplier believes that any direction, instruction, decision or any other act or omission of the Purchaser affects the Supplier’s costs for performing the Works or the time required therefore, the Supplier shall promptly notify the Purchaser in writing, but none delay in performing any obligation under the variation is allowed. The Purchaser, if it agrees, will issue a Variation Order revising the Contract Price and Delivery Dates as required, provided however that no Variation Order shall be allowed if:

a) the act of the Purchaser affected the Supplier’s performance in a manner consistent with the Contract or was necessitated by the Supplier’s failure to comply with a requirement of the Contract; or

b) the Supplier’s performance was adversely affected by the Supplier’s fault, negligence or failure to comply with the stipulations of the Contract; or

c) the Supplier did not promptly notify the Purchaser in writing, due to which the Purchaser could not make recourse to the liable third party.

9.5 Such revision to the Contract Price shall be ascertained and determined in the following manner:

(i) where options and alternatives are defined and priced in the Contract, the amounts stated therefore;

(ii) for on-Site Services adjustment in accordance with the provisions of Appendix A-1 and B-1 to the Contract;

(iii) where they are not so defined and priced, the amounts shall be agreed by the Parties in accordance with one or more of the methods stated below:

(a) on a lump-sum basis, determined from an estimate produced by the Supplier on a basis consistent with the Contract;

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(b) on a lump-sum basis, based on unit prices and/or unit rates which stated in the Contract;

(c) on the basis of costs which the Contract so provides;

where they are not so defined and priced, the amounts shall be discussed and agreed by both Parties.

Due account shall be taken of any partial execution of Work which may be rendered useless by any such variation or omission, and of any sums which may be recoverable by the Supplier from third parties.

Detailed itemized price shall be submitted by the Supplier, and inquiry/quotation documents with his Sub-suppliers shall also be provided to support the related price. All these shall be treated as the supporting documents for the issuance of Variation Order.

Except with the prior agreement of the Purchaser, the Supplier’s submission of change proposal shall be made not later than 14 days after receipt of the Purchaser’s instruction.

9.6 In case both Parties cannot reach an agreement on commercial issues of a Change Proposal, the Supplier shall carry out the Work under the variations of the Purchaser in order to secure the progress of the Project. Both Parties shall continue the discussions on the Change Proposal mentioned above, and then a final agreement shall be reached under the Contract’s condition. In case of the variation is critical for both Parties, the two Parties shall reach an agreement before carrying out the Variation.

9.7 If the Supplier fails to carry out the relating Works under the variation of the Purchaser in order to secure the progress of the Project, the Purchaser is entitled for a self-execution, and the Supplier will be responsible for any consequences arising therefrom.

9.8 A Variation Order shall be issued after the Purchaser has agreed the Supplier’s submission and shall be on a standard form entitled “Variation Order” which shall be the sole method for revising Delivery Dates, the Schedule and/or the Contract Price.

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Chapter 10 Coordination, Liaison and Project Management

10.1 The Supplier shall liaise and work in coordination with the Purchaser’s project management team in the People’s Republic of China.

10.2 Unless specifically stated to the contrary in the Contract, the cost of undertaking such liaison shall be, and shall be deemed to be, covered by the prices included in the Contract. The Supplier further undertakes that it (and its Sub-suppliers where applicable) shall fulfill its obligations but it is expressly agreed between the Parties that the Supplier is not liable for any of the obligations of any other suppliers engaged by the Purchaser; in the event that the Supplier considers that its fulfillment of its obligations is being impeded by any other supplier engaged by the Purchaser, it shall promptly bring such matter to the attention of the Purchaser’s Project Director.

10.3 Project Director shall be the person so nominated by the Purchaser from time to time by the issue of a written notice to the Supplier. When issuing any such notice the Purchaser shall also notify the Supplier of the power that it has delegated to its Project Director and all acts, instructions and decisions subsequently given by the Project Director in accordance with such delegated powers shall be deemed to be acts, instructions and decisions of the Purchaser.

10.4 The Purchaser shall have the right to withdraw or amend any delegation given to its Project Director pursuant to Clause 10.3 by the issue of written notice in advance to the Supplier.

10.5 The Project Director shall have the right to re-delegate any of the powers vested in him by the Purchaser (other than the power to approve any variation or to change any previously established date for the fulfillment of an obligation by the Supplier under the Contract) by the issue of written notice to the Supplier and all acts, instructions and decisions subsequently given by any person within the powers delegated to him by the Project Director shall be deemed to be acts, instructions and decisions of the Project Director.

10.6 The Project Director shall have the right to withdraw or amend any re-delegation of his powers pursuant to Clause 10.5 by the issue of written notice in advance to the Supplier.

10.7 Within one month after Signing of Contract, the Supplier shall submit details of its proposed contract management organization for the Project Director’s review. Such details shall consist of an organization chart and a brief job description for key personnel, and show the powers and authorities vested in those shown in the Supplier’s contract management organization as having direct contact with the Purchaser, the Project Director (including his delegates pursuant to Clause 10.5), and the

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Purchaser’s other representatives including the Overall Designer engaged by the Purchaser for the purposes of the Project. In the event of it being agreed that changes should be made to the Supplier’s organization chart, the Supplier shall forthwith submit a modified organization chart to the Project Director.

10.8 Whenever the Supplier considers that the previously reviewed contract management organization should be changed without prejudice to the interests of the Project, or where the need for change has become unavoidable, it shall forthwith submit details of its proposed revised contract management organization to the Project Director for review as if it were the original proposed contract management organization.

10.9 The Purchaser shall have the right to issue copies of the Supplier’s contract management organization details to its other suppliers engaged for the purposes of the Project.

10.10 So as to enable the Purchaser to exercise its rights under the Contract with regards to access relating to the Works being undertaken by the Supplier’s Sub-suppliers, the Supplier shall provide the Project Director with the necessary details of the Sub-suppliers’ organizations.

10.11 The Supplier undertakes that throughout its contract management organization it shall only use suitably qualified and experienced personnel and that where such personnel are a point of direct contact with the Purchaser, including the Project Director and any of his delegates and representatives, they shall be fluent both in the English and Chinese language.

10.12 Each Party shall provide such facilities as is required under the Contract so as to facilitate the coordinated working procedures and each Party shall be responsible for ensuring that the acts of its employees, agents and other representatives under the Contract shall not prejudice the best interests of the Project. In particular, but without limitation, without prior notice to the Purchaser the Supplier shall not enter, nor permit its Sub-suppliers to enter, into any negotiations with any government entity or agency to develop variances or revisions to any law which has direct application to the Contract and which could adversely affect the best interests of the Purchaser.

10.13 The activities required to be provided by the Supplier include the attendance by the Supplier’s personnel at periodic coordination meetings, monthly progress meetings and meetings on special issues. The host shall provide meeting facilities and prepare meeting documents concerned.

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Chapter 11 Safety Management and Quality Assurance

Part 1: Safety Management

11.1 The Supplier shall abide by the compulsive design standards and codes which shall be noted in the design document and the Contract. In case of no such standards and codes in existence, the Supplier shall make sure as required by the Product Quality Law of People’s Republic of China the design and the product be safe to human health and lives, and property as well.

11.2 Considerations shall be made to ensure the safety and protection of the product in erection and operation. The Supplier shall highlight the safety related information in the design documentation and provide instructions in accident prevention.

11.3 In case of the application of new structure, material or state of arts, the Supplier shall provide relevant safety suggestions to the construction personnel.

11.4 The Supplier shall do the best in enhancing the intrinsic safe performance of the product.

11.5 The Supplier shall provide the Purchaser with the information on the hazards and safety instructions in regard of the transport, erection, commissioning, operations and maintenance of the Equipment.

11.6 The manufacturer shall follow the design and make sure the quality and safety performance of the Equipment in operation lifetime.

11.7 Appropriate safety signs and marks on the product and/or the package of the product shall be provided as required by the Product Quality Law of People’s Republic of China.

11.8 The product containing radioactive sources or toxic and hazardous substance shall bear outstanding warning signs on the surface and the packages, and the Supplier shall make statement on the shipping document and provide safe storage instruction and precautions to the Purchaser.

Part 2: Quality Assurance (hereinafter referred to as the “QA”)

11.9 The Supplier shall establish and implement a Quality Management System which shall comply with ISO 9001:2000 Standard.

11.10 The Supplier shall establish a Project Quality Assurance Program (hereinafter referred to as the “Program”) for this Contract after taking into account scope and nature of the Contract, Specifications, quality warranties and quality control requirements and prepare management procedures and work instruction to meet the contract requirements, if necessary.

11.11 The Supplier shall submit to the Purchaser its generic “quality management manual” for review, and Program and management procedures specific for the project for approval.

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11.12 The Supplier shall submit to the Purchaser documents and records in line with requirement prescribed in Appendices. And the Supplier shall ensure the validity of these documents and records provided to the Purchaser regardless of the Purchaser’s review. In the event that the Purchaser discovers that any quality related documents do not conform to the requirements of the Contract, the Purchaser shall have the right to require revision by the Supplier.

All quality related documents and records relevant to the contract shall be available to the Purchaser’s representatives for reference and review at the location where the corresponding activity is performed. At the Purchaser’s request, if needed on a case-by-case basis, the Supplier shall provide a copy of such quality-related documents. The Purchaser shall have the right to make copies of all documents and records submitted by the Supplier and distribute such copies to its representatives for their use.

11.13 The Supplier shall evaluate its sub-suppliers in line with documented procedure and submit to the Purchaser the qualification report for approval before signing of relevant contracts according to the requirements of Purchaser’s Project Procedures. When it is necessary, the Purchaser shall have right to perform sources evaluation on selected sub-suppliers with supplier. The Supplier shall establish and maintain up to date the list of qualified sub-suppliers in which the status of qualification, QA standard applied and scope of contract shall be indicated. The list of qualified sub-supplier, modification to this list and associated supporting documents shall, be submitted to the Purchaser for review.

The Supplier shall strictly supervise the implementation of its sub-supplier’s QA/QC activities according to the requirements of the applicable QA/QC documents.

11.14 The Quality Plans for this Contract shall be established and implemented by the Supplier in accordance with the requirement of Appendix B-1.

11.15 The Supplier shall handle non-conformance related to this Contract in accordance with the provisions described in Appendix B-1. The non-conformance list of this Contract shall be established and up-dated.

11.16 The Purchaser’s representative has the right to access to the Supplier and its sub-supplier’s premises for its QA and QC activities. The Supplier shall provide to the Purchaser’s representative with convenience and necessary assistance to carry out such QA and QC activities. The Purchaser reserves the right to stop the Supplier’s activities when significant conditions adverse to quality arise and the Supplier shall take all necessary corrective actions promptly to resolve the conditions into satisfaction of the Purchaser prior to resumption of the activities.

11.17 The Purchaser shall have the right to participate in the internal and external QA audit as observer/auditor and kick-off meetings arranged by the Supplier. The Supplier shall inform the Purchaser of the schedule in advance.

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Conclusions, findings and corrective actions of QA audit report related to this Contract shall be transmitted to the Purchaser.

11.18 The representative of the Purchaser shall have access to the Supplier’s and its sub-suppliers premises for surveillance and inspection if safety related activities concerned.

11.19 The Supplier shall include in its sub-contracts the necessary provisions to ensure that all sub-suppliers of this contract comply with the provisions of this chapter, and to entitle the Purchaser with the same right to sub-suppliers as to the Supplier under this contract.

11.20 All QA and QC activities carried out by the Purchaser and the inspecting and witnessing safety related activities carried out by the Purchaser to the Supplier and its sub-suppliers shall not alleviate or free the Supplier from its obligations and legal responsibilities under the contract.

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Chapter 12 lnspection at Manufacturer’s Premises and after Delivery

12.1 During manufacture, the Supplier shall be responsible for all inspection, examination and testing (“In-factory Acceptance Tests”) of the Equipment to be supplied under the Contract and the costs thereof, including that of its Sub-suppliers, prior to completion. Such inspection and examination shall be in accordance with the standards and codes stipulated in the Contract, or where standards and codes are not specifically defined, in accordance with appropriate and generally accepted practice for the Equipment in question.

12.2 During manufacture, the Purchaser or its representative shall be entitled at all reasonable times to inspect and examine, on the Supplier’s premises, the materials and workmanship of Equipment to be supplied under the Contract and to witness the inspection, examination and tests carried out by the Supplier. If part of the said Equipment is being manufactured on other premises the Supplier shall obtain for the Purchaser equivalent authorization as if the said Equipment were being manufactured on the Supplier’s premises. Such inspection, examination and witnessing shall not release the Supplier from any of its obligation under the Contract.

12.3 During manufacture, the Supplier shall monthly submit manufacture progress reports on forms as approved by the Purchaser at suitable time. Such monthly reports shall show the actual progress completed as of date of the reports plotted against the schedule as given in the Contract, and shall be broken down so as to indicate status of purchased materials, detailed shop schedule, shipping dates, and the like as required in accordance with the Contract.

12.4 For any tests to be performed on the premises of the Supplier, the Supplier shall provide free of charge such assistance, labor, materials, electricity, fuel stores, apparatus and instruments as may be requisite and as may be reasonably required to carry out such tests efficiently.

12.5 If during manufacture, when inspecting, any Equipment or any part thereof is found to be not in accordance with the Contract, or in any other way defective, then the Supplier shall promptly replace or re-manufacture the Equipment or part thereof so affected, or remedy the defect or non-conformance. Unless otherwise authorized by the Purchaser, the Supplier shall re-perform within a reasonable time and upon the same terms and conditions such inspection, examination or test, at the expense of the Supplier. No such replacement, re-manufacture, remedy and associated inspection, examination or tests shall be regarded as a Force Majeure occurrence.

12.6 Should the Supplier fails to comply with the requirements of Clause 12.5 above the Purchaser shall have the right to remove the portion of the Equipment concerned from the Supplier and to have the defect remedied by and the test re-performed by the means the Purchaser shall decide, at the Supplier’s expense.

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12.7 The Supplier shall ensure that it and its Sub-suppliers maintain good and clear record systems so as to be able to store and recover the manufacturing and testing history of the Equipment and of its major components.

12.8 This clause is intentionally left blank.

12.9 This clause is intentionally left blank.

12.10 After completion of the In-factory Acceptance Tests, if the performance warranties which are specified in the Appendix B-1 and which shall be detailed in the Acceptance Test Procedures have all been achieved, if the operation of all the Equipment has been normal all along the in-factory availability period and if the known defects have been remedied, a certificate of In-factory Acceptance in two copies shall be signed and issued by the Purchaser. However, the Supplier shall not deliver the Equipment without In-factory Acceptance certificate.

12.11 The In-factory Acceptance Tests and the In-factory availability period shall not release the Supplier from its other obligations under the Contract.

12.12 At an appropriate time, after arrival of Equipment at the Site, the Purchaser shall organize the opening of cases, inspection of packing and Equipment and such non-destructive testing as it considers necessary (all being hereinafter referred to as “open-package inspection”), to establish the extent of any shortage or visible damage, to check the Equipment against shipping documentation and to check quality and specifications against the requirements of the Contract. The Supplier is entitled to send its representatives at its own expense to join in the open-package inspection. The Purchaser shall inform the Supplier of the date and nature of inspection or test *** prior to the open-package inspection. If the representatives of the Supplier cannot reach the Site in time, the Purchaser shall have the right to open the package and conduct the inspection independently. After the Supplier has staff on Site, notice of *** in advance shall be given to the Supplier’s Site staff who may join in such inspection.

12.13 Should any shortage, damage or failure to meet quality standards and specifications stipulated in the Contract, be found affecting the delivered Equipment, during the open-package inspection by the Purchaser and/or the Supplier, a detailed record shall be made and signed by representatives of the Parties. The record shall be sent to the Supplier after the Purchaser conduct the inspection independently as stated in Clause 12.12, if the Supplier disagrees on the record, the comments shall be sent to the Purchaser within *** after receipt, otherwise it shall be deemed that the Supplier accepted the record. This record shall be taken as conclusive evidence for the Purchaser to claim replacement or repair from the Supplier, where the said shortage, defect, damage or failure is due to the fault of the Supplier.

12.14 If the Parties cannot agree on the results of the open-package inspection or on any other means of testing to verify condition of the Equipment as received at Site then either Party may submit the results to the local Branch of General Administration of Quality Supervision, Inspection and Quarantine of China for re-examination and the expenses thereof shall be borne by the

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liable Party. Any claim against the Supplier by the Purchaser shall then rely upon the certificates issued by the same local Branch of General Administration of Quality Supervision, Inspection and Quarantine of China.

12.15 Where it is found liable therefore under the Contract, the Supplier shall replace missing parts free of charge to the Purchaser, or repair, or if the Purchaser considers the repair might cause potential defects or reduce the integrity of the Equipment, replace damaged parts free of charges to the Purchaser at the Site immediately after receiving the certificate of claim from the Purchaser and shall be responsible for the risk and freight therefore to the erection Site and also the repeat inspection fee of the Purchaser. If the Supplier disputes the claim, its objection shall be raised within *** after receiving the certificate of claim. Consultation shall then take place between the Parties. If the objection is raised later than ***, the Purchaser’s claim shall be upheld.

12.16 Replacement or repair performed by the Supplier under Clause 12.15 shall be carried out as soon as practicable by and at the expense of the Supplier and if required urgently airfreight shall apply.

12.17 The open-package inspection and tests mentioned above shall not release the Supplier from its liabilities under Chapter 14 of this Contract.

12.18 The lists of standards and codes applicable to the inspection of Equipment to be provided by the Supplier and the delivery dates therefore are set out in the Appendices of the Contract. If the aforementioned standards and codes are not delivered in time or delivered incompletely, the Purchaser shall be entitled to inspect the Equipment according to the existing standards or codes of a third party chosen by the Purchaser.

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Chapter 13 Erection, Commissioning, Testing and Acceptance

13.1 The erection, commissioning and performance test of the Equipment supplied under the Contract shall be organized and executed by the Purchaser. The Supplier shall provide Documentation, technical assistance, advice and supervision at the Site so as to enable the Purchaser to complete the Contract and put it into operation in accordance with the Appendix B-1.

13.2 The responsibilities of the Site Supervision provided by the Supplier at the Site are as follows:

(i) Assist the Purchaser or its erection contractor to review and to prepare its erection procedures and review with the Purchaser or its erection contractor its erection programs and methods, and provide assistance to the erection contractor when required during the execution of the erection activities;

(ii) Supervise mechanical and electrical erection and provide surveillance of the erection contractor’s erection quality and where required by the Purchaser certify, that quality of erection conforms to the technical requirements of the Supplier;

(iii) Assist the Purchaser to prepare and perform the correct commissioning and performance test program and procedures;

(iv) Provide advice to the Purchaser on the conduct of start-up activities, to assist where necessary on resolution of technical matters and where required by the Purchaser certify, the compliance with the Supplier’s requirements.

13.3 During the various stages of erection, commissioning and performance test both Parties shall duly cooperate with each other. In case of any technical problems arising, the Supplier shall advise the Purchaser and analyze the causes and find the solution immediately. Additionally, necessary technical documents shall be provided by the Supplier at no cost to the Purchaser.

13.4 After completion of the erection of the Equipment, the commissioning, performance test, pre-operational test, demonstration run, and acceptance under the Appendices of the Contract shall be carried out without unreasonable delay. The purpose of the above activities is to verify whether the Equipment meets the warranties and technical performances specified in the Contract.

13.5 After completion of the commissioning, performance test, pre-operational test, demonstration run, if the operation of all the Equipment is normal and the warranties and technical performances of the Equipment have all been achieved, and all the known defects are remedied, the Equipment shall be deemed acceptable. Then a certificate of provisional acceptance (hereinafter called “Provisional Acceptance Certificate”) in two original copies shall be signed by both Parties and issued by the Purchaser, one original copy to be retained by each Party.

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13.6 Notwithstanding the provisions of Clause 13.3, if the pre-operational test, commissioning, demonstration run and performance test of the Equipment cannot meet the requirements of one or more items of warranties or technical performance due to the Supplier’s fault, the provisions of Chapter 14 shall apply.

13.7 If the commissioning, performance tests pre-operational test, demonstration run are delayed, the Supplier shall fulfill its responsibilities as defined in 13.2 at any time upon the Purchaser’s request. The delay of the tests mentioned above shall not release the Supplier from its obligations under this Chapter.

13.8 The Provisional Acceptance Certificate of the Equipment under this Chapter shall not release the Supplier from its liabilities under the Contract.

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Chapter 14 Warranties and Defects After Delivery

14.1 The Supplier warrants that all Equipment supplied shall be brand-new, of the quality required by the Contract. The Supplier further warrants that the Equipment shall satisfy the requirements of the interfaces and comply with the standards, codes, and Specifications specified in the Contract, with the objective of assuring long term, safe, reliable and efficient operation, and easy maintenance.

14.2 Notwithstanding the provisions of Clause 14.1, the Supplier shall promptly notify the Purchaser of any improvement measures related to reliability or efficiency taken or proposed in the light of experience feedback from its own activities or from any other customers. At any time up to the end of the Warranty Period, the Supplier shall be obligated to implement any such improving measures (if required to do so by the Purchaser) free of charge to the Purchaser where such implementation is necessary to ensure reliability of the Equipment to the level envisaged by the Contract or its safe operation.

14.3 The Supplier warrants the delivery of the Equipment in compliance with the scope of supply stipulated in Chapter 2. During the implementation of the Contract, if any item is omitted which is required for safe and reliable operation or convenient maintenance or for achieving the performance stipulated in the Contract, the Supplier shall supply such item or make the necessary adjustment at no additional cost to the Purchaser.

14.4 The Supplier warrants that the Documentation shall be complete, clear and correct and shall meet the requirements of transportation, storage, acceptance testing, operation, maintenance, management, quality control etc. under the Contract.

14.5 The Supplier shall be responsible for making good any defect in or damage to any portion of the Equipment which may appear or occur under proper use during the Warranty Period and which arises from defective materials, workmanship, manufacturing design (other than a design furnished by the Purchaser and for which the Supplier has disclaimed responsibility) or the wrong instructions of the Supplier’s technical personnel or an error in the Documentation.

14.6 If any such defect shall appear or damage occur, for which the Supplier is responsible, the Purchaser shall immediately inform the Supplier thereof stating in writing the nature of the defect or damage. The Supplier shall promptly repair or, if the Purchaser considers that repair might cause potential defects or reduce the integrity of the Equipment, shall replace the defective or damaged part of the Equipment, at the Supplier’s expense including all costs of removal, insurance, reinstallation, packing, transportation to and from Site and if required urgently shall be freighted by air. If required by the Supplier, the Purchaser shall provide such labor, tools, materials and workshop facilities as are available at the Site and shall be reimbursed for all reasonable expenses incurred in so doing.

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14.7 Where any defect or damage for which the Supplier is responsible under Clause 14.5 arises after the Equipment has been put into service, then for the repaired or replaced parts of the Equipment, together with any other parts which cannot be used as a consequence of the said defect or damage, the Warranty Period shall be extended until *** after the repaired or replaced portion of the Equipment has been put back into service by the Purchaser.

14.8 Upon pursuant to this Chapter the Supplier shall supply a part in replacement of a defective or damaged part, the defective or damaged part shall become the property of the Supplier, and shall be disposed of by the Supplier at its own expense.

14.9 If any defect or damage be not remedied within a reasonable time, the Purchaser may proceed to do the Work at the Supplier’s risk and expense without affecting the Supplier’s other liabilities under the Contract or otherwise.

14.10 The Supplier shall make available the Equipment for delivery by the relevant Delivery Dates therefore stated in the Contract. If the Supplier fails to make available the Equipment or any portion thereof by the relevant Delivery Date therefore it shall pay to the Purchaser as liquidated damages for delay ***

***

The liquidated damages for delay shall be up to *** delayed batch of Equipment.

***

14.11 In the event of any defect which may delay the safe and reliable erection commissioning and testing being discovered through an open package inspection, for which the Supplier is responsible, then, in addition to its obligation to repair the said defect or to replace the Equipment in question in accordance with Chapter 12, the Supplier shall also be reliable to pay liquidated damages for delay in accordance with Clause 14.10 as if the Delivery Date thereof was the date when the defect was discovered and the Actual Delivery Date thereof was the date when the Supplier remedied the defect at the Site.

14.12 This clause is intentionally left blank.:

14.13 In the event of the Equipment or any part of it failing to achieve its warranted performance as specified in Appendix B-1 during the acceptance tests carried out pursuant to Chapter 13, the Supplier shall take all steps to correct the deficiencies as

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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soon as possible. If the Equipment fails to be ready by the time stated in the Contract for its acceptance tests, the Supplier shall pay the Purchaser the sum of ***, which sum shall be constructed as liquidated damages. Such liquidated damages shall not exceed *** for such portion of the Equipment which should be tested. This stipulation shall not affect the Purchaser’s any other rights under the Contract.

14.14 Notwithstanding payment by the Supplier or deduction by the Purchaser of liquidated damages from the payment due for the Supplier’s failure to achieve the warranted performance specified in the Contract, after the Supplier has been allowed to take remedial measures for up to *** after the carrying out of relevant performance test pursuant to Chapter 13, then the Purchaser shall be entitled to reject the Equipment, and in the event of such rejection the Supplier shall at its own cost promptly replace the same or, if the Purchaser so decides, repay to the Purchaser all amounts paid in respect of the rejected Equipment plus interest at the time agreed by the Purchaser and the Supplier shall pay any losses caused by rejecting the Equipment.

14.15 Liquidated damages incurred for delay or failure to achieve warranted performance shall be paid by the Supplier to the Purchaser as stipulated in clause 4.7.

14.16 Before the expiry of the, Warranty Period, the Purchaser shall carry out an overall final inspection of the Equipment. The Supplier shall at its own expense dispatch its personnel to participate in the inspection and the Purchaser shall provide to the Supplier reasonable access to the Equipment. If the overall final inspections of the Equipment are delayed, the Supplier shall fulfill its responsibilities as defined in this Clause 14.16 at any time upon the Purchaser’s request. The Supplier shall deal promptly with any defect that are revealed, thereby. As soon as the defects revealed within the Warranty Period have been remedied, the Purchaser shall issue a final acceptance certificate (hereinafter referred to as the “Final Acceptance Certificate”) for the Equipment in two original copies (each Party will hold one original copy), thereby confirming that the Equipment is accepted by the Purchaser.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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Chapter 15 Additional Spare and Replacement Parts and Repairs to the

Equipment

15.1 The Supplier shall upon the Purchaser’s request at any time within the lifetime period of the Equipment promptly sell and supply to the Purchaser at reasonable prices derived from the prices quoted in the Contract Price, Additional Spare and Replacement Parts for the Equipment during the operation Lifetime of the Project, subject to the provisions of this Chapter.

15.2 If before the expiry of the period referred to in Clause 15.1 the Supplier intends to discontinue the supply of Additional Spare or Replacement Parts for the Equipment or any portion thereof, it shall forthwith give notice to the Purchaser of such intention and either:

(i) afford the Purchaser the opportunity (which shall be exercised within ***) of ordering at reasonable prices such quantities of Additional Spare or Replacement Parts as the Purchaser shall reasonably require in relation to the operation lifetime of such Equipment or portion thereof; or

(ii) deliver to the Purchaser free of charge within the above said period of *** such drawings, documentation, software, patterns, tools, moulds, specifications and such other information and equipment as it may have in its possession and as the Purchaser shall require to enable the Purchaser to make or have made such Additional Spare or Replacement Parts, thereby ensuring as good a performance as initially planned and the Supplier shall grant to the Purchaser without payment of any royalty or charge full right and liberty to make or have made such Additional Spare or Replacement Parts as aforesaid.

15.3 If during the period referred to in Clause 15.1 the Supplier fails to fulfill the responsibilities in Clause 15.1 and 15.2, or becomes insolvent or commences to be wound up (not being a member’s voluntary winding up for the purpose of re-construction), then the Supplier shall, so far as it is legally entitled so to do and if so required by the Purchaser, as soon as reasonably practicable deliver to the Purchaser free of charge such drawings, documentation, software, patterns, tools, moulds, specifications and other information as are referred to in Clause 15.2 and the Purchaser shall be entitled to retain the same information for such time only as necessary for the exercise by the Purchaser of its rights under this Chapter and if the Supplier so requires the same shall be returned by the Purchaser to the Supplier in good order and condition (fair wear and tear excepted) and at the Purchaser’s cost and expense.

15.4 If the Purchaser shall exercise its right under Clause 15.3, the Supplier shall also grant to the Purchaser without payment of any royalty or charge full right and liberty to make or have made Additional Spare or Replacement Parts as aforesaid and for such purposes only to use, make and have made copies of all drawings, patterns, specifications and other information supplied by the Supplier to the Purchaser pursuant to the Contract.

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15.5 In entering into the Contract, the Supplier undertakes to carry out such repairs to the Equipment as the Purchaser may require during the period referred to in Clause 15.1 and, other than in respect of repairs for which the Supplier may be liable under the Contract, under separate orders from the Purchaser on commercial terms to be agreed and based on the following principles:

(i) prices will not include more than the Supplier’s normal overhead recovery and margin for the type of Work in question;

(ii) such prices will be presented to the Purchaser in such a manner as will clearly identify the various elements thereof, and

(iii) the right of the Purchaser under Chapter 31 will be extended to cover agreements for repair to Equipment however made.

15.6 The Supplier shall ensure that its Sub-suppliers comply with the provisions of this Chapter.

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Chapter 16 Liability for Accidents and Damage

16.1 The Supplier shall indemnify the Purchaser in respect of all damage or injury and all actions, claims and costs in connection therewith arising our of, in the course of or caused by the carrying out of the Contract provided always that the same is due to any negligent act or omission of the Supplier or its Sub-suppliers and their respective servants or agents or materials or workmanship, subject to the following:

(i) In the event of loss of or damage to the Equipment which is due to the negligence, breach of statutory duty, omission or default of the Supplier’s or its Sub-supplier’s personnel whilst on Site the Supplier shall be liable to remedy such loss or damage in accordance with the provisions of Clauses 14.5 – 14.9 as if it was the result of defective materials, workmanship or design.

(ii) Subject to the provisions of Clause 16.3 the Supplier shall not be liable to the Purchaser for any loss, damage or injury to the extent that it is caused by or arise from the negligent act or omission of the Purchaser.

(iii) In the event of any claim being made against the Purchaser for which the Supplier may be liable under the provisions of this Clause 16.1, the Supplier shall be promptly notified thereof, and may at its own expense conduct all negotiations for the settlement of the same and any litigation that may arise therefrom.

The conduct by the Supplier of such negotiations or litigation shall be conditional upon the Supplier having first given to the Purchaser such reasonable security as shall form time to time be required by the Purchaser to cover the amount ascertained or agreed or estimated, as the case may be, of any compensation, damages, expenses and costs for which the Purchaser may become liable. The Purchaser shall, at the request of the Supplier afford all available assistance for any such purpose, and shall be repaid all reasonable expenses incurred in so doing. The Purchaser shall not make statements which might be prejudicial to such negotiations and litigation unless legally required to do so.

(iv) If at any time the Purchaser is of the opinion that the security provided pursuant to (iii) above is inadequate or should the Purchaser be dissatisfied with the conduct by the Supplier of such litigation involving the Purchaser, the Purchaser shall have the right and option to assume responsibility for the defense of such litigation without waiver of any of the rights and benefits provided under this Contract.

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(v) In the case of loss of or damage to the Equipment in transit, in the place of storage or on the Site arising from or occasioned by causes for which the Supplier is not responsible under the Contract, in accordance with Clause 9.1 the Purchaser may instruct the Supplier to make good the same by repair or replacement. The price of such variation shall be determined in accordance with the provisions of Clause 15.5 and shall be revised to credit the Purchaser with all insurance recoveries for such loss or damage to the Equipment, to the extent that such recoveries have been received by the Supplier.

(vi) In the event of loss of or damage to any property of the Purchaser other than Equipment at the Site or in vicinity thereof which is due to the negligence, breach of statutory duty, omission or default of the Supplier arising out of or in the course of or caused by the carrying out of the Contract, the Supplier’s liability shall be the actual loss or damage sustained.

(vii) The insurance and other protections provided or to be provided by the Supplier pursuant to Chapter 18 remaining in full force and effect.

16.2 The liability of the Supplier to the Purchaser under Clause 16.1 shall terminate on the expiry of the period specified in Clauses 14.5 – 14.7.

16.3 The Supplier shall hold harmless and shall waive all rights of recourse against the Purchaser for liability at law for loss of or damage to property and accidental bodily injury caused by negligence, omission or default of the Purchaser’s employees, agents which may occur at the Supplier’s and its Sub-suppliers’ factories or premises and arise out of or in connection with the implementation of the Contract.

