Central China Securities Co., Ltd. — Proxy Solicitation & Information Statement 2014

Nov 14, 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your securities broker or other registered securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Central China Securities Co., Ltd. (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, securities broker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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 “ 中原證券股份有限公司 ” and carrying on business in Hong Kong as “ 中州證券 ”)

(Stock Code: 01375)

(I) PROPOSED ISSUANCE OF THE SHORT-TERM NOTES; AND (II) PROPOSED ISSUANCE OF DOMESTIC DEBT FINANCING INSTRUMENTS

Letter from the Board is set out on pages 3 to 11 of this circular.

The notice convening an extraordinary general meeting (“EGM”) to be held at 9:00 a.m. on Wednesday, 31 December 2014 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, is set out on pages 12 to 18 of this circular.

The proxy form for use at the EGM is enclosed. Whether or not you are able to attend the EGM in person, you are requested to complete and return the accompanying proxy form in accordance with the instructions printed thereon. In case of holders of H Shares, the proxy forms shall be lodged with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong; and in case of holders of Domestic Shares, the proxy forms shall be lodged at the head office of the Company in the PRC as soon as possible, but in any event, not less than 24 hours before the time scheduled for holding the relevant meetings (or any adjournment thereof) as soon as practicable. Completion and delivery of the proxy forms will not preclude you from attending and voting in person at the relevant meetings or any adjournment if you so desire.

15 November 2014

CONTENTS

		Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
**LETTER **	FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
(I)	PROPOSED ISSUANCE OF THE SHORT-TERM NOTES . . . . . . . . . . . . .	4
(II)	PROPOSED ISSUANCE OF DOMESTIC DEBT FINANCING
	INSTRUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
**NOTICE **	OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12

– i –

DEFINITIONS

In this circular, unless the context requires otherwise, the following terms shall have the following meanings:

• “Articles” or “Articles of Association”

the articles of association of the Company as amended from time to time

• “Board”

the Board of Directors of the Company

• “Company”

Central China Securities Co., Ltd. (中原證券股份有限公 司) (carrying on business in Hong Kong as “中州證券”), a joint stock company incorporated on 8 November 2002 in Henan Province, the PRC with limited liability, the H Shares of which are listed on the Main Board of the Stock Exchange

• “CSRC”

China Securities Regulatory Commission

• “Director(s)”

• director(s) of the Company

• “Domestic Debt Financing Instrument(s)”

the proposed issuance of domestic debt financing instrument(s) by the Company for Shareholders’ approval at the EGM, details of which are set out under the section “Letter From the Board – (II) Proposed Issuance of Domestic Debt Financing Instruments” of this circular

• “Domestic Share(s)”

issued ordinary share(s) in the share capital of the Company, with a nominal value of RMB1.00 each, which are subscribed for or credited as fully paid in RMB

• “EGM”

the extraordinary general meeting (or any adjournment thereof) of the Company to be held at 9:00 a.m. on 31 December 2014 (Wednesday) at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC for the Shareholders to consider and approve, inter alia, resolutions regarding (i) the issuance of the Short-term Notes; and (ii) the issuance of Domestic Debt Financing Instrument(s)

• “H Share(s)”

• overseas listed foreign ordinary share(s) in the share capital of the Company, with a nominal value of RMB1.00 each, which are listed on the Main Board of the Stock Exchange

• “Hong Kong”

The Hong Kong Special Administrative Region of the PRC

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DEFINITIONS

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “PRC” the People’s Republic of China, excluding, for the purpose of this circular only, Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

• “Previous Short-term Notes” the issued short-term notes as approved by Shareholders at the fourth extraordinary general meeting of the Company in 2013

• “RMB” Renminbi, the lawful currency of the PRC “Shareholder(s)” shareholders of the Company

• “Share(s)” Domestic Shares and H Shares “Short-term Notes” the proposed issuance of short-term notes by the Company for Shareholders’ approval at the EGM, details of which are set out under the section “Letter From the Board – (I) Proposed Issuance of the Short-term Notes” of this circular

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “%” per cent.

