Central China Securities Co., Ltd.

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 revised 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.

(a joint stock company incorporated in 2002 in Henan Province, the People’s Republic of China with limited liability under the Chinese corporate name “ ” and carrying on business in Hong Kong as “ ”) (Stock Code: 01375)

PROPOSED ISSUE OF NEW H SHARES UNDER SPECIFIC MANDATE; PROPOSED ADOPTION OF SHARE OPTION SCHEME AND PROPOSED CONSEQUENTIAL AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Joint Placing Agents

Letter from the Board is set out on pages 5 to 19 of this circular.

The revised notice convening the EGM, the Domestic Share Class Meeting and the H Share Class Meeting of the Company to be held at 9:00 a.m., 10:00 a.m. (or as soon thereafter as the EGM shall have been concluded or adjourned, whichever is later) and 11:00 a.m. (or as soon thereafter as the Domestic Share Class Meeting shall have been concluded or adjourned, whichever is later) respectively on 15 June 2015 (Monday) at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, are enclosed herein.

The revised proxy forms for use at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting are enclosed. Whether or not you are able to attend the EGM, the Domestic Share Class Meeting and the H Share Class Meeting in person, you are requested to complete and return the accompanying applicable revised proxy forms in accordance with the instructions printed thereon. In case of holders of H Shares, the revised 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 revised 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 revised proxy forms will not preclude you from attending and voting in person at the relevant meetings or any adjournment if you so desire.

29 May 2015

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
(I) Proposed Issue of New H Shares under Specific Mandate . . . . . . . . . . . . . .	6
(II) Report on Use of Proceeds from Previous Fund Raising Activity . . . . . . . .	13
(III) Proposed Adoption of Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . .	13
APPENDIX – Principal terms of the Share Option Scheme . . . . . . . . . . . . .	20

– i –

DEFINITIONS

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

“Articles of Association”
the articles of association of the Company as amended from time to time;
“Board” the board of Directors of the Company;
“Class Meetings” the Domestic Share Class Meeting and the H Share Class Meeting;
“close associate(s)” has the meaning ascribed to it under the Listing Rules;
“Company”
Central China Securities Co., Ltd. (中原証券股份有限公司) (carrying on business in Hong Kong as “中州証券”), 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)” the director(s) of the Company;
“Domestic Share(s)”

the 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;

“Domestic Share Class Meeting”
the domestic share class meeting (or any adjournment thereof) of the Company to be held at 10:00 a.m. on 15 June 2015 (Monday) at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC (or as soon thereafter as the EGM shall have been concluded or adjourned, whichever is later) for the Shareholders to consider and approve the resolutions regarding, among others, the proposed New H Share Issue, the proposed consequential amendments to the Articles of Association and the proposed adoption of the Share Option Scheme;

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DEFINITIONS

“EGM”

“Grantee”
“H Share(s)”
“H Share Class Meeting”
“HK$”
“Hong Kong”
“Latest Practicable Date”
“Listing Committee”
“Listing Rules”

the extraordinary general meeting (or any adjournment thereof) of the Company to be held at 9:00 a.m. on 15 June 2015 (Monday) 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 the resolutions regarding, among others, the proposed New H Share Issue, the proposed consequential amendments to the Articles of Association and the proposed adoption of the Share Option Scheme;

any Participant who accepts an Offer in accordance with the terms of the Share Option Scheme;
the 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 (stock code: 01375);
the H share class meeting (or any adjournment thereof) of the Company to be held at 11:00 a.m. on 15 June 2015 (Monday) at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC (or as soon thereafter as the Domestic Share Class Meeting shall have been concluded or adjourned, whichever is later) for the Shareholders to consider and approve the resolutions regarding, among others, the proposed New H Share Issue, the proposed consequential amendments to the Articles of Association and the proposed adoption of the Share Option Scheme;

Hong Kong dollar, the lawful currency of Hong Kong;

Hong Kong Special Administrative Region of the PRC;
27 May 2015, being the latest practicable date before printing of this circular for the purpose of ascertaining information for inclusion in this circular;
the Listing Committee of the Stock Exchange;

the Rules Governing the Listing of Securities on the Stock Exchange;

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DEFINITIONS

“New H Share Issue”
“New H Shares”
“New OTC Board”
“Offer”
“Option(s)”
“Option Period”
“Participant(s)”
“PRC”
“RMB”
“Share(s)”

the proposed issue of not more than 592,119,000 New H Shares;

not more than 592,119,000 new H Shares proposed to be issued upon the exercise of the Specific Mandate;
National Equities Exchange and Quotations (全國中小企業股份轉讓系統);

the offer of the grant of an Option;

a right granted by the Company for the subscription of H Shares pursuant to the Share Option Scheme;
the period of time during which the Grantee may exercise the Option, which shall not be more than 5 years from the Offer Date;

All directors (excluding non-executive and independent non-executive directors), other management at the company level, middle management staff and some core employees of the Company and the Group (other than any Substantial Shareholder (with the meaning ascribed to it under the Listing Rules) of the Company or its subsidiaries), who, at the absolute discretion of the Board, have contributed or will contribute to the Company or the Group. The participants of the Scheme primarily include the Chairman, president, directors and supervisors (excluding external supervisors) of the Company (and its management members including directors and supervisors (excluding external supervisors) of its subsidiaries) who did not purchase shares of the Company through the qualified domestic institutional investors (QDII) when the Company was listed in Hong Kong on 25 June 2014;

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;

Renminbi, the lawful currency of the PRC;

Domestic Shares and H Shares of the Company;

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DEFINITIONS

“Share Option Scheme” the proposed share option scheme to be adopted by the Company, the principal terms of which are set out in Appendix of this circular;
“Shareholder(s)” shareholders of the Company; “Specific Mandate” the specific mandate proposed to be granted to the Board by the Shareholders at the EGM and the Class Meetings in relation to the New H Share Issue;
“Stock Exchange” The Stock Exchange of Hong Kong Limited; “Subscription Price” the price at which the Grantees may subscribe for the H Share upon the exercise of an Option; and
“Supervisor(s)” supervisors of the Company.

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LETTER FROM THE BOARD

Central China Securities Co., Ltd.

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 Mr. YUEN Chi Wai Mr. NING Jincheng

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

29 May 2015

To the Shareholders,

PROPOSED ISSUE OF NEW H SHARES UNDER SPECIFIC MANDATE; PROPOSED ADOPTION OF SHARE OPTION SCHEME AND PROPOSED CONSEQUENTIAL AMENDMENTS TO THE ARTICLES OF ASSOCIATION

INTRODUCTION

Reference is made to the announcement of the Company dated 9 April 2015 in relation to the proposed New H Share Issue and the proposed consequential amendments to the Articles of Association; the announcement dated 19 April 2015 relating to, inter alia , the postponement of the EGM and Class Meetings and the announcement dated 26 May 2015 relating to the

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LETTER FROM THE BOARD

proposed adoption of the Share Option Scheme. The purpose of this circular is to provide you with details of the above matters to enable the Shareholders to make an informed decision on whether to vote for or against or abstain from voting on the resolutions proposed at the EGM and the Class Meetings.

PROPOSED ISSUE OF NEW H SHARES UNDER SPECIFIC MANDATE

On 9 April 2015, the Board has resolved to convene the EGM and the Class Meetings for approval of the proposed issue of not more than 592,119,000 New H Shares, representing not more than 22.50% of the total existing issued share capital of the Company before the issue, and 18.37% of total enlarged issued share capital of the Company after the issue; and representing not more than 90.00% of the existing issued H Shares of the Company before the issue, and 47.37% of the enlarged issued H Shares of the Company after the issue. The New H Shares will be issued under the Specific Mandate.

