Central China Securities Co., Ltd. — Governance Information 2021

Dec 24, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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Central China Securities Co., Ltd.

(a joint stock company incorporated in 2002 in Henan Province, the People’s Republic of China with limited liability under the Chinese corporate name “中原証券股份有限公司” and carrying on business in Hong Kong as “中州証券”) (Stock Code: 01375)

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Central China Securities Co., Ltd. (the “ Company ”) proposed to set up the Executive Committee in accordance with the requirements of the Company Law of the People’s Republic of China, the Governance Standards for Securities Companies and other relevant laws and regulations in order to improve the corporate governance structure of the Company and enhance the execution efficiency of the Company’s business decisions and management. Meanwhile, in order to regulate the conduct of the Executive Committee, the Company formulated the Rules of Procedure for the Executive Committee of Central China Securities Co., Ltd.

In addition, according to the Consultation Conclusions on Acceptance of Mainland Accounting and Auditing Standards and Mainland Audit Firms for Mainland Incorporated Companies Listed in Hong Kong (《有關接受在香港上市的內地註冊成立公司採用 內地的會計及審計準則以及聘用內地會計師事務所的諮詢總結》) published by The Stock Exchange of Hong Kong Limited in December 2010, and the Pilot Work Plan for Accounting Firms Engaged in Audit Business for H Share Enterprises (《會計師事務 所從事H股企業審計業務試點工作方案》) issued by the Accounting Division of the Ministry of Finance of the People’s Republic of China (the “ Ministry of Finance ”) and the China Securities Regulatory Commission (the “ CSRC ”), issuers listed in Hong Kong while incorporated in Mainland China are allowed to adopt the China Accounting Standards for Business Enterprises (the “ PRC GAAP ”) to prepare financial statements, and Chinese accounting firms approved by the Ministry of Finance and the CSRC are allowed to adopt the PRC GAAP to audit such financial statements. As considered and approved at the 2019 annual general meeting of the Company held on 10 June 2020, the Company has adopted the PRC GAAP to prepare the financial statements and disclose the relevant financial information both in Hong Kong and the Mainland China since the interim financial report and interim results of 2020.

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In view of the above, the board of directors of the Company (the “ Board ”) resolved at a meeting held on 24 December 2021 to propose to add new articles and amend certain articles to the Articles of Association of the Company (the “ Articles of Association ”).

The Board proposed to amend the Articles of Association as follows:

Original articles		Amended articles
Article 14The senior management referred to in these Articles of Association include the president, vice president, chief financial officer, chief compliance officer, secretary to the Board, and such other personnel hold keep posts as identified by regulators or acknowledged by any board resolution of the Company. The appointment and removal of a Director, supervisor and member of senior management of the Company shall be filed with the securities regulatory authorities under the State Council.		Article 14The senior management referred to in these Articles of Association include the president, vice president, chief financial officer, chief compliance officer, secretary to the Board,members of the Executive Committee and such other personnel hold keep posts as identified by regulators or acknowledged by any board resolution of the Company. The appointment and removal of a Director, supervisor and member of senior management of the Company shall be filed with the securities regulatory authorities under the State Council.

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Article 183 The Board shall be accountable to the general meeting and exercise the following functions and powers:

……

(X) to appoint or remove the Company’s president, chief compliance officer and secretary to the Board as nominated by the chairman and determine their remunerations; to decide to appoint or remove the Company’s vice president, chief financial officer and other senior management as nominated by the president and determine their remunerations;

……

( X V I I ) t o d e t e r m i n e D i r e c t o r s ’ remunerations and distribution plan thereof, and submit special reports to the general meeting on the performance evaluation and remunerations of Directors;