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Chapter 17 Licensing

17.1 The Supplier warrants that the Works will have a level of safety consistent with the regulations established and approved by the appropriate authorities in the People’s Republic of China as included in the Contract and the safety standards issued by the country of origin of the Supplier.

If the Works in a few areas do not fully comply with the above regulations or safety standards, the Supplier should justify the adequacy of safety level of the Works and make appropriate proposal for solving this issue to the Purchaser.

17.2 Should the licensing authorities in the People’s Republic of China request the Purchaser to provide information, the Purchaser will notify the Supplier, and the Supplier shall, free of charge, provide the Information requested on the Works. If new studies under this Contract are required for safety justification, the cost shall be borne by the Supplier.

17.3 The Supplier shall, at its own expense, provide the Purchaser with the services of qualified specialists in licensing which are related to Works, for assisting the Purchaser in the presentation of applications for the construction permits and operating licenses for the Project.

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Chapter 18 Insurance

18.1 Supplier’s Obligations

The Supplier shall provide the Purchaser with such assistance and information as the Purchaser may reasonably require to effect and maintain the insurance as required in this Chapter 18 and any other insurance which the Purchaser chooses to effect, by himself and at its own costs, in connection with the Contract. Further the Supplier shall disclose all relevant information material (e.g. the full replacement value of the equipment and materials) to the insurer and shall promptly advise the Purchaser of any material change thereto.

The Supplier shall with all due diligence conform to the terms, conditions and warranties of the insurance policies and all reasonable requirements of the insurers in connection with the settlement of claims, the recovery of losses and the prevention of accidents.

Furthermore, the Supplier shall be responsible for and shall indemnify and hold harmless the Purchaser in respect of any breach of condition, breach of warranty, non-disclosure of material information, misrepresentation, fraud or any intentional act or gross omission caused by the Supplier which arise out of the performance of the Chapter 18 and result in the avoidance of the insurance by the insurer.

The Supplier shall bear the loss or damages within the retained liability (deductible or excess) where loss or damage is in consequence of any gross negligence or omission or intentional act of the Supplier or its Sub suppliers, agents or other representatives or of the personnel of any of them or in consequence of the defective material, workmanship or design executed by the Supplier or its Sub suppliers.

18.2 Supplier’s Insurance

18.2.1 Insurance for Equipment in Supplier Premises

The Supplier and its Sub-suppliers where applicable shall insure and keep insured at their own expense all Equipment throughout the period of manufacturing for an amount sufficient to provide for claims on a replacement value basis under a policy of Fire, Explosion, Flood, Storm, and, where obtainable, Terrorist Attacks insurance until the commencement of loading prior to the dispatch of such Equipment from the factory or warehouse of the Supplier and as appropriate its Sub-suppliers.

The above insurance shall be in such a manner as will fully protect the interest of the Purchaser in any such Equipment. The Supplier and its Sub-suppliers where applicable shall arrange for the benefit of their respective insurance to be extended to the Purchaser so as to cover the Purchaser’s interest in any Equipment.

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18.2.2 Employer’s Liability Insurance

The Supplier shall at his own cost insure or cause to be insured against the liability to his own employees and those of his Sub-suppliers under an Employer’s Liability Insurance policy or a statutory insurance program.

18.2.3 Supplier’s Obligations

The Supplier shall, at the request of the Purchaser, produce for inspection the insurance policies showing that sufficient insurance has been effected as required in the captioned clause. Upon demand by the Purchaser, the Supplier shall produce for inspection the receipts for the current premium in respect of the said insurance.

18.2.4 The Supplier shall have an insurance policy at its own expense covering the inland transportation from Supplier’s workshop to Purchaser’s project site.

18.3 Insurance in General

If the Supplier shall fail to effect and keep in force the insurance referred to in this Chapter 18, the Purchaser may after giving appropriate prior notice, effect and keep in force any such insurance and pay such premium as may be necessary for that purpose and recover the cost of the same from the Supplier whether by way of deduction or otherwise.

The securing of any insurance policy by the Purchaser shall not relieve the Supplier from any liability arising from or connected with its failure to take out or maintain the insurance policies in compliance with this Chapter 18.

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Chapter 19 Taxes and Duties

19.1 All taxes and duties in connection with and in the performance of the Contract levied by Chinese government on the Purchaser in accordance with the tax laws of People’s Republic of China and local laws/statutes and the agreement between the government of the People’s Republic of China and the government of the country which the foreign member of the Supplier or its Sub-suppliers is from for the reciprocal avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income shall be borne by the Purchaser.

19.2 All taxes and duties in connection with and in the performance of the Contract levied by Chinese government on the Supplier and its Sub-suppliers, in accordance with Chinese tax laws of People’s Republic of China, local laws/statutes and the agreement between the government of the People’s Republic of China and the government of the country which the foreign member of the Supplier is from for the reciprocal avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, shall be borne by the Supplier and its Sub-suppliers.

The Supplier shall be obliged to pay the relevant taxes directly to the Chinese tax authorities. In case as required by Chinese tax laws, the Purchaser is legally obliged to withhold, certain amount of taxes under this Contract and pay them to the relevant Chinese tax authorities, the Purchaser has the right to withhold and pay such amount of taxes to the relevant Chinese tax authorities. After receiving the tax receipts issued by the relevant Chinese tax authorities for the aforesaid taxes, the Purchaser shall submit them to the Supplier without undue delay. The Supplier shall take necessary measures to facilitate the withholding and payment of such taxes.

19.3 All taxes and duties arising outside PRC in connection with and in performance of the Contract shall be borne by the Supplier.

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Chapter 20 Force Majeure

20.1 Should either Party be prevented from performing any of its obligations under this Contract due to the event of Force Majeure (as defined in Clause 1.13), the time for performing those obligations under the Contract shall be extended by a period equivalent to the effect of such Force Majeure. The affected Party shall immediately notify the other Party of occurrence of such an event by fax and send by registered airmail a certificate issued by competent authorities or agency confirming the event of the Force Majeure within *** following its occurrence.

Upon occurrence of Force Majeure, the affected Party shall make his utmost efforts to take immediate and reasonable actions in order to minimize such effects and damages.

The Parties shall continue the performance of their other obligations under the Contract insofar as these are not directly affected by Force Majeure occurrence.

20.2 The affected Party shall not be liable for any delay or failure in performing any of its obligations due to the event of Force Majeure. However, the affected Party shall inform the other Party by fax the termination or elimination of the event of Force Majeure as soon as possible.

20.3 Both Parties shall proceed with their obligations immediately upon the cease of the event of Force Majeure or the removal of the effects and the Delivery Date shall be extended correspondingly. Should the effect of the event of Force Majeure last for more than ***, both Parties shall promptly meet and discuss methods to resolve the difficulties arising from the event of Force Majeure.

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Chapter 21 Vesting of the Equipment and Documentation

21.1 Equipment supplied or intended to be supplied pursuant to the Contract shall become the property of the Purchaser at whichever is the earliest one of the following events:

(i) when in accordance with the provisions of Chapter 5 the Equipment has been delivered;

(ii) when in the event of termination pursuant to Chapter 26, all amounts due and payable to the Supplier in respect thereof have been received by the Supplier.

21.2 In the event of any Equipment becoming the property of the Purchaser pursuant to the Contract and subsequently being rejected by the Purchaser pursuant to Clause 14.14 such Equipment shall forthwith upon such rejection cease to be the property of the Purchaser and become the property of the Supplier.

21.3 All Documentation used for the purpose of the Contract and other documents which are the property of the Supplier and are additional to the Documentation to be submitted in accordance with the Contract (and which shall include but not be limited to shop drawings) shall immediately vest in and become the property of the Purchaser upon an event of bankruptcy or in the event the Work on the Equipment is terminated in accordance with Chapter 24. The Purchaser shall be entitled to use any such designs, Documentation and other documents for the purpose of procuring Equipment not delivered in accordance with the Contract or for any other reasonable purpose.

21.4 This Chapter shall not release any obligations of the Supplier and the Purchaser under this Contract.

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Chapter 22 Infringement

22.1 The Supplier warrants that it has the right and permission to supply to the Purchaser the Equipment, Documentation and Services in accordance with the terms of the Contract. The Supplier shall indemnify the Purchaser against all actions, claims, demands, costs, charges, and expenses arising from or incurred by reason of any infringement or alleged infringement of patent, copyright, trade mark or trade name by the use of any Equipment supplied by the Supplier (excluding the infringements caused by the Purchaser), but such indemnity shall not cover any use of the Equipment otherwise than for the purpose indicated by or reasonably to be inferred from the Contract or any infringement which is due to the use of any Equipment in association or combination with any other Equipment not supplied by the Supplier.

22.2 In the event of any claim being made or action brought against the Purchaser arising out of the matters referred to in the Clause 22.1, the Supplier shall be promptly notified thereof and shall at its own expense conduct all negotiations for the settlement of such claim or action, and any litigation that may arise therefore. The Purchaser shall have the right to be represented in any such action by advisory counsel of its own selection and at its own expense. The conduct by the Supplier of such negotiations or litigation shall be conditional upon the Supplier having first given to the Purchaser such reasonable security as shall from time to-time be required by the Purchaser to cover the amount, as the case may be, of any compensation, damages, expenses, and costs for which the Purchaser may become liable. The Purchaser shall, at the request of the Supplier, afford all available assistance for the purpose of contesting any such claim or action, and shall be repaid all reasonable expenses incurred in so doing.

22.3 In the event that the Purchaser should at any time be of the opinion that the security provided pursuant to Clause 22.2 is inadequate or should the Purchaser reasonably be dissatisfied with the conduct by the Supplier of such litigation involving the Purchaser, the Purchaser shall have the right to assume responsibility for defense of such litigation at the expense of the Supplier without waiver of any rights and benefits provided under the Contract.

22.4 If the Supplier shall be prevented from carrying out its obligations under the Contract due to any infringement or alleged infringement of patent, copyright, trademark or trade name, the Purchaser may treat such inability as a default by the Supplier.

22.5 The Purchaser on its part warrants that any design or instructions furnished or given by the Purchaser to the Supplier shall not be such as will cause the Supplier to infringe any patent, registered design, copyright, trade mark or trade name in the performance of the Contract.

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22.6 The Equipment manufactured based on the requirements of the Purchaser belongs to the Purchaser, which shall be used only in the Purchaser’s existing projects or other related projects. Without the prior written approval by the Purchaser, the Supplier shall not manufacture or use the same Equipment for any other third party.

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Chapter 23 Assignment and Sub-letting

23.1 Any request of the Supplier to subcontract any of his obligations under the Contract to any third party shall be subject to the prior qualifications and written approval made by the Purchaser. The Purchaser shall reserve the right to review the Sub-supplier selection and the documents.

23.2 Any subcontract shall not release the Supplier from any liability or obligation, including schedule control, quality control and quality warranties under the Contract.

23.3 The Supplier shall take full and overall responsibility for the coordination, proper, effective and reliable interfacing for the supplies from different Sub-suppliers and for the interfaces between the Equipment supplied by him and by its Sub-suppliers.

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Chapter 24 Supplier’s Default

24.1 Without prejudice to any rights and remedies to which the Purchaser may be entitled, if Supplier neglects to perform the Contract with due diligence and expedition, or refuses or neglects to comply with any reasonable orders given to the Supplier in writing by the Purchaser in connection with the performance of the Contract, or contravenes the provisions thereof, or any stipulation in the Contract, the Purchaser may give notice in writing to the Supplier to make good the neglect, refusal, or contravention complained of.

24.2 Should the Supplier fail to comply with a notice given by the Purchaser in accordance with Clause 24.1 within *** from the date of service thereof in the case of a failure, neglect or contravention capable of being made good within that time, or otherwise within such time as may be reasonably necessary for making it good, then, and in such case the Purchaser may forthwith suspend, or terminate the Contract or any part thereof by notice in writing to the Supplier.

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Chapter 25 Bankruptcy

Without prejudice to any other rights or remedies to which the Purchaser may be entitled, if the Supplier become bankrupt or insolvent, or have a receiving order made against it, or compound with its creditors, or be a corporation commence to be wound up (not being a member’s voluntary winding up for the purpose of amalgamation or reconstruction) or have a receiver or manager of its business appointed, the Purchaser may either:

i) terminate the Contract forthwith by notice in writing to Supplier or to the receiver or liquidator or to any person in whom the Contract may become vested; or

ii) give such receiver, liquidator, or other person the option of carrying out the Contract subject to his providing a guarantee for the due and faithful performance of the Contract up to an amount to be agreed.

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Chapter 26 Suspension and Termination

26.1 The Purchaser may, at any time, suspend the Work on the Equipment or any part thereof for any reason whatsoever on giving notice in writing to the Supplier specifying that portion of the Work to be suspended and the effective date of suspension. The Supplier shall suspend such Work on the effective date but it shall continue to carry out all other Work under the Contract.

26.2 In the event that the Purchaser suspends any Work in accordance with Clause 26.1 it shall then issue a Variation Order in accordance with Chapter 9 to amend the Contract Price and Delivery Dates of the supply so as to reflect the effects of such, suspension, if any. The Contract Price revision shall be limited to the actual extra cost incurred and paid by the Supplier resulting from the said suspension, provided that the Supplier has taken all necessary steps to mitigate such cost.

26.3 Notwithstanding the foregoing, if the Purchaser suspends Work on the Equipment or any part thereof pursuant to Chapter 24, no Variation Order shall be issued and no revision of or adjustment to the Contract Price or Delivery Date shall be allowed.

26.4 The Purchaser may at any time authorize resumption of all or any portion of Work suspended as aforesaid by giving notice in writing to the Supplier specifying the Work to be resumed and the effective date of resumption.

26.5 The Purchaser may, at any time, terminate Work on the Equipment or any portion thereof for any reason whatsoever by giving written notice to the Supplier specifying the extent and the effective date of such termination. The Supplier shall terminate such Work on the effective date but it shall continue to carry out all other Work under the Contract.

26.6 In the event of the Purchaser terminating Work on the Equipment or any portion thereof (otherwise than in consequence of default or bankruptcy on the part of the Supplier), the Supplier’s sole right shall be payment of the sum of:

i) the Contract Price for the Equipment which is the subject of the notice of termination and calculated at the effective date of such notice;

ii) the actual reasonable and necessary net cost of materials (or cancellation charges in respect thereof) unused and ordered for the Equipment which shall have been delivered to the Supplier or of which the Supplier is legally liable to accept delivery, such materials becoming the property of the Purchaser upon such payment being made by the Purchaser to the Supplier; and

iii) any other actual reasonable and necessary net costs incurred and paid by the Supplier as a direct consequence of termination and approved by the Purchaser.

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The above sum shall be offset by the outstanding balances, if any, due from the Supplier for advances previously paid by the Purchaser.

The Purchaser shall issue a Variation Order pursuant to Chapter 9 reducing the Contract Price in accordance with this Clause.

26.7 In the event of termination of Work on the Equipment or any portion thereof in accordance with Clause 26.5, the Supplier shall in respect of Equipment not already delivered whether fully manufactured or still in the course of manufacture and which is the subject of the termination, make such arrangements on behalf of the Purchaser as in all the circumstances may be reasonable to deliver to the Purchaser or its nominee or to store and insure in the name and to the reasonable satisfaction of the Purchaser such items of Equipment for their full replacement value against such risks as is practicable.

26.8 In the event of the Purchaser terminating Work on the Equipment or any portion thereof in accordance with the provisions of Chapter 24 or Chapter 25, the Purchaser, in addition to its rights under those Clauses, shall be entitled to take possession of and remove from the Supplier’s premises as and when it shall be convenient for the Purchaser so to do, all Equipment, Documentation, drawings and specifications, the property in which has passed to the Purchaser pursuant to the Contract and the Supplier shall afford to the Purchaser all rights of access and all reasonable facilities to enable it to remove such Equipment, Documentation, drawings, and specifications as aforesaid. The Purchaser shall have the right to carry out the Work terminated as aforesaid by whatever means it deems most expedient and the Supplier shall be liable for and shall pay to the Purchaser the additional cost and losses, if any, which the Purchaser may incur as a result of carrying out and completing such Work including all costs of removal as aforesaid.

26.9 In the event of any termination mentioned above:

(i) the Supplier shall execute and deliver to the Purchaser all Documentation required by the Purchaser and take all reasonable steps to fully vest in the Purchaser the rights and benefits of the Supplier under existing agreements with vendors, Sub-suppliers and others related to the Contract;

(ii) the applicable provisions of the Contract shall continue in fall force and effect as to all Work which is not terminated.

50

Chapter 27 Statute and Other Regulations

27.1 The Supplier shall comply, and require compliance by its Sub-suppliers, with all applicable laws in connection with the Contract and in this context law includes any law (national, state, municipal, local or other) and any requirement, ordinance, rule or regulation of any governmental authority or agency.

27.2 Except as otherwise provided in the Contract, the Supplier shall obtain at its own expense all licenses to do business in the country or countries wherein any Work required by the Contract is performed and shall obtain all temporary permits and authorizations required by law for prosecution of such Work and shall give all required notices.

51

Chapter 28 Liens

28.1 If at any time during the performance of the Contract there should be evidence of any lien or claim to which the Purchaser’s property might be subject and which arises from failure of the Supplier, the Supplier shall maintain the Project schedule, defend or protect the title or supply to the Purchaser a replacement for the item of Equipment affected by the lien or claim. Such replacement by the Supplier shall in no way limit the Purchaser’s rights under Chapter 14 in respect of delay and performance.

28.2 If any such lien or claim remains undischarged after completion or termination of the Works, the Supplier shall promptly refund to the Purchaser all amounts that the Purchaser may be compelled to pay in discharging such lien or claims, including all costs and reasonable legal fees.

52

Chapter 29 Independence of the Supplier

Neither the Purchaser nor the Purchaser’s representatives shall have authority to supervise the employees, representatives or Sub-suppliers of the Supplier. The Supplier shall have no authority to make any statements, representations or commitments of any kind or to take any action that shall be binding upon the Purchaser, except as provided for in the Contract.

53

Chapter 30 Conflict of Interest

30.1 The Supplier shall exercise reasonable care and diligence to prevent any actions or conditions, which could result in a conflict with the Purchaser’s best interests. This obligation shall apply to the activities of the employees and agents of the Supplier in their relations with the employees, and their families, of the Purchaser, vendors, Sub-suppliers and third parties arising from the Contract and performance of the Works thereunder.

30.2 The Supplier’s efforts shall include, but not be limited to, establishing precautions to prevent its employees or agents from making, receiving, providing, or offering gifts, payments, loans, substantial entertainment or other considerations for the purpose of influencing individuals to act contrary to the Purchaser’s best interests. The Supplier shall immediately notify the Purchaser of any and all violations of this Clause upon becoming aware of such violation and shall indemnify and save harmless the Purchaser from any loss, cost, or claim as a result of the Supplier’s failure to exercise due care in the observance of the requirements of this Clause.

54

Chapter 31 Business Ethics

The Supplier and its agents are not expected or authorized to take any action on behalf of the Purchaser that would violate applicable laws. All financial statements, reports and invoices rendered shall properly reflect the facts about all activities and transactions handled for the account of the Purchaser. The Supplier shall immediately notify the Purchaser of any and all violations of this Clause upon becoming aware of such violation.

55

Chapter 32 Confidentiality

32.1 The Supplier and its Sub-suppliers shall at all times treat the Contract and everything contained therein as private and confidential except as may be reasonably necessary for the Supplier to carry out the Work under the Contract. In particular the Supplier shall not publish any information, drawing or photographs concerning the Equipment, the Project or the Contract except with the written consent of the Purchaser and subject to such reasonable conditions as the Purchaser may prescribe.

56

Chapter 33 Availability of Information

33.1 The Purchaser’s duly authorized representatives shall have, during the performance of the Contract and for *** thereafter, access at all reasonable times to all the Supplier’s and its Sub-suppliers’ personnel, accounts and records of all description, including but not limited to computer files, pertaining to the Contract to verify or review the quantity, quality, work program and progress of the Equipment, reimbursable costs, amounts claimed by the Supplier, estimates for proposed variations, and for any other reasonable purposes. The Supplier and its Sub-suppliers shall preserve all such accounts and records for a period of ***. The Purchaser’s duly authorized representatives shall have the right to reproduce any such accounts and records.

33.2 This Clause is intentionally left blank.

33.3 The Supplier shall include the necessary provisions in its sub-contracts to ensure that its Sub-suppliers comply with the provisions of this Chapter.

57

Chapter 34 Settlement of Disputes

34.1 All disputes arising from, or in connection with the performance of the Contract, shall be settled through friendly discussion between the two Parties. In case no agreement is reached, the disputes shall be submitted to China International Economic and Trade Arbitration Commission (CIETAC) [Shanghai Branch for arbitration. The tribunal shall be composed of three arbitrators. The arbitration shall be conducted in Beijing in accordance with CIETAC arbitration rule. The rendered award is final and binding on both Parties.

34.2 Notwithstanding any reference to arbitration, both Parties shall continue to perform their respective obligations under the Contract except the part under Arbitration.

34.3 Unless otherwise awarded by the Arbitration, the arbitration fee shall be borne by the losing party.

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Chapter 35 Notices

35.1 Except as otherwise provided in the Contract or agreed by the Parties during the performance thereof, all notices required by the Contract shall be in writing and shall be delivered to the Purchaser or the Supplier as appropriate at their office addresses set forth below:

(i) The Purchaser: Jiangsu Zhongneng Photovoltaic Industry Development Co, Ltd

Address: North of the 310 national highway, economic development zone, Xuzhou

Telephone: 021-68862588

Fax: 021-68863996

E-mail:

(ii) The Supplier: Tap Mate Limited

Address: Flat 1/F., Block 6, Kornhill Gardens, 1120 King’s Road, Quarry Bay, Hong Kong

Telephone: 00852-2805 2708

Telefax: 00852-2805 2913

E-mail: Dongfeng@morimatsu.cn

Each Party shall promptly notify the other Party of any modification to the above details.

35.2 The date of any notice shall be the date it is first received by the addressee or the office of the addressee, whichever is the earlier.

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Chapter 36 Construction of Contract

The construction, validity, interpretation, performance, implementation and all matters relating to this Contract and any amendment thereto shall be governed by the United Nation Convention for the International Sale of Goods. However, to the extent the United Nation Convention for the International Sale of Goods does not cover, the law of People’s Republic of China shall apply.

This Contract is written in Chinese and English. Both language versions shall be equally authentic. If there is any conflict, ambiguity or discrepancy between the Chinese version and the English version, the English version shall prevail.

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Chapter 37 Security for Due Performance

37.1 The Supplier shall, within *** after signing of the Contract, furnish to the Purchaser the advance payment security in the amount of *** in the form specified in Appendix A-2 to the Contract.

In case the Supplier fails to furnish the advance payment security in accordance with this Clause, the Purchaser may, without prejudice to any other rights or remedies provided under this Contract, terminate the Contract and the Supplier shall be liable for and pay to the Purchaser *** as liquidated damages, and bear the additional cost or loss that the Purchaser may incur.

37.2 In case the Supplier fails to fulfill any of his obligations under the Contract, the Purchaser has the right to claim against the Supplier with the advance payment security.

37.3 The security for advance payment shall be denominated in a currency as defined in Chapter 3, and shall be in the form of a bank guarantee issued by reputable banks, in the form provided in Appendix A-2 to the Contract. The advance payment security shall be transmitted from the Supplier’s Bank to the Purchaser’s Bank via the SWIFT system.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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Chapter 38 Effectiveness of the Contract and Miscellaneous

38.1 The Contract is made in [2] copies. Each Party shall keep an original of the Contract, the General Terms and Conditions of the Contract including Appendices that is signed by all Parties.

38.2 The Contract shall become effective upon fulfillment of the following conditions,

(i) Signing of Contract by the authorized representatives of all Parties;

(ii) Duly chopped with the company seals of all Parties.

38.3 These Terms and Conditions, by their nature, shall survive the cancellation, termination, expiration, or abandonment of this Contract, such as Clauses of Chapters 15, 22, 28, and 32.

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Appendices

Appendix A

Appendix A-1 Price Breakdown

Appendix A-2 Bank Guarantee for Advance Payment (10%)

Appendix A-3 “Delivery Schedule”

Appendix B

Appendix B-1 “Technical Agreement”

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Appendix A-1 Price Breakdown

QUOTATION OF DEOXIDIZE FURNACE

Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

	Date: 2008-01-08
	FRQ No.: 08-01-08
Provided by: Tap Mate Limited	Our Ref. No.: B07-JSZN-A41

No.

Item No.

Main Material

Qty.

Unit Wt.(Kg)

Tot. Wt.(Kg)

Breakdown Price (USD)

Total Price (USD)

Remark

Design & Document

Material

Fab.

Packing

Spares

Sub-total

1

Deoxidize furnace

OCrl7Nil2M o2/0Crl8Ni9

***

***

***

***

***

***

***

***

***

***

2

Diaphragm valve

assembly parts

***

***

***

Total

***

***

Charges for inland transport, commodity inspection, customs clearance, (RMB)

***

Jiangsu Xuzhou Site Franco Price

***

The final preferential price is *** USD

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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Appendix A-2 Bank Guarantee for Advance Payment (***)

L/G Draft

Date:

To: Jiangsu Zhongneng Photovoltaic Industry Development Co., Ltd.

310 national highway, economic development zone, Xuzhou, Jiangsu Province,

China

Tel: 0086-2168863908

Fax: 0086-2168863908

Dear Sirs,

We understand from our customers, Messrs Tap Mate Limited, hereinafter called “SELLER”, that on              you have concluded with them a Contract No.              for the supply of 144 Reactorsets (stainless steel) in the total value of USD             ,              say USD             only.

According to the term of the said Contract, the SELLER shall provide you with a bank guarantee in your favor for the sum of USD             (being *** of the total Contract Price) as a guarantee to secure the fulfillment of obligations under the said Contract.

We, The Bank of Tokyo-Mitsubishi, UFJ, Ltd Hong Kong Branch, hereby irrevocably undertake to pay to you any amount up to and not exceeding USD             (say USD             only), on your first demand presenting through your banker and against your written declaration stating that SELLER has failed to comply with his obligations under the said Contract.

Payment under this Guarantee will be made at the counters of The Bank of Tokyo-Mitsubishi, UFJ, Ltd Hong Kong Branch.

This Guarantee shall remain valid until the Contract delivery date(s) of the Goods and /or Service has been issued by you or latest on             .

Our obligations under this Guarantee will cease upon the expiry date and any claim thereunder must be received by us on or before 4:00 pm on that date.

This Guarantee and all rights, obligations and liabilities arising hereunder shall be construed according to the laws of the People’s Republic of China and the venue for any claim thereunder, or for the enforcement thereof, shall be exclusively at the courts of Shanghai, the People’s Republic of China.

This Guarantee shall be returned to us for cancellation as soon as it expires.

Yours faithfully,

For and on behalf of

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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Appendix A-3

Delivery Schedule

(Deoxidize Furnace 3^rd Phase)

Regarding the delivery date of the deoxidize furnace (3^rd phase) of the buyer, both parties have reached the following conditions through discussions:

***

10. What’s been specified above is the delivery plan for the 144 deoxidize furnaces in total.

The abovementioned delivery plan also includes the preparation and confirmation of shop drawings, purchase of materials, as well as the planning of production and the review of the Seller by the buyer.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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Appendix B-1

Technical Agreement

Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

Polysilicon Deoxidize Furnace Project

Technical Agreement

Party A: Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

Party B: TAP MATE LIMITED

Date: Jan. 22, 2008

67

Catalogue

1. General:

2. Specifications and Standards to be Followed in Fabrication and Inspection

3. Design and Drawing

4. Party A Shall Provide the Following Polysilicon Deoxidize Furnace Specifications and Technical Requirements to Party B as Design Basis.

5. Material and Material Management

6. Fabrication Environment

7. Fabricating and Processing Requirement

8. Welding Process

9. Nondestructive Flaw Detection of Welding Seam and Dimensional Check

10. Hydraulic Test

11. Surface Treatment after Fabrication and Pre-delivery Inspection

12. Inspection and Supervision

13. Delivery Status

14. Packaging and Transport

15. Spares

16. Technical Document Delivery of Party B

68

Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (hereinafter referred to as Party A) and TAP MATE LIMITED (hereinafter referred to as Party B) have reached the following agreement in connection with the polysilicon deoxidize furnace project of Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.:

1. General

1.1 This agreement is applicable to the fabrication, testing, inspection and acceptance of the deoxidize furnace of Party A.

1.3 The material, fabrication and inspection shall not only satisfy this technical agreement but also the standards, specifications and technical documents quoted on the drawing. Unless otherwise specified, standards, regulations and technical specifications shall be on the basis of the latest version released before the order date (contract effective date) and the relevant amendment as well as supplement.

1.5 Party B shall not divulge the name, item number, material, design parameter, drawing and other relevant technical documents to any other third party, in the event of violation, Party A shall have the right to take any legal action necessary against Party B.

1.6 Party B may publicize this batch of equipments as part of its sales achievements on condition that the provision of Article 1.5 is not violated.

2. Specifications and Standards to Be Followed in Fabrication and Inspection

The fabrication, inspection and acceptance of the deoxidize furnace shall comply with the requirements of the following standards and specifications:

Pressure Vessel Safety and Technical Supervision Regulation

***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

69

3. Design and Drawing

3.1 Party A shall provide the engineering drawing and technological parameters as required by the project.

3.2 Party B shall carry out the detailed shop drawing design in accordance with the Pressure Vessel Safety and Technical Supervision Regulation and GB150-1998 Steel Pressure Vessels, and provide Party A with design calculation.

3.4 The overall shop drawing and design calculation provided by Party B shall come into effect after signed and confirmed by Party A.

4. Party A shall provide the following polysilicon deoxidize furnace specifications and technical requirements on which Party B will be based in device shop drawing design.

4.1 Technological Requirements

Number of silicon rods: ***

Length of silicon rod: ***

Outside diameter of deoxidize furnace: ***

Outside diameter of cooling jacket: ***

Actuating medium of the deoxidize furnace: ***

Actuating medium of the cooling jacket: ***

Working pressure in the furnace: ***

Inwall working temperature: ***

Working pressure in the cooling jacket: ***

Working temperature in the cooling jacket: ***

Design temperature of the cooling jacket: ***

Number of power connections: ***

70

Number of nozzles connected to the raw gas: ***

Number of windows: ***

4.2 Design Basis

4.2.1 Atmospheric Conditions

***

4.2.2 The work areas are protected from earthquakes with intensity VII.

4.2.3 Power condition

4.2.4 Cooling water

Supply pressure:	***
Supply temperature:	***
Water quality circulating & makeup water turbidity	***
Circulating water turbidity	***
Annual fouling resistance	***
4.2.5Compressed air conditions:	***
Pressure	***
Dew Point:	***
4.2.6Nitrogen Conditions:

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

71

Pressure	***
Oxidecontent	***
Volumerate of total carbon-containing compound converted into CH4	***
Volume rate of vapor	***

4.3 Main Equipment Component Requirement

***

4.4 Appearance and Dimension

***

4.5 Equipment Description

***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

72

4.6 Deoxidize Furnace Feeding Conditions (for reference)

	Start	End	Average
SiHC13 kg/h	***	***	***
H2 Nm3/h	***	***	***
Mixed gas Nm3/h	***	***	***

4.7 Design and Capability

***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

73

4.8. Performance assurance

4.8.1 Technical performance assurance

***

4.8.2 Equipment Performance Assurance

***

4.8.3 Overall equipment life: about *** years, depending on the appropriateness of professional operation and maintenance

5. Material and Material Management

5.1 All materials (including welding material) shall meet the requirements specified on the drawing and the attached material purchasing specification, the material quality certificate shall also be provided.

5.2 Material Management:

5.2.1 After the material arrived in plant, the inspection department shall carry out inspection and reinspection in accordance with the ASME standard and SMS2302 Purchase and Material Management Regulation, and have the material tracking number, material brand and work order number marked with a marker pen in accordance with the 2^nd edition of SMS2108-2002 Procedure for Product Identification and Traceability, keep the record in the relevant document and use them accordingly.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

74

5.2.2 Special materials shall be stored separately from other materials; the storage environment shall be kept clean, underlay timbers below the materials and cover the materials with plastic cloth for protection.

5.2.3 Before the equipment fabrication, the surface of materials shall be protected with sticking films from scratches and contaminations in fabrication.

6. Fabrication Environment

6.1 The welding and assembly of polysilicon deoxidize furnace equipment shall be carried out in special workshop. It’s prohibited to weld or assemble in ferrous atmosphere so as to avoid ferric ion contamination.

6.2 The use of ferrous tools shall be avoided, unless there’s a austenite stainless steel or other nonmetal isolated layer between the ferrous tool surface and the austenite stainless steel metal.