Details of the proposed New H Shares Issue are as follows:

(1) Class of Shares to be issued

Ordinary H Shares with a nominal value of RMB1.00 each. Unless otherwise required by the applicable PRC laws and regulations and the Articles of Association, the New H Shares shall rank pari passu with the issued H Shares.

(2) Size of issuance

The Company will issue not more than 592,119,000 New H Shares, representing not more than 22.50% of the total existing issued share capital of the Company before the issue, and 18.37% of total enlarged issued share capital of the Company after the issue; and representing not more than 90.00% of the existing issued H Shares of the Company before the issue, and 47.37% of the enlarged issued H Shares of the Company after the issue.

(3) Time of issuance

The Company will select an appropriate time within the validity period of the resolutions to be passed at the EGM and the Class Meetings to undertake the New H Share Issue. The New H Share Issue is subject to approval by the CSRC and the listing approval by the Stock Exchange. The Board and the persons delegated by the Board will determine the actual time of issuance with reference to the international capital market conditions, as well as the status of review of the Company’s application for the relevant approvals by the PRC and overseas administrative and/or regulatory authorities. In order to comply with Rule 10.07(1)(b) of the Listing Rules, the Company will not be entering into the relevant placing agreement or subscription agreement(s) (as the case may be) which would result in the controlling shareholder of the Company, Henan Investment Group Co., Ltd., ceased to hold 30% or more interest in the Company within one year from the date of listing and in breach of Rule 10.07(1)(b) of the Listing Rules. Accordingly, the Company will only enter into the relevant placing agreement or subscription agreement(s) after 25 June 2015, being the anniversary of the listing of the H shares of the Company.

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LETTER FROM THE BOARD

(4) Method of issuance

The proposed New H Share Issue will be carried out by way of placing through the joint placing agents or subscription by the investors.

(5) Target placees

The New H Shares will be placed to not more than 10 qualified institutional, individual and/or other investors, who (together with their respective ultimate beneficial owners) are independent third parties and not connected persons (as defined under the Listing Rules) of the Company. It is expected that none of the placees will become a substantial shareholder (as defined under the Listing Rules) of the Company upon completion of the New H Share Issue.

(6) Pricing mechanism

The New H Shares will be issued at a price to be determined by the Board after taking into account the interests of existing Shareholders, investors’ capabilities and the potential issuance risks, as well as the market practice and applicable regulatory requirements, and with reference to the capital market conditions and the valuations of comparable companies at the time when the Company issues the New H Shares, provided that the issue price will be not lower than 80% of the average closing price of the H Shares as quoted on the Stock Exchange over the last five trading days prior to the date of determining such issue price. In any event, the issue price of New H Shares will comply with the requirements of the relevant PRC rules and market practice, i.e. not less than the audited net asset value per share as stated in the audited financial statements of the Company for the year ended 31 December 2014.

(7) Method of subscription

The New H Shares are to be subscribed by the investors in cash, and issued and allotted in accordance with the terms of the subscription agreements to be entered into between the Company and the individual investors or be placed in accordance with the terms of the placing agreement to be entered into between the Company and the joint placing agents in relation to the proposed New H Share Issue.

(8) Accumulated profits

Any accumulated profits of the Company which remain undistributed immediately before the proposed New H Share Issue shall be for the benefit of all the Shareholders (including the placees of the New H Shares) as a whole.

(9) Use of proceeds

The proceeds of the proposed New H Share Issue, after deducting relevant expenses, will all be used to supplement the capital base of the Company, among which:

(i) approximately 75% will be used for the capital-based intermediary business of the Company, which includes but not limited to margin financing and securities lending business, securities-backed lending and securities repurchase business, etc.;

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LETTER FROM THE BOARD

(ii) approximately 15% will be used for the investment and innovative business of the Company, which includes but not limited to proprietary investment business, alternative investment business, market making business, increase in investments in subsidiaries, etc.; and
(iii) approximately 10% will be used for other business and to supplement the liquidity of the Company.

(10) Validity period of the resolutions

The resolutions relating to the New H Share Issue will be valid for 12 months, commencing from the date of passing of the relevant resolutions at the EGM and the Class Meetings. If the Board proceeds with the New H Share Issue, completion of the New H Share Issue shall take place within such 12-month validity period.

(11) Authorization of consequential amendments to the Articles of Association

Upon completion of the proposed New H Share Issue, the number of H Shares in issue, the registered capital and the capital structure of the Company will change and therefore consequential amendments to Article 3 and Article 24 of the Articles of Association are necessary:

Current version:

“Article 3

The registered capital is RMB2,631,615,700”

“Article 24

The Company was approved by the securities regulatory authority of the State Council to issue 598,100,000 overseas listed foreign shares in the form of initial public offering on 22 April 2014 to the foreign investors, and was listed on HKEx on 25 June 2014.

The registered capital of the Company is RMB2,631,615,700.

The share capital structure of the Company is as follows: 2,631,615,700 ordinary shares, in which the domestic shareholders hold 1,973,705,700, accounting for 75 percent of total ordinary shares issued by the Company; the shareholders of the overseas listed foreign shares hold 657,910,000, accounting for 25 percent of total ordinary shares issued by the Company.”

The Board will seek the Shareholders’ authorization at the EGM to authorize the Board and the persons delegated by the Board to amend the registered capital of the Company, number of Domestic Shares and H Shares in issue, and the relevant percentage as set out in the above-stated Articles of the Articles of Association and to implement the proposed amendments

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LETTER FROM THE BOARD

to the Articles of Association consequential to the completion of the New H Share Issue and deal with the relevant registration and filing procedures with the relevant industry and commerce administration authorities and other matters in relation to the implementation of the resolutions passed at the EGM, Class Meetings and the Board meetings during the validity period of the resolutions relating to the New H Share Issue.

(12) Other relevant authorization

The Board will seek the Shareholders’ authorization at the EGM and the Class Meetings respectively to authorize the Board and the persons delegated by the Board to deal with and complete all the matters in relation to the New H Share Issue with full authority for a term of 12 months following the passing of the relevant resolution(s) at the EGM and/or the Class Meetings. Such matters include but are not limited to:

(i) execute and submit all the relevant applications, reports and other documents to the relevant PRC and overseas authorities and deal with all the relevant approvals, registration, filing, sanction and permission;
(ii) be responsible for determining the terms of the proposed New H Share Issue, including the determination of the actual size, issue price (including the price range and final price), timing, method and target placee(s) of the proposed New H Share Issue, the execution, implementation, modification and termination of any agreement, contract or other documents in relation to the exercise of the Specific Mandate to issue the New H Shares, making adjustment to the use of proceeds of the proposed New H Share Issue, and any other relevant matter;
(iii) be responsible for negotiating and entering into subscription agreements with investors or placing agreement(s) with the joint placing agents in relation to the proposed New H Share Issue, and approving any revision or amendments to such subscription agreements or placing agreement(s);
(iv) be responsible for dealing with all the matters in relation to obtaining all the approvals and permissions from the CSRC, the Stock Exchange and/or any other relevant PRC and overseas authorities in relation to the proposed New H Share Issue;
(v) depending on the requirements at the time of the issuance, to engage and appoint the sole global coordinator, the joint bookrunners, the joint placing agents, PRC and overseas legal advisers and other relevant professional parties in relation to the proposed New H Share Issue and enter into engagement or appointment letters and other relevant legal documents. The Company proposes to appoint CCB International Capital Limited as the sole global coordinator; and CCB International Capital Limited, Qilu International Capital Limited and The Hongkong and Shanghai Banking Corporation Limited as the joint bookrunners and joint placing agents of the proposed New H Share Issue;

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LETTER FROM THE BOARD

(vi) make appropriate amendments to the terms of the proposed New H Share Issue in light of the specific circumstances and pursuant to the approval(s) by the relevant regulatory authorities;
(vii) execute, implement, amend and complete any document and do any act as necessary and appropriate in relation to the proposed New H Share Issue;
(viii) approve the publication of relevant announcement(s), circular(s) and notice(s) in relation to the proposed New H Share Issue on the websites of the Stock Exchange and the Company, respectively, and the submission of relevant forms, files or other documents to the Stock Exchange; and
(ix) obtain from the Stock Exchange the approval for listing of and permission to deal in all of the New H Shares to be issued and allotted pursuant to the New H Share Issue on the Main Board of the Stock Exchange.