(XVIII) to evaluate and determine the nature and extent of the risks the Company is willing to take in achieving its strategic objectives, ensure that the company establishes and maintains appropriate and effective risk management and internal control systems, and oversee the Company’s risk management and internal control systems on an ongoing basis, oversee management in the design, implementation and monitoring of the risk management and internal control systems, and ensure that a review of the effectiveness of the Company’s and its subsidiaries’ risk management and internal control systems has been conducted at least annually;

Article 183 The Board shall be accountable to the general meeting and exercise the following functions and powers:

……

(X) to appoint or remove the Company’s president, chief compliance officer ~~and~~ , secretary to the Board and members of the Executive Committee as nominated

by the chairman and determine their remunerations; to decide to appoint or remove the Company’s vice president, chief financial officer and other senior management as nominated by the president and determine their remunerations;

……

(XVII) to listen to the work report of the Executive Committee and examine the work of the Executive Committee;

~~(XVII)(~~ XVIII) to determine Directors’ remunerations and distribution plan thereof, and submit special reports to the general meeting on the performance evaluation and remunerations of Directors;

~~(XVIII)(~~ XIX) to evaluate and determine the nature and extent of the risks the Company is willing to take in achieving its strategic objectives, ensure that the company establishes and maintains appropriate and effective risk management and internal control systems, and oversee the Company’s risk management and internal control systems on an ongoing basis, oversee management in the design, implementation and monitoring of the risk management and internal control systems, and ensure that a review of the effectiveness of the Company’s and its subsidiaries’ risk management and internal control systems has been conducted at least annually;

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(XIX) to determine the objectives of Company’s culture construction and shall be liable to the effectiveness of the Company’s culture construction; (XX) to exercise other functions and powers as stipulated by laws and regulations, departmental rules, regulatory documents or Articles of Association. ……		~~XIX~~
Chapter VII President and Other Senior Management Members		Chapter VII President, Executive Committee and Other Senior Management Members
Newly added article		Article 215 The Company shall set up the Executive Committee, which is a standing operating and management decision-making body of the Board of the Company and implements the route and policy determined by the Board under the leadership of the Party Committee of the Company. Members of the Executive Committee shall be considered and recommended b y t h e P a r t y C o m m i t t e e o f t h e Company, and nominated by the Chairman of the Board, including the Chairman, President, Vice President, Chief Accountant and other senior management, and shall be appointed or dismissed by the Board. The Chairman of the Board shall serve as the director of the Executive Committee, and the President shall serve as the deputy director of the Executive Committee. Members of the Executive Committee shall assist the director of the Executive Committee, be responsible to the director of the Executive Committee, report to him/her, and perform relevant duties according to his/her division of work.

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The term of office of the members of the Executive Committee shall be the same as that of the Board and the members of the Executive Committee can be reappointed after the expiry of the term.

	The term of office of the members of the Executive Committee shall be the same as that of the Board and the members of the Executive Committee can be re- appointed after the expiry of the term.	The term of office of the members of the Executive Committee shall be the same as that of the Board and the members of the Executive Committee can be re- appointed after the expiry of the term.
Newly added article		Article 216 The Executive Committee of the Company shall mainly exercise the following functions and powers: (I) to consider major proposals to be submitted to the Board and the general meeting for consideration; (II) to consider and formulate the Company’s business policies, development strategies, business plans, investment and financing plans and other major issues; (III) to consider and formulate the Company’s annual financial budgets, final accounts, profit distribution plans, loss recovery plans and plans for the appointment and dismissal of accounting firms; (IV) to consider and formulate plans for the increase or reduction of the Company’s registered capital, and plans for material acquisitions, asset restructuring, disposal of assets, transfer of property rights, acquisition of the Company’s shares, merger, division, dissolution of the Company and its significant subsidiaries or change of corporate form;
		(I)
		(II)
		(III)
		(IV)

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(V) to consider and formulate the allocation and use of large funds within the budget of the Company, the allocation and use of funds exceeding the budget, large donations and sponsorships and other large funds operation matters;

(VI) t o c o n s i d e r a n d f o r m u l a t e major investment projects of the Company;

(VII) to consider and formulate plans for response and disposal of major risks in investment and financing business;

(VIII) t o c o n s i d e r a n d f o r m u l a t e proposals for amendments to the Articles of Association and the basic management system of the Company;

(IX) to exercise other functions and powers according to relevant laws and regulations, rules and regulatory documents and granted by the Board.