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LETTER FROM THE BOARD

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 “ 中原證券股份有限公司 ” and carrying on business in Hong Kong as “ 中州證券 ”)

(Stock Code: 01375)

Executive Directors: Mr. JIAN Mingjun (Chairman) Mr. ZHOU Xiaoquan

Non-executive Directors:

Mr. LI Xingjia Mr. ZHANG Qiang Mr. ZHU Jie Mr. WANG Lixin Mr. YU Zeyang

Independent Non-executive Directors: Mr. ZHU Shanli Mr. YUAN Dejun Ms. SHI Dan Mr. YUEN Chi Wai

Registered Address in the PRC: No. 10 Shangwu Waihuan Road Zhengdong New District Zhengzhou, Henan Province China

Headquarters/Principal Place of Business in the PRC: No. 10 Shangwu Waihuan Road Zhengdong New District Zhengzhou, Henan Province China

Principal Place of Business in Hong Kong: 18/F, Tesbury Centre 28 Queen’s Road East Wanchai, Hong Kong

15 November 2014

To the Shareholders

(I) PROPOSED ISSUE OF SHORT-TERM NOTES; AND (II) PROPOSED ISSUE OF DOMESTIC DEBT FINANCING INSTRUMENTS

INTRODUCTION

The purpose of this circular is to provide you with details of (i) the proposed issue of the Short-term Notes; and (ii) the proposed issue of the Domestic Debt Financing Instruments to enable you to make an informed decision on whether to vote for or against or abstain from voting on the proposed resolutions at the EGM.

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LETTER FROM THE BOARD

(I) PROPOSED ISSUE OF THE SHORT-TERM NOTES

At the fourth extraordinary general meeting of the Company in 2013, the Shareholders passed the resolution relating to the issue of the Previous Short-term Notes and authorized the Board to issue the Previous Short-term Notes within the quota approved by the People’s Bank of China and within the authorization of the Shareholders’ general meeting within two years from the date on which such resolution was passed, being from 8 May 2013 to 7 May 2015. On 11 September 2013, the People’s Bank of China determined the maximum outstanding balance of such short-term notes at RMB1.7 billion. As of 30 September 2014, the Company has issued 5 tranches of such notes of RMB4.2 billion in aggregate with an undue balance of RMB800 million.

The issue of the Previous Short-term Notes opened a new financing channel for the Company to replenish short-term working capital in support of its rapid growth, noticeably solving its problems of narrow financing methods and low debt capacity and enhancing its gearing ratio. Short-term notes have become a vital financing instrument of the Company. In order to match and optimize the capital structure of the Company and promote its business development orderly in long run, the Board is of the view that it is necessary to further issue such notes.

Proposal for the Issuance of Short-Term Notes

Taking into account of the forthcoming expiry of the authorization on the Previous Short-term Notes on 7 May 2015 and the considerable time required to obtain approval from and complete filing with regulatory authorities with respect to the application of the issue of such notes, the Company has drawn up a proposal ensuring the smooth proceeding of financing thereof and capturing market opportunity as follows:

• (1) Size of issuance : The size shall be managed based on the outstanding balance, which shall not exceed 60% of the net capital of the Company nor the maximum outstanding balance as determined by the People’s Bank of China. The Company may apply to regulatory authorities for an increase or decrease in the total issuing amount according to changes in its net capital. The size of each tranche shall be determined based on actual requirements of the Company and the issue shall be on a revolving basis.

• (2) Term of issuance : The term shall be no longer than 91 days. In the event that the People’s Bank of China adjusted the upper limit of the term of the Short-term Notes based on the market development, the Company can adjust the longest term for the issuance of Short-term Notes accordingly.

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LETTER FROM THE BOARD

(3) Method of issuance : To be issued in inter-bank market. Specific method of issuance is subject to the final approval from regulatory authority. (4) Use of proceeds : To be used as working capital of the Company and other uses which are not prohibited by relevant laws and regulations. (5) Validity period of : Effective within 48 months from the date on which the the resolution resolution in respect of the issuance of the Short-term Notes being passed at the EGM.

Shareholders’ Authorization

In view of the issuance of short-term notes by securities companies has rules and regulations to follow and with risks under control, the market condition and issuance work for short-term notes are more mature. Short-term notes have a shorter financing term and higher issuance frequency. Its issue time, frequency and market condition are closely related to the operation of the Company. In order to expedite the issuance of the Short-term Notes, it is proposed at the EGM to authorize the Board and agree the Board in turn to authorize the Chairman and the President to jointly determine the specific size, proposal, time of each tranche of Short-term Notes and other matters with respect to such issuance, and oversee the issuance and repayment of the Short-term Notes. The authorization will be effective within 48 months from the date of passing of such resolutions at the EGM.