Upon the authorization by the Shareholders at the EGM and the Class Meetings as mentioned above, the Board will delegate such authorization to Mr. Jian Mingjun (an executive Director and the chairman of the Board) and Mr. Zhou Xiaoquan (an executive Director and the president of the Company), severally or jointly, to exercise the authorization granted by the Shareholders to the Board as mentioned above.

Depending on market conditions, the Board may or may not exercise the proposed Specific Mandate, if granted, to issue the New H Shares. If the Board proceeds with the New H Share Issue pursuant to the Specific Mandate, a separate announcement will be made.

Conditions to the New H Share Issue

The proposed New H Share Issue is conditional upon:

(1) the grant of the proposed Specific Mandate by the Shareholders to the Board having been obtained at the EGM and the Class Meetings;
(2) the approval of the proposed issue of the New H Shares pursuant to the proposed Specific Mandate by the relevant PRC administrative and/or regulatory authorities, including the CSRC;
(3) the CSRC having approved the Company to further issue not more than 592,119,000 New H Shares;
(4) the entering into of subscription agreements between the Company and the investors or the placing agreement(s) between the Company and the joint placing agents and such subscription agreements/placing agreement(s) not being terminated in accordance with the terms therein; and
(5) the Listing Committee of the Stock Exchange granting listing of and permission to deal in all of the New H Shares to be issued and allotted pursuant to the proposed New H Share Issue.

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LETTER FROM THE BOARD

Reasons for and Benefits of the New H Share Issue

(1) Changes in domestic securities industry and regulatory environment since the listing of H Shares of the Company

China’s securities market has witnessed fundamental changes since the listing of H Shares of the Company mid last year. As a result of the bullish trend, A-share index soared, and the capital-based intermediary business experienced rapid growth as evidenced by the sharp increase in the balance of margin financing and securities lending from more than RMB400 billion in the first half of 2014 to the current figure of RMB2 trillion. The securities industry is facing favourable development opportunities.

In addition, the CSRC has been encouraging securities companies to establish and enhance capital replenishment mechanisms, expand capital replenishment channels, improve capital quality and tighten capital constraint. The CSRC also requires securities companies to establish and enhance capital replenishment mechanisms, formulate capital planning, fully capitalize on domestic and overseas capital markets, proactively increase respective share capital, introduce strategic investors and carry out listing and financing activities in multi-layer capital markets. Moreover, securities companies are required to emphasize on internal capital accumulation by formulating scientific and stable dividend distribution policy.

Taking into account the aforesaid favourable development opportunities arising subsequent to the listing of H Shares of the Company and the policy in favour of capital replenishment, the Company considers it an appropriate time to issue new H Shares.

(2) Facilitate the business development and implementation of strategies of the Company

The Company has entered into a new stage of development since the initial public offering of its H Shares – the reputation and influence of the Company has increased significantly, and all its businesses have shown a trend of “moving upward together, achieving overall growth”. With regard to its capital-based intermediary business, the margin financing and securities lending business have grown rapidly whilst the securities-backed lending business has been expanding continuously. Innovative business of the Company such as New OTC Board market making and other over-the-counter business of the Company has also expanded. In line with the “five-in-one” industry chain model, the regional equity trading centre which the Company will have a controlling shareholding therein has entered into a substantive preparatory stage. The direct investment subsidiary of the Company has continuously expanded its investment scale in projects of good quality, which helps to reserve resources for future development of the Company. The Company has also been active in exploring and building its internet finance business model, nurturing new sources of profits, accelerating the establishment and capital injection progress of its Hong Kong subsidiaries and exploring the overseas market.

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LETTER FROM THE BOARD

The Company has been actively grasping the development opportunity in the PRC capital market and utilising its own advantages in order to establish itself as a boutique listed company in the following four aspects: steady growth in operation results; highly responsible to its investors; strict and stricter risk control; and fully responsible to the society. The reasonable and efficient utilisation of existing capital market platform by the Company and the proposed New H Share Issue to raise funds will further enhance the shareholding structure of the Company and its operational efficiency and returns to the Shareholders, thus forming a win-win situation between the Company and the investors.

(3) Enhance, transform and innovate the domestic business of the Company and supplement to the net capital of the Company for overseas business expansion

Following the rapid development of the intermediary and other business of the Company, the leveraging rate and operation results of the Company accelerated rapidly. Meanwhile, the development of the Company requires higher demand for its net capital, and thus additional capital is needed for improving various risk control indicators. The Company intends to, through the implementation of the New H Share Issue, supplement its capital, increase its financing capability, promote the development of its capital-driven business such as capitalbased intermediary business, direct investment business, market-making business, etc., expand its innovative and overseas business, and keep the risk control indicators under a reasonable limit.

Effects of the New H Share Issue on the Shareholding Structure of the Company

Assuming that a total of 592,119,000 New H Shares under the New H Share Issue are permitted for issuance and all of the New H Shares are issued, and the issued share capital of the Company prior to completion of the New H Share Issue remains unchanged, the possible change in the shareholding structure of the Company as at the Latest Practicable Date and immediately after the completion of the New H Share Issue is set out as follows:

Domestic Shares H Shares New H Shares Total	As at the Latest Practicable Date Number of Shares Approximate percentage of the Company’s issued share capital 1,973,705,700 75.00% 657,910,000 25.00% – – 2,631,615,700 100%	Immediately upon completion of the New H Share Issue Number of Shares Approximate percentage of the Company’s issued share capital 1,973,705,700 61.22% 657,910,000 20.41% 592,119,000 18.37% 3,223,734,700 100%	Immediately upon completion of the New H Share Issue Number of Shares Approximate percentage of the Company’s issued share capital 1,973,705,700 61.22% 657,910,000 20.41% 592,119,000 18.37% 3,223,734,700 100%
			100%

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LETTER FROM THE BOARD

Fund Raising Activities since Listing

During the period from the date of listing of the H Shares of the Company on the Stock Exchange (i.e. 25 June 2014) to the Latest Practicable Date, no fund raising activities were conducted by the Company.

Application for Listing

Application will be made to the Listing Committee of the Stock Exchange for the listing of and permission to deal in all the New H Shares on the Stock Exchange.

REPORT ON USE OF PROCEEDS FROM PREVIOUS FUND RAISING ACTIVITY

The Company issued 598,100,000 H Shares in the initial public offering of H Shares in June 2014, and the total proceeds raised were approximately HK$1,501,231,000 (approximately RMB1,192,112,500). By reference to the relevant requirements of CSRC relating to the submission of a report of use of proceeds from previous fund raising activity for approval at a general meeting before a further shares issuance in the PRC, the Company will propose an ordinary resolution for approval at the EGM on the use of proceeds from the previous H Share offering. The Company reports that the funds raised from the initial public offering of H Shares of the Company were used in accordance with the proceeds investment plan, and the actual uses of proceeds were in line with the disclosure in the prospectus of the initial public offering of H Shares dated 11 June 2014.

