China Medical System Holdings Ltd : TERMS OF REFERENCE OF THE NOMINATION COMMITTEE

CHINA MEDICAL SYSTEM HOLDINGS LIMITED (the" Company" )

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?Incorporated in the Cayman Islands with limited liability?

?Stock Code?867?

TERMS OF REFERENCE OF THE NOMINATION COMMITTEE ("Committee")

* For identification purpose only

Members

Mr. Cheung Kam Shing, Terry (Chairman) Mr. Lam Kong
Mr. Wu Chi Keung
Dr. Peng Huaizheng

1. Constitution

1.1 The Committee is established pursuant to a resolution passed by the board of Directors (the "Board")
of the Company at its meeting held in 2007.
1.2 Members of the Committee shall be appointed by the Board from amongst the directors of the Company and shall consist of not less than three members and a majority of whom shall be independent non-executive directors.
1.3 The Chairman of the Committee shall be appointed and removed by the Board.
1.4 The Company Secretary of the Company or his/her delegate shall be the secretary of the Committee

2. Proceedings of the Committee

2.1 Quorum
The quorum of the Committee meeting shall be two members of the Committee and a majority of which shall be the independent non-executive directors.
2.2 Attendance

2.2.1 At the invitation of the Remuneration Committee, the Chairman of the Board and/or Group Managing Director and/or Deputy Group Managing Director, external advisers and other persons may be invited to attend all or part of any meetings.

2.2.2 Meetings can be held in person, by telephone or by video conference. Only Members are entitled to vote at Committee meetings.

2.2.3 The Chairman or in his/her absence, another Member shall attend the annual general meetings of the Company and be prepared to respond to the questions from shareholders

on the activities of the Committee and their responsibilities.

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2.3 Frequency:
Meetings shall be held at least once a year to review, formulate and consider the nomination procedures as regards the appointment, reappointment and removal of directors ("Directors") of the Company, their implementation during the year and to make recommendations to the Board on candidates for appointment as Directors.

3. Written resolutions

Resolutions of the Committee shall be passed by a majority of votes. A resolution in writing signed by all the Members shall be as valid and effectual as if it has been passed at a meeting of the Committee duly convened and held.

4. Authority of the Committee

The Committee may exercise the following powers:
4.1 to seek any information it requires from any employee of the Company and its subsidiaries (together, the "Group") and any professional advisers in order to perform its duties, to require any of them to prepare and submit reports and to attend Committee meetings and to supply information and address the questions raised by the Committee;
4.2 to review the performance of the Directors and the independence of independent non-executive
Directors in relation to their appointment or reappointment as Directors;
4.3 to obtain, at the Company's expenses, outside legal or other independent professional advice on or assistance to any matters within these terms of reference, including the advice of independent human resource consultancy firm or other independent professionals, and to secure the attendance of outsiders with relevant experience and expertise at its meetings if it considers this necessary. The Committee shall have full authority to commission any search (including without limitation litigation, bankruptcy and credit searches), report, survey or open recruitment which it deems necessary to help it fulfill its duties and should be provided with sufficient resources to discharge its duties;
4.4 to review annually these terms of reference and their effectiveness in the discharge of its duties and to make recommendation to the Board any changes it considers necessary; and

5. Duties

The duties of the Committee shall be:
A. to review the structure, size and composition (including the skills, knowledge and experience) of

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the Board on a regular basis;
B. to identify individuals suitably qualified to become members of the Board and may select individuals nominated for directorship;
C. to assess the independence of the independent non-executive Directors; D. to make recommendations to the Board on:
(a) the role, responsibilities, capabilities, skills, knowledge and experience required from members of the Board;
(b) the policy on the terms of employment of non-executive Directors;
(c) the composition of the audit committee, remuneration committee and other board committees of the Company;
(d) proposed changes to the structure, size and composition of the Board; (e) candidates suitably qualified to become members of the Board;
(f) the selection of individuals nominated for directorship;
(g) the re-election by shareholders of the Company of any Directors who are to retire by rotation having regard to their performance and ability to continue to contribute to the Board;
(h) the continuation (or not) in service of any independent non-executive Director serving more than nine years and to provide recommendation to the shareholders of the Company as to how to vote in the resolution approving the re-election of such independent non-executive Director;
(i) relevant matters relating to the appointment, re-appointment of Directors; and
(j) succession planning for Directors in particular the chairman and the chief executive officer;

6. Minutes and Reporting Procedures

6.1 Full minutes of the meetings of the Committee and all written resolutions of the Committee should be kept by the secretary of the Committee.
6.2 The Committee should report to the Board, identifying any matters in respect of which it considers that action or improvement is needed, and making recommendations as to the steps to be taken.
6.3 The secretary shall circulate the minutes of meetings and reports of the Committee to all members of the Board within a reasonable time.

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