Among them, items (V), (VI) and (VII) shall be submitted to the Board and/or the general meeting for consideration in accordance with the decision-making authority of the Board and the general meeting as stipulated in the listing rules and regulatory requirements.

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Newly added article		Article 217 The Executive Committee shall be convened and chaired by the director of the Executive Committee, and the deputy director may be entrusted by the director to convene and chair the meetings of the Executive Committee. Members of the Executive Committee shall attend the meetings in person. If he/she cannot attend the meetings for any reason, he/she may appoint another member in writing to attend the meetings on his/her behalf. The chairman of the supervisory committee, the head of the discipline inspection team and other relevant personnel of the Company may attend the meeting.
Newly added article		Article 218 The Executive Committee shall formulate the rules of procedure for the Executive Committee, which shall be implemented upon approval by the Board.
		Board.
Article 271The financial statements of the Company shall be prepared in accordance with not only PRC accounting standards and regulations, but also the international accounting standards or the accounting standards of the overseas place where Company’s shares are listed. If the financial statements prepared under the two accounting standards are discrepant significantly, such discrepancy shall be indicated in the notes to the financial statements. The Company shall distribute the after-tax profit of the relevant financial year as per the less of the after-tax profits in the aforesaid two financial statements.		Article~~271~~ ~~2~~75 The financial statements of the Company shall be prepared in accordance with~~not only~~ PRC accounting standards and regulations~~, but also the~~ ~~international accounting standards or~~ ~~the accounting standards of the overseas~~ ~~place where Company’s shares are listed.~~ ~~If the financial statements prepared~~ ~~under the two accounting standards are~~ ~~discrepant significantly, such discrepancy~~ ~~shall be indicated in the notes to the~~ ~~financial statements. The Company~~ ~~shall distribute the after-tax profit of the~~ ~~relevant financial year as per the less of~~ ~~the after-tax profits in the aforesaid two~~ ~~financial statements~~ ~~.~~

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Article 272 The interim results or financial data announced or disclosed by the Company shall be prepared in accordance with the PRC accounting standards and regulations as well as the international accounting standards or the accounting standards of the overseas place where Company’s shares are listed.

Article ~~272~~ 276 The interim results or financial data announced or disclosed by the Company shall be prepared in accordance with the PRC accounting standards and regulations ~~as well as the international accounting standards or the accounting standards of the overseas place where Company’s shares are listed~~ .

As a result of the aforesaid proposed amendments to the Articles of Association, the subsequent articles will be renumbered accordingly and the relevant numbering of such articles referred to in the Articles of Association shall be adjusted accordingly.

Save for the aforementioned articles, the contents of other articles in the Articles of Association remain unchanged.

The English version of the Articles of Association is an unofficial translation of the Chinese version. In the event of any inconsistency, the Chinese version shall prevail.

The proposed amendments to the Articles of Association are subject to the approval of the shareholders of the Company by way of special resolution at the shareholders’ general meeting of the Company.

By order of the Board Central China Securities Co., Ltd. JIAN Mingjun Chairman

Henan, the PRC 24 December 2021

As at the date of this announcement, the Board comprises executive director Mr. JIAN Mingjun, non-executive directors Mr. LI Xingjia, Ms. ZHANG Qiuyun, Mr. TIAN Shengchun, Mr. ZHANG Xiaoqi and Mr. LU Benson Cheng, and independent non-executive directors Mr. YU Xugang, Ms. ZHANG Dongming, Mr. CHEN Zhiyong and Mr. TSANG Sung.

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