PROPOSED ADOPTION OF SHARE OPTION SCHEME

Pursuant to Article 104 of the Articles of Association, Shareholder(s) severally or jointly holding no less than 3.0% shares of the Company may submit written provisional proposals to the convener 10 days before a general meeting is convened. The convener shall serve a supplementary notice of general meeting to other shareholders within two days after receipt of such proposal, and place the proposal on the agenda for the said meeting and submit the proposal for approval at a general meeting if the said proposal falls within the functions and powers of general meetings. The contents of the provisional proposal shall fall within the functions and powers of general meetings and have specific discussion topic and specific matters to be resolved.

On 26 May 2015, Mao Yuan Capital Limited (“ Mao Yuan ”), a Shareholder holding approximately 4.107% of the issued share capital of the Company issued a written notice to the Company to propose new resolutions at the EGM and the Class Meetings regarding the proposed adoption of the Share Option Scheme.

Pursuant to the written notice issued by Mao Yuan, it proposed the new resolution in relation to the adoption of the Share Option Scheme because it intends to establish a close bonding between the interest of the Company’s management and the interest of the Company and unify the interests of the Company, its leaders and employees, so that the confident of the Shareholders and investors will be strengthened and the interest of the Shareholders will be maximized.

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LETTER FROM THE BOARD

To the best knowledge, information and belief of the Directors and having made all reasonable enquiry, Mao Yuan and its close associates do not have any relationship with the Participants under the Share Option Scheme, and they also do not have any material interest (whether economic or otherwise) in the Share Option Scheme. As such, Mao Yuan is not required to abstain from voting on the relevant resolutions in relation to the adoption of the Share Option Scheme at the EGM and the Class Meetings.

The Company has not adopted any share option scheme since the listing of its H Shares on 25 June 2014 and currently does not have any subsisting share option scheme as at the Latest Practicable Date.

Reasons for Adoption of the Share Option Scheme

Adoption of the Share Option Scheme is aimed to closely link the interests of the management team with that of the Company, align the interests of the management team and investors with that of the Company, mobilize the enthusiasm of the management team and maximize the Shareholders’ return.

Value of the Options

The Directors consider that it is not appropriate to state the value of all Options that can be granted pursuant to the Share Option Scheme as if they had been granted at the Latest Practicable Date. The Directors believe that any statement regarding the value of the Options as at the Latest Practicable Date will not be meaningful to the Shareholders and to certain extent would be misleading to the Shareholders, taking into account the number of variables which are crucial for the calculation of the value of the Options and have not been determined. Such variables include the Subscription Price, Option Period, any performance targets set and other relevant variables.

Scheme Mandate Limit

Subject to the obtaining of Shareholders’ approval with respect to the adoption of the Share Option Scheme, pursuant to Rule 17.03 of the Listing Rules, the total number of Shares which may be issued upon the exercise of all options to be granted under the Share Option Scheme and any other share option schemes of the Company must not, in aggregate, exceed 10% of the Shares in issue as at the date of approval of the Share Option Scheme. The Board shall not grant any Options which would result in the maximum aggregate number of Shares which may be issued upon exercise of all outstanding options granted but yet to be exercised under the Share Option Scheme and any other share option schemes adopted by the Company exceeding, in aggregate, 30% of the Shares in issue from time to time.

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LETTER FROM THE BOARD

Maximum Number of Shares

Application will be made to the Stock Exchange for the approval of the listing of, and permission to deal in, the H Shares which may be issued upon the exercise of the options which may be granted up to 10% of the total number of H Shares in issue as at the date of the EGM and Class Meetings under the Share Option Scheme. Assuming there is no change in the number of H Shares before the date of the EGM, the total number of issued H Shares is 657,910,000 and the maximum number of Shares which may be issued upon exercise of all options under the Share Option Scheme is 65,791,000, representing approximately 10% of the issued H Shares of the Company as at the Latest Practicable Date.

Conditions of the Adoption of the Share Option Scheme

The Share Option Scheme shall take effect conditional upon:

(i) the passing of the resolution by the Shareholders to approve and adopt the Share Option Scheme and to authorise the Board to grant Options under the Share Option Scheme and to allot and issue Shares pursuant to the exercise of any Options;
(ii) the implementation of this scheme is in compliance with the laws and regulations of the PRC and the jurisdiction of the place where the shares of the Company are listed, and;
(iii) the Listing Committee granting approval of the listing of, and the permission to deal in, any Shares to be issued pursuant to the exercise of any Options in accordance with the terms and conditions of the Share Option Scheme.

Application for Listing

Application will be made to the Listing Committee for the listing of and permission to deal in, the Shares which may fall to be issued and allotted pursuant to the exercise of any Options that may be granted under the Share Option Scheme up to the limit equal to 10% of the total number of Shares in issue as at the date of EGM.

A summary of the principal terms of the Share Option Scheme is set out in the Appendix to this circular.

A special resolution will be proposed at the EGM and the Class Meetings to approve the proposed adoption of the Share Option Scheme. To the best knowledge of the Directors having made all reasonable enquiries, none of the Shareholders has a material interest in the proposed adoption of the Share Option Scheme and is required to abstain from voting on the said resolution.

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LETTER FROM THE BOARD

Document available for inspection

A copy of the Share Option Scheme will be available for inspection during 9:00 a.m. to 6:00 p.m. (other than on Saturdays, Sundays and public holidays) at the Company’s principal place of business in Hong Kong at 18/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong from the date of this circular up to and including the date of the EGM and the Class Meetings.

Authorization of consequential amendments to the Articles of Association

As every time when a Grantee exercises his Options after the adoption of the Share Option Scheme will lead to changes in the number of H Shares in issue, the registered capital and the capital structure of the Company, Article 3 and Article 24 of the Articles of Association as stated below will also require consequential amendment from time to time.

Current version:

“ Article 3

The registered capital is RMB2,631,615,700.”

“ Article 24

The registered capital of the Company is RMB2,631,615,700.

In view of the aforesaid, the Board will seek the Shareholders’ authorization at the EGM to authorize the Board and the persons delegated by the Board to amend the registered capital of the Company, number of Domestic Shares and H Shares in issue, and the relevant percentage as set out in the above-stated Articles of the Articles of Association and to implement the proposed amendments to the Articles of Association consequential to the exercise of the Options during the Option Period and deal with the relevant registration and filing procedures with the relevant industry and commerce administration authorities.

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LETTER FROM THE BOARD

EGM, DOMESTIC SHARE CLASS MEETING AND H SHARE CLASS MEETING

The revised notices convening the EGM, the Domestic Share Class Meeting and the H Share Class Meeting of the Company to be held at 9:00 a.m., 10:00 a.m. (or as soon thereafter as the EGM shall have been concluded or adjourned, whichever is later) and 11:00 a.m. (or as soon thereafter as the Domestic Share Class Meeting shall have been concluded or adjourned, whichever is later) respectively on Monday, 15 June 2015 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, are enclosed herein.

As the date of the relevant meetings is postponed and the proxy forms for use at the EGM and the Class Meetings does not contain the new resolution in relation to the proposed adoption of the Share Option Scheme (the “ New Resolution ”), the Company has prepared revised proxy forms (the “ Revised Proxy Forms ”) for use at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting for dispatch together with this circular.