6.3 The carbon steel components shall be painted with anti-rust material before entering the workshop, except for locations that is *** from both sides of the welding joint.

6.4 In order to check whether the welding environment is up to spec., a “ Cu (Phen)” test shall be performed in the welding environment to make sure the content of ferrous ion in the welding environment is compliant with the requirement.

6.5 All onsite operators must wear clean white cotton uniforms, shoe covers or clean rubber shoes, all of these shall be kept clean and stored in a clean wardrobe.

7. Fabricating and Processing Requirement

7.1 The fabrication and processing of all process steps shall be carried out in accordance with the specified items on the process acceptance report by the operator, the inspection shall be carried out in accordance with the specified items on the process acceptance report by the inspector, the inspection marking and records shall be kept properly, move to the next process step only after the present one is qualified and accepted. Implement the special process according to the related regulations.

7.2 In the fabrication process, in case there’s component failed in one process step inspection or testing, it shall then be handled in accordance with the SMS2310 Regulation of Non-conformity Items Management.

7.3 Cutting and Divided Edge Treatment

75

7.4 End Closure

***

7.5 Shell Forming and Welding

***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

76

7.7 Shell Circular Seam Assembly

***

7.8 Inside Assembly of Vessel

***

8. Welding Process

8.1 The welding process shall be implemented in accordance with SMS2204-1999 Welding Control and Inspection Regulation.

8.2 All welding documents including WPS and PQR shall comply with JB4708-2000 and JB/T4709-2000.

***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

77

9. Nondestructive Flaw Detection of Welding Seam and Dimensional Check

9.1 Nondestructive flaw detection and check shall be done in accordance with the Appendix A of SMS2110-1999 Nondestructive Testing. Regulation of Pressure Vessels (1^st edition) and JB/T4730-2005 Nondestructive Testing of Pressure Vessels.

9.2 Nondestructive flaw detection and check shall be implemented in accordance with the work drawing and the related standards.

9.3 The dimensional check shall be implemented in accordance with SMS2111-2002 Testing, Measuring and Testing Equipment Control Procedure (2^nd edition).

9.4 Dimensional check shall be implemented in accordance with the work drawing and the related standards.

10. Hydraulic Test

***

11. Surface Treatment after Fabrication and Pre-delivery Inspection

***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

78

12. Inspection and Supervision

***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

79

13. Delivery Status

***

14. Packaging and Transport

***

15. Spares

15.1 The physical dimension of the spares will be determined according to the final drawing and specification at the third design liaison meeting.

15.2 The Seller shall provide the spares for commissioning free of charge. The quantity of spares used in commissioning shall be decided by the Seller, however, it shall satisfy the needs of commissioning.

15.3 The Buyer has come up with the following list of wearing parts based on the past experience, they shall be provided by Party B free of charge.

Name	Qty. (per furnace)
Deoxidize furnace flange – furnace floor filler plate	***
Deoxidize furnace flange – cooling pan gasket	***
Electrode sealing kit	***
Nozzle sealing kit	***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

80

All other sealing elements (including eyelet)	***
Eyelet glass	***
Furnace floor fixing forcer	***
Electrode	***
Silicon core graphite adapter	***

16. Party B Technical Document Delivery

16.1 The technical document includes: quality certificate, safety&quality supervision and testing assessment released by the local technical supervision agency, conformity certificate, raw material quality inspection report, raw material reinspection report, welding process regulation and assessment report, appearance quality and physical dimension testing report, nondestructive flow detection report, heat treatment records, pressure test, paint report etc.

16.2 Copies of document: Party B shall provide two sets of work drawing and calculation sheet within *** after both parties signed the contract, after they’re signed and approved by Party A, Party B start the fabrication accordingly, Party B shall provide Party A with two complete sets of as-built drawings (one set of original and one set of duplicate) after delivery, within *** after the equipment’s delivered, two complete sets of quality certificates (one set of original and one set of duplicate) within *** after the equipment is delivered.

Note 1: This technical agreement is a guidance document of the polysilicon deoxidize furnace project of Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., the more detailed process document shall be generated in accordance with the work drawing of every equipment.

Note 2: The SMS series of documents appeared in this agreement are of the internal quality management documents of TAP MATE LIMITED. The TAP MATE LIMITED has the ultimate power of interpretation.

The Technical Agreement is made of two originals and will be effective after signed by both parties; it bears the same legal force as the Business Contract.

Party A: Jiangsu Zhongneng Polysilicon	Party B: TAP MATE LIMITED
Technology Development Co., Ltd.
Rep.:	Rep.:
Date:	Date:
Tel:	Tel:
Fax:	Fax:

81

GUARANTY AGREEMENT

This Guaranty Agreement (hereinafter referred to as “Guaranty Agreement”) shall be signed and entered on Feb. 4, 2008 in Shanghai by and between:

Purchaser: Jiangsu Zhongneng Photovoltaic Industry Development Co, Ltd.

Address: North of the 310 national highway, economic development zone, Xuzhou, China

Guarantor: SHANGHAI MORIMATSU CHEMICAL EQUIPMENT CO., LTD.

Address: No. 29 JinWen Road, Pudong New Area, Shanghai 201323, CHINA

Supplier: TAP MATE LIMITED

Address: Flat 1/F., Block 6, Kornhill Gardens, 1120 King’s Road, Quarry Bay, Hong Kong

Purchaser, Guarantor and Supplier are hereinafter collectively referred to as “the Parties” and each individually as “a Party”.

Whereas, the Purchaser and the Supplier has entered into a Purchase Contract (hereinafter referred to as “Purchase Contract”) in Shanghai on Feb. 4, 2008 with the contract number of [2NSH3001]. Based on this Purchase Contract, Supplier shall supply the Purchaser with 144 reactorsets (stainless steel) and Equipment, Engineering, Documentation and Services and to perform the Works associated with the Equipment;

82

Whereas, the fabrication will be performed at the plant of Shanghai Morimatsu Chemical Equipmentel Co., Ltd (the Guarantor), who executes the Purchase Contract on behalf of Tap Mate Ltd and undertake jointly and severally all the responsibilities and obligations under the Purchase Contact.

Whereas, Supplier, a legal entity duly established and validly existing under the People’s Republic of China (“China” or “PRC”) with its principal place of business at Flat F, 1/F., Block 6, Komhill Gardens, 1120 King’s Road, Quarry Bay, Hong Kong, and the Guarantor, a corporation organized and existing under the Laws of the People’s Republic of China, registered and located at No. 29 JinWen Road, Pudong New Area, Shanghai 201323, CHINA.

NOW THEREFORE, the Parties authorize their representatives, following friendly consultations, to agree on the following terms and conditions and to sign this Guaranty Agreement.

Guarantor hereby irrevocably guarantees and promises to undertake severally all responsibilities and obligations under the Purchase Contract (including the liabilities for breach of the contract), if the Supplier is failed to execute and perform, for any reason, any of its obligations under the Purchase Contract (including without limitation, timely delivery, quality guarantee in accordance with the contract, liabilities for breach of the contract, etc.). Supplier and Guarantor shall be bound by this Guaranty Agreement.

83

Guarantor and Supplier hereby further warrant and represent that:

1. Guarantor, a corporation organized and existing under the Laws of the People’s Republic of China, shall inform Purchaser timely of any events or facts which have changed or may change the status, position of Guarantor.

2. Guaranty under this Guaranty Agreement shall be joint and several guaranty liability. Guarantor shall undertake immediately all liabilities under the Purchase Contract which the Supplier shall execute and perform upon a written notice by the Purchase (including execute fully the Purchase Contract and/or the liabilities for breach of the contract). Supplier and Guarantor shall warrant that they and each the successor and assignee will undertake jointly and severally the obligations to execute the Purchase Contract fully.

3. The Purchase Contract and this Guaranty Agreement shall be independent and effective each other.

4. The guaranty term under this Guaranty Agreement shall be started from the effectiveness of this Guaranty Agreement, and ended at the date on which all obligations and responsibilities of the Supplier under the Purchase Contract have been completed fully.

84

5. This Guaranty Agreement and its interpretation shall be governed by and construed in accordance with the laws of the People’s Republic of China. The settlement of any disputes arising out of or in connection with this Guaranty Agreement shall be executed in accordance with the agreement of arbitration stated in the Purchase Contract. This Guaranty Agreement shall become effective at the date of signing by the legal representative or the authorized representative of each Purchaser, Guarantor and Supplier.

SIGNED BY

For and on behalf of The Purchaser

Jiangsu Zhongneng Photovoltaic Industry Development Co, Ltd

85

For and on behalf of The Supplier

86

EX-10.10

Exhibit 10.10

Polysilicon Supply Agreement

By and between

Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

And

Changzhou Trina Solar Energy Co., Ltd.

Serial Number on the side of the Seller: SSC000119

Serial Number on the side of the Buyer: TCZ—A1130—0803—CGC—120—0

March 29, 2008

Polysilicon Supply Agreement

This Polysilicon Supply Agreement is executed by the following parties on March 29, 2008.

Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., a company incorporated in the People’s Republic of China with its legal address at No.66, Yangshan Road, Xuzhou Economic Development Zone, Jiangsu Province, PRC (hereinafter referred to as “Seller”).

Changzhou Trina Solar Energy Co., Ltd., a company incorporated in the People’s Republic of China with its legal address at No.2, Tianhe Road, Electron Industrial Park, Xinbei District, Changzhou, Jiangsu, PRC (hereinafter referred to as “Buyer”).

The Buyer and the Seller are each hereinafter also referred to as the “Party” and, collectively as the “Parties”.

PREAMBLE

WHEREAS, the Buyer intends to engage in a long-term trade relationship with the Seller and to purchase quantities of solar grade polysilicon from the Seller, and the Seller intends to be a supplier and to sell quantities of solar grade polysilicon to the Buyer; and

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, the Seller and the Buyer agree as follows:

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PART I DEFINITION

1. As used herein, unless otherwise agreed in the clauses of this Agreement, or defined by the context, the following terms shall have the following meaning:

Agreement means this Polysilicon Supply Agreement, including all Exhibits hereto, as it may be amended, modified or supplemented from time to time in accordance with its terms.

Term of this Agreement means the period from the Effective Date of this Agreement to the expiry date of it, which is the effective term of this Agreement.

Business Day means any day on which companies in the PRC are generally open for business, including a Saturday or Sunday which the PRC government temporarily declares to be a working day (“Working Rest Day”), but excluding a statutory holiday, or a Saturday or Sunday other than a Working Rest Day.

Effective Date means the date the Parties duly sign this Agreement.

Agreement Year means each calendar year during the Term of this Agreement, i.e. from January 1 to December 31. The first Agreement Year shall be from the Effective Date to December 31, 2008.

Affiliate or Affiliates means any company which is directly or indirectly controlled by, or under the same control with, or jointly controls another company with, each Party.

The term “control” as used in the preceding Clause 1.6 means, with respect to a corporation, the right to exercise, directly or indirectly, fifty percent (50%) or more of the voting rights attributable to the shares of such corporation.

Loss or Losses means any and all damages, fines, fees, taxes, penalties, deficiencies, losses (including lost profits or diminution in value) and expenses, including interest, reasonable expenses of investigation, court costs, reasonable fees and expenses of attorneys, accountants and other experts or other expenses of any proceedings or of any claim, default or assessment (such fees and expenses to include all fees and expenses, including fees and expenses of attorneys, incurred in connection with (i) the investigation or defense of any third party claims, (ii) asserting or disputing any rights under this Agreement against any Party hereto or otherwise, or (iii) settling any action or proceeding or threatened action or proceeding).

Intellectual Property means all the rights from any of the following items: invention, discovery, improvement, utility model, copyrightable work, industrial design or mask work, algorithm, data structure, trade secrets or know-how, confidential information, or any idea having commercial value. Intellectual Property shall also include any trademark, trade dress, trade name, domain name, or other marks that serve to identify and distinguish goods or services as coming from, or falling under the control of, a single source. Intellectual Property shall include all rights of whatsoever nature in computer software and data, all intangible rights or privileges of a nature similar to any of the foregoing in every case in any part of the world, and all rights in any applications and granted registrations for any of the foregoing rights.

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China or PRC means the People’s Republic of China. But in this Agreement, shall not include Hong Kong , Macao, or Taiwan district.

Renminbi or RMB means the lawful currency of China from time to time.

Laws means the laws, regulations, rules, and other legislative, executive or judicial notices, decisions or pronouncements binding on either Party, or in relation to the subject matter of this Contract.

Products means the solar grade polysilicon as defined in Products specification in Exhibit A of this Agreement. The Seller agrees to sell and deliver and the Buyer agrees to buy and acquire the Products with such specification.

Payment means the total amount of the Price (net price) of the Products and the tax borne by the Buyer.

Advance Payment shall have the meaning as defined in Clause 3.5.1 of this Agreement.

Total Agreement Price means the tax-included total price as stipulated in Exhibit B.

PART II GENERAL PROVISIONS

2.1. The Preamble in the above context and Exhibits attached hereto constitute an integral part of this Agreement.

2.2. Headings preceding the text, articles and clauses hereof have been inserted solely for convenience and reference and shall not be construed to affect the meaning, construction or effect of this Agreement.

2.3. During the Term of this Agreement, the Buyer shall purchase, accept and pay for the Products, subject to the terms and conditions herein.

2.4. During the Term of this Agreement, the Seller shall sell and deliver the Products, subject to the terms and conditions herein.

2.5. Term of this Agreement shall be from the Effective Date to December 31, 2015, and unless sooner terminated or canceled in accordance with the terms of this Agreement, this Agreement shall continue in full force until both Parties have completed their obligations as detailed herein.

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2.6. Take or Pay Agreement. This Agreement is a “take or pay agreement” such that Buyer is absolutely and irrevocably required to accept and pay for the contracted volume of Products per year in the Term of this Agreement at the prices set forth in Exhibit B. In the event that Buyer fails to perform its contracted volume (including but not limit to: fails to order contracted volume and fails to pay the account payable) in a given year, the Seller is entitled to invoice Buyer regardless the difference between the ordered and the contracted at full contract price and Buyer is liable to pay the full price as specified in that invoice within *** of the invoice date. Buyer specifically acknowledges and accepts that it will be liable for the full purchase price of volume differentia between the quantity ordered and the contracted volume.

2.7. Except the two special circumstances as specified hereinafter, the Buyer shall not resell Products or be a reseller or distributor of Products without prior written consent from the Seller: (i) the Buyer use Products for its purpose of production, or: (ii) the Buyer resell or distribute Products to its Affiliates.

PART III SUPPLY OF PRODUCTS

3.1 Products

The Products to be supplied under this Agreement shall meet the specification as stipulated in Exhibit A to this Agreement or the specification which have been amended and executed by the Parties at the time of supply. The specifications set forth in Exhibit A may be amended only in written upon the agreement of the Seller and the Buyer.

3.2 Price

3.2.1  The price of Products during the Term of this Agreement shall be fixed as set forth in Exhibit B. The Parties hereto agree that upon the execution of this Agreement, neither Party may require the adjustment of the said price by the other Party for any grounds.

3.2.2  The price in this Agreement shall be quoted as net price after value-added tax (means that: the price in the Agreement shall be net price and shall not include any tax amount), and subject to the adjustment of value-added tax while issuing an invoice. The price shall not include any expense for transportation, insurance and other logistic procedures, or any tax borne by the Buyer. The Seller shall issue the invoice with value-added tax, and the Buyer shall bear the tax other than net price.

3.3 Volume

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3.3.1 The volume of Products supplied during the Term of this Agreement shall be set forth in Exhibit B, provided, however, Seller may adjust the products supplied in every quarter (“quarter” referred to as the each period of three months from April 2008, and so forth) within *** more or less than the scheduled volume in a given quarter. The Seller shall make up for the short supply to the scheduled volume in the following quarter, i.e. at the end of the quarter, in which case the Seller shall not bear any liability for breach of Agreement. In addition, the parties hereto agree that upon the execution of this Agreement, neither Party may require the adjustment of the said volume by the other Party for any grounds.

3.4 Quality

3.4.1 The quality standard of the Products under this Agreement shall follow Products specification in Exhibit A to this Agreement. In case of any dispute arising concerning the Products’ quality, the Parties shall entrust official authentication institute for an authentication report and the authentication report shall prevail in respect of the quality of the Products. If the deficiencies of the Products are proved according to the authentication report, the expenses and costs shall be ultimately borne by the Seller; and if the deficiencies of the Products are proved non-in-existence according to the authentication report, the expenses and costs shall be ultimately borne by the Buyer.

The parties hereto expressly agree that the quality standard of the Products under this Agreement shall follow Products specification in Exhibit A to this Agreement from the Effective Date, which should be adjusted *** by the Parties as follows: the Parties shall negotiate with each other within *** prior to the expiration of each *** from the Effective Date; in case that no consensus has been reached between the Parties within *** from the negotiating date, the Parties shall strive for collecting the top three producers of solar grade polysilicon in the mainland of PRC within *** and adjust the Exhibit A according to the average specification of these specifications from the top three producers. The Seller shall be included in the top three and its specification shall be taken as a reference should its production rank the top three; in case consensus between the Parties regarding the adjustment of the specification in Exhibit A is not yet reached within the *** abovementioned, the Parties shall be responsible to separately purchase *** of products as specified in the authentication report(s) in the shortest time and the consequent

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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average specification shall be applied in the adjustment of the Exhibit A. The adjusted specification shall be effectively applied from the *** day from the receipt of the authentication report(s) for the samples supplied by the top three producers. To avoid any doubt, the receipt of the authentication report(s) by any Party shall be deemed the receipt of the authentication report(s) by Parties.

3.5 Payment

3.5.1  Advanced Payment. The Buyer agrees to pay RMB*** as Advance Payment, of which the interest shall not be calculated and the Seller shall own all the interest herein. Unless otherwise stipulates in the context of this Agreement, the Advance Payment is unrefundable, and irrevocable. The term of paying the Advance Payment shall be the same as the term stipulated in Exhibit B. Unless otherwise specified in Exhibit B of this Agreement, the Buyer explicitly acknowledges and accepts that: once affixing to this Agreement, the Seller shall not be responsible to return all or part of the Advance Payment to the Buyer in any case. The Advance Payment shall be deducted for Payment to Products only in situations specified in this Agreement. The Parties herein explicitly agree that: the Buyer is entitled to deduct *** of the Advance Payment as Payment to Products from *** up to the date that the total amount of the Advance Payment is thoroughly deducted. If the Advance Payment is deducted as liquidated damages or compensation for any losses due to the Buyer’s breach of contract, the deduction as the Payment of the Products shall be commenced only after the deduction of the liquidated damages or compensation for any losses. The Seller shall return the residual amount of the Advance Payment to the Buyer within *** after its performance of this Agreement finished or sooner cancellation or termination of this Agreement because of the breach by the Buyer or the Seller, excluding the events that the Buyer materially breaches this Agreement.

If the Buyer breaches the Agreement, the Seller shall have right to deduct relevant liquidated damages or loss compensation from the Advance Payment, and request the Buyer to pay an amount equals to the deduction to recovery the amount of guarantee, non-performance of which shall be deemed as a breach of this Agreement and the Seller shall be responsible to assume the liability pursuant to Clause 8.3 of this Agreement.

3.5.2  Payment. The Buyer shall make the Payment to the Seller before the Seller delivering the Products in accordance with the Exhibit B, the Seller is entitled to refuse the delivery the Products if the Buyer does not pay adequately. The Seller is obligated to deliver the corresponding Products to the Payment adequately paid within *** from the date of its receipt of the Payment.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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3.5.3  After the Buyer makes the full Payment to the Seller each time, the Seller shall issue relevant invoice for the use of value-added-tax with the value of the paid amount at that time to the Buyer within ***. The property rights of the Products shall be owned by the Seller before the Payment is fully settled.

3.6 Delivery

3.6.1  All deliveries shall be made in accordance with the delivery schedule specified in Exhibit B.

3.6.2  All Products purchased and sold hereunder shall be delivered at Seller’s location or other locations ordered by the Seller (e.g. workshop, factory or storehouse). All risk of Losses to such Products shall be transferred to Buyer upon the date of any delivery herein.

3.6.3  Transportation and Insurance. The Buyer is liable for the transportation and insurance of the Products at its own cost.

3.6.4  In the event of a delay in delivery due to Buyer’s request or due to Buyer’s failure to collect the Products at the delivery date, the Seller is entitled to place such Products in escrow to notarial authorities or seal up the Products for storage at the Buyer’s cost. Once the Products are in escrow or sealed up, the risk of the Products shall transfer to the Buyer, and the Buyer shall bear the expense of escrow or the sealed storage. If the Buyer delays for more than *** to collect the Products, it shall be considered as irrevocable acceptance of the Products, and the Seller has the right to dispose the Products and own the proceeds accordingly.

In the event that the Buyer fails to purchase Products from the Seller in accordance with the volume of this Agreement in a given month, the Seller is entitled to resell the unpurchased Products to other buyers in the domestic or overseas market at its own discretion, and the Buyer shall be liable to pay the margin between the resale price and scheduled price in this Agreement and the expenses resulting from the resale.

3.6.5  In the event that the Seller is delayed to deliver the Products as stipulated in Clause 8.4 of this Agreement, the Buyer shall permit the Seller to reasonably extend the delivery term for a period no less than *** and no more than ***, which should be noticed explicitly by the Buyer. The Seller shall not be responsible for any liability of breach of this Agreement during the extension period. If the Seller fails to deliver the scheduled Products upon the expiration of the extension period, it shall be charged with the liability for delay delivery as specified in Clause 8.4.

The Seller shall have right to delivery partly upon the consent of the Buyer.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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3.6.6  Inspection. The Buyer shall process the inspection and issue a written notice of Products’ flaws to the Seller in *** after delivery if there are flaws discovered during the inspection. Once exceed the time limit, the Products delivered shall be deemed to be up to standard, and the Buyer shall accept all the Products unconditionally. To avoid any doubt, the rules of inspection herein is only applicable to the inspection of ploysilicon and the Parties herein disagree to apply the inspection rules of silicon chips to the inspection of polysilicon.

3.6.7  The Parties acknowledge and explicitly agree that: the Seller in only liable to provide the Products according to the Exhibit A of this Agreement, and; the responsibilities for the fitness of the Products for special purpose, and the processing, use, and application of the Products should be solely assumed by the Buyer.

3.7 Warranty

3.7.1  The Parties hereto agree and acknowledge that all risks arising out of the fluctuation of the product prices shall be borne by the Parties respectively, and Buyer is obligated to purchase and Seller is obligated to provide the Products contracted during the Term of this Agreement.

3.7.2  Qualification warranty. The Seller makes its warranty for the qualification of delivered Products to the extent permitted and required under the Exhibit A. In the event that the delivered Products is not meet the specification as specified in Exhibit A, the Buyer will have right to claim for exchange of Products up to the specification in Exhibit A. Except the warranty abovementioned, any implied or express warranty from the Seller for the qualification of Products or warranty for the future proper sale of Products or fitness for a particular purpose are specifically excluded from this Agreement.

(a) According to the related provisions of this Agreement, in the event that the Buyer suffers any claims or suits arising from any deficiencies of the Products, the remedial right of the Buyer and the liabilities and obligations of the Seller are absolutely limited to: (i) making exchange for the disqualified Products or paying back the sum of money paid for them, or (ii) paying damages with a sum of money not exceeding ***. As a condition precedent to the exercitation of the remedial right of the Buyer, the Buyer should give a prior notice to the Seller pursuant to the relevant provisions of this Agreement.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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(b) Parties agree that the remedies stipulated in this Agreement are sufficient and exclusive. Saved as these indemnification obligations of the Parties as stipulated above, one Party shall not be liable to any special damages, incidental damages, indirect damages or any other damages suffered by the other Party resulting from the its disobeying by the obligations under this Agreement or other reasons excluded from this Agreement, including suit of infringement, strict liability, liability for products and infringement of trademark.

4. FORCE MAJEURE

4.1 Events of Force Majeure

If a Party delays or fails in performance of any obligation of this Agreement, completely due to causes beyond its reasonable control, and the Party who delays or fails in performance is in compliance with the requirement of Clause 8 of this Agreement and is of no fault or negligence, the Party shall not be liable for such delays or failures in performance and shall not be deemed as breaching this Agreement. The aforesaid causes include, but are not limited to, force majeure, war, riot, explosion, fire, changes of Laws, acts or nonfeasance of the government inducing the delays or failures in performance of this Agreement (generally referred to as “Force Majeure”). Provided the matters (the delays or failures in performance) of the carriers, distributors, or suppliers of the Buyer, which results in the delays or failures in performance of the Buyer, are completely caused by aforesaid events of Force Majeure, it shall also be deemed as the delays or failures in performance induced by the Force Majeure under this clause. The parties agree to continue performing their obligations as soon as the events of Force Majeure disappear, and to deduct the non-performance period caused by Force Majeure and postpone the Agreement accordingly.

4.2 Notice and Response

The Party experiencing the Force Majeure shall promptly give written notification to the other Party. Such notification shall include a full and complete explanation of the Force Majeure and its cause, the status of the Force Majeure, and the actions such Party is taking and proposes to take to overcome the Force Majeure. The Party experiencing the Force Majeure shall exercise due diligence in endeavoring to overcome any delay caused by Force Majeure and shall undertake reasonable measures to make up the time delayed by the Force Majeure without additional compensation from the other party.

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4.3 Effect of Force Majeure

If any Party delays or fails in performance of any obligation of this Agreement due to occurrence of Force Majeure, its term of performing this Agreement shall be prolonged to include the reasonable time which is needed to overcome the events of Force Majeure.

4.4 Exemptions

Seller shall choose to delay delivery without bearing default liabilities in the following circumstance:

4.4.1  Seller examines and repairs, maintains the equipments; ***

5. INTELLECTUAL PROPERTY

Any and all drawings, data, designs, tooling, equipment, procedures, engineering changes, inventions, trade secrets, copyrights, mask works, source code, object code, patents, patent applications, know-how, computer and/or product software and all parts thereof, trademarks and all other information, technical or otherwise which was developed, made or supplied by or for Seller in the development, production or manufacture of the Products, will be and remain the sole property of Seller (or its licensors, if any), and in any way nothing in this Agreement shall be construed as granting ownership or any other rights regarding the Products (to Buyer). Buyer agrees not to reverse engineer any Product purchased hereunder.

6. CONFIDENTIALITY

6.1 The Parties acknowledge and agree that the terms of this Agreement and certain information exchanged between them pertaining to this Agreement, including information regarding research, technology, product developments, marketing plans or conditions, products information, business strategies, and the like, constitutes “Confidential Information” of the Party disclosing the information. The purpose of the exchange of the Confidential Information is to allow the Parties to perform their obligations and responsibilities under this Agreement. During the term of this Agreement, and for a period of *** years following its termination or expiration, except as required by applicable laws, regulation or rules of any securities exchange, the Party received any Confidential Information, and its employees, attorneys, financial advisors, officers, directors and shareholders who shall receive such Confidential Information (hereinafter refers to “Receiving Parties”) shall not, except with the prior written consent of the

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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disclosing Party, use, divulge, disclose or communicate, to any person, firm, corporation or entity, in any manner whatsoever, the terms of this Agreement or any Confidential Information of the disclosing Party; provided, however, that each Party may use, divulge, disclose or communicate the terms of this Agreement or Confidential Information of the disclosing Party to its affiliates if such affiliates undertake to keep such information strictly confidential in accordance with stipulations of this Agreement and each affiliate has a “need to know”. Each Party further agrees to use the same degree of care to avoid publication or dissemination of the Confidential Information disclosed to such Party under this Agreement as it employs with respect to its own Confidential Information, but at all times one party shall use at least reasonable care to protect against disclosure of Confidential Information of the opposite party. Confidential Information does not and shall not include information that:

(a) was already known to the Receiving Parties at the time such information is disclosed by the other Party;

(b) was or became publicly known without Receiving Parties’ faults;

(c) was rightfully received from a third party without restriction;

(d) was independently developed by the Receiving Parties;

(e) was approved for release by written authorization of the Party disclosing such information under this Agreement; or

(f) was required by legal or financial reporting purposes to be disclosed; provided, however, that the Party being required to disclose shall, if circumstances permit, provide advanced notice to the other Party and shall allow the other Party a reasonable opportunity to oppose such disclosure, if appropriate.

6.2 The Parties shall treat such Confidential Information as confidential, each Party shall not recopy or use such Confidential Information unless in necessity of fulfilling its obligations under this Agreement. One Party shall return all Confidential Information to the other Party upon completion of such obligations for its use, or upon the request of the other Party.

6.3 The Parties acknowledge and agree that the illegally use or disclosure of the Confidential Information may cause irreparable injury to Disclosing Party for which its loss may not be adequate remedied by Laws, and that any actual or contemplated breach of this clause will entitle Disclosing Party to obtain immediate injunctive relief prohibiting such breach, in addition to any other rights and remedies available to it.

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6.4 The Parties (including the Affiliates procuring Confidential Information under this Agreement) agree that, each Party shall comply with the obligations and liabilities concerning Confidential Information, one Party shall not, without obtaining the prior consent from the other Party, issue or release any announcement, report, declaration, or message about this Agreement or any transaction or clause of this Agreement. However, one Party or its Affiliates shall disclose the contents of this Agreement according to the compulsive requirements of its local Laws and applicable Laws. After achieving a mutual consent on the details of the news report, the Parties shall report the subscription and contents of this Agreement through press.

7. OWNERSHIP AND USE OF DRAWINGS, DOCUMENTS AND OTHER ITEMS

All drawings, blueprints, dies, patterns, tools, printing plates and any other items or documents prepared or constructed by the Seller to develop, produce or manufacture the Products hereunder shall be the sole property of the Seller, and promptly upon the expiration, termination or cancellation of this Agreement, shall be delivered to the Seller. The Buyer shall use all drawings, blueprints, dies, patterns, tools, printing plates and any other items or documents prepared or constructed by Seller solely for the purposes of this Agreement and shall not use any of such items for the benefit of any third party.

8. TERMINATION

8.1 Buyer understands and acknowledges that Seller is, on the basis of trust to the Buyer and estimation to the Buyer’s demand, making substantial capital investments to expand its manufacturing capabilities in order to satisfy Buyer’s demand for the Products. The parties acknowledge it is their sincere intent that the risks on the fluctuation of the product prices shall be borne by the Parties respectively, and Buyer is obligated to purchase and Seller is obligated to provide the contracted volumes over the Term of this Agreement. Accordingly, the basis and circumstances under which the parties can terminate this Agreement prior to the expiration of the Term of this Agreement is expressly limited to the terms of this Clause 8.

8.2 Seller understands and acknowledges that Seller is, on the basis of trust to the Buyer and estimation to the Buyer’s demand, making substantial capital investments to expand its manufacturing capabilities. The parties acknowledge it is their sincere intent that the risks on the fluctuation of the product prices shall be borne by the Parties respectively, and Buyer is obligated to purchase and Seller is obligated to provide the contracted volumes over the Term of this Agreement. Accordingly, the basis and circumstances under which the parties can terminate this Agreement prior to the expiration of the Term of this Agreement is expressly limited to the terms of this Clause 8.

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8.3 Damages for the delayed payment of the Buyer

If the Buyer delays to make the Advance Payment of Products, the Buyer shall be liable to pay *** liquidated damages per delayed day, and if the delayed period expires ***, the Seller shall be entitled to terminate this Agreement anytime thereafter. In case the Seller terminates this Agreement, the Buyer shall bear liquidated damages of *** in addition to the accumulated amount of the aforesaid liquidated damages for Advance Payment. The Seller shall also have the right to not terminate this Agreement and the liquidated damages should be accumulatively calculated. If Buyer delays to make any Payment, the Seller shall issue notice within *** to ask Buyer to rectify default, the Buyer shall rectify default in time, in case the Buyer fails to rectify the default within ***, the Buyer shall be liable for *** as liquidated damages per delayed day as of the ***, if the Buyer delays to pay off the Payment for *** or more days, the Seller shall terminate this Agreement anytime thereafter. In case Seller terminates this Agreement, Seller shall claim Buyer for, in addition to the accumulated amount of the aforesaid liquidated damages, an amount of liquidated damages equals to residual Payment for the un-purchased volume of Products within the committed volume during the Term of this Agreement as stipulated in Exhibit B; or Seller shall make such requests to the Buyer: (a) to pay the accumulated amount of the aforesaid liquidated damages; and (b) the residual Advance Payment paid by the Buyer shall be kept by the Seller; and (c) to pay an amount of liquidated damages equals to ***. The Seller shall also have the right to not terminate this Agreement and the liquidated damages stipulated in section (a) of this clause should be accumulatively calculated.