(II) PROPOSED ISSUANCE OF DOMESTIC DEBT FINANCING INSTRUMENTS

To supplement capital continuously, secure the capital of the company and match its financial position with the corresponding industry position and business development, one of the important methods taken by securities companies is to finance their liabilities using various debt financing instruments. In order to facilitate transformation and innovation, expansion in capital investment and capital intermediate business, and coupled with the current liability, leveraging and future actual operation needs of the Company, the Company proposed to implement a stable debt finance strategy by drawing on debt financing methods commonly used in the industry in accordance with various laws and regulations such as the Securities Law of the People’s Republic of China, the Company Law of the People’s Republic of China, the Regulations on Supervision and Management of Securities Companies and the Provisions on the Administration of Subordinated Debts of Securities Companies, thereby optimizing its capital structure and maximizing the interest of Shareholders.

Based on the above reasons, the Company proposed the resolutions in relation to the issuance of Domestic Debt Financing Instruments at the EGM for approval. Provided that the Company complied with the Administrative Measures for the Risk Control Indicators of Securities Companies in PRC and the internal prudential risk indicators of the Company, the Company can issue various domestic debt financing instruments at one or more occasions or

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LETTER FROM THE BOARD

in several tranches in PRC, either openly or privately. These domestic debt financing instruments include, but not limited to, short-term notes of securities companies, subordinated notes, subordinated debts, asset-backed securities (notes), beneficiary certificates and other domestic debt financing instruments issued by the Company as approved or filed with CSRC, Securities Association of China, stock exchanges and other relevant authorities in accordance with relevant regulation, except for debt financing instruments (such as short-term notes and securities companies notes) which are subject to the approval of the Board or the general meeting in accordance with national regulations and policies of the Company (the above domestic debt financing instruments shall not contain any provision for conversion into shares).

Proposal for the Issuance of Domestic Debt Financing Instruments

The specific details on the proposal for the issuance of Domestic Debt Financing Instruments are as follows:

• (1) Size

• : The total size of the Domestic Debt Financing Instruments shall not exceed RMB10 billion (inclusive, calculated at the outstanding amount upon issuance). Subject to relevant laws and regulations in respect of issuance limit, the Domestic Debt Financing Instruments can be issued at one or more occasions or in several tranches.

• (2) Types

• : The specific types and priorities for repayment of the Domestic Debt Financing Instruments shall be determined according to relevant regulations and the market condition at the time of issuance.

• (3) Terms

• : The term of Domestic Debt Financing Instruments shall not exceed 10 years (inclusive) with a single term or hybrid type with multiple terms.

• (4) Interest rate

• : The interest rate of the issuance and its method of calculation and payment method thereof shall be determined according to the market condition at the time of issuance and relevant regulations.

• (5) Issue price

• : The issue price shall be determined according to the market condition at each issuance and relevant laws and regulations.

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LETTER FROM THE BOARD

• (6) Security and other : Security and other credit enhancement arrangements credit enhancement shall be determined according to relevant laws and arrangements regulations.

• (7) Use of proceeds : After deducting relevant expenses for the issuance of Domestic Debt Financing Instruments, all of the proceeds will be used to supplement the working capital of the Company, fulfill the operation needs and support the business expansion, or used for the adjustment on liability structure of the Company, the supplement of the working capital of the Company and project investment and/or construction of fixed assets in according to laws.

• (8) Issuer(s) : The Company or the domestic wholly-owned subsidiary(ies) of the Company will be served as the issuer(s).

• (9) Method of issuance : Shall be under custody and issue in accordance with the approval or filing of relevant authorities.

• (10) Targets of issue : The targets of issue shall be investors which meet the and the placement conditions for subscription in accordance with relevant arrangements to laws and regulations. Placement to the Shareholders of the Shareholders the Company can be conducted in accordance with laws.

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LETTER FROM THE BOARD

• (11) Safeguard : During the term of Domestic Debt Financing measures for Instruments, the Company can increase the proportion debt repayment of allocations of discretionary surplus reserve and general risk reserve. When there is an anticipated or actual failure to repay the principal and interests of the Domestic Debt Financing Instruments when they become due, at least the following measures shall be taken by the Company:

• (1) not to distribute dividend to the Shareholders;

• (2) to suspend implementation of any capital expenditure projects such as material external investments, acquisitions and mergers, etc.;

• (3) to reduce or cease the payment of salary and bonus of the Directors and senior management of the Company;

• (4) to forbid the job transfers of principal persons in charge.