The revised proxy forms for the EGM, the Domestic Share Class Meeting and the H Share Class Meeting are enclosed. Whether or not you are able to attend the EGM, the Domestic Share Class Meeting and the H Share Class Meeting in person, you are requested to complete and return the accompanying applicable revised proxy forms in accordance with the instructions printed thereon. In case of holders of H Shares, the revised 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 revised 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) (the “ Closing Time ”) as soon as practicable. Completion and delivery of the revised proxy forms will not preclude you from attending and voting in person at the relevant meetings or any adjournment if you so desire.

Shareholders who have lodged the proxy form(s) (the “ Original Proxy Form(s) ”) with the Company prior to the date of this circular should note that:

(i) If no Revised Proxy Form(s) is lodged with the Company’s Hong Kong share registrar (for holders of H Shares) or the head office of the Company in the PRC (for holders of Domestic Shares) prior to the Closing Time, the Original Proxy Form(s) will be treated as a valid form of proxy lodged by him or her if correctly completed and signed and returned in accordance with the instructions printed thereon. The proxy appointed by the Shareholder will be entitled to vote at his/her discretion or abstain on any resolution properly proposed to the EGM (including the New Resolution), the Domestic Share Class Meeting and/or the H Share Class Meeting, as the case may be.

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LETTER FROM THE BOARD

(ii) If the Revised Proxy Form is lodged with the Company’s Hong Kong share registrar (for holders of H Shares) or the head office of the Company in the PRC (for holders of Domestic Shares) prior to the Closing Time, the Revised Proxy Form will revoke and supersede the relevant Original Proxy Form previously lodged by him or her. The Revised Proxy Form will be treated as a valid form of proxy lodged by such Shareholder if correctly completed and signed and returned in accordance with the instructions printed thereon.
(iii) If the duly completed and signed Revised Proxy Form is lodged with the Company’s Hong Kong share registrar (for holders of H Shares) or the head office of the Company in the PRC (for holders of Domestic Shares) after the Closing Time, the Revised Proxy Form will be invalid. However, it will revoke the Original Proxy Form previously lodged by such Shareholder, and any vote that may be cast by the purported proxy (whether appointed under the Original Proxy Form or the Revised Proxy Form) will not be counted in any poll which will be taken on any proposed resolution.

Accordingly, Shareholders are advised not to lodge the Revised Proxy Form after the Closing Time. In such case, if any Shareholder wishes to vote at the EGM, the Domestic Share Class Meeting and/or the H Share Class Meeting, he/she will have to attend in person and vote at the relevant meeting himself/herself. Completion and return of the Original Proxy Form(s) and/or the Revised Proxy Form(s) will not preclude Shareholders from attending and voting in person at the EGM, the Domestic Share Class Meeting and/or the H Share Class Meeting or any adjournment thereof should he/she so wish.

Save for the date of the EGM, Domestic Share Class Meeting and H Share Class Meeting should be 15 June 2015, the reply slips for the EGM, Domestic Share Class Meeting and the H Share Class Meeting despatched by the Company on 10 April 2015 require no other amendment and the relevant reply slips lodged by the Shareholders prior to 25 May 2015 shall continue to be valid.

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 respective resolutions as stated in the revised notice of the EGM, the revised notice of the Domestic Share Class Meeting and the revised notice of the H Share Class Meeting will be taken by way of a poll under Article 116 of the Articles of Association.

During the poll, every Shareholder present in person or by proxy (or in case of Corporation, its duly authorised representative) at the EGM, the Domestic Share Class Meeting or the H Share Class Meeting 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.

No Shareholder is required to abstain from voting in connection with the matters to be resolved at the EGM, the Domestic Share Class Meeting or the H Share Class Meeting.

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LETTER FROM THE BOARD

RECOMMENDATION

The Board considers that all resolutions to be proposed at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting 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.

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

In view that the New H Share Issue is subject to certain conditions and accordingly, may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the H Shares or other securities of the Company.

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

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

This appendix summarises the principal terms of the Share Option Scheme (the “ Scheme ”) but does not form part of, nor is it intended to be, part of the Scheme nor should it be taken as affecting the interpretation of the rules of the Scheme. The Directors reserve the right at any time prior to the EGM to make such amendments to the Scheme as they may consider necessary or appropriate provided that such amendments do not conflict in any material aspects with the summary in this appendix.

The following is a summary of the principal terms of the Scheme in compliance with the provisions of Chapter 17 of the Listing Rules:

1. Purposes

The terms of the Scheme provide that in granting options under the Scheme, the Board may offer to grant any Options subject to such terms and conditions in relation to the minimum period of the Options to be held and/or the performance criteria to be satisfied before such Options can be exercised and/or any other terms as the Board may determine in its absolute discretion. The Board will also have discretion in determining the Subscription Price (subject to the Listing Rules and the terms of the Share Option Scheme) in respect of any Option. As such the Board will have the flexibility to impose the minimum period for which the Options have to be held, the performance targets, the Subscription Price and other conditions (if any) that have to be achieved before the Options can be exercised, which will place the Group in a better position to attract and retain human resources that are valuable to the growth and development of the Group as a whole.

2. Participants

All directors (excluding non-executive and independent non-executive directors), other management at the company level, middle management staff and some core employees of the Company and the Group (other than any Substantial Shareholder (with the meaning ascribed to it under the Listing Rules) of the Company or its subsidiaries), who, at the absolute discretion of the Board, have contributed or will contribute to the Company or the Group. The participants of the Scheme primarily focus on the Chairman, president, directors and supervisors (excluding external supervisors) of the Company and its management members including directors and supervisors (excluding external supervisors) of its subsidiaries who did not purchase shares of the Company through the qualified domestic institutional investors (“ QDII ”) when the Company was listed in Hong Kong on 25 June 2014.

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

3. Conditions

3.1 The Scheme is conditional upon:
(A) the passing of a resolution by the shareholder(s) of the Company in a general meeting to approve the terms of the Scheme and to authorise the Board to grant Options under the Scheme and to allot and issue Shares pursuant to the exercise of any Options;
(B) the implementation of the Scheme in compliance with all the applicable laws and regulations of the PRC and the jurisdiction of the place where the shares of the Company are listed; and
(C) the Listing Committee granting approval of the listing of, and permission to deal in, any H Shares which may be issued pursuant to the exercise of Options granted under the Scheme.

The Scheme shall take effect on the date when all the conditions precedent for adopting the Scheme were satisfied in accordance with the resolution on the Scheme passed by the shareholders of the Company at the EGM and the Board has resolved to adopt the Share Option Scheme pursuant to the authorization granted at the EGM (the “ Adoption Date ”).

4. Duration and administration

4.1 Subject to the fulfilment of the conditions in clause 3 and the termination provision in clause 14, the Scheme shall be valid and effective for the duration commencing from the Adoption Date for five (5) years and expiring at the close of business on the day before the fifth anniversary of the Adoption Date (the “ Scheme Period ”), after which period no further Options will be granted but in respect of all Options which remain outstanding and exercisable on the expiry of the Scheme Period, the provisions of the Scheme shall remain in full force and effect.
4.2 The Scheme is administrated by the Board. The Board, within the scope of authority empowered by the general meeting, formulates and adjusts the specific plan of the Scheme in accordance with the applicable laws, regulations and relevant provisions from the regulatory authorities as well as resolutions passed at the general meeting for such purposes, and based on the actual conditions of the Company, including but not limited to, participants, timing of grant, conditions of grant, exercise price, number of exercisable options and relevant adjustments, etc.. Save and except for those decisions on matters required to be approved at the general meeting pursuant to any laws, regulations and the Articles of Association, any decision of the Board (save as otherwise provided in the Scheme) shall be final and binding on all parties.