8.4 Damages for Seller’s default

If the Seller’s delivery delays or falls short of contracted volume, except the occasion stipulated in clause 3.3 of this Agreement, the Buyer shall, within ***, issue notice to ask Seller to rectify default, the Seller shall rectify default in time, if the Seller fails to do so within ***, the Seller shall be liable for *** as liquidated damages per delayed day as of the ***, if the Seller fails to deliver for *** or more days, Buyer shall be entitled to terminate this Agreement anytime thereafter. In case the Buyer terminates this Agreement, the Buyer shall make

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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such requests to the Seller: (a) to pay the aforesaid liquidated damages accumulatively, and (b) Seller shall return the residual Advance Payment paid by the Buyer to the Buyer, and pay *** as liquidated damages, and (c) to pay *** as liquidated damages. The Buyer shall also have the right to not terminate this Agreement and the liquidated damages stipulated in section (a) of this clause should be accumulatively calculated.

8.5 The Parties hereto agree and acknowledge that all Losses arising out of the said breaches have been anticipated at the conclusion of this Agreement, and agree that the calculation methods for Losses there from shall be the same with those of liquidated damages. The parties hereto agree the waiver of rights, as set forth in Article 114 of Contract Law of the People’s Republic of China, to refuse the payment of balances between the higher liquidated damages and the lower Losses.

9. NOTICE

All certificates or notices required hereunder shall be given in writing and addressed or delivered to the representative specified herein below. Notices shall be deemed received (a) upon delivery, when personally delivered; (b) upon receipt, when sent via registered or certified mail; and (c) the next business day, when sent via overnight courier. Copies of all general correspondence regarding this Agreement shall also be sent to following representatives:

Notices to Seller:

Jiangsu Zhongneng Polysilicon Technology Development Co.,

Ltd.

No. 66, Yangshan Road, Xuzhou Economic Development Zone,

Jiangsu, PRC

Mr. Zhu Guomin

General Manager

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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Notices to Buyer:

Changzhou Trina Solar Energy Co., Ltd.

No.2, Tianhe Road, Electron Industrial Park, Xinbei District, Changzhou,

Jiangsu, PRC

Zhu Yu

Vice-president

Buyer or Seller may change the representative designated to receive notice hereunder by written notice to the other Party. All correspondence and transmittals between the Parties shall be executed pursuant to coordination procedures that shall be developed by the Parties.

10. LANGUAGE

The Parties hereby confirm that this Agreement shall be prepared in Chinese and English. Both languages are consistent in binding. In case disputes arise, the Chinese version should prevail.

11. CHOICE OF LAWS

This Agreement shall be governed by and construed in accordance with the Laws of PRC, excluding the non-PRC laws and rules regarding collision of choice of law.

12. ARBITRATION

Except as otherwise provided in this Agreement, any dispute, controversy or claim arising out of or in connection with this Agreement, or the breach, termination or validity thereof, shall be finally settled by the China International Economic and Trade Arbitration Commission, Shanghai Commission (“CIETAC-SH”) under the spot PRC arbitration rules in force. The place of arbitration shall be Shanghai, and the language used in the arbitral proceedings shall be Chinese mandarin.

The arbitral award made and granted by the arbitrator shall be final, binding and incontestable and may be used as a basis for judgment thereon in any court having jurisdiction. All costs of arbitration (including, without limitation, those incurred in the appointment of arbitrator) shall be apportioned in the arbitral award.

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13. WAIVER

The failure of either Party to demand strict performance of the terms hereof or to exercise any right conferred hereby shall not be construed as a waiver or relinquishment of its rights to assert or rely on any such term or right in the future.

14. SEVERABILITY

In the event that any provision of this Agreement is deemed as a matter of Laws to be unenforceable or null and void, such unenforceable or void portion of such provision shall be deemed severable from the Agreement and the remainder of the Agreement shall continue in full force and effect.

15. ASSIGNMENT

Except the occasion as stipulated in clause 2.7 of this Agreement, neither Seller nor Buyer shall assign, subcontract or otherwise delegate any of their rights or obligations hereunder without the other Party’s prior written consent. Any such assignment without the other Party’s consent shall be void.

16. SURVIVAL

All warranties, remedial obligations, indemnities, and confidentiality rights and obligations provided herein shall survive the cancellation, expiration or termination hereof.

17. AMENDMENTS

No amendment, modification or waiver of any term hereof shall be effective unless set forth in a writing signed by both Buyer and Seller.

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18. ENTIRE AGREEMENT

This Agreement, which includes this cover contract and the Exhibits hereto, constitutes the entire agreement of the Parties with respect to the subject matter herein and supersedes any prior or contemporaneous agreement or understanding between the Parties.

19. EFFECTIVENESS

This Agreement will become effective as of the date the Parties execute it.

The underside of this page intentionally remains blank, and the subscription page is attached.

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Signature Page

Seller: Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

seal

Authorized representative

Date:

Buyer: Changzhou Trina Solar Energy Co., Ltd.

seal

Authorized representative

Date:

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Exhibit A

Specifications of Solar Grade Polysilicon

1. Boron: ***

2. Donor: ***

3. Carbon: ***

4. Total Metals (Fe, Cu, Ni, & Cr etc.): ***

5. Lifetime (N type): ***

Exhibit B Trina Solar Monthly Supply Volume, Price and Prepayment

2008 Monthly Supply Volume and Price

Month

Unit

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

Total

Planned polysilicon supply volume

tonnes

***

***

***

***

***

***

***

***

***

***

Price

Unit price (before tax) (RMB)

RMB/kg

***

***

***

***

***

***

***

***

***

Total price (before tax)

RMB

***

***

***

***

***

***

***

***

***

***

Unit price (after tax) (RMB)

RMB/kg

***

***

***

***

***

***

***

***

***

Applicable tax rate

17

%

17

%

17

%

17

%

17

%

17

%

17

%

17

%

17

%

Payment date

***

***

***

***

***

***

***

***

***

Total (after tax)

RMB

***

***

***

***

***

***

***

***

***

***

Supply Volume and Price for 2009-2010 Quarterly Plan

Year	Unit	2009					2010
Month		1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Total	lst Quarter	2nd Quarter	3rd Quarter	4th Quarter	Total
Planned polysilicon supply volume	tonnes	***	***	***	***	***	***	***	***	***	***
Unit price (after tax) (RMB)	RMB/kg	***	***	***	***		***	***	***	***
Total (after tax)	RMB	***	***	***	***	***	***	***	***	***	***

Supply Volume and Price for 8-year Long Term Contract

Year		2008	2009	2010	2011	2012	2013	2014	2015	Total
Volume	tonnes	***	***	***	***	***	***	***	***	16350
Unit Price (after tax)	RMB/kg	***	***	***	***	***	***	***	***
Total (after tax)	RMB	***	***	***	***	***	***	***	***	12029000000
Pre-payment										***
Pre-payment timeline	Payment timeline	***	***	***
	RMB	***	***	***						***

Term:

1. Seller may adjust the above listed supply plan, For each quarter after the agreement date, the adjustment shall not be more than *** of the total quarterly supply volume

2. except for the April 2008 delivery, the payment date should be ***, on the *** of each month, the prepayment for next month’s delivery should be paid in full.

3. the parties shall negotiate the supply volume for the next year in each December. If such negotiation fails, the seller may determine the month supply volume based on ***.

4. the after tax price has included a tax of 17%, if the tax rate has been adjusted by the government, the tax shall be calculated based the rate determined by the government.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Supplementary Agreement to the Polysilicon Supply Agreement

by and between

Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

And

Changzhou Trina Solar Energy Co., Ltd.

Seller contract number: SSC000119

Buyer contract number: TCZ-A1130-0803-CGC-120-0

August 19, 2008

1

Supplementary Agreement to the Polysilicon Supply Agreement

Buyer: Changzhou Trina Solar Energy Co., Ltd.

Business Address (mailing address): No. 2 Tianhe Road, Electronics Industrial Park, Xinbei District, Changzhou, Jiangsu

Legal Representative: Gao Jifan

Seller: Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

Business Address (mailing address): No. 66, Yangshan Road, Xuzhou Economic Development Zone, Jiangsu Province, PRC

Legal Representative: Zhu Guomin

The Seller and the Buyer entered in to a Polysilicon Supply Agreement dated May 29, 2008 (Buyer contract number: TCZ-A1130-0803-CGC-120-0; Seller contract number: SSC000119) (the “Long –term Agreement”). Pursuant to Clause 1.3 and 17 of the Long-term Agreement, through friendly consultation and for mutual benefits, the parties agree to enter into this supplementary agreement to the Long-term Agreement (the “Supplementary Agreement”):

1. The Seller and the Buyer hereby agree to amend the polysilicon supply volume, purchase price and delivery schedule as stipulated in Exhibit B to the Long-term Agreement for the years 2008 and 2009. In addition to the polysilicon supply stipulated in Exhibit B to the Long-term Agreement for the years from 2010 to 2015, the Seller and the Buyer further agree to supply and to purchase additional 125*125 mm solar-grade monosilicon wafers for the years from 2010 to 2015 (the “Wafers”) at the price stipulated herein. The details regarding the amended products supply volume, purchase price and payment are set forth in Exhibit B-1 to this Supplementary Agreement.

2. Upon the effectiveness of this Supplementary Agreement, the Buyer shall make prepayment in accordance to the amended prepayment schedule. The prepayment, as amended, shall be RMB***. The details regarding the amount and payment schedule of such prepayment are set forth in Exhibit B-1. The RMB*** prepayment that has already been paid by the Seller is the prepayment for its polysilicon purchase (the “Polysilicon Prepayment”); matters in connection with such prepayment (including effectiveness and setoff) shall be carried out in accordance with the Long-term Agreement. The RMB*** prepayment to be made by the Seller is the prepayment for its additional Wafer purchase (the “Wafer Prepayment”). One *** of the Wafer Prepayment shall be used to offset the monthly purchase price payable by the Buyer commencing from ***.

3. Upon the effectiveness of the Supplementary Agreement, the supply volume, price and other terms stipulated in the Long-term Agreement shall be amended by this Supplementary Agreement, and the parties shall perform the Long-term Agreement accordingly. Exhibit B to the Long-term Agreement shall be replaced by Exhibit B-1 to this Supplementary Agreement. For polysilicon that has already been supplied in accordance with the original supply volume and delivery schedule for year 2008 set forth in the original Exhibit B to the Long-term Agreement, the parties shall continue to perform their obligations in accordance with the Long-term Agreement.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

2

4. For the additional Wafers Supply during year 2010 to year 2015, the parties agree to the following (in this clause the word “product” or “products” refers to the Wafers) :

4.1 Quality

The quality of the Wafers supplied by the Seller shall comply with the specification set forth in Exhibit A-1 to this Supplementary Agreement (as amended by the parties from time to time). The parties shall amend the quality specification of the Wafers once a year through negotiation. However, if the parties cannot reach an agreement through such negotiation, the relevant provisions in Clause 3.4.2 of the Long–term Agreement shall apply. Any dispute concerning the specification of the Wafers shall be handled in accordance with Clause 3.4.1 of the Long-term Agreement.

4.2 Supply Volume and Price

The volume and price of the Wafers to be supplied by Seller is set forth in Exhibit B-1 to this Supplementary Agreement. Such price includes value added tax, but does not include shipping costs, insurance fees and any other fees which shall be borne by the Buyer. The Seller may adjust (increase or decrease) the supply volume of the Wafers in every quarter by no more than *** of the total quarterly supply volume, and the amount in short (if any) shall be supplied to the Buyer in the following quarter.

4.3 Payment

4.3.1 Prepayment: the Buyer shall make prepayment in accordance with Clause 2 of this Supplementary Agreement.

4.3.2 Payment: the parties hereby agree on the terms set forth in Exhibit B-1 hereto. The Seller may refuse to make delivery of the portion of the products for which the purchase price has not been fully paid.

4.3.3 the Seller shall issue an invoice (including VAT) to the Buyer within *** of receiving the full payment for the products to be delivered in the then current month.

4.4 Packaging and Labeling

4.4.1 the packaging of the Wafers shall be suitable for long distance shipping and there shall not be damage or contamination to the Wafers when they reach the storage facility designated by the Seller. The Seller shall be liable for any loss, damage or contamination to the Wafers caused by inappropriate packaging. Notwithstanding the foregoing, the Seller shall not be subject to any liability if damage to the Wafers is less than *** of the total number of Wafers delivered in the given batch.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

3

4.4.2 Labeling: the Seller shall indicate the manufacturer, product serial number, product model, weight and date of manufacture on the interior and exterior packaging in accordance with the Buyer’s instructions.

4.5. Delivery

The delivery location of the Wafer shall be designated by the Seller. The shipping and insurance costs from the delivery location to the Buyer’s premise shall be borne by the Buyer. The monthly supply shall be delivered in equal installment every *** days (*** installments in total each month). Clause 3.6.4 of the Long-term Agreement continues to govern the delivery of the Wafers. However, if the Buyer cannot pick up the Wafers on time due to product quality issues caused by the Seller, Clause 3.6.4 of the Long-term Agreement shall not apply.

4.6 Inspection

4.6.1 Amount: Buyer shall inspect the products within *** after receiving the delivery at the Buyer’s premise. If the amount of damaged Wafers exceeds *** of the total amount of Wafers delivered or if the number of Wafers delivered is less than the agreed amount, the Buyer shall promptly inform the Seller by written notice. The Seller shall make up the shortage within *** of receiving the written notice, provided that any damaged Wafers are still in their original packaging. The Seller is not liable for any damage to the Wafers caused by damage or trauma to the packaging. The quality of the Wafers delivered to replace the damaged Wafers shall comply with the specification set out in Exhibit A-1 (as amended by the parties from time to time). If the Buyer does not notify the Seller of any deficiencies in the delivered product within the time limit as set forth above, the Seller shall be deemed as having no complaint about the amount of the Wafer delivered.

4.6.2 Quality: the product quality of the Wafers shall comply with the specifications set forth in Exhibit A-1 (as amended by the parties from time to time). The Buyer shall complete its inspection concerning the product quality of the Wafers within *** of the delivery. If during the inspection conducted within *** of the delivery, the Buyer discovered that the Wafers do not comply with the specifications set out in the Exhibit A-1 hereto (as amended by the parties from time to time), the Buyer shall promptly inform the Seller by written notice. The Buyer shall be entitled to require the Seller to replace the defective Wafers with Wafers whose quality complies with the specifications set forth in Exhibit A-1 (as amended by the parties from time to time) within *** after receiving the Buyer’s written notice. If the Buyer does not notify the Seller any quality defect within the time limit as set forth above, the Buyer shall be deemed as having no complaint about the quality of the Wafers delivered.

4.6.3 Other inspection: the Buyer shall complete the inspection of the number of packages, exterior appearance and weight of the delivery packages of the Wafers at the time of picking up the Wafers. If no complaint is raised at the time when Buyer picks up the Wafers, the Buyer is deemed as having no complaint about the number, exterior appearance and weight of the delivery packages.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

4

4.6.4 The Buyer is entitled to send an authorized representative to the delivery location to conduct inspection prior to picking up the delivery. However, such inspection shall not adversely affect the ordinary production and business of the Seller and shall be conducted in accordance with the safety rules and procedures and other regulations of the Seller.

4.6.5 The costs associated with products exchanges stipulated in Clause 4.6.2 shall be borne by the Seller.

4.6.6 If there is any dispute regarding the product quality of the Wafers and the Seller does not make any exchange, before the final determination on the product quality has been made in accordance with Clause 3.4.1 of the Long-term Agreement, Clause 4.8.1 herein shall not apply. If according to the final determination made in accordance to Clause 3.4.1 of the Long-term Agreement the quality of the Wafers does not comply with the specifications set out in Exhibit A-1 (as amended by the parties from time to time), the Seller shall exchange such defective Wafers within *** after the inspection report issued by an authorized entity (as stipulated in Clause 3.4.1 of the Long-term Agreement), and the Seller shall pay a penalty equals to ***; otherwise Clause 4.8.1 shall apply.

4.7 Manufacture: the Seller may manufacture the Wafers itself or entrust a third party to manufacture the Wafers.

4.8 Liabilities

4.8.1 Seller’s Liabilities: Except for a force majeure event, if Seller fails to make timely delivery or exchange of the Wafers, the Seller shall be entitled to a grace period of *** during which the Seller shall promptly cure its default. If the Seller still fails to make delivery or exchange within *** after receiving the default notice by the Buyer, then starting from the *** the Seller shall pay a penalty equals to ***. If the Seller delays delivery or exchange for more than ***, the Buyer shall be entitled to terminate its purchase of the additional Wafers from the Seller for year 2010 to year 2015. If the Buyer so terminates its purchase of the Wafers, the Buyer shall be entitled to request the Seller, within *** of the termination date (i) to pay the above accumulated penalties, (ii) to refund the remaining prepayment made by the Buyer and pay a penalty equals ***, and (iii) to pay a penalty equals to ***. The buyer may also choose not to terminate its purchase. In such case, the penalty stipulated in provision (i) above shall continue to accumulate, and the Buyer shall be entitled to make cover purchase from domestic and international markets. The portion of the cover price (including any related expenses) that exceed the price set forth in Exhibit B-1 (as amended from time to time) and any expenses related to the cover purchase shall be paid by the Seller, provided that the cover price shall not be higher than *** of the then current market price and the related expenses shall not be higher than *** of the total contract price of such cover purchase.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

5

4.8.2 Buyer’s Liability: Except for a force majeure event, if the Buyer delays in making prepayments for the Wafers, the Buyer shall be entitled to a grace period of ***, during which the Buyer shall promptly cure its default. If the Buyer still fails to make payment within *** after receiving the default notice by the Seller, the Seller shall be entitled to terminate the additional Wafer supply for year 2010 to year 2015 within *** thereafter and keep the prepayment which has already been paid. The Seller may choose not to terminate this Supplementary Agreement, and the Buyer shall pay a penalty equals to *** of the outstanding prepayment per each day of delay starting from the *** day after receiving the default notice.

If the Buyer fails to make the payment for a certain batch of Wafers, the Buyer shall be entitled to a *** grace period, during which the Buyer shall promptly cure the default. If the Buyer still fails to make the payment within *** after receiving the default notice by the Seller, the Buyer shall pay a penalty equals to ***. If the Buyer fails to make payment for more than ***, the Seller shall be entitled to terminate its additional Wafer supply for year 2010 to year 2015. If the Seller so terminates its Wafer supply, the Seller shall been entitled to, within *** of the termination date (i) request the Buyer to pay the above accumulated penalties, (ii) to retain *** of the remaining prepayment which has already been paid by the Buyer, and (iii) to request the Buyer to pay a penalty equals to ***. *** of the remaining prepayment shall be returned to the Buyer within *** of the date on which the Seller terminates its Wafer supply for year 2010 to year 2015. The above mentioned amount payable by the Seller and the Buyer shall offset each other and the remaining balance shall be paid by the appropriate party. The Seller may also choose not to terminate its Wafer supply. In such case, the penalty stipulated in provision (i) above shall continue to accumulate, and the Seller shall be entitled to sell the Wafers to domestic and international markets. Any shortfall in the cover price (including any related expenses) as compared to the price set forth in Exhibit B-1 (as amended from time to time) shall be paid by the Buyer along with any expenses related to the cover sales, provided that the cover price shall not be less than *** of the then current market price and the related expenses shall not be higher than *** of the total contract price of such cover sale.

4.9 In case a force majeure event takes place, which renders the performance of a party’s obligation as stipulated in this Clause 4 delayed or impossible, such party shall inform the other party within *** of such force majeure event. It the force majeure event is not resolved or overcome within *** after its occurrence, the other party shall be entitled to unilaterally terminate the Wafer purchase or supply under this Supplementary Agreement and the parties shall handle the follow-up procedures in accordance with the relevant laws.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

6

5. The quality and model of the polysilicon supply under both the Long-term Agreement and this Supplementary Agreement shall comply with the specifications and standard set forth in Exhibit A to the Long-term Agreement. The Buyer shall inspect the quality within *** after receiving the delivery. If the Buyer discovers that the polysilicon supply does not comply with the specification and standard set forth in Exhibit A, the Buyer shall notify the Seller in writing and is entitled to request the Seller to make exchange within *** after receiving the notice. If the Buyer does not raise any complaint within the aforementioned period, the Buyer is deemed as having no complaint about the quality.

6. The full name of the Long-term Agreement shall be amended to “Polysilicon and Wafer Supply Agreement” and any reference to “polysilicon” therein shall be amended to “polysilicon and wafers.”

7. This Supplementary Agreement shall be deemed as a supplement to the Long-term Agreement and it shall only amend the Long-term Agreement as expressly set forth herein. Both parties hereby agree that other provisions of the Long-term Agreement shall continue in full force and effect and shall be performed by and applied to the parties accordingly. For the avoidance of doubt, the parties agree that matters related to Polysilicon supply and purchase shall be carried out in accordance with the Long-term Agreement except otherwise expressively amended herein; and matters related to Wafer purchase, supply and any liability related thereto shall be carried out in accordance with Clause 4 of this Supplementary Agreement, provided that any matter not stipulated in this Supplementary Agreement shall continue to be governed by the Long-term Agreement (including the preamble, Part 1 (Definition), Part 2 (General Provisions), Part 3 (Supply of Products) as well as Portions of Parts 4, 5, 6, 7, and 9 which are not otherwise amended or stipulated in this Supplementary Agreement).

8. Without prior written consent by the other party, each party shall regard any materials or information concerning this Supplementary Agreement as confidential, and shall not disclose directly or indirectly any information concerning the other party except where such disclosure is otherwise required by law. If any disclosure is required by law, the disclosing party shall apply for confidential treatment and give written notice to and discuss with the other party about the scope and content of such disclosure when possible.

9. The interpretation and performance of the Supplementary Agreement shall be governed by the currently effective PRC laws.

10. Matters not addressed herein shall be governed by supplemental written agreements between the parties, which supplemental written agreements shall have the equal force and effect as this Supplementary Agreement.

11. The Supplementary Agreement shall become effective upon the signing by the legal representatives or authorized representatives of the parties and affixing of all seals of the parties.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

7

12. The Supplementary Agreement is executed in four counterparts, with both parties holding two, and each counterpart shall have the equal force and effect.

8

Buyer: Changzhou Trina Solar Energy Co., Ltd.

By:

Title:

Seller: Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

By:

Title:

9

Exhibit A-1 Product Specification for Solar Grade 125x125mm Wafer

Property	Specification
	A
Growth method	***
Crystal Orientation	***
Donor type / Dopant	***
Oxygen concentration	***
Carbon concentration	***
Dislocation density(etching pit)	***
Resistivity	***
Lifetime	***
Geometry	***
Thickness (T)	***
TTV	***
Dimensions(W×W)	***
Diameter( )	***
Saw marks	***
Surface quality	***
Edge Chip	***
Edge Defect	***
Warpage	***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

10

***

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

11

Exhibit B-1

Product Supply Volume, Purchase Price and Prepayment

Year 2008 monthly Polysilicon supply volume and purchase price

Month	Unite	September	October	November	December	Total
Planned supply volume	tonnes	***	***	***	***	***
Unit price (after tax)	RMB/kg	*** or *** times of then current spot market price (whichever is lower)	*** or *** times of then current spot market price (whichever is lower)	*** or *** times of then current spot market price (whichever is lower)	*** or *** times of then current spot market price (whichever is lower)
Total price (after tax)	RMB	*** or the total purchase price calculated based on the after tax unit price being *** times of then current spot market price (whichever is lower)	*** or the total purchase price calculated based on the after tax unit price being *** times of then current spot market price (whichever is lower)	*** or the total purchase price calculated based on the after tax unit price being *** times of then current spot market price (whichever is lower)	*** or the total purchase price calculated based on the after tax unit price being *** times of then current spot market price (whichever is lower)	*** or the total purchase price calculated based on the unit price being *** times of then current spot market price (whichever is lower)
Payment date		***	***	***	***

Year 2009 quarterly Polysilicon supply volume and purchase price

Quarter		First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Total
Planned supply volume	tonnes	***	***	***	***	***
Unit price (after tax)	RMB/kg	*** or *** times of then current spot market price (whichever is lower)	*** or *** times of then current spot market price (whichever is lower)	*** or *** times of then current spot market price (whichever is lower)	*** or *** times of then current spot market price (whichever is lower)
Total price (after tax)	RMB	*** or the total purchase price calculated based on the after tax unit price being *** times of then current spot market price (whichever is lower)	*** or the total purchase price calculated based on the after tax unit price being *** times of then current spot market price (whichever is lower)	*** or the total purchase price calculated based on the after tax unit price being *** times of then current spot market price (whichever is lower)	*** or the total purchase price calculated based on the after tax unit price being *** times of then current spot market price (whichever is lower)	*** or the total purchase price calculated based on the unit price being *** times of then current spot market price (whichever is lower)

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

12

Polysilicon and wafer (125x125mm) supply volume and purchase price from year 2010 to year 2015

Year		2010	2011	2012	2013	2014	2015	Total
Polysilicon Supply Volume	tonnes	***	***	***	***	***	***	16,350
Polysilicon unite price (after tax)	RMB/kg	***	***	***	***	***	***
Polysilicon total price (after tax)	RMB	***	***	***	***	***	***	***
Wafer (125x125mm) supply volume	pieces	***	***	***	***	***	***	***
Wafer (125x125mm) unit price (after tax)	RMB/piece	***	***	***	***	***	***
Wafer (125x125mm) total price (after tax)	RMB	***	***	***	***	***	***	***
Total Contract Price		***	***	***	***	***	***	28,850,670,000
Prepayment
Total Prepayment	RMB	***
Amount paid	RMB	***
Amount outstanding	RMB	***
Prepayment date (the relevant prepayment has to be made prior to such date)		***	***	***	***	***
Prepayment Amount (such amount shall be paid prior to the relevant prepayment date)	RMB	***	***	***	***	***	***

Notes:

(1) The spot market price for polysilicon for year 2008 and 2009 shall equal to the average price at which the Seller made it spot market sale for the prior three months.

(2) the parties shall negotiate and determine the monthly supply volume (for both polysilicon and Wafers) of the following year every December based on the production capacity and production schedule of the Seller and the purchase ability of the Buyer. In the event that determination can not be reached in December, the monthly supply volume (for both polysilicon and Wafers) of the following year shall be *** (for both polysilicon and Wafers). The after tax unit price of the year multiplies the supply volume of a month shall be the purchase price of that month.

(2) the Buyer shall pay the total amount of the purchase price of the following month prior to the *** of each month.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

13

(3) the after tax price has included a tax of 17%, if the tax rate has been adjusted by the government, the tax shall be calculated based on such rates determined by the government.

14

Amendment to the Supplementary Agreement to the Polysilicon Supply Agreement

by and between

Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

And

Changzhou Trina Solar Energy Co., Ltd.

Seller contract number: SSC000119

Buyer contract number: TCZ-A1130-0803-CGC-120-0

September 19, 2008

1

Amendment to the Supplementary Agreement to the Polysilicon Supply Agreement

Buyer: Changzhou Trina Solar Energy Co., Ltd.

Business Address (mailing address): No. 2 Tianhe Road, Electronics Industrial Park,

Xinbei District, Changzhou, Jiangsu

Legal Representative: Gao Jifan

Seller: Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

Business Address (mailing address): No. 66, Yangshan Road, Xuzhou Economic

Development Zone, Jiangsu Province, PRC

Legal Representative: Zhu Guomin

The Seller and the Buyer (the “Parties”) entered into a Supplementary Agreement to the Polysilicon Supply Agreement dated August 19^th, 2008 (the “Supplementary Agreement”) to clarify certain issues under the Polysilicon Supply Agreement entered into by the Parties dated March 29^th, 2008 (Buyer Contract No. TCZ-A1130-0803-CGC-120-0, Seller Contract No. SSC000119). The Parties hereby make the following amendment to the Supplementary Agreement to correct a clerical error.

For the polysilicon and wafer (125×125mm) supply volume and purchase price from year 2010 to year 2015 under Exhibit B-1 of the Supplementary Agreement (Product Supply Volume, Purchase Price and Prepayment), the total polysilicon supply volume from the year 2010 to year 2015 is hereby amended from 16,350 tonnes to 15,200 tonnes.

Buyer: Changzhou Trina Solar Energy Co., Ltd.

Representative:

Seal

Seller: Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

Representative:

Seal

EX-10.20

Exhibit 10.20

EXECUTION COPY

SHARE PURCHASE AGREEMENT

by and among

HAPPY GENIUS HOLDINGS LIMITED

and

MANDRA SILICON LIMITED

and

GCL SILICON TECHNOLOGY HOLDINGS INC.

Dated as of July 18, 2008

TABLE OF CONTENTS

			Page
ARTICLE I DEFINITIONS			2
	1.01	DEFINITIONS	2
	1.02	ADDITIONAL DEFINITIONS	6
	1.03	CONSTRUCTION	6
ARTICLE II PURCHASE OF SHARES AND CLOSING			7
	2.01	PURCHASE AND SALE	7
	2.02	CLOSING	7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS			8
	3.01	ORGANIZATION	8
	3.02	AUTHORITY	9
	3.03	NO CONFLICTS	9
	3.04	GOVERNMENTAL APPROVALS AND FILINGS	9
	3.05	TITLE TO ASSETS AND PROPERTIES	9
	3.06	CLOSING SHARES	10
	3.07	INTEREST IN JZPTD	10
	3.08	LEGAL PROCEEDINGS	10
	3.09	COMPLIANCE WITH LAWS AND ORDERS	10
	3.10	BROKERS	10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY			11
	4.01	ORGANIZATION	11
	4.02	AUTHORITY	11
	4.03	NO CONFLICTS	11
	4.04	INFORMATION	11
	4.05	NO U.S. PERSON	12
	4.06	NO DIRECTED SELLING EFFORTS	12
	4.07	INVESTMENT PURPOSES	12
	4.08	BROKERS	12
	4.09	ORDINARY SHARES	13
ARTICLE V CONDITIONS TO OBLIGATIONS OF THE COMPANY			13
	5.01	Representations and Warranties	13
	5.02	Performance	13
	5.03	Orders and Laws	13
	5.04	Regulatory Consents and Approvals	13
	5.05	Initial Public Offering Closing	14
	5.06	Release of Security Interests	14
ARTICLE VI CONDITIONS TO OBLIGATIONS OF THE SELLERS			14
	6.01	REPRESENTATIONS AND WARRANTIES	14
	6.02	PERFORMANCE	14
	6.03	ORDERS AND LAWS	15
	6.04	REGULATORY CONSENTS AND APPROVALS	15
	6.05	INITIAL PUBLIC OFFERING CLOSING	15
	6.06	RELEASE OF SECURITY INTERESTS	15
ARTICLE VII SURVIVAL OF REPRESENTATIONS AND WARRANTIES			15
	7.01	SURVIVAL OF REPRESENTATIONS AND WARRANTIES	15

i Share Purchase Agreement

ARTICLE VIII TERMINATION			15
	8.01	TERMINATION	15
	8.02	EFFECT OF TERMINATION AND SURVIVAL	15
ARTICLE IX GOVERNING LAW AND RESOLUTION OF DISPUTES			16
	9.01	GOVERNING LAW	16
	9.02	DISPUTE RESOLUTION FORUM	16
	9.03	PERFORMANCE PENDING DISPUTE RESOLUTION	16
ARTICLE X MISCELLANEOUS			16
	10.01	ENTIRE AGREEMENT	16
	10.02	BINDING EFFECT; BENEFIT	17
	10.03	ASSIGNMENT	17
	10.04	AMENDMENT; WAIVER	17
	10.05	NOTICES	17
	10.06	COUNTERPARTS	18
	10.07	SEVERABILITY	18
	10.08	COSTS AND EXPENSES	18
	10.09	FURTHER ASSURANCES	18
APPENDIX A			A-1

ii Share Purchase Agreement

SHARE PURCHASE AGREEMENT

This SHARE PURCHASE AGREEMENT (this “Agreement”) dated as of July 18, 2008 is made by and among:

(1) Happy Genius Holdings Limited (“Happy Genius”), a company incorporated and existing under the laws of the British Virgin Islands and having its registered office at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands,

(2) Mandra Silicon Limited (“Mandra”; together with Happy Genius, the “Sellers”), a company incorporated and existing under the laws of the British Virgin Islands and having its registered office at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands, and

(3) GCL Silicon Technology Holdings Inc. (the “Company”), a company incorporated and existing under the laws of the Cayman Islands and having its registered office at Offshore Incorporations (Cayman) Limited, Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman KY1-1112, Cayman Islands.

Capitalized terms not otherwise defined herein have the meanings set forth in ARTICLE I.