• (12) Listing of debt : Matters in respect of listing application shall be financing determined in accordance with the actual situation of instruments the Company, market condition and relevant laws and regulations.

• (13) Validity period of : Effective within 48 months from the date on which the the resolution resolution in respect of the issuance of Domestic Debt Financing Instruments being passed at the EGM.

Shareholders’ Authorization

In order to expedite the issuance of the Domestic Debt Financing Instruments, it is proposed at the EGM to authorize the Board and agree the Board in turn to authorize the Chairman and the President to jointly determine, on the principle to maximize the benefits of the Company, the specific size, proposal, time, method and other matters with respect to such issuance in accordance with related laws and regulations, opinions and suggestions of regulatory authorities, capital requirement of the Company and the then prevailing market condition, and oversee the issue and repayment status of domestic debt financing. Such authorization includes but not limited to the following:

• (1) Subject to applicable laws and regulations and related requirements of regulatory authorities and resolutions of the EGM, to formulate and adjust specific proposals for the issuance of the Domestic Debt Financing Instruments (including but not

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LETTER FROM THE BOARD

limited to the determination of the appropriate issuer, types, size, term, method to determine interest rate, provisions, targets and time (such as one-off issue, issue in multiple occasions and issue in tranches and in multiple types, and the size and term of each issue, tranche and type) thereof), security arrangements, credit enhancement arrangements such as letters of guarantee and letters of support and credit rating, specific use of proceeds, terms of re-sale and redemption, option to raise the interest rate, put option by investors, registration, listing and place of listing, repayment and interest payment, measures to lower repayment risks, measures to safeguard repayment and all other matters in relation to such issuance in accordance with condition of the Company and related debt markets;

• (2) To determine on the engagement of intermediaries, to execute, exercise, revise and conclude all agreements and documents in relation to the Domestic Debt Financing Instruments issuance (including but not limited to credit enhancement agreements such as sponsorship agreements, underwriting agreements, guarantee agreements and letters of support, bond indentures, engagement agreements of intermediaries, entrusted management agreements, settlement management agreements, registration and custody agreements, listing agreements and other legal documents) and to make relevant disclosure in accordance with related laws and regulations and listing rules of stock exchanges on which securities of the Company are listed;

• (3) To appoint the entrusted manager and settlement manager for the Domestic Debt Financing Instruments issuance, to execute any entrusted management agreements and settlement management agreements in relation thereto and to formulate procedures for meeting of such instruments, if applicable;

• (4) To conduct all reporting and listing in relation to such issuance, if applicable, including but not limited to preparation, modification and delivery of reporting materials of the Domestic Debt Financing Instruments issuance, listing, credit enhancement agreements such as guarantees and letters of support provided by the issuer and/or any third parties, and to execute related reporting documents and other legal documents in accordance with requirements of regulatory authorities and industry self-discipline organizations;

• (5) To make corresponding adjustment to the Domestic Debt Financing Instruments issuance according to opinions of regulatory authorities, changes of policy and change in market condition or to determine whether proceed with all or part of the work in relation thereto, save for matters subject to the reapproval of the general meeting required under related laws and regulations and the Articles of Association of the Company;

• (6) To carry out or determine all other matters related to the issuance, listing and other matters of such instruments.

• (7) The above authorization shall be valid within 48 months from the date of passing of such resolution at the EGM. However, if the Board and/or its delegations have

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LETTER FROM THE BOARD

determined the issuance or part of the issuance of the Domestic Debt Financing Instruments during the validity period of such authorization and the Company has also obtained approval, permit, filing or registration (if applicable) thereof from regulatory authorities during the validity period of such authorization, the Company may complete such issuance or part issuance during the validity period of confirming such approval, filing or registration, and, for the purposes of such issuance or part of the issuance related, the validity period of such authorization shall be extended to the date on which the issuance or part of the issuance becomes complete.

Given that the issuance of the Short-Term Notes and the Domestic Debt Financing Instruments is subject to approval at the EGM and by related government departments or regulatory authorities in the PRC, Shareholders and investors are advised to exercise caution when dealing in the Shares and other securities of the Company.