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

5. Grant of Options

5.1 Subject to the requirements of the Listing Rules, the Board shall have the right to:
(A) interpret and construe the provisions of the Scheme;
(B) determine the persons who will be awarded Options under the Scheme, the minimum period for which the Participant must hold before the Options can be exercised, the number of H Shares to be issued under the Option, the price at which the Grantees may subscribe for the H Share upon the exercise of an Option as described in clause 6 (the “ Subscription Price ”) and the matters authorised to the Board pursuant to clause 4.2;
(C) make such appropriate and equitable adjustments to the terms of Options granted under the Scheme as it deems necessary; and
(D) make such other decisions, determinations or regulations as it shall deem appropriate in the administration of the Scheme.

On and subject to the terms of the Scheme and all applicable statutory requirements, the Board shall be entitled at any time within the Scheme Period to make an Offer to any Participant as the Board may in its absolute discretion select to subscribe for such number of Shares as the Board may (subject to clause 9) determine at the Subscription Price.

5.2 Options shall not be granted after the Group obtains inside information and before the relevant information is published. In particular, during the period of one month immediately preceding the earlier of:-
(A) the date of the Board meeting (as such date is first notified to the Stock Exchange in accordance with the Listing Rules) for the approval of the Company’s results for any year, half-year, quarterly, or any other interim period (whether or not required under the Listing Rules); and
(B) the deadline for the Company to publish an announcement of its results for any year or half-year under the Listing Rules, or quarterly or any other interim period (whether or not required under the Listing Rules),

and ending on the date of the actual publication of results announcements, no Option may be granted. The period during which no Option may be granted shall cover any period of delay in the publication of a results announcement.

5.3 Further to the restrictions in Clause 5.2, no Option may be granted to a Director, chief executive officer or a Supervisor, on any day on which financial results of the Company are published and:
(i) during the period of 60 days immediately preceding the publication date of the annual results or, if shorter, the period from the end of the relevant financial year up to the publication date of the results; and

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(ii) during the period of 30 days immediately preceding the publication date of the quarterly results (if any) and half-year results or, if shorter, the period from the end of the relevant quarterly or half-year period up to the publication date of the results.
5.4 An Offer shall be made to a Participant by an offer letter (the “ Offer Letter ”) in such form as the Board may from time to time determine, specifying the name, address and position of the Grantee, the date of offer of the Option (the “ Offer Date ”), the maximum number of Shares which may be issued under the Option, the Subscription Price, the option period (the period of time during which the Grantee may exercise the Option, which shall not be more than 5 years from the Offer Date, hereinafter referred to as the “ Option Period ”) in respect of which the Offer is made and the date or dates during the Option Period upon which the Option shall first become exercisable, the minimum period for which the Participant must hold before the Option can be exercised and other terms on which the Option is to be granted. The Offer shall also require the Participant to undertake to hold the Option on the terms of which it is to be granted and to be bound by the provisions of the Scheme. An Offer shall remain open for acceptance by the Participant to whom an Offer is made for a period of twenty-one (21) days from the Offer Date (or for such other period of time as may be determined by the Board at its discretion from time to time) provided that no such Offer shall be open for acceptance after the expiry of the Scheme Period or after the Scheme has been terminated in accordance with the terms herein.
5.5 The Offer for grant of an Option shall be deemed to have been accepted and effective when the duplicate of the Offer Letter comprising acceptance of the Offer duly signed by the Grantee with the number of Shares in respect of which the Offer is accepted clearly stated therein together with a remittance in favour of the Company of RMB1.00, irrespective of the number of Shares in respect of which the Option is accepted, as consideration for the grant thereof is received by the Company within twenty-one (21) days from the Offer Date or within such other period of time as may be determined by the Board pursuant to the Listing Rules. Such remittance shall in no circumstances be refundable nor deemed to be part of the Subscription Price.
5.6 Any Offer may be accepted or deemed to have been accepted in respect of less than the number of Shares for which it is offered provided that it is accepted in respect of a whole board lot for dealing in Shares on the Stock Exchange or an integral multiple thereof. Such number of shares accepted shall be clearly stated in the duplicate of the Offer Letter accepting the Offer for grant of an Option. To the extent that the Offer is not accepted and received by the Company within twenty-one (21) days in the manner described in clause 5.4, it shall be deemed to have been irrevocably declined and the Offer will lapse.
5.7 No Offer shall be made to, nor shall any Offer be capable of acceptance by, any Participant at a time when the Participant ceases to be a Participant or would or might be prohibited from dealing in the Shares by the Listing Rules or by any other applicable rules, regulations or law.

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

5.8 Subject to the provisions of the Scheme and the Listing Rules, the Board may, when making the Offer, impose any conditions, restrictions or limitations in relation thereto as it may at its absolute discretion think fit.

6. Subscription Price

6.1 Subject to any adjustments made pursuant to clause 10, the Subscription Price in respect of each Share issued pursuant to the exercise of Options granted hereunder shall be a price determined by the Board in its absolute discretion and notified to a Participant (which shall be stated in the Offer Letter) and shall be at least the highest of:-
(A) the closing price of the Shares as stated in the daily quotations sheet issued by the Stock Exchange on the Offer Date, which must be a Business Day;
(B) the average closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange for the five (5) consecutive Business Days immediately preceding the Offer Date (provided that the new issue price for the listing of the Shares shall be used as the closing price for any Business Day falling within the period before listing of the Shares if the Shares have been listed for less than five Business Days before the Offer Date); and
(C) the nominal value of the Shares.
6.2 Where a relevant Option is to be granted, for the purposes of clauses 6.1(A) and 6.1(B), the date of the Board meeting at which the grant was approved shall be taken to be the Offer Date for such relevant Option, and the provisions of clause 6.1 shall apply mutatis mutandis .

7. Exercise of Options

7.1 An Option shall be personal to the Grantee and shall not be transferable.
7.2 Unless otherwise determined by the Board and specified in the Offer Letter at the time of the Offer, there is no performance target required to be achieved, complied with or surpassed before an Option can be exercised by the respective Grantee. An Option may be exercised in whole or in part (but if in part only, in respect of a board lot or any integral multiple thereof) in the manner as set out in the Offer Letter, this clause 7.2 and clause 7.3 by the Grantee (or depending on the circumstances by his legal personal representative(s)) giving notice in writing to the Company stating that the Option is thereby exercised and the number of Shares in respect of which it is exercised. Each such notice must be accompanied by a remittance for the full amount of the total Subscription Price for the Shares in respect of which the notice is given. After receipt of the notice and the remittance and, where appropriate, receipt of the Auditors’ certificate pursuant to clause 10, the Company shall within

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

thirty (30) days of the date upon which an Option is effectively exercised (being the date of such receipt by the secretary of the Company) allot the relevant Shares to the Grantee (or his legal personal representative(s)) credited as fully paid and instruct the relevant share registrar to issue to the Grantee (or his legal personal representative(s)) a share certificate in respect of the Shares so allotted.