WHEREAS:

WHEREAS, Happy Genius is the legal and beneficial owner of 82.00% of the issued share capital of each of Sun Wave Group Limited (“Sun Wave”), a company incorporated and existing under the laws of the British Virgin Islands and Greatest Joy International Limited (“Greatest Joy”), a company incorporated and existing under the laws of the British Virgin Islands;

WHEREAS, Mandra is the legal and beneficial owner of 18.00% of the issued share capital of each of Sun Wave and Greatest Joy;

WHEREAS, Sun Wave is the legal and beneficial owner of 100% of the issued share capital of each of Wise Universe Investments Limited, Excel Bond International Limited and Asia Silicon Technology Development Holdings Limited, each a company incorporated in the British Virgin Islands.

WHEREAS, Wise Universe Investments Limited, Excel Bond International Limited and Asia Silicon Technology Development Holdings Limited are the legal and beneficial owners of 100% of the issued share capital of Speedy Gain Limited, Asia Silicon Technology Development Limited and Asia Silicon Technology Development Holdings Limited respectively, each a company incorporated in Hong Kong.

WHEREAS, Speedy Gain Limited, Asia Silicon Technology Development Limited and Asia Silicon Technology Development Holdings Limited are the legal and beneficial holders of 7%, 8% and 5%, respectively, of the equity interest in Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (“JZPTD”), a limited liability company organized in the People’s Republic of China.

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WHEREAS, Greatest Joy is the legal and beneficial owner of 100% issued share capital of Richmore International Development Limited, a company incorporated in Hong Kong.

WHEREAS, Richmore International Development Limited is the legal and beneficial holder of 16% of the equity interest in JZPTD.

WHEREAS, the Sellers agree to sell to the Company and the Company agrees to purchase from the Sellers 100% in the aggregate of the issued share capital of each of Sun Wave and Greatest Joy;

WHEREAS, The Sellers and the Company agree to enter into this Agreement to govern the Sellers’ sale and the Company’s purchase of 100% of the issued share capital of each of Sun Wave and Greatest Joy;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.01 Definitions.

The following terms shall have the following meanings for purposes of this Agreement:

“Actions or Proceedings” means any action, suit, proceeding, arbitration or any investigation or audit by any Government Authority.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person and “Affiliates” and “Affiliated” shall have correlative meanings. For the purpose of this definition, the term “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or influence the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise

“Agreement” has the meaning stated in the preamble.

“Assets and Properties” of any Person means assets and properties of any kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including

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without limitation cash, cash equivalents, investment assets, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory, goods and intellectual property.

“Business Day” means a day other than Saturday, Sunday or any day on which banks located in Hong Kong are authorized or obligated to close.

“Company” means GCL Silicon Technology Holdings Inc.

“Confidential Information” means (a) any information concerning the organization, business, technology, trade secrets, know-how, finance, transactions or affairs of any Party or any Party’s Representatives (whether conveyed in written, oral or in any other form and whether such information has been furnished before, on or after the date of this Agreement), (b) any information or materials prepared by a Party or its Representatives that contains or otherwise reflects, or is generated from, Confidential Information and (c) this Agreement, the transactions contemplated hereby, the terms and conditions hereof or any discussions, correspondence or other communications among the Parties or their respective Representatives relating to this Agreement or any of the transactions contemplated hereunder.

“Contract” means any agreement, lease, license, engagement, evidence of Indebtedness, mortgage, indenture, security agreement, financial instrument, purchase order, commitment, arrangement, understanding or other contract (whether written, oral or otherwise).

“Convertible Bonds” means any of the unsecured convertible bonds having the characteristics set forth in the term sheet attached hereto as Exhibit A.

“Employee” means any officer or employee including any part-time, regular contract or fixed-term officer or employee.

“Encumbrance” means (a) any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, deed of trust, title retention, security interest or other encumbrance of any kind securing, or conferring any priority of payment in respect of, any obligation of any Person, including any right granted by a transaction which, in legal terms, is not the granting of security but which has an economic or financial effect similar to the granting of security under applicable Law, (ii) any lease, sub-lease, occupancy agreement, easement or covenant granting a right of use or occupancy to any Person, (iii) any proxy, power of attorney, voting trust agreement, interest, option, right of first offer, negotiation or refusal or transfer restriction in favor of any Person and (iv) any adverse claim as to title, possession or use.

“Equity Securities” means the capital stock, membership interests, partnership interests, registered capital or other ownership interest in any Person or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or exchangeable for, such capital stock, membership interests, partnership interests, registered capital or other ownership interests (whether or not such derivative securities are issued by such Person).

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“Environmental Laws” shall mean all national, state, regional and local laws, statutes, ordinances and regulations, in each case as amended or supplemented from time to time, and any Government Authority thereof, including orders, consent decrees or judgments relating to the regulation and protection of human health, safety, the environment and natural resources.

“GCL HK” means GCL Silicon Technology Holdings Limited.

“Government Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the Cayman Islands or of the PRC, any other country or territory or any province, state, county, city or other political subdivision of any other country or territory.

“Greatest Joy” has the meaning stated in the preamble.

“Happy Genius” means Happy Genius Holdings Limited.

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC.

“Indebtedness” of any Person means all obligations (contingent or otherwise) of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business), (iv) under capital leases and (v) in the nature of guarantees of the obligations described in clauses (i) through (iv) above of any other Person.

“JZPTD” means Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

“Law” means any law, treaty, statute, ordinance, code, rule or regulation of any Government Authority or any Order.

“Liabilities” means all Indebtedness, obligations and other liabilities of a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether due or become due).

“Licenses” means all licenses, permits, certificates of authority, authorizations, approvals, registrations, franchises and similar consents granted or issued by any Governmental Authority.

“Mandra” means Mandra Silicon Limited.

“Material Adverse Effect” means a material adverse effect on the Business or Condition of the Group Companies taken as a whole, but excluding effects attributable to (i) the transactions contemplated by this Agreement; (ii) economic, industry or market conditions and generally, including, without limitation, changes affecting the industry in which the Company operates; (iii) any change in laws or regulatory or political conditions affecting the wind power and energy industry and generally, including any acts of war or terrorist activities; or any change in conditions or fluctuations in financial markets.

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“Memorandum and Articles” means memorandum and articles of association, the articles of incorporation, by-laws or other equivalent constitutional documents of the Company, as amended from time to time.

“Order” means any writ, judgment, decree, injunction, award or similar order of any Government Authority (in each such case whether preliminary or final).

“Ordinary Shares” means the ordinary shares, par value US$0.00001 per share, of the Company.

“Parties” means collectively the Sellers and the Company. Each of the Parties shall be referred to as a “Party.”

“Person” means an individual, firm, corporation, partnership, association, limited liability company, union, trust or estate or any other entity or organization whether or not having separate legal existence, including any Government Authority.

“Purchase Price” means:

I. If the initial public offering price of the American depositary shares representing the Company’s Ordinary Shares provides an effective price of at least $23.88 per Ordinary Share (as such Ordinary Shares are constituted as of July 15, 2008):

(a) US$240,625,000 in cash, paid to Happy Genius;

(b) US$446,875,000 principal amount of unsecured Convertible Bonds (with an agreed fair market value of US$558,200,000) to Happy Genius;

(c) 215,469,340 Ordinary Shares to Happy Genius; and

(d) 53,068,620 Ordinary Shares to Mandra.

II. If the initial public offering price of the American depositary shares representing the Company’s Ordinary Shares provides an effective price of at less than $23.88 per Ordinary Share (as such Ordinary Shares are constituted as of July 15, 2008), the Purchase Price stated in I.(a) and I.(b) shall remain the same, and the number of Ordinary Shares in I.(c) and I.(d) shall be reduced by multiplying the number of Ordinary Shares in each case by the fraction of in which the numerator is the effective initial public offering price and the denominator is $23.88.

“Representatives” means with respect to any Person, such Person’s directors, officers, Employees, agents, Affiliates, partners, counsel, legal and financial advisers, accountants, consultants and controlling persons.

5 Share Purchase Agreement

“PRC” or “China” means the People’s Republic of China and for the purposes of this Agreement, excluding the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan.

“Qualified IPO” means a firm commitment underwritten public offering of Ordinary Shares of the Company and the listing of such Ordinary Shares on a reputable international stock exchange (including without limitation stock exchanges in the United States, Hong Kong and Singapore, or any other stock exchange that is approved by the board of directors of the Company).

“Securities Act” means the United States Securities Act of 1933, as amended and the rules and regulations promulgated thereunder.

“Sellers” means Mandra and Happy Genius.

“Subsidiary” means any Person which the Company controls, directly or indirectly. For purposes of this definition, “control” has the meaning set forth above under the definition of “Affiliate.”

“Sun Wave” has the meaning stated in the preamble.

“Tax” means any form of taxation (including any value added, excise, use, personal property, use and occupancy, business and occupation, mercantile, real estate, payroll, franchise or capital gains tax), estate duty, customs duty, deduction, withholding, duty, impost, levy or fee or charge levied, collected, withheld or assessed by any Government Authority and any interest, penalty, surcharge or fine in connection therewith or any other measure of tax.

1.02 Additional Definitions.

The following terms shall have the meanings set forth in the indicated Clause of this Agreement:

Defined Terms	Articles Reference
“Closing”	2.02
“Closing Date”	2.02
“Closing Shares”	2.01
“Disclosure Schedule”	ARTICLE III
“HKIAC”	9.02(a)

1.03 Construction.

Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders. Unless otherwise specified, words such as “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular clause or sub-clause of this Agreement, and references herein

6 Share Purchase Agreement

to “articles” or “clauses” refer to articles or clauses of this Agreement. Unless otherwise specified, references herein to the word “including” shall be deemed to be followed by words “without limitation” or “but not limited to,” as applicable, or words of similar import. In the event that any translated version of this Agreement differs from the English version, the English version shall control. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified.

ARTICLE II

PURCHASE OF SHARES AND CLOSING

2.01 Purchase and Sale.

Subject to the terms and conditions hereof, at the Closing, Happy Genius shall sell to the Company, and the Company shall purchase from Happy Genius at the applicable Purchase Price, 82 shares of Sun Wave and 82 shares of Greatest Joy free and clear of all Encumbrances, representing 82% of the issued share capital of each of Sun Wave and Greatest Joy (the “Happy Genius Shares”).

Subject to the terms and conditions hereof, at the Closing, Mandra shall sell to the Company, and the Company shall purchase from Mandra at the applicable Purchase Price, 18 shares of Sun Wave and 18 shares of Greatest Joy free and clear of all Encumbrances, representing 18% of the issued share capital of each of Sun Wave and Greatest Joy (the “Mandra Shares”; together with the Happy Genius Shares, the “Closing Shares”).

2.02 Closing.

Subject to the satisfaction or waiver of the conditions set forth in ARTICLE V and ARTICLE VI of this Agreement, the closing of the transactions contemplated under Article 2.01 (the “Closing”) shall take place at the offices of Milbank, Tweed, Hadley & McCloy LLP at Tower 2, China Central Place, Suite 1505-1506, 79 Jianguo Road, Chao Yang District, Beijing 100025, People’s Republic of China, or at such other place as the Company and the Sellers mutually agree, concurrently with the closing of the Company’s initial public offering that constitutes a Qualified IPO provided that all of the conditions set forth in ARTICLE V and ARTICLE VI hereunder have been satisfied or waived (or any other day as may be mutually agreed by the Company and the Sellers) (the “Closing Date”).

(a) At the Closing, Happy Genius shall deliver to the Company:

(i) shares aggregating 82% of the issued share capital of each of Sun Wave and Greatest Joy;

(ii) a certified copy of the updated register of members of each of Sun Wave and Greatest Joy that duly registers the name of the Company as record owner of such shares; and

(iii) each other item that is to be completed or delivered by Happy Genius at Closing in accordance with this Agreement and applicable Law.

7 Share Purchase Agreement

(b) At the Closing, Mandra shall deliver to the Company:

(i) shares aggregating 18% of the issued share capital of each of Sun Wave and Greatest Joy;

(ii) a certified copy of the updated register of members of each of Sun Wave and Greatest Joy that duly registers the name of the Company as record owner of such shares; and

(iii) each other item that is to be completed or delivered by Mandra at Closing in accordance with this Agreement and applicable Law.

(c) At the Closing, the Company shall deliver to the Sellers (as applicable):

(i) the cash portion of the Purchase Price by wire transfer of immediately available funds to an account to be designated by the Company, such account to be so designated at least two Business Days prior to the Closing;

(ii) the Ordinary Shares constituting such portion of the Purchase Price;

(iii) the unsecured Convertible Bonds constituting such portion of the Purchase Price; and

(iv) each other item that is to be completed or delivered by it at Closing in accordance with this Agreement and applicable Law.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Except as set forth in the Disclosure Schedule dated the Closing Date (the “Disclosure Schedule”) to be made part of this Agreement upon delivery thereof to the Company each of the Sellers hereby severally, and not jointly represents and warrants to the Company as of the date hereof and as of the Closing Date as follows:

3.01 Organization.

The Seller is a corporation duly organized and validly existing under the Laws of its place of incorporation and has full corporate power and authority to execute and deliver this Agreement to which it is a party and to perform its obligations hereunder and to consummate the transactions contemplated hereby. The Seller has the full corporate power and authority to conduct its business as now conducted. The Seller is duly qualified to do business in each jurisdiction in which it currently conducts business except where the failure to be so qualified would not be reasonably expected to have a Material Adverse Effect.

8 Share Purchase Agreement

3.02 Authority.

(a) The execution and delivery by the Seller of this Agreement and the performance by the Seller of its obligations hereunder have been duly and validly authorized by all necessary corporate action of the Seller.

(b) This Agreement has been duly and validly executed and delivered by the Seller and constitutes, and upon its execution and delivery, shall constitute, a legal, valid and binding obligation, enforceable against it in accordance with its terms, except as (i) the enforceability thereof may be limited by applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium and other laws of general application or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity and (ii) rights of acceleration, if any, and the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a Proceeding in equity or at law).

3.03 No Conflicts.

The execution and delivery by the Seller of this Agreement does not, and the performance by the Seller of each of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not:

(a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the Memorandum and Articles or other constitutional documents of the Seller; or

(b) subject to obtaining the consents, approvals and actions, making the filings, conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to the Seller anywhere such conflict, violation or breach would result, or would reasonably be expected to result, in a Material Adverse Effect.

3.04 Governmental Approvals and Filings.

No consent, approval or action of, filing with or notice to any Government Authority on part of the Seller is required in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

3.05 Title to Assets and Properties.

The Seller has good and marketable title to its Assets and Properties held free and clear of any mortgage, pledge, lien, encumbrance, security interest or charge of any kind with no exceptions that would interfere with the use made or to be made thereof by them where failure to comply with any of the foregoing would have or would be reasonably likely to have a Material Adverse Effect. With respect to the Assets and Properties it leases, the Seller is in compliance with such leases and, to the best of its knowledge, the Seller holds valid leasehold interests in such Assets and Properties free of any Liens, encumbrances, security interests or claims of any party other than the lessors of such Assets and Properties with no exceptions that would interfere with the use made or to be made thereof by them where failure to comply with any of the foregoing would have or would be reasonably likely to have a Material Adverse Effect.

9 Share Purchase Agreement

3.06 Closing Shares.

(a) The Happy Genius Shares will be owned at all times prior to the Closing by Happy Genius, and such shares represent valid and binding obligations of Sun Wave and Greatest Joy, enforceable against them in accordance with their terms.

(b) The Mandra Shares will be owned at all times prior to the Closing by Mandra, and such shares represent valid and binding obligations of Sun Wave and Greatest Joy, enforceable against them in accordance with their terms.

(c) The Closing Shares when sold to the Company at Closing will be duly and validly authorized and issued, fully paid and non-assessable. At the Closing, in accordance with the provisions of this Agreement, the Company will own the Closing Shares free and clear of any Encumbrance, or third party right or claim of any kind.

(d) The outstanding capital shares of the Company are duly and validly authorized and issued, credited as fully paid and non-assessable, have been issued in accordance with all applicable laws, the Company’s Memorandum and Articles of Association and any relevant securities laws or pursuant to valid exemptions therefrom.

3.07 Interest in JZPTD.

(a) The Seller is the beneficial holder of percentage of equity interest in JZPTD set forth in the preamble; and

(b) at the Closing, in accordance with the provisions of this Agreement and the acquisition of the Closing Shares, the Company will indirectly own such percentage of equity interest in JZPTD free and clear of any Encumbrance, or third party right or claim of any kind.

3.08 Legal Proceedings.

As of the date hereof, except as disclosed in the Disclosure Schedule, there are no Orders outstanding against the Seller or any Subsidiary.

3.09 Compliance With Laws and Orders.

As of the date hereof, the Seller is not or has not received any notice that it is or has been in violation of or in default under any Law or Order applicable to the Seller that would be reasonably likely to have a Material Adverse Effect.

3.10 Brokers.

All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by the Seller directly with the Company without the intervention of any Person on behalf of the Seller in such manner as to give rise to any valid claim by any Person against the Sellers or the Company for a finder’s fee, brokerage commission or similar payment.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to each of the Sellers as of the date hereof and as of the Closing Date as follows:

4.01 Organization.

The Company is a corporation duly organized and validly existing under the Laws of its place of incorporation. The Company has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.

4.02 Authority.

(a) The execution and delivery by the Company of this Agreement, and the performance by the Company of its obligations hereunder, have been duly and validly authorized by all necessary action.

(b) This Agreement has been duly and validly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against it in accordance with its terms, except as (i) the enforceability thereof may be limited by applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium and other laws of general application or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity and (ii) rights of acceleration, if any, and the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a Proceeding in equity or at law).

4.03 No Conflicts.

The execution and delivery by the Company of this Agreement does not, and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not:

(a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the constitutional documents of the Company; and

(b) subject to obtaining the consents, approvals and actions, making the filings, conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to the Company.

4.04 Information.

(a) The Company acknowledge that (A) it has had the opportunity to request copies of any documents, records, and books pertaining to this investment and (B) any such documents, records and books that the Company requested have been made available for inspection by the Company, the Company’s attorney, accountant or advisors.

11 Share Purchase Agreement

(b) The Company and its advisors have had a reasonable opportunity to ask questions of and receive answers from representatives of the Sellers or persons acting on behalf of the Sellers concerning this investment and all such questions have been answered to the full satisfaction of the Company.

(c) The Company has sufficient knowledge and experience in financial, Tax and business matters to enable the Company to utilize the information made available to them in connection with the transactions contemplated hereby, to evaluate the merits and risks of an investment and to make an informed investment decision.

4.05 No U.S. Person.

The Company is not a “U.S. Person” (as defined in Rule 902 of Regulation S of the Securities Act) and it understands that no action has been or will be taken in any jurisdiction by the Sellers that would permit a public offering of the Closing Shares in any country or jurisdiction where action for that purpose is required.

4.06 No Directed Selling Efforts.

No form of “directed selling efforts” (as defined in Rule 902 of Regulation S), general solicitation or general advertising in violation of the Securities Act has been or will be used nor will any offers by means of any directed selling efforts in the United States be made by the Company or any of its representatives in connection with the offer and sale of any of the Closing Shares.

4.07 Investment Purposes.

The Company acknowledges that neither the offer nor sale of the Closing Shares has been registered under the Securities Act or under the securities laws of any foreign or state Governmental Authority. The Company is acquiring the Closing Shares for its own account for investment purposes and is not acquiring the Closing Shares with a view to any distribution or resale thereof that would violate the Securities Act or the securities laws of any state of the United States or any other applicable jurisdiction. The Company has not offered or sold the Closing Shares being acquired and does not have any present intention of selling, distributing or otherwise disposing of such Closing Shares either currently or after the passage of a fixed or determinable period of time or upon the occurrence or non-occurrence of any predetermined event or circumstances in violation of the Securities Act or the securities laws of any state of the United States or any other applicable jurisdiction.

4.08 Brokers.

All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by the Company directly with Sellers without the intervention of any Person on behalf of the Company in such manner as to give rise to any valid claim by any Person against any Seller or the Company for a finder’s fee, brokerage commission or similar payment.

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4.09 Ordinary Shares.

(a) The Ordinary Shares when transferred to the Sellers at Closing will be duly and validly authorized and issued, fully paid and non-assessable. At the Closing, in accordance with the provisions of this Agreement, the Sellers will own the Ordinary Shares that are a portion of the Purchase Price free and clear of any Encumbrance, or third party right or claim of any kind.

(b) The outstanding capital shares of the Company are duly and validly authorized and issued, credited as fully paid and non-assessable, have been issued in accordance with all applicable laws, the Company’s Memorandum and Articles and any relevant securities laws or pursuant to valid exemptions therefrom.

ARTICLE V

CONDITIONS TO OBLIGATIONS OF THE COMPANY

The obligation of the Company to proceed with the Closing is subject to the fulfillment, at or before the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by the Company):

5.01 Representations and Warranties.

Each of the representations and warranties made by the Sellers in this Agreement shall be true and correct on and as of the Closing Date as though such representation or warranty was made on and as of the Closing Date except to the extent they expressly refer to another time or period, in which case they shall be true and correct as of such specific time or period, and the Sellers shall have each delivered a certificate to the Company, dated the Closing Date, to such effect.

5.02 Performance.

The Sellers shall have performed and complied with each agreement, covenant and obligation required by this Agreement to be so performed or complied with by it at or before the Closing and the Sellers shall have delivered a certificate to the Company dated the Closing Date, to such effect.

5.03 Orders and Laws.

There shall not be in effect on the Closing Date any Order or Law restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement.

5.04 Regulatory Consents and Approvals.

All consents, approvals and actions of, filings with and notices to any Government Authority necessary to permit each of the Parties to perform its obligations under this Agreement and to consummate the transactions contemplated hereby shall have been duly obtained, made or given and be in full force and effect.

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5.05 Initial Public Offering Closing.

There shall be a closing of an initial public offering of the Company’s Ordinary Shares that constitutes a Qualified IPO which shall concurrently occur on the Closing Date.

5.06 Release of Security Interests

The following assets of the Sellers, which secure the Closing Shares, shall be released to the Company after the closing of a Qualified IPO: (1) a charge over all of the assets of Sun Wave and Greatest Joy and each direct and indirect subsidiary of Sun Wave and Greatest Joy which are the direct holders of the equity interest in JZPTD, including mortgages over shares they hold in the respective subsidiaries and in the 36% equity interest in JZPTD owned by the Sellers in the aggregate; (2) a mortgage of shares in the Company owned by Happy Genius (as to 60% of the total issued share capital of the Company) and Mandra (as to 10% of the total issued share capital of the Company); and (3) a mortgage of shares in Sun Wave and Greatest Joy owned by the Happy Genius (as to 82% of the total issued share capital of Sun Wave and Greatest Joy).

ARTICLE VI

CONDITIONS TO OBLIGATIONS OF THE SELLERS

The obligation of the Sellers to proceed with the Closing is subject to the fulfillment, at or before the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by the Sellers):

6.01 Representations and Warranties.

Each of the representations and warranties made by the Company in this Agreement shall be true and correct on and as of the Closing Date as though such representation or warranty was made on and as of the Closing Date, except to the extent they expressly refer to another time or period, in which case they shall be true and correct as of such specific time or period, and the Company shall have delivered a certificate to each of the Sellers, dated the Closing Date, to such effect.

6.02 Performance.

The Company shall have performed and complied with each agreement, covenant and obligation required by this Agreement to be so performed or complied with by the Company at or before the Closing, and the Company shall have delivered a certificate to the Sellers, dated the Closing Date, to such effect.

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6.03 Orders and Laws.

There shall not be in effect on the Closing Date any Order or Law that became effective after the date of this Agreement restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement.

6.04 Regulatory Consents and Approvals. All consents, approvals and actions of, filings with and notices to any Government Authority necessary to permit each of the Parties to perform its obligations under this Agreement shall have been duly obtained, made or given and be in full force and effect.

6.05 Initial Public Offering Closing.

There shall be a closing of an initial public offering of the Company’s Ordinary Shares that constitutes a Qualified IPO which shall concurrently occur on the Closing Date.

6.06 Release of Security Interests.

The charge over all the assets of the Company, including a mortgage over the shares of GCL HK and 64% of the equity interest in JZPTD shall be released to the Company after the closing of a Qualified IPO.

ARTICLE VII

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

7.01 Survival of Representations and Warranties. The representations and warranties contained in ARTICLE III and ARTICLE IV of this Agreement will survive for ninety (90) days following the Closing.

ARTICLE VIII

TERMINATION

8.01 Termination. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned:

(a) by mutual written consent of the Parties; or;

(b) by written notice of the Sellers or the Company, if the Closing shall not have occurred prior to December 31, 2008 (provided that the right to terminate this Agreement under this Section 8.01(b) shall not be available to any Party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to have occurred on or before such date).

8.02 Effect of Termination and Survival. If this Agreement is validly terminated pursuant to Article 8.01, this Agreement shall forthwith become null and void, and there shall be no further liability or obligation on the part of the Company or any of the Sellers; provided, that any right, provision or obligation of this Agreement that by its nature should survive thereafter shall survive following any such termination. Notwithstanding any other provision in this Agreement to the contrary, upon any termination of this Agreement pursuant to Article 8.01, the Company shall remain liable to the Sellers for any breach of this Agreement by the Company

15 Share Purchase Agreement

existing at the time of such termination, and the Sellers shall remain liable to the Company for any breach of this Agreement by the Sellers existing at the time of such termination, and the Company or the Sellers may seek such remedies in accordance with ARTICLE IX with respect to any such breach as are provided in this Agreement or as are otherwise available at Law or in equity.

ARTICLE IX

GOVERNING LAW AND RESOLUTION OF DISPUTES

9.01 Governing Law. This Agreement and any disputes, claims or controversies arising from, related to or in connection with this Agreement shall be construed in accordance with the Laws of the state of New York of the United States, without regard to its conflict of law principles.

9.02 Dispute Resolution Forum.

(a) Any controversy or claim arising out of or relating to this Agreement, or any breach of this Agreement, shall be initiated, maintained and finally determined by binding arbitration under the auspices of the Hong Kong International Arbitration Center (the “HKIAC”) and the site of the arbitration shall be in Hong Kong. The arbitral tribunal shall be appointed within 30 days of the notice of dispute, and shall consist of three arbitrators, each opposing party to a dispute shall be entitled to appoint one arbitrator and the third shall be jointly appointed by the disputing parties or, failing such agreement within such 30-day period, the HKIAC shall appoint the third arbitrator.

(b) The arbitration proceeding shall be conducted in English. The arbitration tribunal shall apply the UNCITRAL Arbitration Rules as administered by the HKIAC at the time of the arbitration.

(c) The award of the arbitration tribunal shall be final and binding upon the disputing parties, and the prevailing party or parties may apply to a court of competent jurisdiction for enforcement of such award.

(d) Any party shall be entitled to seek preliminary injunctive relief from any court of competent jurisdiction pending the constitution of the arbitral tribunal.

9.03 Performance Pending Dispute Resolution. Unless otherwise terminated in accordance with the terms hereof, this Agreement and the rights and obligations of the Parties hereunder shall remain in full force and effect during the pendency of any proceeding under Article 9.02.

ARTICLE X

MISCELLANEOUS

10.01 Entire Agreement. This Agreement constitutes the whole agreement among the parties hereto relating to the subject matter hereof and supersedes all prior agreements or understandings both oral and written among all of the parties hereto relating to the subject matter hereof.

16 Share Purchase Agreement

10.02 Binding Effect; Benefit. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Parties, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

10.03 Assignment. No Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the written consent of the other Parties.

10.04 Amendment; Waiver. (a) This Agreement may not be amended, modified or supplemented except by a written instrument executed by each of the Parties.

(b) No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the Party waiving such provision. No failure or delay by a Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Without limiting the foregoing, no waiver by a Party of any breach by any other Party of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

10.05 Notices. Each notice, demand or other communication given or made under this Agreement shall be in writing and delivered or sent to the relevant Party at its address or fax number set out below (or such other address or fax number as the addressee has by five days’ prior written notice specified to the other Parties). Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been delivered (a) if delivered in person or by messenger, when proof of delivery is obtained by the delivering Party; (b) if sent by post within the same country, on the third day following posting, and if sent by post to another country, on the fifth day following posting, and (c) if given or made by fax, upon dispatch and the receipt of a transmission report confirming dispatch. The initial address and facsimile for the Parties for the purposes of this Agreement are:

(a) if to Happy Genius, to:

Address:	C/O GCL Silicon Technology Holdings Inc. Suite 3601, Two Exchange Square Central, Hong Kong
Attention:	Richard Li/ David Fung
Fax No.:	852 2526 7638

17 Share Purchase Agreement

(b) if to Mandra, to:

Address:	10th Floor, Fung House, 19-20 Connaught Road Central, Hong Kong
Attention:	Song-Yi Zhang
Fax No.:	852 3113 8252

(c) if to the Company, to:

Address:	Suite 3601, Two Exchange Square, Central, Hong Kong
Attention:	Hunter Jiang
Fax No.:	852 2526 7638

10.06 Counterparts. This Agreement may be signed in any number of counterparts including counterparts transmitted by facsimile, each of which shall be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

10.07 Severability. If any provision contained in this Agreement shall for any reason be determined to be partially or wholly invalid, illegal or unenforceable by any court of competent jurisdiction, such provision shall be of no force and effect to the extent so determined, but the invalidity, illegality or unenforceability of such provision shall have no effect upon and shall not impair the validity, legality or enforceability of any other provision of this Agreement.

10.08 Costs and Expenses. Costs and expenses incurred by any Party in connection with its business, technical, legal and financial due diligence and otherwise arising from, related to or in connection with the preparation, execution, delivery and performance of this Agreement and each other Transaction Document shall be borne by such Party.

10.09 Further Assurances. Each Party shall give such further assurance, provide such further information, take such further actions and execute and deliver such further documents and instruments as are, in each case, within its power to give, provide and take so as to give full effect to the provisions of this Agreement.

(Signature page follows)

18 Share Purchase Agreement

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

HAPPY GENIUS HOLDINGS LIMITED

By:

Name:

Title:

MANDRA SILICON LIMITED

By:

Name:

Title:

GCL SILICON TECHNOLOGY HOLDINGS INC.

By:

Name:

Title:

EXHIBIT A

CONVERTIBLE BOND TERM SHEET

GCL SILICON TECHNOLOGY HOLDINGS INC. 3% CONVERTIBLE BOND TERM SHEET

Capitalized terms used but not herein defined shall have the meanings set forth in the Subscription Agreement, dated June 5, 2008, between Happy Genius Holdings Limited and the purchasers set forth on Schedule 1 thereto.