GENERAL INFORMATION

The EGM will be convened by the Company to seek approval from Shareholders for, inter alia, (i) the issuance of the Short-term Notes; and (ii) the issuance of the Domestic Debt Financing Instruments. Please be reminded that, other than approval from Shareholders, the issuance of the Short-term Notes and the Domestic Debt Financing Instruments is still subject to approval from the CSRC and other relevant regulatory authorities.

EGM

The notices convening the EGM of the Company to be held at 9:00 a.m. on Wednesday, 31 December 2014 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, are set out on pages 12 to 18 of this circular.

No Shareholder is required to abstain from voting in connection with the matters to be resolved at the EGM.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM in person, you are requested to complete and return the accompanying applicable form of proxy in accordance with the instructions printed thereon as soon as possible to the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (in case of holders of H Shares) and to the head office of the Company in the PRC (in case of holders of Domestic Shares) as soon as possible, but in any event, no later than 24 hours before the time appointed for holding the EGM (or any adjournment thereof). Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment if you so wish.

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LETTER FROM THE BOARD

Voting

According to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Therefore, the resolutions as set out in the notice of EGM will be taken by way of a poll under the Article 116 of the Articles.

During the poll, every Shareholder present in person or by proxy (or in case of Corporation, its duly authorised representative) at the EGM shall have one vote for each Share registered in his/her name in the register of members. A Shareholder entitled to more than one vote needs not use all his/her votes or cast all the votes he/she uses in the same manner.

RECOMMENDATION

The Board considered that all resolutions to be proposed at the EGM are in the interests of the Company and the Shareholders as a whole. Therefore, the Board recommends the Shareholders to vote in favour of all resolutions to be proposed at the meetings.

Yours faithfully, On behalf of the Board Central China Securities Co., Ltd. JIAN Mingjun Chairman

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NOTICE OF EGM

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 “ 中原證券股份有限公司 ” and carrying on business in Hong Kong as “ 中州證券 ”)

(Stock Code: 01375)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of Central China Securities Co., Ltd. (the “ Company ”) will be held at 9:00 a.m. on 31 December 2014 (Wednesday) at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, for the purpose of considering and, if thought fit, passing the following resolutions:

Unless otherwise indicated, capitalised terms used herein shall have the same meaning as those defined in the circular of the Company dated 15 November 2014 (the “ Circular ”).

AS SPECIAL RESOLUTIONS

“ THAT :

1. Subject to the approval of relevant government or regulatory authorities in the PRC, the following proposal in respect of the issuance of the Short-term Notes be approved:

2. (1) Size of issuance : The size shall be managed based on the outstanding balance, which shall not exceed 60% of the net capital of the Company nor the maximum outstanding balance as determined by the People’s Bank of China. The Company may apply to regulatory authorities for an increase or decrease in the total issuing amount according to changes in its net capital. The size of each tranche shall be determined based on actual requirements of the Company and the issue shall be on a revolving basis.

3. (2) Term of issuance : The term shall be no longer than 91 days. In the event that the People’s Bank of China adjusted the upper limit of the term of the Short-term Notes based on the market development, the Company can adjust the longest term for the issuance of Short-term Notes accordingly.

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NOTICE OF EGM

• (3) Method of issuance : To be issued in inter-bank market. Specific method of issuance is subject to the final approval from regulatory authority.

• (4) Use of proceeds : To be used as working capital of the Company and other uses which are not prohibited by relevant laws and regulations.

• (5) Validity period of : Effective within 48 months from the date on the resolution which the resolution in respect of the issuance of the Short-term Notes being passed at the EGM.

• To authorize the Board and agree the Board in turn authorize the Chairman and the President, to jointly determine the specific size, proposal, time of each tranche of Short-term Notes and other matters with respect to the issuance of the Short-term Notes, and oversee the issuance and repayment of the Short-term Notes; and to approve that such authorization be effective within 48 months from the date of passing of such resolutions at the EGM.