7.3 Subject as hereinafter provided and to the restrictions which may be imposed by the Board, the Option may be exercised by the Grantee (or his legal personal representatives) at any time during the Option Period provided that:-
(A) in the event that the Grantee ceases to be a Participant for any reason (other than on his death) including the termination of his employment or engagement with the Group on one or more of the grounds specified in clause 8.1(E)(ii), the Option granted to such Grantee will lapse on the date of such cessation (to the extent not already exercised) and will not be exercisable unless the Board otherwise determines to grant an extension at the absolute discretion of the Board in which event the Grantee may exercise the Option in accordance with the provisions of clause 7.2 within such period of extension and up to a maximum entitlement directed at the absolute discretion of the Board on the date of grant of extension (to the extent which has become exercisable and not already exercised) and subject to any other terms and conditions decided at the discretion of the Board. For the avoidance of doubt, such period of extension (if any) shall be granted within and in any event ended before the expiration of the period of one (1) month following the date of his cessation to be a Participant (the date of cessation of employment or engagement shall be the last actual date on which the Grantee was physically at work with the Company or the relevant Subsidiary whether salary (if any) is paid in lieu of notice or not) or the relevant Option Period, whichever is earlier;
(B) in the event the Grantee being an individual dies or becomes permanently disabled before exercising the Option in full and none of the events which would be a ground for termination of his employment or engagement under clause 8.1(E)(ii) arises, the legal personal representative(s)/legal representative of the Grantee or the Grantee shall be entitled to exercise the Option up to the entitlement of such Grantee as at the date of death or become permanently disabled (to the extent which has become exercisable and not already exercised) within a period of twelve (12) months from the date of death or become permanently disabled (provided that such exercise is made during the Option Period) or such longer period as the Board may at its absolute discretion determine;
(C) if a general or partial offer, whether by way of a take-over or share re-purchase offer (but other than by way of scheme of arrangement pursuant to clause 7.3(D) below), is made to all the holders of Shares (or all such holders other than the offeror and/or any person controlled by the offeror and/or any person

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

acting in association or concert (within the meaning of the Codes on Takeovers and Mergers and Share Repurchases) with the offeror) and if such offer becomes or is declared unconditional prior to the expiry of the relevant Option Period, the Grantee (or his legal personal representative(s)) shall be entitled to exercise the Option in full by notice in writing (to the extent which has become exercisable on the date of the notice of the offeror and not already exercised) at any time within one (1) month after the date on which the offer becomes or is declared unconditional;

(D) if a general or partial offer by way of a scheme of arrangement is made to all the holders of Shares and has been approved by the necessary number of holders of Shares at the general meetings, the Grantee (or his legal personal representative(s)) may thereafter (but only until such time as shall be notified by the Company, after which it shall lapse) exercise the Option by notice in writing (to the extent which has become exercisable and not already exercised) to its full extent or to the extent specified in such notice;
(E) other than a general or partial offer by way of a scheme of arrangement contemplated in clause 7.3(D) above, if a compromise or arrangement between the Company and its members or creditors is proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies, the Company shall give notice thereof to all the Grantees on the same date or soon after it dispatches the notice which is sent to each member or creditor of the Company summoning the meeting to consider such a compromise or arrangement, and thereupon each Grantee (or his legal personal representative(s)) may by notice in writing to the Company accompanied by the remittance for the full amount of the Subscription Price in respect of the relevant Option (such notice to be received by the Company not later than two Business Days before the proposed meeting) exercise any of his Options (to the extent which has become exercisable and not already exercised) whether in full or in part, but the exercise of an Option as aforesaid shall be conditional upon such compromise or arrangement being sanctioned by the court of competent jurisdiction and becoming effective. The Company shall as soon as possible and in any event no later than the Business Day immediately prior to the date of the proposed meeting referred to above, allot and issue such number of Shares to the Grantee which falls to be issued on such exercise credited as fully paid and register the Grantee as holder of such Shares. Upon such compromise or arrangement becoming effective, all Options shall lapse except insofar as previously exercised under the Scheme. The Company may require the Grantee (or his legal personal representative(s)) to transfer or otherwise deal with the Shares issued as a result of the exercise of Options in these circumstances so as to place the Grantee in the same position as nearly as would have been the case had such Shares not been subject to such compromise or arrangement; and
(F) if a notice is given by the Company to its members to convene a general meeting for the purposes of considering, and if thought fit, approving a

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

resolution to voluntarily wind-up the Company other than for the purposes of a reconstruction, amalgamation or scheme of arrangement, the Company shall forthwith or soon after it despatches such notice to each member of the Company, give notice thereof including the text of this provision to all the Grantees and thereupon, each Grantee (or his respective legal personal representative(s)) may, subject to the provisions of all applicable laws, by notice in writing to the Company, accompanied by the remittance for the full amount of the Subscription Price in respect of the relevant Option (such notice to be received by the Company not later than two Business Days prior to the proposed general meeting of the Company) at any time thereafter (but before such time as shall be notified by the Company) exercise the Option (to the extent which has become exercisable and not already exercised) whether in full or to the extent notified by the Company and the Company shall as soon as possible and, in any event, no later than one Business Day immediately prior to the date of the proposed general meeting referred to above, allot and issue such number of Shares to the Grantee which falls to be issued on such exercise credited as fully paid and register the Grantee as holder of such Shares.

7.4 The H Shares to be allotted and issued upon the exercise of an Option will be subject to all the provisions of the memorandum and articles of association of the Company and the laws of the China for the time being in force including voting, transfer rights and rights arising on a liquidation of the Company and will rank pari passu in all respects with the fully paid H Shares in issue on the Exercise Date (i.e. on the date of their allotment and issue) and accordingly will entitle the holders of the H Shares to participate in all dividends or other distributions paid or made on or after the Exercise Date other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date therefor shall be before the Exercise Date. The Options holders themselves will have no voting rights and dividend rights prior to the exercise of an Option. The H Shares allotted and issued upon the exercise of an Option shall not carry voting rights or dividend rights until the name of the Grantee has been duly entered into the register of members of the Company as the holder thereof.
7.5 The Options holders should raise the fund for exercising the Options themselves. The Company will not provide any guarantee or financial assistance in this regard.

8. Lapse of Options

8.1 An Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the earliest of:-
(A) the expiry of the Option Period (subject to the provisions of clauses 4.1 and 14);
(B) the expiry of the periods referred to in clauses 7.3(A), (B) or (E), where applicable;

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(C) subject to the court of competent jurisdiction not making an order prohibiting the offeror from acquiring the remaining Shares in the offer, the expiry of the period referred to in clause 7.3(C);
(D) subject to the scheme of arrangement as referred to in clause 7.3(D) becoming effective, the expiry of the period referred to in clause 7.3(D);
(E) (i) subject to the expiry of the period of extension (if any) referred to in clause 7.3(A), the date on which the Grantee ceases to be a Participant for any reason other than his death or the termination of his employment or engagement on one or more grounds specified in clause 8.1(E)(ii) below. A transfer of employment from one company in the Group to another company in the Group shall not be considered as a cessation of employment;
(ii) the date on which the Grantee ceases to be a Participant by reason of the termination of his employment on the grounds that he has been guilty of misconduct, or has been in breach of a material term of the relevant employment contract, or appears either to be unable to pay or have no reasonable prospect to be able to pay debts, or has committed any act of bankruptcy, or has become insolvent, or has been served a petition for bankruptcy or winding-up, or has made any arrangements or composition with his creditors generally, or has been convicted of any criminal offence or (if so determined by the Board, the board of the relevant Subsidiary or the board of the relevant associated company of the Company, as the case may be) on any other ground on which an employer would be entitled to summarily terminate his employment at common law or pursuant to any applicable laws or under the Grantee’s service contract with the Company, the relevant Subsidiary or the relevant associated company of the Company (as the case may be). A resolution of the Board, the board of the relevant Subsidiary or the board of the relevant associated company of the Company (as the case may be) to the effect that the employment or engagement of a Grantee has or has not been terminated on one or more of the grounds specified in this clause 8.1(E)(ii) shall be conclusive and binding on the Grantee;
(F) the date on which the Grantee ceases to be a Participant by reason of the termination of his or her relationship (whether by appointment or otherwise) with our Company or its subsidiaries as a consultant or adviser on any one or more of the grounds that he or she has become unable to pay his or her debts or has become otherwise insolvent or has made any arrangement or composition with his or her creditors generally, or has been convicted of any criminal offence involving his or her integrity or honesty or (if so determined by the Board) has committed any act which is prejudicial to or not in the interests of our Company or its subsidiaries. A resolution of the Board or the board of directors of the relevant subsidiary to the effect that the relationship with the Grantee has or has not been terminated on one or more of the grounds specified in this clause shall be conclusive and binding on the Grantee;

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(G) the date of the commencement of the winding-up of the Company referred to in clause 7.3(F);
(H) the date when the proposed compromise or amalgamation becomes effective;
(I) the date on which the Grantee commits a breach of clause 7.1;
(J) the date on which the Option is cancelled by the Board as provided in clause 15; or
(K) the non-fulfilment of any condition referred to in clause 3 on or before the date stated therein.
8.2 If an Option shall lapse, the Board shall notify the Grantee in writing of such lapse.
8.3 The Company shall owe no liability to any Grantee for the lapse of any Option under this clause 8.