GCL SILICON TECHNOLOGY HOLDINGS INC. CONVERTIBLE BONDS

	INDICATIVE TERMS
Issuer	GCL SILICON TECHNOLOGY HOLDINGS INC. (Listco)
Opco	(formerly known as ), a wholly foreign owned enterprise established under the laws of the PRC between GCL (HK), Asia Silicon Technology Development Limited, Asia Silicon Technology Development Holdings Limited, Speedy Gain Limited and Richmore International Development Limited.
Investor	EB holders on IPO Date
EB	Exchangeable Bond due 2010 issued by Happy Genius Holdings Limited
Description of Security	Bonds convertible into common shares of Listco, at the option of the bondholders (CB)
Status	Direct, senior, unsubordinated and unsecured
Offer Size	Outstanding principal amount of the EB on the IPO Date, following partial redemption upon a Complying IPO, as per the EB, split into the following classes: •     Class A – 50% of the outstanding principal amount •     Class B – 25% of the outstanding principal amount •     Class C – 25% of the outstanding principal amount
Currency	US dollars
Maturity	1.5 year after the IPO Date
Coupon	3.00%

A-1

Issue Price	100.00%
Redemption Price	100.00 %
Yield	3.00% per annum calculated on a semi-annual basis
Day Count Fraction	30/360
Conversion Price	IPO Price
Conversion Period	As per the EB in accordance with the following table:

Class of CB   Class A   Class B   Class C Convertible from   IPO + 6 months   IPO + 9 months   IPO + 12 months

Min. Denomination	US$100,000 and integral multiples of US$1,000 in excess thereof
Min. Conversion Amount	US$1,000
Anti-Dilution Protection	Yes, as per the EB
Capital Distribution Pass-through	Yes, as per the EB
Cash settlement option	None
Reps and Warranties	Day one reps and warranties will be given by Listco as is customary for a listed company CB. Thereafter, no repetition of reps and warranties
Other Terms and Conditions	Such other terms and conditions which are standard with such offerings including the following:
	•     to timely pay any interests or redemption amount when they become due and payable subject to grace periods to be agreed; •     to maintain an office or agency in the U.S.; •     to provide financial information in the form of reports, as per SEC requirements; •     negative pledge at Listco and offshore subsidiary level. No offshore subsidiaries below the Listco level may incur any financial indebtedness. •     compliance with an agreed Consolidated Debt to Consolidated EBITDA as per the EB; •     to comply with law in all material respects; •     to maintain corporate existence; •     to carry on business subject to certain carve-outs; •     to provide notice of default; •     to comply with certain restrictions on merger if Listco is not the surviving entity after the merger;

A-2

	•     to pay additional amounts if there is a change in law that requires withholding tax, coupled with a right of Listco to redeem the Bonds as per the EB; and •     to redeem the Bonds upon the occurrence of certain fundamental events, such as a merger or change of control as per EB
Conditions Precedent	Such conditions precedent which are standard with such offerings including the following: •     constitutional documents of Listco and Opco including a certificate of good standing of Listco; •     a no registration opinion issued by a reputable national US law firm (as counsel to the issuer) customary on the offering of the CB and the exchange of the EB for the CB. •     legal opinions on due execution, authorisation, legal validity and enforceability of all documentation to be executed by Listco; •     shareholders resolution and board resolutions required to authorize the issue of the CB by Listco and its entering and execution of all documentation in connection with the issue of the CB; •     certificate of an authorized signatory of Listco the contents of which to be as per those required under the EB; and •     relevant process agent appointment letters and acceptance from the process agent for each of the documents to be entered into by Listco
Cross default	Yes, US$10,000,000 or equivalent (actual not potential)
Change of Control	Yes, if a change of control occurs, the bondholders will have an option, exercisable at their election, to redeem the Bonds for cash at the change of control early redemption amount or to convert the Bonds into Shares as per the EB
De-listing Put	Yes, if a delisting of the shares occurs, the bondholders will have an option, exercisable at their election, to redeem the Bonds for cash at the event of default early redemption amount as per the EB
Events of Default	Standard Euro-market Events of Default and Event of Default put as per the EB
Tax Gross Up	Applicable
Tax Redemption	Yes, as per the EB
Transferability	Yes
Registration Rights	Registration rights similar to those relating to the EB will be provided by Listco
Use of Proceeds	To purchase the outstanding principal amount of the EB on the IPO Date
Other terms	Other standard CB terms such as market disruption, indemnities and break costs. All reasonable out of pocket expenses incurred by the bondholders in connection with the exchange into the CB are to be reimbursed by Listco

A-3

Governing Law	New York Law
Rating	Not rated
Listing	No Listing
Closing and Payment Date	IPO Date
Settlement Date	IPO Date
Trustee	DB
Expenses	Happy Genius Holdings Limited to pay the costs and expenses (including the costs and expenses of legal counsels and other professional advisers) reasonably incurred in connection with the issue of the CB

A-4

EXECUTION COPY

AMENDED SHARE PURCHASE AGREEMENT

by and among

HAPPY GENIUS HOLDINGS LIMITED

and

MANDRA SILICON LIMITED

and

GCL SILICON TECHNOLOGY HOLDINGS INC.

Dated as of September 30, 2008

TABLE OF CONTENTS

			Page
ARTICLE I DEFINITIONS			2
	1.01	DEFINITIONS	2
	1.02	ADDITIONAL DEFINITIONS	6
	1.03	CONSTRUCTION	6
ARTICLE II PURCHASE OF SHARES AND CLOSING			7
	2.01	PURCHASE AND SALE	7
	2.02	CLOSING	7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS			8
	3.01	ORGANIZATION	8
	3.02	AUTHORITY	8
	3.03	NO CONFLICTS	9
	3.04	GOVERNMENTAL APPROVALS AND FILINGS	9
	3.05	TITLE TO ASSETS AND PROPERTIES	9
	3.06	CLOSING SHARES	10
	3.07	INTEREST IN JZPTD	10
	3.08	LEGAL PROCEEDINGS	10
	3.09	COMPLIANCE WITH LAWS AND ORDERS	10
	3.10	BROKERS	10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY			11
	4.01	ORGANIZATION	11
	4.02	AUTHORITY	11
	4.03	NO CONFLICTS	11
	4.04	INFORMATION	11
	4.05	NO U.S. PERSON	12
	4.06	NO DIRECTED SELLING EFFORTS	12
	4.07	INVESTMENT PURPOSES	12
	4.08	BROKERS	12
	4.09	ORDINARY SHARES	13
ARTICLE V CONDITIONS TO OBLIGATIONS OF THE COMPANY			13
	5.01	REPRESENTATIONS AND WARRANTIES	13
	5.02	PERFORMANCE	13
	5.03	ORDERS AND LAWS	13
	5.04	REGULATORY CONSENTS AND APPROVALS	13
	5.05	INITIAL PUBLIC OFFERING CLOSING	14
	5.06	RELEASE OF SECURITY INTERESTS	14
ARTICLE VI CONDITIONS TO OBLIGATIONS OF THE SELLERS			14
	6.01	REPRESENTATIONS AND WARRANTIES	14
	6.02	PERFORMANCE	14
	6.03	ORDERS AND LAWS	14
	6.04	REGULATORY CONSENTS AND APPROVALS	15
	6.05	INITIAL PUBLIC OFFERING CLOSING	15
	6.06	RELEASE OF SECURITY INTERESTS	15
ARTICLE VII SURVIVAL OF REPRESENTATIONS AND WARRANTIES			15
	7.01	SURVIVAL OF REPRESENTATIONS AND WARRANTIES	15

i Share Purchase Agreement

ARTICLE VIII TERMINATION			15
	8.01	TERMINATION	15
	8.02	EFFECT OF TERMINATION AND SURVIVAL	15
ARTICLE IX GOVERNING LAW AND RESOLUTION OF DISPUTES			16
	9.01	GOVERNING LAW	16
	9.02	DISPUTE RESOLUTION FORUM	16
	9.03	PERFORMANCE PENDING DISPUTE RESOLUTION	16
ARTICLE X MISCELLANEOUS			17
	10.01	ENTIRE AGREEMENT	17
	10.02	BINDING EFFECT; BENEFIT	17
	10.03	ASSIGNMENT	17
	10.04	AMENDMENT; WAIVER	17
	10.05	NOTICES	17
	10.06	COUNTERPARTS	18
	10.07	SEVERABILITY	18
	10.08	COSTS AND EXPENSES	19
	10.09	FURTHER ASSURANCES	19
APPENDIX A			A-1

ii Share Purchase Agreement

AMENDED SHARE PURCHASE AGREEMENT

This AMENDED SHARE PURCHASE AGREEMENT (this “Agreement”) dated as of September 30, 2008 is made by and among:

(1) Happy Genius Holdings Limited (“Happy Genius”), a company incorporated and existing under the laws of the British Virgin Islands and having its registered office at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands,

(2) Mandra Silicon Limited (“Mandra”; together with Happy Genius, the “Sellers”), a company incorporated and existing under the laws of the British Virgin Islands and having its registered office at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands, and

(3) GCL Silicon Technology Holdings Inc. (the “Company”), a company incorporated and existing under the laws of the Cayman Islands and having its registered office at Offshore Incorporations (Cayman) Limited, Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman KY1-1112, Cayman Islands.

Capitalized terms not otherwise defined herein have the meanings set forth in ARTICLE I.

WHEREAS:

WHEREAS, Happy Genius is the legal and beneficial owner of 82.00% of the issued share capital of each of Sun Wave Group Limited (“Sun Wave”), a company incorporated and existing under the laws of the British Virgin Islands and Greatest Joy International Limited (“Greatest Joy”), a company incorporated and existing under the laws of the British Virgin Islands;

WHEREAS, Mandra is the legal and beneficial owner of 18.00% of the issued share capital of each of Sun Wave and Greatest Joy;

WHEREAS, Sun Wave is the legal and beneficial owner of 100% of the issued share capital of each of Wise Universe Investments Limited, Excel Bond International Limited and Asia Silicon Technology Development Holdings Limited, each a company incorporated in the British Virgin Islands.

WHEREAS, Wise Universe Investments Limited, Excel Bond International Limited and Asia Silicon Technology Development Holdings Limited are the legal and beneficial owners of 100% of the issued share capital of Speedy Gain Limited, Asia Silicon Technology Development Limited and Asia Silicon Technology Development Holdings Limited respectively, each a company incorporated in Hong Kong.

WHEREAS, Speedy Gain Limited, Asia Silicon Technology Development Limited and Asia Silicon Technology Development Holdings Limited are the legal and beneficial holders of 7%, 8% and 5%, respectively, of the equity interest in Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (“JZPTD”), a limited liability company organized in the People’s Republic of China.

1 Share Purchase Agreement

WHEREAS, Greatest Joy is the legal and beneficial owner of 100% issued share capital of Richmore International Development Limited, a company incorporated in Hong Kong.

WHEREAS, Richmore International Development Limited is the legal and beneficial holder of 16% of the equity interest in JZPTD.

WHEREAS, the Sellers agree to sell to the Company and the Company agrees to purchase from the Sellers 100% in the aggregate of the issued share capital of each of Sun Wave and Greatest Joy;

WHEREAS, the Sellers and the Company agree to enter into this Agreement to govern the Sellers’ sale and the Company’s purchase of 100% of the issued share capital of each of Sun Wave and Greatest Joy;

WHEREAS, the Sellers and the Company entered into a share purchase agreement dated July 18, 2008 and have agreed to amend certain terms of such agreement in this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.01 Definitions.

The following terms shall have the following meanings for purposes of this Agreement:

“Actions or Proceedings” means any action, suit, proceeding, arbitration or any investigation or audit by any Government Authority.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person and “Affiliates” and “Affiliated” shall have correlative meanings. For the purpose of this definition, the term “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or influence the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise

“Agreement” has the meaning stated in the preamble.

2 Share Purchase Agreement

“Assets and Properties” of any Person means assets and properties of any kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including without limitation cash, cash equivalents, investment assets, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory, goods and intellectual property.

“Business Day” means a day other than Saturday, Sunday or any day on which banks located in Hong Kong are authorized or obligated to close.

“Company” means GCL Silicon Technology Holdings Inc.

“Confidential Information” means (a) any information concerning the organization, business, technology, trade secrets, know-how, finance, transactions or affairs of any Party or any Party’s Representatives (whether conveyed in written, oral or in any other form and whether such information has been furnished before, on or after the date of this Agreement), (b) any information or materials prepared by a Party or its Representatives that contains or otherwise reflects, or is generated from, Confidential Information and (c) this Agreement, the transactions contemplated hereby, the terms and conditions hereof or any discussions, correspondence or other communications among the Parties or their respective Representatives relating to this Agreement or any of the transactions contemplated hereunder.

“Contract” means any agreement, lease, license, engagement, evidence of Indebtedness, mortgage, indenture, security agreement, financial instrument, purchase order, commitment, arrangement, understanding or other contract (whether written, oral or otherwise).

“Convertible Bonds” means any of the unsecured convertible bonds having the characteristics set forth in the term sheet attached hereto as Exhibit A.

“Employee” means any officer or employee including any part-time, regular contract or fixed-term officer or employee.

“Encumbrance” means (a) any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, deed of trust, title retention, security interest or other encumbrance of any kind securing, or conferring any priority of payment in respect of, any obligation of any Person, including any right granted by a transaction which, in legal terms, is not the granting of security but which has an economic or financial effect similar to the granting of security under applicable Law, (ii) any lease, sub-lease, occupancy agreement, easement or covenant granting a right of use or occupancy to any Person, (iii) any proxy, power of attorney, voting trust agreement, interest, option, right of first offer, negotiation or refusal or transfer restriction in favor of any Person and (iv) any adverse claim as to title, possession or use.

“Equity Securities” means the capital stock, membership interests, partnership interests, registered capital or other ownership interest in any Person or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or exchangeable for, such capital stock, membership interests, partnership interests, registered capital or other ownership interests (whether or not such derivative securities are issued by such Person).

3 Share Purchase Agreement

“Environmental Laws” shall mean all national, state, regional and local laws, statutes, ordinances and regulations, in each case as amended or supplemented from time to time, and any Government Authority thereof, including orders, consent decrees or judgments relating to the regulation and protection of human health, safety, the environment and natural resources.

“GCL HK” means GCL Silicon Technology Holdings Limited.

“Government Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the Cayman Islands or of the PRC, any other country or territory or any province, state, county, city or other political subdivision of any other country or territory.

“Greatest Joy” has the meaning stated in the preamble.

“Happy Genius” means Happy Genius Holdings Limited.

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC.

“Indebtedness” of any Person means all obligations (contingent or otherwise) of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business), (iv) under capital leases and (v) in the nature of guarantees of the obligations described in clauses (i) through (iv) above of any other Person.

“JZPTD” means Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

“Law” means any law, treaty, statute, ordinance, code, rule or regulation of any Government Authority or any Order.

“Liabilities” means all Indebtedness, obligations and other liabilities of a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether due or become due).

“Licenses” means all licenses, permits, certificates of authority, authorizations, approvals, registrations, franchises and similar consents granted or issued by any Governmental Authority.

“Mandra” means Mandra Silicon Limited.

“Material Adverse Effect” means a material adverse effect on the Business or Condition of the Group Companies taken as a whole, but excluding effects attributable to (i) the transactions contemplated by this Agreement; (ii) economic, industry or market conditions and

4 Share Purchase Agreement

generally, including, without limitation, changes affecting the industry in which the Company operates; (iii) any change in laws or regulatory or political conditions affecting the wind power and energy industry and generally, including any acts of war or terrorist activities; or any change in conditions or fluctuations in financial markets.

“Memorandum and Articles” means memorandum and articles of association, the articles of incorporation, by-laws or other equivalent constitutional documents of the Company, as amended from time to time.

“Order” means any writ, judgment, decree, injunction, award or similar order of any Government Authority (in each such case whether preliminary or final).

“Ordinary Shares” means the ordinary shares, par value US$0.0001 per share, of the Company.

“Parties” means collectively the Sellers and the Company. Each of the Parties shall be referred to as a “Party.”

“Person” means an individual, firm, corporation, partnership, association, limited liability company, union, trust or estate or any other entity or organization whether or not having separate legal existence, including any Government Authority.

“Purchase Price” means:

I. If the initial public offering price of the American depositary shares representing the Company’s Ordinary Shares provides an effective price of at least $2.37 per Ordinary Share (as such Ordinary Shares are constituted as of September 30, 2008):

(a) US$240,625,000 in cash, paid to Happy Genius;

(b) US$446,875,000 principal amount of unsecured Convertible Bonds (with an agreed fair market value of US$558,200,000) to Happy Genius;

(c) 216,896,603 Ordinary Shares to Happy Genius; and

(d) 53,426,250 Ordinary Shares to Mandra.

II. If the initial public offering price of the American depositary shares representing the Company’s Ordinary Shares provides an effective price of at less than $2.37 per Ordinary Share (as such Ordinary Shares are constituted as of September 30, 2008), the Purchase Price stated in I.(a) and I.(b) shall remain the same, and the number of Ordinary Shares in I.(c) and I.(d) shall be reduced by multiplying the number of Ordinary Shares in each case by the fraction of in which the numerator is the effective initial public offering price and the denominator is $2.37.

“Representatives” means with respect to any Person, such Person’s directors, officers, Employees, agents, Affiliates, partners, counsel, legal and financial advisers, accountants, consultants and controlling persons.

5 Share Purchase Agreement

“PRC” or “China” means the People’s Republic of China and for the purposes of this Agreement, excluding the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan.

“Qualified IPO” means a firm commitment underwritten public offering of Ordinary Shares of the Company and the listing of such Ordinary Shares on a reputable international stock exchange (including without limitation stock exchanges in the United States, Hong Kong and Singapore, or any other stock exchange that is approved by the board of directors of the Company).

“Securities Act” means the United States Securities Act of 1933, as amended and the rules and regulations promulgated thereunder.

“Sellers” means Mandra and Happy Genius.

“Subsidiary” means any Person which the Company controls, directly or indirectly. For purposes of this definition, “control” has the meaning set forth above under the definition of “Affiliate.”

“Sun Wave” has the meaning stated in the preamble.

“Tax” means any form of taxation (including any value added, excise, use, personal property, use and occupancy, business and occupation, mercantile, real estate, payroll, franchise or capital gains tax), estate duty, customs duty, deduction, withholding, duty, impost, levy or fee or charge levied, collected, withheld or assessed by any Government Authority and any interest, penalty, surcharge or fine in connection therewith or any other measure of tax.

1.02 Additional Definitions.

The following terms shall have the meanings set forth in the indicated Clause of this Agreement:

Defined Terms	Articles Reference
“Closing”	2.02
“Closing Date”	2.02
“Closing Shares”	2.01
“Disclosure Schedule”	ARTICLE III
“HKIAC”	9.02(a)

1.03 Construction.

Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders. Unless otherwise specified, words such as

6 Share Purchase Agreement

“herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular clause or sub-clause of this Agreement, and references herein to “articles” or “clauses” refer to articles or clauses of this Agreement. Unless otherwise specified, references herein to the word “including” shall be deemed to be followed by words “without limitation” or “but not limited to,” as applicable, or words of similar import. In the event that any translated version of this Agreement differs from the English version, the English version shall control. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified.

ARTICLE II

PURCHASE OF SHARES AND CLOSING

2.01 Purchase and Sale.

Subject to the terms and conditions hereof, at the Closing, Happy Genius shall sell to the Company, and the Company shall purchase from Happy Genius at the applicable Purchase Price, 82 shares of Sun Wave and 82 shares of Greatest Joy free and clear of all Encumbrances, representing 82% of the issued share capital of each of Sun Wave and Greatest Joy (the “Happy Genius Shares”).

Subject to the terms and conditions hereof, at the Closing, Mandra shall sell to the Company, and the Company shall purchase from Mandra at the applicable Purchase Price, 18 shares of Sun Wave and 18 shares of Greatest Joy free and clear of all Encumbrances, representing 18% of the issued share capital of each of Sun Wave and Greatest Joy (the “Mandra Shares”; together with the Happy Genius Shares, the “Closing Shares”).

2.02 Closing.

Subject to the satisfaction or waiver of the conditions set forth in ARTICLE V and ARTICLE VI of this Agreement, the closing of the transactions contemplated under Article 2.01 (the “Closing”) shall take place at the offices of Milbank, Tweed, Hadley & McCloy LLP at Tower 2, China Central Place, Suite 1505-1506, 79 Jianguo Road, Chao Yang District, Beijing 100025, People’s Republic of China, or at such other place as the Company and the Sellers mutually agree, concurrently with the closing of the Company’s initial public offering that constitutes a Qualified IPO provided that all of the conditions set forth in ARTICLE V and ARTICLE VI hereunder have been satisfied or waived (or any other day as may be mutually agreed by the Company and the Sellers) (the “Closing Date”).

(a) At the Closing, Happy Genius shall deliver to the Company:

(i) shares aggregating 82% of the issued share capital of each of Sun Wave and Greatest Joy;

(ii) a certified copy of the updated register of members of each of Sun Wave and Greatest Joy that duly registers the name of the Company as record owner of such shares; and

7 Share Purchase Agreement

(iii) each other item that is to be completed or delivered by Happy Genius at Closing in accordance with this Agreement and applicable Law.

(b) At the Closing, Mandra shall deliver to the Company:

(i) shares aggregating 18% of the issued share capital of each of Sun Wave and Greatest Joy;

(ii) a certified copy of the updated register of members of each of Sun Wave and Greatest Joy that duly registers the name of the Company as record owner of such shares; and

(iii) each other item that is to be completed or delivered by Mandra at Closing in accordance with this Agreement and applicable Law.

(c) At the Closing, the Company shall deliver to the Sellers (as applicable):

(i) the cash portion of the Purchase Price by wire transfer of immediately available funds to an account to be designated by the Company, such account to be so designated at least two Business Days prior to the Closing;

(ii) the Ordinary Shares constituting such portion of the Purchase Price;

(iii) the unsecured Convertible Bonds constituting such portion of the Purchase Price; and

(iv) each other item that is to be completed or delivered by it at Closing in accordance with this Agreement and applicable Law.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Except as set forth in the Disclosure Schedule dated the Closing Date (the “Disclosure Schedule”) to be made part of this Agreement upon delivery thereof to the Company each of the Sellers hereby severally, and not jointly represents and warrants to the Company as of the date hereof and as of the Closing Date as follows:

3.01 Organization.

The Seller is a corporation duly organized and validly existing under the Laws of its place of incorporation and has full corporate power and authority to execute and deliver this Agreement to which it is a party and to perform its obligations hereunder and to consummate the transactions contemplated hereby. The Seller has the full corporate power and authority to conduct its business as now conducted. The Seller is duly qualified to do business in each jurisdiction in which it currently conducts business except where the failure to be so qualified would not be reasonably expected to have a Material Adverse Effect.

8 Share Purchase Agreement

3.02 Authority.

(a) The execution and delivery by the Seller of this Agreement and the performance by the Seller of its obligations hereunder have been duly and validly authorized by all necessary corporate action of the Seller.

(b) This Agreement has been duly and validly executed and delivered by the Seller and constitutes, and upon its execution and delivery, shall constitute, a legal, valid and binding obligation, enforceable against it in accordance with its terms, except as (i) the enforceability thereof may be limited by applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium and other laws of general application or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity and (ii) rights of acceleration, if any, and the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a Proceeding in equity or at law).

3.03 No Conflicts.

The execution and delivery by the Seller of this Agreement does not, and the performance by the Seller of each of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not:

(a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the Memorandum and Articles or other constitutional documents of the Seller; or

(b) subject to obtaining the consents, approvals and actions, making the filings, conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to the Seller anywhere such conflict, violation or breach would result, or would reasonably be expected to result, in a Material Adverse Effect.

3.04 Governmental Approvals and Filings.

No consent, approval or action of, filing with or notice to any Government Authority on part of the Seller is required in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

3.05 Title to Assets and Properties.

The Seller has good and marketable title to its Assets and Properties held free and clear of any mortgage, pledge, lien, encumbrance, security interest or charge of any kind with no exceptions that would interfere with the use made or to be made thereof by them where failure to comply with any of the foregoing would have or would be reasonably likely to have a Material Adverse Effect. With respect to the Assets and Properties it leases, the Seller is in compliance with such leases and, to the best of its knowledge, the Seller holds valid leasehold interests in such Assets and Properties free of any Liens, encumbrances, security interests or claims of any party other than the lessors of such Assets and Properties with no exceptions that would interfere with the use made or to be made thereof by them where failure to comply with any of the foregoing would have or would be reasonably likely to have a Material Adverse Effect.

9 Share Purchase Agreement

3.06 Closing Shares.

(a) The Happy Genius Shares will be owned at all times prior to the Closing by Happy Genius, and such shares represent valid and binding obligations of Sun Wave and Greatest Joy, enforceable against them in accordance with their terms.

(b) The Mandra Shares will be owned at all times prior to the Closing by Mandra, and such shares represent valid and binding obligations of Sun Wave and Greatest Joy, enforceable against them in accordance with their terms.

(c) The Closing Shares when sold to the Company at Closing will be duly and validly authorized and issued, fully paid and non-assessable. At the Closing, in accordance with the provisions of this Agreement, the Company will own the Closing Shares free and clear of any Encumbrance, or third party right or claim of any kind.

(d) The outstanding capital shares of the Company are duly and validly authorized and issued, credited as fully paid and non-assessable, have been issued in accordance with all applicable laws, the Company’s Memorandum and Articles of Association and any relevant securities laws or pursuant to valid exemptions therefrom.

3.07 Interest in JZPTD.

(a) The Seller is the beneficial holder of percentage of equity interest in JZPTD set forth in the preamble; and

(b) at the Closing, in accordance with the provisions of this Agreement and the acquisition of the Closing Shares, the Company will indirectly own such percentage of equity interest in JZPTD free and clear of any Encumbrance, or third party right or claim of any kind.

3.08 Legal Proceedings.

As of the date hereof, except as disclosed in the Disclosure Schedule, there are no Orders outstanding against the Seller or any Subsidiary.

3.09 Compliance With Laws and Orders.

As of the date hereof, the Seller is not or has not received any notice that it is or has been in violation of or in default under any Law or Order applicable to the Seller that would be reasonably likely to have a Material Adverse Effect.

3.10 Brokers.

All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by the Seller directly with the Company without the intervention of any Person on behalf of the Seller in such manner as to give rise to any valid claim by any Person against the Sellers or the Company for a finder’s fee, brokerage commission or similar payment.

10 Share Purchase Agreement

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to each of the Sellers as of the date hereof and as of the Closing Date as follows:

4.01 Organization.

The Company is a corporation duly organized and validly existing under the Laws of its place of incorporation. The Company has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.

4.02 Authority.

(a) The execution and delivery by the Company of this Agreement, and the performance by the Company of its obligations hereunder, have been duly and validly authorized by all necessary action.

(b) This Agreement has been duly and validly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against it in accordance with its terms, except as (i) the enforceability thereof may be limited by applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium and other laws of general application or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity and (ii) rights of acceleration, if any, and the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a Proceeding in equity or at law).

4.03 No Conflicts.

The execution and delivery by the Company of this Agreement does not, and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not:

(a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the constitutional documents of the Company; and

(b) subject to obtaining the consents, approvals and actions, making the filings, conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to the Company.

11 Share Purchase Agreement

4.04 Information.

(a) The Company acknowledge that (A) it has had the opportunity to request copies of any documents, records, and books pertaining to this investment and (B) any such documents, records and books that the Company requested have been made available for inspection by the Company, the Company’s attorney, accountant or advisors.

(b) The Company and its advisors have had a reasonable opportunity to ask questions of and receive answers from representatives of the Sellers or persons acting on behalf of the Sellers concerning this investment and all such questions have been answered to the full satisfaction of the Company.

(c) The Company has sufficient knowledge and experience in financial, Tax and business matters to enable the Company to utilize the information made available to them in connection with the transactions contemplated hereby, to evaluate the merits and risks of an investment and to make an informed investment decision.

4.05 No U.S. Person.

The Company is not a “U.S. Person” (as defined in Rule 902 of Regulation S of the Securities Act) and it understands that no action has been or will be taken in any jurisdiction by the Sellers that would permit a public offering of the Closing Shares in any country or jurisdiction where action for that purpose is required.

4.06 No Directed Selling Efforts.

No form of “directed selling efforts” (as defined in Rule 902 of Regulation S), general solicitation or general advertising in violation of the Securities Act has been or will be used nor will any offers by means of any directed selling efforts in the United States be made by the Company or any of its representatives in connection with the offer and sale of any of the Closing Shares.

4.07 Investment Purposes.

The Company acknowledges that neither the offer nor sale of the Closing Shares has been registered under the Securities Act or under the securities laws of any foreign or state Governmental Authority. The Company is acquiring the Closing Shares for its own account for investment purposes and is not acquiring the Closing Shares with a view to any distribution or resale thereof that would violate the Securities Act or the securities laws of any state of the United States or any other applicable jurisdiction. The Company has not offered or sold the Closing Shares being acquired and does not have any present intention of selling, distributing or otherwise disposing of such Closing Shares either currently or after the passage of a fixed or determinable period of time or upon the occurrence or non-occurrence of any predetermined event or circumstances in violation of the Securities Act or the securities laws of any state of the United States or any other applicable jurisdiction.

12 Share Purchase Agreement

4.08 Brokers.

All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by the Company directly with Sellers without the intervention of any Person on behalf of the Company in such manner as to give rise to any valid claim by any Person against any Seller or the Company for a finder’s fee, brokerage commission or similar payment.

4.09 Ordinary Shares.

(a) The Ordinary Shares when transferred to the Sellers at Closing will be duly and validly authorized and issued, fully paid and non-assessable. At the Closing, in accordance with the provisions of this Agreement, the Sellers will own the Ordinary Shares that are a portion of the Purchase Price free and clear of any Encumbrance, or third party right or claim of any kind.

(b) The outstanding capital shares of the Company are duly and validly authorized and issued, credited as fully paid and non-assessable, have been issued in accordance with all applicable laws, the Company’s Memorandum and Articles and any relevant securities laws or pursuant to valid exemptions therefrom.

ARTICLE V

CONDITIONS TO OBLIGATIONS OF THE COMPANY

The obligation of the Company to proceed with the Closing is subject to the fulfillment, at or before the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by the Company):

5.01 Representations and Warranties.

Each of the representations and warranties made by the Sellers in this Agreement shall be true and correct on and as of the Closing Date as though such representation or warranty was made on and as of the Closing Date except to the extent they expressly refer to another time or period, in which case they shall be true and correct as of such specific time or period, and the Sellers shall have each delivered a certificate to the Company, dated the Closing Date, to such effect.

5.02 Performance.

The Sellers shall have performed and complied with each agreement, covenant and obligation required by this Agreement to be so performed or complied with by it at or before the Closing and the Sellers shall have delivered a certificate to the Company dated the Closing Date, to such effect.

5.03 Orders and Laws.

There shall not be in effect on the Closing Date any Order or Law restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement.

13 Share Purchase Agreement

5.04 Regulatory Consents and Approvals.

All consents, approvals and actions of, filings with and notices to any Government Authority necessary to permit each of the Parties to perform its obligations under this Agreement and to consummate the transactions contemplated hereby shall have been duly obtained, made or given and be in full force and effect.

5.05 Initial Public Offering Closing.

There shall be a closing of an initial public offering of the Company’s Ordinary Shares that constitutes a Qualified IPO which shall concurrently occur on the Closing Date.

5.06 Release of Security Interests

The following assets of the Sellers, which secure the Closing Shares, shall be released to the Company after the closing of a Qualified IPO: (1) a charge over all of the assets of Sun Wave and Greatest Joy and each direct and indirect subsidiary of Sun Wave and Greatest Joy which are the direct holders of the equity interest in JZPTD, including mortgages over shares they hold in the respective subsidiaries and in the 36% equity interest in JZPTD owned by the Sellers in the aggregate; (2) a mortgage of shares in the Company owned by Happy Genius (as to 60% of the total issued share capital of the Company) and Mandra (as to 10% of the total issued share capital of the Company); and (3) a mortgage of shares in Sun Wave and Greatest Joy owned by the Happy Genius (as to 82% of the total issued share capital of Sun Wave and Greatest Joy).

ARTICLE VI

CONDITIONS TO OBLIGATIONS OF THE SELLERS

The obligation of the Sellers to proceed with the Closing is subject to the fulfillment, at or before the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by the Sellers):

6.01 Representations and Warranties.

Each of the representations and warranties made by the Company in this Agreement shall be true and correct on and as of the Closing Date as though such representation or warranty was made on and as of the Closing Date, except to the extent they expressly refer to another time or period, in which case they shall be true and correct as of such specific time or period, and the Company shall have delivered a certificate to each of the Sellers, dated the Closing Date, to such effect.

6.02 Performance.

The Company shall have performed and complied with each agreement, covenant and obligation required by this Agreement to be so performed or complied with by the Company at or before the Closing, and the Company shall have delivered a certificate to the Sellers, dated the Closing Date, to such effect.

14 Share Purchase Agreement

6.03 Orders and Laws.

There shall not be in effect on the Closing Date any Order or Law that became effective after the date of this Agreement restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement.

6.04 Regulatory Consents and Approvals

All consents, approvals and actions of, filings with and notices to any Government Authority necessary to permit each of the Parties to perform its obligations under this Agreement shall have been duly obtained, made or given and be in full force and effect.

6.05 Initial Public Offering Closing.

There shall be a closing of an initial public offering of the Company’s Ordinary Shares that constitutes a Qualified IPO which shall concurrently occur on the Closing Date.

6.06 Release of Security Interests

The charge over all the assets of the Company, including a mortgage over the shares of GCL HK and 64% of the equity interest in JZPTD shall be released to the Company after the closing of a Qualified IPO.

ARTICLE VII

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

7.01 Survival of Representations and Warranties

The representations and warranties contained in ARTICLE III and ARTICLE IV of this Agreement will survive for ninety (90) days following the Closing.

ARTICLE VIII

TERMINATION

8.01 Termination

This Agreement may be terminated, and the transactions contemplated hereby may be abandoned:

(a) by mutual written consent of the Parties; or;

(b) by written notice of the Sellers or the Company, if the Closing shall not have occurred prior to December 31, 2008 (provided that the right to terminate this Agreement under this Section 8.01(b) shall not be available to any Party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to have occurred on or before such date).

15 Share Purchase Agreement

8.02 Effect of Termination and Survival

If this Agreement is validly terminated pursuant to Article 8.01, this Agreement shall forthwith become null and void, and there shall be no further liability or obligation on the part of the Company or any of the Sellers; provided, that any right, provision or obligation of this Agreement that by its nature should survive thereafter shall survive following any such termination. Notwithstanding any other provision in this Agreement to the contrary, upon any termination of this Agreement pursuant to Article 8.01, the Company shall remain liable to the Sellers for any breach of this Agreement by the Company existing at the time of such termination, and the Sellers shall remain liable to the Company for any breach of this Agreement by the Sellers existing at the time of such termination, and the Company or the Sellers may seek such remedies in accordance with ARTICLE IX with respect to any such breach as are provided in this Agreement or as are otherwise available at Law or in equity.