• Subject to approval from related governmental departments or regulatory authorities of the PRC and compliance of the Administrative Measures for the Risk Control Indicators of Securities Companies in PRC and the internal prudential risk indicators of the Company, to approve the issuance of various domestic debt financing instruments at one or more occasions or in several tranches in PRC, either openly or privately. These domestic debt financing instruments include, but not limited to, short-term notes of securities companies, subordinated notes, subordinated debts, asset backed securities (notes), beneficiary certificates and other domestic debt financing instruments issued by the Company as approved or filed with CSRC, Securities Association of China, stock exchanges and other relevant authorities in accordance with relevant regulation, except for debt financing instruments (such as short-term notes and securities companies notes) which are subject to the approval of the Board or the general meeting in accordance with national regulations and policies of the Company. The domestic debt financing instruments referred to in this resolution shall not contain any provision for conversion into shares.

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NOTICE OF EGM

1. Subject to approval from related governmental departments or regulatory authorities of the PRC, to approve the proposal for the issuance of Domestic Debt Financing Instruments as follows:

2. (1) Size : The total size of the Domestic Debt Financing Instruments shall not exceed RMB10 billion (inclusive, calculated at the outstanding amount upon issuance). Subject to relevant laws and regulations in respect of issuance limit, the Domestic Debt Financing Instruments can be issued at one or more occasions or in several tranches.

3. (2) Types : The specific types and priorities for repayment of the Domestic Debt Financing Instruments shall be determined according to relevant regulations and the market condition at the time of issuance.

4. (3) Terms : The term of Domestic Debt Financing Instruments shall not exceed 10 years (inclusive) with a single term or hybrid type with multiple terms.

5. (4) Interest rate : The interest rate of the issuance and its method of calculation and payment method thereof shall be determined according to the market condition at the time of issuance and relevant regulations.

6. (5) Issue price : The issue price shall be determined according to the market condition at each issuance and relevant laws and regulations.

7. (6) Security and other : Security and other credit enhancement credit enhancement arrangements shall be determined according to arrangements relevant laws and regulations.

8. (7) Use of proceeds : After deducting relevant expenses for the issuance of Domestic Debt Financing Instruments, all of the proceeds will be used to supplement the working capital of the Company, fulfill the operation needs and support the business expansion, or used for the adjustment on liability structure of the Company, the supplement of the working capital of the Company and project investment and/or acquisition and construction of fixed assets in according to laws.

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NOTICE OF EGM

• (8) Issuer(s) : The Company or the domestic wholly-owned subsidiary(ies) of the Company will be served as the issuer(s).

• (9) Method of issuance : Shall be under custody and issue in accordance with the approval or filing of relevant authorities.

• (10) Targets of issue : The targets of issue shall be investors which meet and the placement the conditions for subscription in accordance arrangements to with relevant laws and regulations. Placement to the Shareholders the Shareholders of the Company can be conducted in accordance with laws.

• (11) Safeguard : During the term of Domestic Debt Financing measures for Instruments, the Company can increase the debt repayment proportion of allocations of discretionary surplus reserve and general risk reserve. When there is an anticipated or actual failure to repay the principal and interests of the Domestic Debt Financing Instruments when they become due, at least the following measures shall be taken by the Company:

• (1) not to distribute dividend to the Shareholders;

• (2) to suspend implementation of any capital expenditure projects such as material external investments, acquisitions and mergers, etc.;

• (3) to reduce or cease the payment of salary and bonus of the Directors and senior management of the Company;

• (4) to forbid the job transfers of principal persons in charge.

• (12) Listing of debt : Matters in respect of listing application shall be financing determined in accordance with the actual instruments situation of the Company, market condition and relevant laws and regulations.

• (13) Validity period of : Effective within 48 months from the date on the resolution which the resolution in respect of the issuance of Domestic Debt Financing Instruments being passed at the EGM.

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NOTICE OF EGM

1. To authorize the Board and agree the Board in turn authorize the Chairman and the President, to jointly determine, on the principle to maximize the benefits of the Company, the specific size, proposal, time, method and other matters with respect to the issuance of the Domestic Debt Financing Instruments in accordance with related laws and regulations, opinions and suggestions of regulatory authorities, capital requirement of the Company and the then prevailing market condition, and oversee the issue and repayment status of domestic debt financing. Such authorization includes but not limited to the following:

2. (1) Subject to applicable laws and regulations and related requirements of regulatory authorities and resolutions of the EGM, to formulate and adjust specific proposals for the issuance of the Domestic Debt Financing Instruments (including but not limited to the determination of the appropriate issuer, types, size, term, method to determine interest rate, provisions, targets and time (such as one-off issue, issue in multiple occasions and issue in tranches and in multiple types, and the size and term of each issue, tranche and type) thereof), security arrangements, credit enhancement arrangements such as letters of guarantee and letters of support and credit rating, specific use of proceeds, terms of re-sale and redemption, option to raise the interest rate, put option by investors, registration, listing and place of listing, repayment and interest payment, measures to lower repayment risks, measures to safeguard repayment and all other matters in relation to such issuance in accordance with condition of the Company and related debt markets;

3. (2) To determine on the engagement of intermediaries, to execute, exercise, revise and conclude all agreements and documents in relation to the Domestic Debt Financing Instruments issuance (including but not limited to credit enhancement agreements such as sponsorship agreements, underwriting agreements, guarantee agreements and letters of support, bond indentures, engagement agreements of intermediaries, entrusted management agreements, settlement management agreements, registration and custody agreements, listing agreements and other legal documents) and to make relevant disclosure in accordance with related laws and regulations and listing rules of stock exchanges on which securities of the Company are listed;

4. (3) To appoint the entrusted manager and settlement manager for the Domestic Debt Financing Instruments issuance, to execute any entrusted management agreements and settlement agreements in relation thereto and to formulate procedures for meeting of such instruments, if applicable;

5. (4) To conduct all reporting and listing in relation to such issuance, if applicable, including but not limited to preparation, modification and delivery of reporting materials of the Domestic Debt Financing Instruments issuance, listing, credit enhancement agreements such as guarantees and letters of support provided by the Company, the issuer and/or any third parties, and to execute related reporting documents and other legal documents in accordance with requirements of regulatory authorities and industry self-discipline organizations;

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NOTICE OF EGM

• (5) To make corresponding adjustment to the Domestic Debt Financing Instruments issuance according to opinions of regulatory authorities, changes of policy and change in market condition or to determine whether proceed with all or part of the work in relation thereto, save for matters subject to the reapproval of the general meeting required under related laws and regulations and the Articles of Association of the Company;

• (6) To carry out or determine all other matters related to the issuance, listing and other matters of such instruments;

• (7) The above authorization shall be valid within 48 months from the date of passing of such resolution at the EGM. However, if the Board and/or its delegations have determined the issuance or part of the issuance of the Domestic Debt Financing Instruments during the validity period of such authorization and the Company has also obtained approval, permit, filing or registration (if applicable) thereof from regulatory authorities during the validity period of such authorization, the Company may complete such issuance or part issuance during the validity period of confirming such approval, filing or registration, and, for the purposes of such issuance or part of the issuance related, the validity period of such authorization shall be extended to the date on which the issuance or part of the issuance becomes complete.”

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

Henan, the PRC 15 November 2014

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NOTICE OF EGM

Notes:

1. The register of members of the Company will be closed from 1 December 2014 to 31 December 2014 (both days inclusive), during which period no transfer of shares of the Company can be registered. In order to qualify to attend and vote at the EGM, all transfer documents accompanied by the relevant share certificates must be lodged with the H share registrar of the Company, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H shares of the Company) or the head office in the PRC of the Company (for holders of domestic shares of the Company), no later than 4:30 p.m. on 28 November 2014.

2. Shareholders who are entitled to attend and vote at the EGM may appoint one or more proxies to attend and vote on their behalves. A proxy need not be a Shareholder of the Company.

3. In order to be valid, the proxy form for the EGM must be deposited by hand or post, for holders of H shares of the Company, to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong and, for holders of domestic shares of the Company, to the head office in the PRC of the Company not less than 24 hours before the time for holding the EGM (or any adjournment thereof) for taking the poll. If the proxy form is signed by a person under a power of attorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at the same time as mentioned in the proxy form. Completion and return of the proxy form will not preclude shareholders from attending and voting in person at the EGM or any adjourned meetings should they so wish.

4. Shareholders or their proxies shall provide their identity documents when attending the EGM.

5. Shareholders who intend to attend the EGM should complete the reply slip and return it by hand or by post to the H share registrar of the Company (for holders of H shares of the Company) or to the head office in the PRC of the Company (for holders of domestic shares of the Company) on or before 11 December 2014.

6. The EGM is expected to take an hour approximately. Shareholders attending the EGM shall be responsible for their own travel and accommodation expenses.

7. The address of the head office in the PRC of the Company is No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, China.

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