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

Aug 7, 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)

PROPOSED ESTABLISHMENT OF THE HONG KONG SUBSIDIARIES

Letter from the Board is set out on pages 3 to 8 of this circular.

A notice convening an extraordinary general meeting (“ EGM ”) of the Company to be held at 9:00 a.m. on Monday, 22 September 2014 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the People’s Republic of China (“ PRC ”) is set out on pages 9 to 10 of this circular.

The proxy form for use at the EGM is enclosed. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying proxy form in accordance with the instructions printed thereon. In case of H Shares, the proxy form 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 Domestic Shares, the proxy form 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 EGM (or any adjournment thereof) as soon as practicable. Completion and delivery of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment if you so desire.

7 August 2014

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9

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DEFINITIONS

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

• “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 in 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

• “Directors” the directors of the Company

• “Domestic Share(s)” ordinary share(s) of the Company in issue with a nominal value of RMB1.00 each, which is subscribed for and credited as fully paid up in RMB

• “EGM”

• the extraordinary general meeting (or any adjournment thereof) of the Company to be held at 9:00 a.m. on Monday, 22 September 2014 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, among other things, the proposed establishment of the Hong Kong subsidiaries

• “H Share(s)”

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

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

• “Hong Kong Subsidiaries”

• a subsidiary intended to be established in Hong Kong by the Company (provisionally named as “中州國際金融控 股有限公司”, subject to the final approval of the examination and approval and registration authorities), and other wholly-owned subsidiaries intended to be established in Hong Kong through such subsidiary

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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 (for the purpose of this
	circular, excluding Hong Kong, the Macao Special
	Administrative Region of the PRC and Taiwan)
“RMB”	Renminbi, the lawful currency of the PRC
“Shareholder(s)”	the shareholder(s) of the Company
“Share(s)”	the Domestic Shares and H Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

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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. WANG Jinian Mr. ZHANG Qiang

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

7 August 2014

To the Shareholders

Dear Sir/Madam,

PROPOSED ESTABLISHMENT OF THE HONG KONG SUBSIDIARIES

INTRODUCTION

In order to enhance the core competitiveness of the Company under the fully open environment of the capital market in the PRC, learn from the advanced management methods and innovative development philosophy from overseas mature capital markets and expand our overseas businesses, the Company currently intends to establish a subsidiary and other wholly-owned subsidiaries in Hong Kong through such subsidiary so as to launch businesses in securities broking and futures broking, etc.

The purpose of this circular is to provide you with details of the proposed establishment of the Hong Kong Subsidiaries.

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LETTER FROM THE BOARD

PROPOSED ESTABLISHMENT OF THE HONG KONG SUBSIDIARIES

The Board announces that the Company currently intends to establish a wholly-owned subsidiary in Hong Kong with the registered capital of HK$50 million (provisionally named as 中州國際金融控股有限公司, subject to the final approval of the examination and approval and registration authorities), and other wholly-owned subsidiaries in Hong Kong through such subsidiary so as to launch businesses in securities broking and futures broking, etc.

The establishment of the Hong Kong Subsidiaries will be financed by the internal fund of the Company.

Conditions of Establishing a Subsidiary in Hong Kong

In accordance with Notice regarding the establishment, acquisition, equity participation in securities institutions in Hong Kong by securities companies in the PRC and other regulatory issues (《關於內地證券公司在香港設立、收購、參股證券經營機構和業務監管有 關問題的通知》) (Ji Gou Bu Bu Han 【2009】 No. 432) issued on 28 September 2009, and Supplemental Notice regarding the establishment, acquisition, equity participation in securities institutions in Hong Kong by securities companies in the PRC and other regulatory issues (《關於內地證券公司在香港設立、收購、參股證券經營機構和業務監管有關問題的補 充通知》) (Ji Gou Bu Bu Han 【2009】 No. 582) issued on 22 November 2011 by the CSRC, the securities companies in the PRC which would like to apply for the establishment, acquisition or participation in securities institutions in Hong Kong shall satisfy certain conditions and obtain the approval at the general meeting of such companies. The conditions and that being satisfied by the Company are shown as follows:

The CSRC’s requirements

The Company’s condition

1 The two most recent The Company was rated as A of Class A in 2010, class ratings of the and rated as BBB of Class B in 2013 and 2014. securities company In accordance with the relevant requirements of are above BBB of Supplemental Notice regarding the Class B with one establishment, acquisition, equity participation Class A rating in securities institutions in Hong Kong by securities companies in the PRC and other regulatory issues (《關於內地證券公司在香港 設立、收購、參股證券經營機構和業務監管有 關問題的補充通知》), the securities companies can lower the qualification requirements appropriately according to the features and needs of “Go Abroad” policy. Therefore, the Company meets this requirement

Whether the Company meets the requirements

Yes

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LETTER FROM THE BOARD

Whether the Company The CSRC’s meets the requirements The Company’s condition requirements

2 No material breach During the last 12 months, the Company had no Yes of law and material breach of law and regulations and all regulations in the risk control indicators met the required recent year, and all standards. As at 30 June 2014, the net capital of risk control the Company exceeded RMB3 billion indicators continue to meet the required standards in last 12 months. The net capital for the most recent period is not less than RMB3 billion

3 The market share of According to the rankings of 2013 Securities Yes securities brokerage, Company Operating Results announced by securities Securities Association of China, the Company undertaking and ranked 38th of 2013 Securities Dealing Agent sponsor or securities Business in terms of net income, 22nd of Lead asset management Equity Underwriters and 30th of Underwriting business in the recent and Sponsor Business in terms of net income, year is not less than which are higher than the industry average the industrial average 4 The company has The Company continues to make profits for the Yes sustainable last three years, among which the net profits profitability without between 2011 and 2013 are RMB93 million, uncovered loss and RMB183 million and RMB238 million makes profits for at respectively and no uncovered loss was found least two years out of the last three accounting years, and the accumulated net profit for the three years is not less than RMB1 billion

5 The company, with sound corporate governance structure, optimized risk management system and internal control department, is able to prevent risk transfer and conflict of interests with overseas subsidiaries

The Company has sound corporate governance Yes structure, optimized risk management system and an internal control department

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LETTER FROM THE BOARD

The CSRC’s requirements

• 6 The company obtains Foreign Exchange Operating License in accordance with the laws, and has legal source of foreign exchange capital

The Company’s condition

The Company obtained Securities Business and Foreign Exchange Operating License (《證券業 務外匯經營許可證》) issued by State Administration of Foreign Exchange (“SAFE”) in 2008, and renewed the license in 2011 in accordance with the requirements of SAFE. The license is valid until 11 October 2014 (Hui Zi Zi Di no. SC201129). The source of the foreign exchange capital of the Company is derived from three aspects, namely the foreign exchange capital fund acquired through commercial banks upon the approval of SAFE, the foreign exchange business operating income and the capital in Hong Kong dollars funded through the successful listing in Hong Kong. The Company regularly settles and transfers the revenue of the foreign exchange business in Renminbi through commercial banks

Whether the Company meets the requirements

Yes

• 7 The company The Company obtained Foreign Exchange Yes operates foreign Business Operating License (《經營外匯業務許 investment stock 可證》) in 2008, and has operated the foreign broking business for invested shares business for nearly 6 years. over two years with With its long-term operation, the Company has related professionals a number of professionals

Reasons for and Benefits of the Establishment of the Hong Kong Subsidiaries

With the further liberalization of the financial market in the PRC, especially the gradual introduction of Shanghai-Hong Kong Stock Connect and the financial liberalization policy in Shanghai Free Trade Zone, the pace of the liberalization of capital markets in the PRC has significantly accelerated. In order to adapt to the new circumstances and gain experience amid international competitions, developing businesses in Hong Kong is the first and meaningful step for the Company to achieve globalization. Furthermore, the diversified products and sound market environment of the Hong Kong market are relatively attractive to certain mainland investors while there are currently only few channels for them to invest in Hong Kong stocks. Therefore, the development of Hong Kong business of the Company is beneficial to the current clients by providing them with diversified services and satisfying their growing demand for overseas investment and finance. In addition, the establishment of the Hong Kong Subsidiaries by the Company can also create additional stable streams of revenue as well as diversify the potential investment risks through the sophisticated system of Hong Kong market.