ARTICLE IX

GOVERNING LAW AND RESOLUTION OF DISPUTES

9.01 Governing Law.

This Agreement and any disputes, claims or controversies arising from, related to or in connection with this Agreement shall be construed in accordance with the Laws of the state of New York of the United States, without regard to its conflict of law principles.

9.02 Dispute Resolution Forum.

(a) Any controversy or claim arising out of or relating to this Agreement, or any breach of this Agreement, shall be initiated, maintained and finally determined by binding arbitration under the auspices of the Hong Kong International Arbitration Center (the “HKIAC”) and the site of the arbitration shall be in Hong Kong. The arbitral tribunal shall be appointed within 30 days of the notice of dispute, and shall consist of three arbitrators, each opposing party to a dispute shall be entitled to appoint one arbitrator and the third shall be jointly appointed by the disputing parties or, failing such agreement within such 30-day period, the HKIAC shall appoint the third arbitrator.

(b) The arbitration proceeding shall be conducted in English. The arbitration tribunal shall apply the UNCITRAL Arbitration Rules as administered by the HKIAC at the time of the arbitration.

(c) The award of the arbitration tribunal shall be final and binding upon the disputing parties, and the prevailing party or parties may apply to a court of competent jurisdiction for enforcement of such award.

(d) Any party shall be entitled to seek preliminary injunctive relief from any court of competent jurisdiction pending the constitution of the arbitral tribunal.

16 Share Purchase Agreement

9.03 Performance Pending Dispute Resolution

Unless otherwise terminated in accordance with the terms hereof, this Agreement and the rights and obligations of the Parties hereunder shall remain in full force and effect during the pendency of any proceeding under Article 9.02.

ARTICLE X

MISCELLANEOUS

10.01 Replacement of Share Purchase Agreement

This Agreement shall restate, replace and supercede the share purchase agreement entered into by the Sellers and the Company dated July 18, 2008 in its entirety.

10.02 Entire Agreement

This Agreement constitutes the whole agreement among the parties hereto relating to the subject matter hereof and supersedes all prior agreements or understandings both oral and written among all of the parties hereto relating to the subject matter hereof.

10.03 Binding Effect; Benefit

This Agreement shall inure to the benefit of and be binding upon the Parties and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Parties, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

10.04 Assignment

No Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the written consent of the other Parties.

10.05 Amendment; Waiver

(a) This Agreement may not be amended, modified or supplemented except by a written instrument executed by each of the Parties.

(b) No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the Party waiving such provision. No failure or delay by a Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Without limiting the foregoing, no waiver by a Party of any breach by any other Party of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

17 Share Purchase Agreement

10.06 Notices.

Each notice, demand or other communication given or made under this Agreement shall be in writing and delivered or sent to the relevant Party at its address or fax number set out below (or such other address or fax number as the addressee has by five days’ prior written notice specified to the other Parties). Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been delivered (a) if delivered in person or by messenger, when proof of delivery is obtained by the delivering Party; (b) if sent by post within the same country, on the third day following posting, and if sent by post to another country, on the fifth day following posting, and (c) if given or made by fax, upon dispatch and the receipt of a transmission report confirming dispatch. The initial address and facsimile for the Parties for the purposes of this Agreement are:

(a) if to Happy Genius, to:

Address:	C/O GCL Silicon Technology Holdings Inc. Suite 3601, Two Exchange Square Central, Hong Kong
Attention:	Richard Li/ David Fung
Fax No.:	852 2526 7638

(b) if to Mandra, to:

Address:	10th Floor, Fung House, 19-20 Connaught Road Central, Hong Kong
Attention:	Song-Yi Zhang
Fax No.:	852 3113 8252

(c) if to the Company, to:

Address:	Suite 3601, Two Exchange Square, Central, Hong Kong
Attention:	Hunter Jiang
Fax No.:	852 2526 7638

18 Share Purchase Agreement

10.07 Counterparts

This Agreement may be signed in any number of counterparts including counterparts transmitted by facsimile, each of which shall be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

10.08 Severability

If any provision contained in this Agreement shall for any reason be determined to be partially or wholly invalid, illegal or unenforceable by any court of competent jurisdiction, such provision shall be of no force and effect to the extent so determined, but the invalidity, illegality or unenforceability of such provision shall have no effect upon and shall not impair the validity, legality or enforceability of any other provision of this Agreement.

10.09 Costs and Expenses

Costs and expenses incurred by any Party in connection with its business, technical, legal and financial due diligence and otherwise arising from, related to or in connection with the preparation, execution, delivery and performance of this Agreement and each other Transaction Document shall be borne by such Party.

10.10 Further Assurances

Each Party shall give such further assurance, provide such further information, take such further actions and execute and deliver such further documents and instruments as are, in each case, within its power to give, provide and take so as to give full effect to the provisions of this Agreement.

(Signature page follows)

19 Share Purchase Agreement

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

HAPPY GENIUS HOLDINGS LIMITED

By:                                                                       

Name:                                                                   

Title:                                                                     

MANDRA SILICON LIMITED

By:                                                                        

Name:                                                                   

Title:                                                                     

GCL SILICON TECHNOLOGY HOLDINGS INC.

By:                                                                        

Name:                                                                   

Title:                                                                     

EXHIBIT A

CONVERTIBLE BOND TERM SHEET

GCL SILICON TECHNOLOGY HOLDINGS INC. 3% CONVERTIBLE BOND TERM SHEET

Capitalized terms used but not herein defined shall have the meanings set forth in the Subscription Agreement, dated June 5, 2008, between Happy Genius Holdings Limited and the purchasers set forth on Schedule 1 thereto.

GCL SILICON TECHNOLOGY HOLDINGS INC. CONVERTIBLE BONDS
	INDICATIVE TERMS
Issuer	GCL SILICON TECHNOLOGY HOLDINGS INC. (Listco)
Opco	(formerly known as ), a wholly foreign owned enterprise established under the laws of the PRC between GCL (HK), Asia Silicon Technology Development Limited, Asia Silicon Technology Development Holdings Limited, Speedy Gain Limited and Richmore International Development Limited.
Investor	EB holders on IPO Date
EB	Exchangeable Bond due 2010 issued by Happy Genius Holdings Limited
Description of Security	Bonds convertible into common shares of Listco, at the option of the bondholders (CB)
Status	Direct, senior, unsubordinated and unsecured
Offer Size	Outstanding principal amount of the EB on the IPO Date, following partial redemption upon a Complying IPO, as per the EB, split into the following classes: •      Class A – 50% of the outstanding principal amount •      Class B – 25% of the outstanding principal amount •      Class C – 25% of the outstanding principal amount
Currency	US dollars
Maturity	1.5 year after the IPO Date
Coupon	3.00%

A-1

Issue Price	100.00%
Redemption Price	100.00 %
Yield	3.00% per annum calculated on a semi-annual basis
Day Count Fraction	30/360
Conversion Price	IPO Price
Conversion Period	As per the EB in accordance with the following table:
	Class of CB                            Convertible from Class A                                   IPO + 6 months Class B                                    IPO + 9 months Class C                                    IPO + 12 months
Min. Denomination	US$100,000 and integral multiples of US$1,000 in excess thereof
Min. Conversion Amount	US$1,000
Anti-Dilution Protection	Yes, as per the EB
Capital Distribution Pass- through	Yes, as per the EB
Cash settlement option	None
Reps and Warranties	Day one reps and warranties will be given by Listco as is customary for a listed company CB. Thereafter, no repetition of reps and warranties
Other Terms and Conditions	Such other terms and conditions which are standard with such offerings including the following:
	•      to timely pay any interests or redemption amount when they become due and payable subject to grace periods to be agreed; •      to maintain an office or agency in the U.S.; •      to provide financial information in the form of reports, as per SEC requirements; •      negative pledge at Listco and offshore subsidiary level. No offshore subsidiaries below the Listco level may incur any financial indebtedness. •      compliance with an agreed Consolidated Debt to Consolidated EBITDA as per the EB; •      to comply with law in all material respects; •      to maintain corporate existence; •      to carry on business subject to certain carve-outs; •      to provide notice of default; •      to comply with certain restrictions on merger if Listco is not the surviving entity after the merger;

A-2

	•      to pay additional amounts if there is a change in law that requires withholding tax, coupled with a right of Listco to redeem the Bonds as per the EB; and •      to redeem the Bonds upon the occurrence of certain fundamental events, such as a merger or change of control as per EB
Conditions Precedent	Such conditions precedent which are standard with such offerings including the following: •    constitutional documents of Listco and Opco including a certificate of good standing of Listco; •    a no registration opinion issued by a reputable national US law firm (as counsel to the issuer) customary on the offering of the CB and the exchange of the EB for the CB. •    legal opinions on due execution, authorisation, legal validity and enforceability of all documentation to be executed by Listco; •    shareholders resolution and board resolutions required to authorize the issue of the CB by Listco and its entering and execution of all documentation in connection with the issue of the CB; •    certificate of an authorized signatory of Listco the contents of which to be as per those required under the EB; and •    relevant process agent appointment letters and acceptance from the process agent for each of the documents to be entered into by Listco
Cross default	Yes, US$10,000,000 or equivalent (actual not potential)
Change of Control	Yes, if a change of control occurs, the bondholders will have an option, exercisable at their election, to redeem the Bonds for cash at the change of control early redemption amount or to convert the Bonds into Shares as per the EB
De-listing Put	Yes, if a delisting of the shares occurs, the bondholders will have an option, exercisable at their election, to redeem the Bonds for cash at the event of default early redemption amount as per the EB
Events of Default	Standard Euro-market Events of Default and Event of Default put as per the EB
Tax Gross Up	Applicable
Tax Redemption	Yes, as per the EB
Transferability	Yes
Registration Rights	Registration rights similar to those relating to the EB will be provided by Listco
Use of Proceeds	To purchase the outstanding principal amount of the EB on the IPO Date
Other terms	Other standard CB terms such as market disruption, indemnities and break costs. All reasonable out of pocket expenses incurred by the bondholders in connection with the exchange into the CB are to be reimbursed by Listco

A-3

Governing Law	New York Law
Rating	Not rated
Listing	No Listing
Closing and Payment Date	IPO Date
Settlement Date	IPO Date
Trustee	DB
Expenses	Happy Genius Holdings Limited to pay the costs and expenses (including the costs and expenses of legal counsels and other professional advisers) reasonably incurred in connection with the issue of the CB

A-4

EX-10.30

Exhibit 10.30

Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.

Phase IV (Inner Mongolia Xilinguole Zhongneng Polysilicon Co., Ltd.

(in the process of formation))

Sales Contract

for

[Reactor (24-pair electrodes design)]

Buyer: Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV Inner Mongolia Xilinguole Zhongneng Polysilicon Co., Ltd. (in the process of formation)

Seller: Shanghai Morimatsu Mixing Technology Engineering Co., Ltd.

Contract No.: NMZN0051

Content

1. Definitions	3
2. Subject Matter	5
3. Scope of Supply	6
4. Contract Price	7
5. Payment	7
6. Delivery and Transportation	8
7. Packing and Labeling	10
8. Technical Service and Liaison	13
9. Quality Supervision and Inspection	14
10. Installation, Commissioning, Single Machine Trial Run, Combined Test Run with Water, Feed and Trial, and Acceptance	17
11. Warranty and Claim	20
12. Insurance	21
13. Expenses of Taxation	22
14. Outsourcing	22
15. Modification, Amendment and Termination of Contract	22
16. Liability for Breach of Contract	23
17. Force Majeure	24
18. Dispute Settlement	24
19. Effectiveness of Contract	25
20. Miscellaneous	25
Page for Signature and Seal	27
Attachment I Technology Agreement
Attachment II Price List
Attachment III Delivery Schedule
Attachment IV Confirmation Letter, Letter of Undertaking

Sales Contract

The contract is concluded by the two parties as follows on September 12^th, 2008 in Xuzhou.

Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV Inner Mongolia Xilinguole Zhongneng Polysilicon Co., Ltd. (in the process of formation) (“Buyer”), with legal address of West of No. 3 Electricity Factory of Xilinguole Avenue, Xilinhot.

Shanghai Morimatsu Mixing Technology Engineering Co., Ltd. (“Seller”), with legal address at No. 29 Jinwen Road, Nanhui District, Shanghai.

To supply the Reactor, Spare Parts and Components, and special tools of Polysilicon Phase IV Project of “Zhongneng Polysilicon—Inner Mongolia Xilinguole” and to provide the Technical Service related thereto, Buyer will purchase from Seller, and Seller will sell to Buyer equipment listed under this Contract (including Attachments) and provide Technical Service, technical materials, Spare Parts and Components and special tools, etc as stipulated herein. Therefore, bound by law and in line with provisions of existing laws and regulations of China, both parties agree to conclude the following Articles.

1. Definitions

Meaning of following words in the Contract and Attachments are defined as below.

1.1 The “Buyer” refers to Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV Inner Mongolia Xilinguole Project, including its agent, successor and assignee.

1.2 The “Seller” refers to Shanghai Morimatsu Mixing Technology Engineering Co., Ltd., including its agent, successor and assignee.

1.3 “Contract” refers to all parts contained in this Contract and Attachments.

1.4 “Contract Price” refers to provision described in Article 4 hereof.

1.5 “Effective Date” refers to the effective date described in Article 19 hereof.

1.6 “Technical Materials” refers to documents required for the design, manufacture, Manufacturing Supervision, inspection, installation, commissioning, checking and acceptance, performance test and technical guidance relating to the Contract

Equipment and the project, (including drawing, explanations, standard, statement and manual, various software, etc.) applied in project operation and maintenance as specified in Attachment I hereof.

1.7 “Contract Equipment” refers to machines, equipments, materials, special tools, Spare Parts and Components and various goods, detailed content and requirements are listed and prescribed in Attachment I hereof.

1.8 “Manufacturing Supervision” refers to a representative of Buyer (or the representative of a qualified Manufacturing Supervision Unit appointed by Buyer) assigned to supervise, during the manufacturing process, quality of key parts of Contract Equipment supplied by Seller, and to implement documentation validation and field validation. Such quality supervision will not relieve the responsibility of Seller for the quality of Contract Equipment.

1.9 “Performance Acceptance Test” refers to test carried out per provisions of Attachment I hereof to test the guaranteed performance value as specified in Attachment I hereof.

1.10 “Preliminary Inspection and Acceptance” refers to the joint inspection and acceptance carried out by Buyer upon each set of equipment when the result of Performance Acceptance Test shows that equipment has reached the guaranteed value specified in Attachment I hereof.

1.11 “Final Inspection and Acceptance” refers to inspection and acceptance by Buyer regarding each set of Contract Equipment upon expiration of guarantee period.

1.12 “Day, Month and Year” refers to day, month and year of the Gregorian calendar; each “Day” refers to 24 hours, while “Week” refers to 7 days.

1.13 “Project” refers to Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV Inner Mongolia Xilinguole Project.

1.14 “Technical Service” refers to the full-process service furnished by Seller of technical instruction, cooperation and training etc. in relation to the Contract Equipment with respect to engineering design, equipment Manufacturing Supervision, inspection, civil work, installation, commissioning, inspection and acceptance, Performance Acceptance Test, running and repair related to the Contract Equipment.

1.15 “Site” refers to Buyer’s premises for Contract Equipment installation which is located in the City of Xilinguole, Inner Mongolia Autonomous Region.

1.16 “Spare Parts and Components” refers to spare parts for equipment provided as per the Contract, including Spare Parts and Components accompanying the delivery as well as Spare Parts and Components sufficient for 4-year running of the equipment.

1.17 “Single Unit Trial Run”, “Water Inter-Linkage” and “Loaded Trial Run” refers to single unit trial run, water inter-linkage and loaded trial run in accordance with relevant PRC governmental standard and any amendments thereto.

1.18 “Construction” refers to Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV Inner Mongolia Xilinguole Project.

1.19 “Written Document” refers to any manuscript, printed document or typed document or document bearing seal and/or signature.

1.20 “Subcontractor” or “Sub-Supplier” refers to any legal person or any successor thereof to which Seller subcontracts any part of goods supply within the scope of the Contract.

1.21 “The Last Batch of Delivery” refers to that batch of goods after the delivery of which the total value of the delivered Contract Equipment would amount to over 98% of the total Contract Equipment price, and the remaining undelivered equipment would not affect the installation, commissioning, Single Unit Trial Run, water inter-linkage, loaded trial run and Performance Acceptance Test of the Contract Equipment.

1.22 “Equipment Fault” refers to condition when the Contract Equipment (incl. parts, raw materials, cast and forged parts, original parts, etc) cannot meet the performance and quality criterion specified in the Contract and/or cannot satisfy the requirement of project stability, reliability, safety and economic operation.

2. Subject Matter

Equipment ordered under the Contract will be used in the Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV Inner Mongolia Xilinguole Project. Seller shall provide equipment, Technical Materials and service etc. to Buyer as per the prescribed conditions and schedule hereof.

2.1 Equipment Name and Quantity

Equipment name: Reactor (24-pair electrodes design)

Quantity: 60 sets.

2.2 Equipment provided by Seller shall be brand-new, technologically advanced and mature and reliable.

2.3 See technical agreement (which is Attachment I hereof) for technical specifications, technology and economic indicators, performance of the equipment, Technical Materials and Technical Services provided by Seller etc.

2.4 Where it’s deemed necessary by Buyer, Seller shall dispatch appropriate, experienced, healthy and capable staff to provide Technical Service to ensure the correct installation, commissioning, maintenance and operation of Contract Equipment, and any such staff dispatched to site shall comply with the safety management agreement signed by the parties, which is related to this Contract.

2.5 Seller shall provide accompanying Spare Parts and Components to Buyer as provided in the Contract and prepare Spare Parts and Components as provided in Article 3 hereof; in addition, where required by Buyer, Seller shall repair equipment as provided herein.

2.6 During the term of the Project, Seller shall provide any new operation experience and information obtained to Buyer for free and shall inform Buyer of any confirmed improvement in terms of technology and safety which is applicable to the Contract Equipment.

2.7 Special tools provided by Seller shall meet requirements in terms of transportation, storage, protection, lifting, installation, commissioning and maintenance of the equipment on site.

2.8 Seller shall perform its other responsibilities and duties otherwise as provided hereunder.

3. Scope of Supply

3.1 See Attachment II for the scope of supply hereof.

3.2 Both parties hereto agree that the equipment to be provided pursuant to this Contract shall be subject to Attachment II, which shall include all Contract Equipment, Technical Materials, special tools, Spare Parts and Components and Technical Service. However, in case of any omission and shortage during contract performance that is not listed in the delivery list but should have been included in the scope of goods to be supplied, or which is necessary to meet the performance guarantee value of the Contract Equipment as stipulated in Attachment I, Seller shall supply to Buyer such omitted equipment, technical material, special tool, Spare Parts and Components etc. without any additional cost to Buyer.

4. Contract Price

4.1 The per reactor price is ***, and the total Contract Price is ***.

The Contract Price include expenses of Contract Equipment (incl. Spare Parts and Components), Technical Materials, Technical Service and installation guidance tax, packing cost, freight, insurance and miscellaneous fees relating to the contract.

4.2 See Attachment II for break-down price of the total Contract Price; in case of any conflict between the total Contract Price and the sum of break-down price, the contract unit price shall prevail.

The contract unit price (expect under the circumstances provided in Note 4 of Attachment II) shall remain unchanged during the contract term.

4.3 Seller agrees to provide Spare Parts and Components required to meet various indicators provided in Attachment II hereof to Buyer for the four years after the effectiveness of the Contract based upon the following conditions (whereas Buyer shall not have the obligation to purchase from Seller such items):

1. The purchase price shall be the price set forth in Attachment II (which includes freight and insurance fees, etc.); in case a relevant price is unavailable in Attachment II, the purchase price shall be the market price of the Spare Parts and Components at the time when the Contract comes into effect.

2. Other terms of such sale and purchase shall be subject to the friendly negotiation of both parties hereto.

5. Payment

5.1 The currency applied in the Contract shall be RMB.

5.2 Method of payment: T/T (wire transfer)

5.3 Payment

5.3.1 Advance Payment

Buyer shall pay *** as advance payment to Seller within *** upon signing this Contract, and Seller shall provide receipt of such payment (one original and four copies).

5.3.2 *** prior to the shipment of the equipment, Buyer shall pay ***, and Seller shall provide receipt of such payment to Buyer (one original and four copies).

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

5.3.3 After the delivery arriving the Site, within *** after Buyer’s issuance of the test acceptance certificate against the equipment, Buyer shall pay ***, and in no event shall the payment be made later than *** after the delivery to the Site. Seller shall provide a formal receipt evidencing the payment and a quality warranty L/C equal to ***.

5.3.4 If the delivery is delayed as a result of Buyer’s request due to Site conditions or other reasons, Buyer’s obligation to make timely payment shall not be waived.

6. Delivery and Transportation

6.1 Delivery schedule and sequence of Contract Equipment delivery shall meet the requirements of project Construction, equipment installation progress and sequence as well as the requirements in Attachment III attached hereto to ensure the project progress.

6.2 Delivery schedule, location and receiving unit

6.2.1 Delivery term: specified in Attachment III.

6.2.2 Delivery location: West of No. 3 Electricity Factory of Xilinguole Avenue, Xilinhot.

6.2.3 Receiving unit: on-site representative of Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV (Inner Mongolia Xilinguole Zhongneng Polysilicon Co., Ltd.), telephone:

fax:

recipient: Xu Dongjun: 15047189998/ 13218553388.

6.3 Within *** upon the effectiveness of the Contract, Seller shall provide the production plan to Buyer as provided in Attachment I and Attachment III of the Contract, which shall include the name of the equipment to be delivered in each batch, primary delivery plan, master schedule of equipment and master packaging index under the Contract. *** before the commencement of goods delivery, Seller shall provide Buyer with the information provided in Article 6.6 by telex or fax (“delivery notice”).

6.4 However, in case of any damage, deficiency, shortage or condition inconsistent with the specified quality standard and regulations in the Contract is discovered upon inspection of the goods, the delivery date of such batch of goods shall be the date when Seller corrects its noncompliance.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

6.5 Seller shall go through the transportation tool plan required for delivering Contract Equipment to the carrier, be responsible for the transportation and insurance etc. of Contract Equipment from Seller’s premises to the delivery destination, including all expenses related therewith.

6.6 Upon the preparation of each batch of equipment and within *** from the dispatch of the transporting vehicle, Seller shall inform Buyer of the following content by telex or fax:

(1) Contract number;

(2) Equipment number;

(3) Preparation and dispatch date of equipment;

(4) Name, code and price of goods;

(5) Gross weight of goods;

(6) Total volume of goods;

(7) Total pieces packaged;

(8) Name of carrier, delivery station/port name, vehicle number/vessel number and packing number;

(9) Name, weight, volume and number of each piece over 20 tons in weight or over 9x3x3m in dimension. For each piece of such equipment/part, the center of gravity and lifting position shall be marked, including sketch map thereof.

(10) For special articles (flammable, explosive and toxic articles and other hazardous substances, equipment or articles having special requirements with respect to environmental variables like temperature etc. and vibration during transportation), name, nature, special protective measures, preservation manner and treatment of incidents etc. shall be specially marked.

6.7 For articles not covered in Attachment I and Attachment III (excl. Spare Parts and Components listed in Article 4.4 hereof), Seller shall deliver the same in coordination with the project progress if required by Buyer.

6.8 In case of any equipment (or parts) damage or potential equipment (parts) fault caused or in existence by reason attributable to Seller during the warranty term, and which has been replaced by Spare Parts and Components in storage, Seller shall replenish the Spare Parts and Components *** and deliver them to the destination station/port designated within *** at the latest at the Seller’s expense and inform Buyer of it.

6.9 Seller shall, subject to provisions in Attachment I and Attachment III, provide Buyer with Technical Materials to satisfy the requirements of project design, supervision, Construction, commissioning, test, inspection, training, operation and maintenance in several batches. Seller shall, as provided in Attachment I and Attachment III hereof, provide *** of Technical Materials for each set of equipment. In addition, Seller shall, within seven days upon the effectiveness of the Contract, submit the submission schedule of

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

the abovementioned Technical Materials (excluding the fundamental materials provided in Article 8.1) pursuant to the delivery schedule set forth in Attachment I and Attachment III to Buyer for approval, and Seller shall make proper modification as required by Buyer.

6.10 Technical Materials shall be delivered within *** after the equipment delivery and shall usually be delivered by mail or courier. Within *** of submitting Technical Materials to postal office or courier company, Seller shall inform Buyer and the Project team of the mailing date and mail slip number for the Technical Materials delivered, detailed list of Technical Materials, pieces and pages, weight and contract number etc. in the form of fax or telex. Technical Materials shall be mailed to the address of Buyer as provided in the Contract.

6.11 The date of Buyer’s on-site acceptance of documents shall be deemed as the actual delivery date of documents provided by Seller. The date of delivery of the final version of documents shall be deemed as the actual delivery date of relevant documents. Such delivery date may serve as a basis for calculating default penalty for any delayed delivery of documents. In case any insufficiency, loss or damage without any fault of Buyer shall be discovered in any technical data when inspected by the representative of Buyer or of Seller, Seller shall *** upon receiving any notification signifying the same from Buyer make up the insufficiency, the missing or the damaged documents for free. In case any insufficiency, loss or damage with fault of Buyer should be discovered, Seller shall within *** upon receiving any notification signifying the same from Buyer make up the insufficiency, the missing or the damaged documents for free.

6.12 Seller shall notify Buyer of the delivery date in a written form *** in advance. Buyer may send a representative or representatives to the factory of Seller and to loading stations of Seller to inspect packing quality and supervise loading conditions. In case such representative(s) of Buyer fail to participate in such inspections on schedule, Seller shall have right to dispatch the equipments. Inspections and/or supervision of such representatives as aforesaid shall not exempt any responsibility of Seller.

6.13 In case any of the equipment should be damaged or missing prior to delivery, Seller shall as per provisions of Article 11 of the Contract be responsible for repairing and/or replacing such equipment immediately. In case the Contract Equipment should be damaged or lost during the course of transport, Seller shall be responsible for contacting the carrier and its insurance company and shall repair or make up the equipment for free so as to meet requirements of engineering progress.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

7. Packing and Labeling

7.1 Any and all equipments as may be delivered by Seller shall have proper packing suitable for long-distance transportation, multiple delivery and loading & unloading as per provisions of GB191-73 regarding packing, storage and delivery instructions and marks as well as relevant provisions of competent PRC national authorities. Packing materials provided by Seller shall be sufficient to keep goods sound and safe during transport, loading and unloading and shall be provided with measures relating to reducing vibration and anti-shock. In case such packing materials provided by Seller is unable to keep the equipment inside them safe and sound, Seller shall compensate Buyer for any resulting issues in the design structures of the equipment. Packing shall be provided as per characteristics of equipment with protection measures regarding to anti-damp, mildew-proof, rust prevention and anti-corrosion, ensuring that the equipments may be delivered to the site without any damage and corrosion. Before packing, Seller shall inspect and clean the equipments as per the whole set of equipments, making sure that there are no foreign objects and ensuring the completeness of components and spare parts.

7.2 Seller shall mark clearly the numbers of components and spare parts in the packing boxes and bales as per the assembly drawings.

7.3 Seller shall on both sides of each packing box use fade-proof oil paint to print the following marks conspicuously in Chinese:

(1) Contract number;

(2) Destination station/port;

(3) Consigner and consignee;

(4) Name of equipments, equipment number, and drawing number;

(5) Box number/bale number;

(6) Gross weight/net weight (kg);

(7) Volume (length * width * height, in mm)

For goods exceeding two tons (inclusive), Seller shall on the side of the packing boxes mark the center of gravity and lifting point with proper signs and patterns as normally adopted for transportations for giving assistance to loading, unloading and handing. As per characteristics of goods and in line with requirements on loading & unloading and transportation, the packing boxes shall be clearly printed with “Handle with care”, “Keep upright” and/or “Caution against rain”, “Caution against damp”, etc.

7.4 As to goods shipped without packaging, Seller shall employ metal labels or directly mark relevant particulars as aforesaid on the goods. For large goods, sufficient racks or stow woods shall be provided.

7.5 For each piece of packing box, detailed packing list and qualification certificate including names of equipments, quantity, price, equipment number, and drawing number shall be provided. For outsourced packing boxes, a factory qualification certificate and a

specification shall be provided within them. Two lists describing the items in the packing boxes shall be mailed.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

7.6 Spare parts and components set forth in Attachment I shall be respectively packed in sets and shall be marked clearly outside the packing boxes and shall be delivered in one shipment.

7.7 Spare parts and components shall be packed separately and marked with particulars as provided in Article 7.2 and Article 7.3. Special tools shall also be separately packed.

7.8 Loosened components of equipments of various kinds shall be properly packed in boxes with appropriate sizes and shall as possible be delivered in a single vehicle so as to reduce costs.

7.9 Grid type boxes and/or similar packing shall be properly packed and shall be able to prevent theft and from being damaged by other articles or rainwater.

7.10 Any and all openings of any pipe, pipeline, valve and other equipments shall be protected by protection covers or be protected with any other method.

7.11 Seller and/or any Subcontractor of Seller shall not employ the same box number to mark any two boxes.

7.12 As to any goods with clear and clean processing surfaces requiring for special packing, the processing surface shall be protected by employing excellent and durable protection layers (never employ oil paint) so as to protect it from rust and/or damage before installation.

7.13 Any and all technical data be delivered by Seller to Buyer shall employ such packing as may be suitable for long-distance transportation and with such functions like multiple moves, rainwater proof and damp proof.

The cover of each bale of technical data shall specify the following particulars:

(1) Contract number;

(2) Consignor and consignee;

(3) Destination station/port;

(4) Gross weight;

(5) Box number/bale number.

Each bale of technical data shall be enclosed with two copies of lists in details, signifying the serial number, document number, name and pages.

7.14 In case goods should be damaged or lost due to improper packing of Seller or improper storage, regardless of the time of discovery, Seller shall when confirmed repair, replace or indemnify as per the Contract. In case any goods should be damaged or lost during the course of transport, Seller shall be responsible for contacting the carrier department or the insurance company; as such, Seller shall as possible make up such goods so as to meet the requirements of Construction works.

7.15 Buyer shall within *** after checking out the equipment return any dedicated railway packing boxes, packing racks, etc. to Seller at expense of Seller.

8. Technical Service and Liaison

8.1 Seller shall within *** after effectiveness of the Contract submit to Buyer through mail with an organization plan for implementation of the service works stipulated in Article 8.2 and shall make such organization plan in duplicate for verification by Buyer and shall make relevant modifications as per requirements of Buyer.

8.2 Details of expenses for technical liaison meeting, times, quorum and place are provided in Attachment I and the tender documents as submitted by Seller (in case of any discrepancy between the two, provisions of the Attachment I shall prevail).

8.3 Seller shall when necessary invite Buyer to participate in the technical design process of Seller and explain issues relating to such technical design to Buyer.

8.4 In case of any major issue requiring immediate research and negotiations of the parties, any party may convene a meeting and the other party under normal circumstances shall attend the meeting.

8.5 As to each meeting and any other contact modes, the parties shall prepare conference summaries or liaison summaries and summaries so made shall be executed by both parties. In case any clause of the Contract should be modified, such modification shall be approved by legal representatives or authorized representatives of the parties before taking effect.

8.6 Buyer shall have right to distribute any and all data (supplied by Seller) in connection with the Contract Equipment to each party involved in the Project or work and such distributions shall not be deemed as an infringement or infringements, provided that Buyer shall not supply the same to any third party without any connection with the Project or work.

8.7 As to any and all data affixed with words “Confidential documents”, whether of Buyer or of Seller, the parties shall be responsible for keeping such data confidential.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

8.8 Where any Subcontractor of Seller requests any Technical Services regarding the Contract Equipment or needs to conduct onsite work, Seller shall be responsible for the organization of such Subcontractors at its own expenses with the agreement of Buyer.

8.9 Seller shall bear any and all responsibilities regarding supply of equipments (including subcontracting and outsourcing), equipment and technical interface, Technical Services, technical data, etc. But if any design drawings submitted by the designing institutions should have any mistake, Seller shall not be held responsible.

8.10 As to other equipments & devices required in connection with the Contract Equipment, Seller shall be responsible for providing interfaces and technical cooperation and shall not make Buyer bear any extra expense that arises therefrom other than the Contract Price.

8.11 Any and all onsite technicians as may be appointed by Seller shall be full of practical experiences and competent for works for the project. A full list of such technicians shall be submitted to Buyer within *** of effectiveness of the Contract for verification by Seller.

Details regarding Technical Services are provided in Attachment I.

9. Quality Supervision and Inspection

9.1 Quality Supervision

9.1.1 Seller shall within *** upon effectiveness of the Contract provide Buyer with a list regarding standards on design, manufacturing and inspection of the Contract Equipment. Standards of design, manufacturing and inspection shall comply with provisions of Attachment I hereof.

9.1.2 Subject to the consent of Seller, Buyer may entrust a competent supervision entity to supervise equipment manufacture, inspections and pre-delivery examination, and to gather information regarding equipment installation, inspection, trial run and packing quality and to provide confirmation. Such manufacturing supervision and inspection shall adhere to the relevant standard set forth in Attachment I. Seller shall coordinate with such entity for Manufacturing Supervision and during the process of Manufacturing Supervision provide relevant data and standards to such entity without delay and free of charge.

9.1.3 Details of range of Manufacturing Supervision and specific projects for Manufacturing Supervision inspection/witness are provided in Attachment I.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

9.1.4 Seller shall provide the following items for the stationed representative of the Buyer and Manufacturing Supervision representative as may be entrusted by Buyer:

9.1.4.1 At feeding for the Contract Equipment, production plan for the whole set of equipments together with actual production schedule for each month and inspection plan for each month;

9.1.4.2 *** in advance, provide contents regarding Manufacturing Supervision and schedule on inspections;

9.1.4.3 Standards (including factory standards), drawings, data and workmanship in connection with Manufacturing Supervision of the Contract Equipment, and records on actual technological process and inspections (including interim inspection records and/or inconsistency reports) together with relevant documents and copies as provided in Attachment I.

9.1.4.4 Conveniences relating to work and life of the Manufacturing Supervision representative.

9.1.5 Generally, Manufacturing Supervision inspection/witness (usually onsite witness) shall not interfere with the normal production process (excluding stoppage and inspection for any major failure discovered) of the plant, and such supervision shall be conducted by taking into consideration the actual production process of Seller’s plant. In case the Manufacturing Supervision representative should fail to be present at the site according to the schedule provided to Seller, works for tests in the plants of Seller may go on being conducted and conclusions of such tests shall be effective, provided that the Manufacturing Supervision representative shall be entitled to after that be informed of such tests, review and reproduce inspection reports and tests conclusions (namely, witness of documents).

9.1.6 In case the Manufacturing Supervision representative should during Manufacturing Supervision find out any quality problem or inconformity to standards or packing requirements, the Manufacturing Supervision representative shall have right to put forward suggestions and decline to make its signature temporarily. Seller shall then take relevant improvement measures so as to ensure an excellent quality level of equipments to be delivered. Whether the Manufacturing Supervision representative requests or knows or not, Seller shall have responsibility to actively and punctually notify the Manufacturing Supervision representative of any and all major quality defects and problems discovered during the course of manufacturing of the Contract Equipment and shall not seek to conceal such issues, nor shall Seller handle such issues at its own discretion without notifying the supervision unit.

9.1.7 Whether the Manufacturing Supervision representative participates in Manufacturing Supervision and/or leaves factory inspection, and/or the Manufacturing Supervision representative assists in Manufacturing Supervision and/or leaves factory

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

inspection, when reports regarding Manufacturing Supervision and inspections have been signed, such facts shall not be deemed as an exemption of any responsibility regarding to quality warranty of Seller as provided in the Contract, nor shall any responsibility for the Contract Equipment of Seller be released.

9.2 Factory Inspection and Onsite Opening-Box Inspection

9.2.1 Any and all Contract Equipment/components (including subcontracting and outsourcing) to be provided by Seller shall during the period of manufacturing be strictly inspected and tested and any and all inspections, tests and assembly shall be formally recorded. Eligible equipment may be delivered out of the factory only when all works as aforementioned have been completed. Any and all recording documents so prepared complete with qualification certificate shall act as part of technical data be mailed to Buyer for filing. As such, Seller shall also along with accompanied documents provide qualification certificate and quality certificate documents.

9.2.2 Buyer shall conduct opening-box inspections upon arrival of equipment and shall notify Seller of the date for such opening-box inspections *** in advance. Seller shall as per requirements specified in such notifications as may be served by Buyer dispatch relevant inspection personnel to the site of Buyer to attend such inspection works, which include inspecting the packing and extrinsic features as well as making clear the numbers as per waybill and packing list, together with specifications and quality. In case any discrepancy due to fault of Seller (as confirmed by representatives of both parties) should be discovered, such case shall be handled and settled by Seller. Buyer shall provide conveniences regarding work and life to the inspection personnel of Seller. When the inspection personnel of Seller fails to arrive at the site punctually, Buyer shall have right to conduct opening-box inspections by itself. In such circumstances, any and all inspection conclusions as well as records shall be equally effective and binding on both parties respectively and may serve as valid evidence for lodging any claims by Buyer against Seller. In case Buyer fails to conduct inspections within one month after arrival of the equipment, the equipment shall be deemed to have passed inspections.

9.2.3 During onsite inspections, in case any damage, defect, insufficiency or nonconformity in any equipment due to fault of Seller (including causes like improper transportation) should be discovered, such issues shall be recorded and shall be signed by the representatives of both parties respectively and each party shall hold one copy of such records which may serve as evidences for Buyer to request repairs and/or replacement and/or compensation against Seller. In case Seller entrusts Buyer to repair any damaged equipment, expenses for repairs shall be borne by Seller; in case any damage or insufficiency with fault of Buyer should be spotted, Seller shall upon receipt of a notification from Buyer provide or replace relevant components without delay, at Buyer’s own expenses.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

9.2.4 In case Seller should have any objection against any of the requirements regarding repairs, replacement and/or claim made by Buyer, Seller shall within 7 days upon receipt of a written notification signifying the same from Buyer or within 14 days upon being informed of such issues send representative(s) to the site of Buyer to re-check, at expenses of Seller itself; otherwise, the requirements as aforesaid shall take effect upon being made.

9.2.5 In case no consensus regarding inspection records can be reached by the parties in any joint inspections, Buyer shall entrust a competent quality inspection institution to conduct such inspections. Inspection results so made shall be binding upon both parties and the expenses for such inspections shall be borne by the party with fault.

9.2.6 Upon receipt of a claim lodged by Buyer pursuant to Articles 9.2.2 to 9.2.5 of the Contract, Seller shall repair, replace or make up the shortfall pursuant to Article 9.2.7 without delay, and any and all expenses so incurred in connection with manufacturing, repairing and delivery the equipment as well as any insurance cost in connection thereto shall be borne by the responsible party. Buyer may deduct an equivalent sum from the performance guarantee or quality bond for such claims.

9.2.7 The time for repair or replacement of equipment or components with fault of Seller shall not be later than *** with the principle of not affecting the Construction schedule after discovery of defects, damages or insufficiency; unless otherwise specified by the parties, Buyer shall have right to handle such cases as per the provisions of Article 11.

9.2.8 The time for lodging claims regarding the specifications, models and quantity of equipments arrived shall not be later than *** after arrival of such equipments.

9.2.9 Any and all inspections as provided from Article 9.2.1 to Article 9.2.7 shall refer to onsite inspections of equipments arrived at the site. In case no problem should be discovered or Seller has as per requirements of claims replaced or repaired any problems, quality assurance responsibility of Seller under the Contract shall not be deemed to be rescinded.

10. Installation, Commissioning, Single Machine Trial Run, Combined Test Run with Water, Feed and Trial, and Acceptance

10.1 Installation, commissioning, single machine trial run, combined test run with water, feed and trial, operation and maintenance of the Contract Equipment shall be conducted by Buyer as per the technical data, inspection standards, drawings and specifications. Onsite technicians of Seller shall give instructions for works over the whole process of installation and commissioning and shall for key working processes sign their names so as to confirm (and without due cause shall not decline signing their names). Details of key

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

working processes are provided in Attachment I. During the process of installation and commissioning, in case Buyer fails to follow instructions of the technical data and of onsite technicians of Seller and any failure should occur, Buyer shall be solely responsible for such failure (excluding any failure due to any defect in the equipments); in case any failure should occur when instructions of technical data and/or instructions of onsite technicians of Seller has been followed or when the equipments having such failures have been confirmed by the onsite technicians of Seller, Seller shall be liable for responsibilities accordingly.

10.2 Works regarding acceptance and inspections of such equipments installed shall be conduced as per requirements of Attachment I.

10.3 Seller shall upon completion of installation of Contract Equipment send relevant personnel to the site of Buyer to provide instruction and shall settle any and all problems involving the equipment without delay. Seller shall conduct such works based on the principle of keeping all works on schedule and the time for doing such works shall not exceed ***; otherwise, it shall be treated as a delay of working period.

10.4 Acceptance inspections on performance of equipments shall be conducted as per requirements of Attachment I after completion of installation of all equipments for each complete set of equipments and such performance inspections shall be performed by Buyer and shall be attended by Seller. After completion of such inspections, if the Contract Equipment reach the guaranteed indicators as provided in Attachment I, Buyer shall within *** sign the preliminary acceptance certificate regarding the Contract Equipment countersigned by Seller and such certificate shall be made in duplicate with Seller and Buyer respectively holding one copy.

In case the Contract Equipment fails to reach one guaranteed indicator or several guaranteed indicators provided in the Attachment I to the Contract, such circumstance shall be handled as per provisions of Article 10.6 and Article 11.7.

10.5 Based on the precondition of not affecting the safe and reliable operation of the Contract Equipment, in case any minor defect should be discovered, Seller shall within the period as requested by Buyer rectify such minor defects for free and Buyer may then agree to countersign a preliminary acceptance certificate.

10.6 In case in the first performance acceptance inspection the Contract Equipment fail to reach one or several guaranteed indicators as provided in Attachment I to the Contract, the parties shall then jointly ascertain the cause so as to make clear the parties respective responsibilities. Then the party with the major responsibility for such failure shall take further measures. The second acceptance inspection shall be conducted one month after the first acceptance inspection.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

10.7 After the second performance acceptance inspection, in case any major performance indicator still fails to meet the provisions set forth in Attachment I to the Contract, the parties shall jointly research the case and find out the reasons so as to make clear the responsibilities involved:

In case it is not the fault of Buyer, then the case shall be handled as per provisions of Article 11.7.

In case it is all the fault of Buyer, the Contract Equipment shall be deemed to have passed the preliminary acceptance inspection. In such circumstances, the representative of Buyer shall within *** sign the preliminary acceptance certificate regarding the Contract Equipment countersigned by the representative of Seller. Such certificate shall be formulated in duplicate with Seller and Buyer holding one copy respectively. Seller shall then still have obligations to seek proper measures with Buyer so as to ensure that the Contract Equipment may meet the guaranteed indicators.

10.8 In case the Contract Equipment operate stably while the performance acceptance inspection should be delayed for over *** with fault of Buyer, Buyer shall then within *** after the *** have elapsed sign the preliminary acceptance certificate regarding the Contract Equipment countersigned by Seller.

10.9 Whether the performance acceptance inspection regarding the Contract Equipment is performed once or twice, Buyer shall after formulation and issuance of the preliminary acceptance certificate within *** when all claims have been settled issue a final acceptance certificate as per provisions of Article 11.4.

10.10 The preliminary acceptance certificate issued by Buyer as per provisions of Article 10.4 and Article 10.7 only proves that the performance and parameters regarding the Contract Equipment as provided by Seller can be accepted as per requirements of the Contract as of the time of issuance of the preliminary acceptance certificate and shall not be regarded as evidence for exemption of any responsibility of Seller for any potential defect of the Contract Equipment. As such, the final acceptance certificate can not be regarded as evidence for exemption of any responsibility of Seller for any potential defect of the Contract Equipment. Potential defects provided herein shall refer to any defect that can not be discovered in the process of manufacturing, trial run and performance acceptance inspections. In case any such defects should be discovered, Seller shall repair or replace as per provisions of Article 6.8 and Article 11.3.1 of the Contract.

10.11 At any time during the performance of the Contract when Seller asks for any inspection, test, re-test, repairing or replacing for any failure with fault of Seller, Buyer shall properly arrange works so as to coordinate with Seller in doing such works as aforementioned. Seller shall then be responsible for any and all expenses for repairing or replacing as well as for personnel of Seller so incurred. In case any rework should be caused by Seller who entrusts Construction personnel of Buyer to process and/or repair and/

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

or replace equipments, or caused by mistakes of designing drawings (other than those provided by its designing institution(s)) provided by Seller or improper instructions of technicians of Seller, Seller shall pay to Buyer a payment according to the formula provided below: (any and all expenses shall be calculated as per the rate when the expenses incurred)

***

11. Warranty and Claim

11.1 Quality warranty period or Warranty Period shall be a period of *** commencing from the date of issuing the preliminary acceptance certificate or a period of *** commencing from the date of receipt of the current batch of equipment (whichever is earlier). However, the Warranty period may be extended pursuant to Article 11.6 and Article 11.8 of the Contract. The parties shall perform their obligations pursuant to relevant provisions of the Contract during the Warranty Period.

11.2 Seller hereby undertakes that the Contract Equipment are brand new, being advanced and mature in technology which employs the first class workmanship and materials, excellent in quality, safe and reliable in type selection of equipments, economical in operation and convenient in maintenance. Seller shall ensure the completeness, integrity, correctness and accuracy of technical data as may be provided complete with Attachments to the Contract and that such technical data are able to meet the requirements of design, installation, commissioning, operation and maintenance of the Contract Equipment.

11.3.1 During the period of performance of the Contract, in case any defect in the equipment or any misstatement in the technical data as provided by Seller should be discovered, or any reworking and/or scrapping of the equipment occurs due to improper instruction or omission by technicians of Seller, Seller shall without delay replace or repair them for free and indemnify Buyer for any and all losses so incurred. In case of replacement or repairs, Seller shall assume any and all expenses so caused and Seller shall within *** upon being proved to be the fault of Seller replace or repair them.

11.3.2 In case any damage in any equipment should be caused by improper operation, installation and/or commissioning by Buyer who fails to follow requirements of the technical data, drawings, specifications and instructions of onsite Technical Service personnel

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

of Seller, Buyer shall be responsible for repairing and/or replacing such equipments, provided that Seller shall as soon as possible provide such spare parts as may be needed and for any emergency spare part requested by Buyer, Seller shall arrange the fastest way of transportation. Any and all expenses so incurred shall be borne by Buyer.

11.4 When the Warranty period expires, Buyer shall within *** submit to Seller a final acceptance certificate regarding expiration of the Contract Equipment, provided that during this period Seller shall have paid any and all claims and/or requests for compensation as may be lodged by Buyer prior to expiry of the Warranty period. Notwithstanding such provisions, Seller shall not be responsible for any loss arising from any improper maintenance and/or erroneous operation and/or normal depreciation.

11.5 During the Warranty period, in case any defect in the equipments should be discovered yet such defects do not conform to provisions of the Contract but are the fault of Seller, Buyer shall have right to lodge a claim against Seller. Should Seller have any dispute over a claim so lodged, such case shall be handled as per provisions of Article 9.2.4. Otherwise, Seller shall upon receipt of claim documents from Buyer immediately and gratuitously repair, replace or entrust Buyer to arrange a major overhaul and indemnify Buyer accordingly.

11.6 In case any stoppage of Contract Equipment or deferred installation should be caused by replacement or repairing of equipments with defects with fault of Seller, the Warranty period shall then be extended accordingly with extended period equivalent to the time so deferred.

11.7 In case the equipments without fault of Buyer fail to reach one or several guaranteed indicators as specified in Attachment I hereof in the secondary acceptance tests, Seller shall be liable for any and all responsibilities specified in Article 15 of the Contract.

11.8 In case during the Warranty period any defect in the Contract Equipment should be discovered with fault of Seller, the Quality warranty period of such equipment shall be recommenced after elimination of such defects.

12. Insurance

12.1 Seller shall for the purpose of the Contract Equipment to be shipped by transportation methods such as water carriage, land carriage and air transportation take out insurance policies in favor of Seller and Buyer with an insured amount of 110% of prices of delivered Contract Equipment, and the insured zone shall be from the warehouses of Seller to the site for delivery of equipments.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

13. Expenses of Taxation

13.1 Any and all expenses of taxation relating to the Contract to be paid by Seller as per provisions of relevant PRC laws, regulations and rules on expenses of taxation shall be borne by Seller.

13.2 Contract Price includes tax. Any and all expenses of taxation of any and all equipments, technical data, service, transportation, insurance, imported equipments/spare parts, etc. shall be covered by the Contract Price and shall be borne by Seller.

14. Outsourcing

14.1 Seller shall independently manufacture any and all components to be supplied under this Contract. Without consent from Buyer, Seller shall not subcontract any component (including purchasing the main components) to be supplied under this Contract from any third parties. In case Seller needs to subcontract or outsource part of the Contract, Seller shall obtain prior consent from Buyer with regard to the specific scope and scale of the proposed subcontracting and outsourcing. Seller shall not engage in any subcontracting or outsourcing without Buyer’s consent.

14.2 After Seller has obtained consent from Buyer regarding its outsourcing and subcontracting, Seller shall submit to Buyer the list of potential Subcontractors together with their background information before Seller starts negotiating with such Subcontractors, and Buyer shall examine the same regarding the Subcontractor within 2 days of its receipt of the materials and shall reply to Seller in writing. Seller shall select Subcontractor from the list of Subcontractors approved by Buyer and notify Buyer in writing of its selection accordingly.

14.3 Any and all Technical Services and/or technical coordination for the outsourced equipments/components shall be handled as per provisions of Article 8.10, Article 8.11 and Article 8.12.

14.4 The terms of this Contract shall govern Seller’s liabilities with regard to outsourced equipments and/or components.

15. Modification, Amendment and Termination of Contract

15.1 After the Contract becomes effective, neither party hereto may unilaterally modify any content (including Attachments hereof) of the Contract. Notwithstanding the foregoing, any party may propose to modify, amend, cancel and/or supplement any part of the Contract in writing. If any proposed amendment involves Contract Price and delivery schedule, such proposal shall include a detailed explanation regarding the impact of such amendment on Contract Price and/or delivery schedule. Once agreed by both parties, the proposed amendment shall become effective upon execution by the legal representatives or authorized agents of the both parties.

15.2 In case of any of the following circumstances, Buyer shall be entitled to terminate the Contract:

(1) due to Seller’s fault, the equipment fails to reach the major performance indicators specified in Attachment I to the Contract during the secondary performance tests conducted pursuant to Article 10.7;

(2) delivery of equipment by Seller more than nine (9) weeks overdue or delivery of technical data and/or supplying of Technical Service more than four (4) weeks overdue;

(3) any inaccuracy or falsehood in any part of the biding documents submitted by Seller, Seller’s business license or license to manufacture the equipment and/or components under the Contract being revoked, or Seller breaches provisions of any other contract between Seller and Buyer; and

(4) such any other circumstances as prescribed by the relevant laws.

15.3 In any event of bankruptcy, change of control (such as merger, combination, dissolution, cancellation, etc.) or insolvency of Seller, or in the event Seller operates under receivership for the interest of the its creditor(s), Buyer shall be entitled to terminate the Contract immediately upon notification to Seller, the receiver or relevant counter-party then under the Contract. Alternatively, Buyer may negotiate with such receiver, manager or counter party, and subject to Buyer’s consent and depending on performance guarantee provided by such receiver, manager or counter party, the parties may perform part of the Contract.

16. Liability for Breach of Contract

16.1 If delivery of equipment is delayed due to Seller’s fault, Seller shall pay Buyer a penalty fee. Buyer shall grant Seller a grace period of *** for such delayed delivery, and Seller shall be liable for a penalty equals ***.

16.2 If Seller fails to make timely delivery of technical data for design and manufacture, Seller shall pay Buyer a penalty equals ***.

16.3 If Buyer fails to make timely payment, Buyer shall be liable for a penalty equals ***.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

16.4 This Article does not limit any other liabilities or damages arising out of the breach by any party.

16.5 In the event that there should be any discrepancy between this Article and the Special Agreement regarding Liabilities entered by both Parties on September 11^th, 2008, the Special Agreement shall prevail.

17. Force Majeure

17.1 An event of force majeure refers to severe natural disaster and catastrophe (such as typhoon, flood, earthquake, fire, explosion, etc.), war (declared or undeclared), riot, turmoil, etc. In case any party hereto should be prevented from performance of obligations of the Contract by and event of force majeure, the period for performance of the Contract shall be extended accordingly with the extended period equivalent to the period delayed by the event of force majeure, provided that the Contract Price shall not be adjusted due to such an event of force majeure.

17.2 The party being affected by an event of force majeure shall upon being informed of the event of force majeure so notify the other party through of facsimile or cable without delay and shall within *** submit such certificate proving such an event of force majeure as may be issued by a competent authority to the other party for verification. The party being affected shall out of due care and diligence take all measures as may be necessary so as to minimize such adverse effects and delay as may be caused by such an event of force majeure and upon elimination of such adverse effects caused by the event of force majeure so notify the other party without delay.

17.3 In case the adverse effect of such an event of force majeure should be forecasted to last for more than ***, the parties shall through friendly negotiations settle issues relating to performance of the Contract, including but not limited to delivery of equipments, installation, pilot run and acceptance.

18. Dispute Settlement

18.1 Any and all disputes arising out of performance of the Contract shall be settled through amicable consultations by the parties to each other and in case no agreement can be reached, the parties hereby agree that any party may submit the case to CIETAC Beijing Commission to be arbitrated by the same as per then valid arbitration rules.

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

18.2 Unless otherwise specified by such arbitration award, any and all expenses so incurred shall be borne by the losing party.

18.3 During the period of arbitration, the Contract shall continue to be performed except for the issue under arbitration.

19. Effectiveness of Contract

19.1 The Contract shall come into force upon being signed and sealed by legal representatives or authorized agent of the parties.

20. Miscellaneous

20.1 The Contract shall be governed by the laws of the People’s Republic of China.

20.2 Any and all Attachments hereof shall constitute an integral part of the Contract and shall be equally authentic with the Contract. In case there is any discrepancy between such Attachments with the Contract, the Contract shall prevail. In case of anything not covered herein, refer to the bidding invitation documents and their supplementary prepared by Buyer for purchasing of equipments and the tender documents and their supplementary as submitted by Seller. In case of any discrepancy between such bidding invitation documents with the tender documents, the bidding invitation documents shall prevail.

20.3 Obligations of each party under the Contract shall not exceed the range of the Contract and no party may make any declaration, statement, promise or action restricting the other party.

20.4 The Contract has set forth and made clear all terms and conditions covering responsibilities, obligations, compensations and relieves and no party shall bear any responsibility, obligation, compensation and/or relief not provided herein.

20.5 No party shall without prior consent of the other party assign its obligations under the Contract to any third party, in part or in whole.

20.6 Any and all documents and/or data mutually provided between the parties shall not be provided to any third party having no concern with the Contract Equipment, the Project and related projects other than for the purposes of performance of the Contract.

20.7 Each party shall appoint a second authorized representative who shall be responsible for directly handling technical and business issues of the Contract Equipment. Names and addresses of the authorized representatives of the parties respectively shall be made clear to the other party upon taking effect of the Contract.

20.8 As to any and all correspondences, notifications and requirements from one party to the other party, in case they are formally prepared and served by a dedicated person or in the manner of a registered mail, air mail, cable, facsimile or telegraph, they shall be deemed to have been formally received by the other party when receiving a confirmation signifying receipt by any personnel and/or communication facilities from such other party.

20.9 The Contract has two originals and four copies, with each party holding one original and two copies.

Addresses of the parties hereto are provided as follows:

Buyer: Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV

Inner Mongolia Xilinguole Project

Tel: 15047189998

Fax:

Address:

Contact: Xu Dongjun

Bank:

Account number:

Zip code:

Registration number of taxpayer:

Seller: Shanghai Morimatsu Mixing Technology Engineering Co., Ltd.

Tel: 021-38112058

Fax: 021-33756886

Address:

Contact: Dong Feng

Bank:

Account number:

Zip code:

Registration number of taxpayer:

Page for Signature and Seal

Buyer:

Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV Inner

Mongolia Xilinguole Project

(Sealed)

Signature of authorized representative:

Date:

Seller:

Shanghai Morimatsu Mixing Technology Engineering Co., Ltd.

(Sealed)

Signature of authorized representative:

Date: September 13, 2008

Attachment II

Provided by: Shanghai Morimatsu Mixing Technology Engineering Co., Ltd.

No.

Item No.

Main Material

Q’ty

Unit Wt. (Kg)

Tot. Wt. (Kg)

Breakdown Price (RMB) Tot. Price (RMB)

Remark

Design& Document

Material

Fab.

Packing

Spares

Sub-total

Tot. (RMB)

1

Reactor (24-pair electrodes design)

316L/0Cr18Ni9/16MnR

60

***

***

***

***

***

***

***

***

***

Total

60

***

***

Inner Mongolia Xilinguole On-site Delivery Price

***

Quotation Note:

1. This quotation is made according to the requirements of Buyer, should there be any major discrepancy in size between the actual equipment and the blueprints, the price and delivery schedule shall be adjusted accordingly.

2. The Spare Parts and Components include ***.

3. The manufacturer of the equipment is Shanghai Morimatsu Pressure Vessel Co., Ltd of the Morimatsu Group.

4. In the event that the advance payment is delayed for ***, and the raw material price increases more than *** compared to the raw material price at the time when the Contract is executed, the unit price of the equipment shall be renegotiated.

Shanghai Morimatsu Mixing Technology Engineering Co., Ltd.

September 2008

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Attachment III	Reactor (24-pair electrodes design) Delivery Schedule
Delivery Date	1.	20 sets of Reactors (24-pair electrodes design) shall be delivered by ***.
	2.	20 sets of Reactors (24-pair electrodes design) shall be delivered by ***.
	3.	20 sets of Reactors (24-pair electrodes design) shall be delivered by ***.
	4.	the abovementioned delivery dated is conditioned on the Contract becoming effective on ***, the blueprints are determined by ***, and the material order is determined by ***, otherwise the delivery shall be postponed accordingly.

Note: 1. The total number of reactors to be delivered is 60.

2. The delivery site shall be the Construction site in Inner Mongolia. The deliver shall be made on vehicle.

Shanghai Morimatsu Mixing Technology Engineering Co., Ltd.

September 2008

*** CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Confirmation Letter

Attention: Mr. Dong Feng

This Confirmation Letter refers to the Sales Contract (NMZN0051) (the “Contract”) entered into by Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. Phase IV Inner Mongolia Xilinguole Zhongneng Polysilicon Co., Ltd. (in the process of formation) (“Buyer”) and Shanghai Morimatsu Mixing Technology Engineering Co., Ltd. (“Seller”) on September 19^th, 2008. Upon receiving sufficient and valid documentations to confirm the representations provided herein, Seller hereby confirms:

1. Intellectual Property Indemnity

Seller shall indemnify Buyer and its respective management, directors, agents and employees (“Buyer Indemnified Parties”) for any cost, loss, liability, expense (including legal fees), damage or judgment suffered by any Buyer Indemnified Parties as a result of claim, litigation or legal proceeding against such Buyer Indemnified Parties due to infringement of any patent, copy right, trade mark, trade name, trade secrete or any other intellectual property rights worldwide arising from use of the equipment (including the technique and technology used by or provided through such equipment), documentations, services provided by Seller.

2. Potential Representations and Warranties concerning Intellectual Property

Seller hereby represents and warrants that it is entitled or permitted to provide the equipment, documentations and services to Buyer according to the Contract. Seller represents and warrants that: (i) Seller is the owner of the equipment and documentations, and is entitled to provide or license (as the case might be) Buyer to use the equipment, documentations and services (and that the Seller is duly authorized by any third party owner of any component of the equipment and documentation to provide and to license to the Buyer, as applicable, such equipment, documentation and services in accordance with the Contract), (ii) Seller confirms that it may disclose to Buyer information concerning the equipment (including the methodologies and technologies used or produced by such equipment), documentations and services, and such disclosure will not result in any third party trade secret infringement claims, (iii) none of the equipment (including the methodologies and technologies used or produced by such equipment), documentations and services (and the Seller’s receipt and use thereof) infringes any third party patent, copy right, trade mark, trade secret or other intellectual property rights worldwide, and (iv) the sale or use of the equipment does not infringe any third party patent, copy right, trade mark, business secrete or any other intellectual property rights as .

All aspects of this Confirmation Letter shall be governed by and construed in accordance with PRC laws/United Nations Convention

on Contracts of International Sales of Goods (the “Convention”) (to the extent the United Nation Convention for the International Sale of Goods does not cover, the laws of People’s Republic of China), including all matters of construction, validity and performance.

It is hereby confirmed.

Shanghai Morimatsu Mixing Technology Engineering Co., Ltd.

(Seal)

Legal Representative or

Authorized Representative:             

Title:

September 13^th, 2008

Certificate

The Confirmation Letter is made by Shanghai Morimatsu Mixing Technology Engineering Co., Ltd.

EX-23.1

Exhibit 23.1

    Deloitte Touche Tohmatsu 35/F One Pacific Place 88 Queensway Hong Kong

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Registration Statement on Form F-1 of our report dated April 25, 2008 (July 18, 2008 as to the effects of the share splits described in Note 9) relating to the consolidated financial statements of Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd. (Predecessor) for the period from March 7, 2006 to December 13, 2006, and consolidated financial statements of GCL Silicon Technology Holdings Inc. (Successor) as of December 31, 2006 and 2007, and for the period from November 13, 2006 to December 31, 2006 and the year ended December 31, 2007, appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading “Experts” in such Prospectus.

/s/    Deloitte Touche Tohmatsu

Deloitte Touche Tohmatsu

Certified Public Accountants

Hong Kong

October 2, 2008

EX-24.1

Exhibit 24.1

Power of Attorney

I hereby appoint Mr. Zhu Gongshan and Mr. Zhang Songyi as attorneys-in-fact with full power of substitution, for him or her in any and all capacities, to do any and all acts and all things and to execute any and all instruments which said attorney and agent may deem necessary or desirable to enable the registrant to comply with the Securities Act of 1933, as amended (the “Securities Act”), and any rules, regulations and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under the Securities Act of ordinary shares of the registrant (the “Shares”), including, without limitation, the power and authority to sign my name in the capacity as Chief Financial Officer (Principal Financial Officer) and Chief Accounting Officer (Principal Financial Officer) to the Registration Statement on Form F-1 (the “Registration Statement”) to be filed with the Securities and Exchange Commission with respect to such Shares, to any and all amendments or supplements to such Registration Statement, whether such amendments or supplements are filed before or after the effective date of such Registration Statement, to any related Registration Statement filed pursuant to Rule 462(b) under the Securities Act, and to any and all instruments or documents filed as part of or in connection with such Registration Statement or any and all amendments thereto, whether such amendments are filed before or after the effective date of such Registration Statement; and I hereby ratify and confirm all that such attorney and agent shall do or cause to be done by virtue hereof.

This power of attorney may be executed in any number of counterparts, which together shall constitute one and the same instrument.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned has duly executed this power of attorney this 25^th day of August, 2008

By:	/s/    JASON LI
Name:	Jason Li
Title:	Chief Financial Officer (Principal Financial Officer) and Chief Accounting Officer (Principal Financial Officer)

ACCEPTED by each attorney-in-fact as of the date set forth above:
/s/    ZHU GONGSHAN
By:	Mr. Zhu Gongshan
/s/    ZHANG SONGYI
By:	Mr. Songyi Zhang

Power of Attorney

I hereby appoint Mr. Zhu Gongshan and Mr. Zhang Songyi as attorneys-in-fact with full power of substitution, for him or her in any and all capacities, to do any and all acts and all things and to execute any and all instruments which said attorney and agent may deem necessary or desirable to enable the registrant to comply with the Securities Act of 1933, as amended (the “Securities Act”), and any rules, regulations and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under the Securities Act of ordinary shares of the registrant (the “Shares”), including, without limitation, the power and authority to sign my name in the capacity as the Authorized Representative in the United States to the Registration Statement on Form F-1 (the “Registration Statement”) to be filed with the Securities and Exchange Commission with respect to such Shares, to any and all amendments or supplements to such Registration Statement, whether such amendments or supplements are filed before or after the effective date of such Registration Statement, to any related Registration Statement filed pursuant to Rule 462(b) under the Securities Act, and to any and all instruments or documents filed as part of or in connection with such Registration Statement or any and all amendments thereto, whether such amendments are filed before or after the effective date of such Registration Statement; and I hereby ratify and confirm all that such attorney and agent shall do or cause to be done by virtue hereof.

This power of attorney may be executed in any number of counterparts, which together shall constitute one and the same instrument.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned has duly executed this power of attorney this 30th day of September, 2008

By:	/s/    DONALD J PUGLISI
Name:	Donald J Puglisi
Title:	Authorized Representative in the United States

ACCEPTED by each attorney-in-fact as of

the date set forth above:

/s/    ZHU GONGSHAN

By: Mr. Zhu Gongshan

/s/    ZHANG SONGYI

By: Mr. Songyi Zhang