Therefore, by virtue of the above and the fact that the Company has met the conditions of establishment of subsidiary in Hong Kong as required by CSRC, the Board considered that the establishment of the Hong Kong Subsidiaries is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

The EGM

The Company will convene the EGM for the purpose of, among other things, seeking the Shareholders’ approval on the proposed establishment of the Hong Kong Subsidiaries.

The EGM will be held at 9:00 a.m./p.m. on Monday, 22 September 2014 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, for, among other things, the Shareholders to consider and, if thought fit, approve the proposed establishment of the Hong Kong Subsidiaries. At the EGM, the votes of the Shareholders will be taken by poll.

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

The notice of the EGM is set out on pages 9 to 10 of this circular.

The proxy form for use at the EGM is enclosed. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying proxy form in accordance with the instructions printed thereon. In case of H Shares, the proxy form 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 Domestic Shares, the proxy form 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 EGM (or any adjournment thereof) for taking the poll as soon as practicable. Completion and delivery of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment if you so desire.

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, all resolutions as stated in the notice of EGM will be proposed at the EGM and will be taken by way of a poll under the Article 116 of the articles of association of the Company.

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.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors considered that the proposed establishment of the Hong Kong Subsidiaries is in the interests of the Company and the Shareholders as a whole. Therefore, the Directors recommend the Shareholders to vote in favour of the relevant resolution to be proposed at the EGM.

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

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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 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 Monday, 22 September 2014 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the People’s Republic of China (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 7 August 2014 (the “ Circular ”).

AS ORDINARY RESOLUTIONS

“ THAT:

1. subject to the approval of CSRC and/or relevant authorities of the State, the establishment of a wholly-owned subsidiary (provisionally named as 中州國際金融 控股有限公司, subject to the final approval of the examination and approval and registration authorities) (“ Central China International Finance ”) in Hong Kong with a registered capital of HK$50 million by the Company be and is hereby approved and confirmed, and the Board be authorized to act on behalf of the Company to take all steps necessary or expedient, comply with the PRC and/or Hong Kong laws and regulations and satisfy the requirements (if any) of the relevant PRC regulatory authorities, to establish Central China International Finance, including but not limited to the application for the registration of Central China International Finance, the formulation of the articles of association and the execution of all such other documents and instruments; and

2. subject to the approval of CSRC and/or relevant authorities of the State, the establishment of other wholly-owned subsidiaries (the “ Other Subsidiaries ”) in Hong Kong through Central China International Finance by the Company and the application for licenses in relation to engaging in securities business in Hong Kong (the “ Licenses ”) pursuant to the Securities and Futures Ordinance be and are hereby approved and confirmed, and the Board be authorized to act on behalf of the Company to take all steps necessary or expedient, comply with the PRC and/or Hong Kong laws and regulations and satisfy the requirements (if any) of the relevant PRC regulatory authorities, to establish Other Subsidiaries and apply for the Licenses, including but not limited to the application for the registration of Other Subsidiaries, the formulation of the articles of association, the application of the Licenses and the execution of all such other documents and instruments.”

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

Henan, the PRC 7 August 2014

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. The register of members of the Company will be closed from 23 August 2014 to 22 September 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 22 August 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.

3. In order to be valid, the proxy form 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 2 September 2014.

6. The EGM is expected to take half of the day 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.

As at the date of this notice, the Board of the Company comprises executive Directors JIAN Mingjun and ZHOU Xiaoquan; non-executive Directors LI Xingjia, WANG Jinian and ZHANG Qiang; and independent non-executive Directors ZHU Shanli, YUAN Dejun, SHI Dan and YUEN Chi Wai .

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