9. Maximum number of Shares available for subscription

9.1 Subject to clause 9.2:-
(A) The total number of Shares which may be allotted and issued upon exercise of all Options to be granted under this Scheme and any other share option scheme of the Company must not in aggregate exceed 10% of the H Shares in issue as at the Adoption Date (the “ Scheme Mandate Limit ”) unless the Company obtains a fresh approval from its shareholders pursuant to clause 9.1(B) or the Options are granted pursuant to clause 9.1(C) below. Options lapsed in accordance with clause 8 shall not be counted for the purpose of calculating the Scheme Mandate Limit.
(B) The Company may seek approval of its shareholders in general meeting to renew the Scheme Mandate Limit provided that the total number of Shares in respect of which options may be granted by the directors of the Company under the Scheme and any other share option schemes of the Company shall not exceed ten (10) per cent. (the “ Renewal Limit ”) of the issued share capital of the Company at the date of approval to renew such limit. Options previously granted under the Scheme (including those outstanding, cancelled, lapsed in accordance with the Scheme or exercised Options) shall not be counted for the purpose of calculating the Renewal Limit. The Company shall send a circular to its shareholders containing the information and the disclaimer required under Chapter 17 of the Listing Rules for the purpose of seeking the approval of its shareholders for the Renewal Limit.

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(C) The Company may authorise the Board or persons authorized by the Board to grant Options to specified Participants beyond the Scheme Mandate Limit or the Renewal Limit (as the case may be) if the grant of such Options is specifically approved by the shareholders of the Company in general meeting. In such case, the Company shall send a circular to its shareholders in connection with the general meeting at which their approval will be sought containing a generic description of the specified Participants who may be granted such Options, the number and terms of the Option to be granted, the purpose of granting Options to the specified Participants with an explanation as to how the terms of the Options serve such purpose, the information and the disclaimer required under the Listing Rules and such further information as may be required by the Stock Exchange from time to time.
9.2 Notwithstanding anything in clause 9.1 and subject to clause 10, the maximum number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Scheme and any other share option schemes of the Company shall not exceed thirty (30) per cent. of the total number of Shares in issue from time to time. No Options shall be granted under the Scheme or any other share option scheme of the Company or any of its Subsidiaries if this will result in the limit being exceeded.
9.3 (A) Subject to clause 9.3(B), the total number of Shares issued and to be issued upon exercise of the options granted and to be granted pursuant to the Scheme and any other share option schemes of the Group to each Participant (including both exercised and outstanding options) in any 12-month period up to and including the date of grant of the options shall not exceed one (1) per cent. of the total number of Shares in issue (the “ Personal Limit ”).
(B) Any further grant of options in excess of the Personal Limit shall be subject to the approval of the shareholders of the Company in general meeting, at which such Participant and his close associates shall abstain from voting. A circular shall be sent to the shareholders of the Company with disclosure of the identity of the Participant, the number and terms of the options to be granted (and any options previously granted to such Participant), and the information and the disclaimer required under the Listing Rules. The number and terms (including the Subscription Price) of options to be granted to such Participant under the circumstances set out in this clause 9.3(B) shall be fixed before the general meeting at which the same are approved. The date of the Board meeting for proposing such further grant shall be taken as the Offer Date for the purpose of calculating the Subscription Price.
9.4 Any grant of Options to a Participant who is a director, supervisor, chief executive or substantial Shareholder (if any) of the Company (or its subsidiaries) or any of their respective associates shall be approved by the independent non-executive directors of the Company.

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

9.5 Subject to clauses 9.1 to 9.3 above, the maximum number of Shares referred to in clauses 9.1 to 9.3 will be adjusted in such manner as the Auditors or an independent financial adviser appointed by the Company (acting as experts and not as arbitrators) shall certify to be fair and reasonable, in the event of any alteration in the capital structure of the Company whether by way of capitalisation of profits or reserves, rights issue, repurchase, consolidation, sub-division or reduction in the share capital of the Company or otherwise howsoever (excluding any alteration in the capital structure of the Company as a result of an issue of Shares as consideration in respect of a transaction to which the Company is a party).

10. Reorganisation of capital structure

In the event of a capitalisation issue, rights issue, sub-division or consolidation of the Shares, subdivision or reduction of the share capital in the Company whilst any Option remains exercisable (excluding any alteration in the capital structure of the Company as a result of an issue of Shares as consideration in respect of a transaction to which the Company is a party), or in the event of any distribution of the Company’s capital assets to its shareholders on a pro rata basis (whether in cash or in specie) other than dividend paid out of the net profits attributable to its shareholders for each financial year of the Company, such corresponding alterations (if any) shall be made to:

(A) the number or nominal amount of Shares subject to the Option so far as unexercised; or
(B) the Subscription Price for the Shares subject to the Option so far as unexercised,

or any combination thereof, as an independent financial adviser appointed by the Company or the Auditors shall at the request of the Board certify in writing to the directors of the Company, either generally or as regards any particular Grantee, to be in their opinion fair and reasonable, provided that any such alterations shall satisfy the requirements set out in the note to Rule 17.03(13) of the Listing Rules and shall give a Grantee the same proportion of the issued share capital of the Company as that to which he was previously entitled (as interpreted in accordance with the Supplementary Guidance attached to the letter from the Stock Exchange dated 5 September 2005 to all issuers relating to share option schemes and/or any future guidance or interpretation of the Listing Rules issued by the Stock Exchange from time to time), but so that no such alterations shall be made the effect of which would be to enable any Share to be issued at less than its nominal value. The capacity of the independent financial adviser or the Auditors in this clause is that of experts and not of arbitrators and their certification shall, in the absence of manifest error, be final, conclusive and binding on the Company and the Grantees. The costs of the independent financial adviser or the Auditors shall be borne by the Company. Notice of such alteration(s) (if any) shall be given to the Grantees by the Company.

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

11. Share Capital

The exercise of any Option shall be subject to the shareholders of the Company in general meeting approving any necessary increase in the authorised share capital of the Company. Subject thereto, the Board shall make available sufficient authorised but unissued share capital of the Company to meet subsisting requirements on the exercise of Options.

12. Disputes

Any dispute arising in connection with the Scheme (whether as to the number of Shares involved, the subject of an Option, the amount of the Subscription Price or otherwise) shall be referred to the decision of an independent financial adviser appointed by the Company or the Auditors who shall act as experts and not as arbitrators and whose decision, save in the case of manifest error, shall be final, conclusive and binding. The costs of the Auditors or the independent financial adviser to the Company shall be borne equally by the Company and the relevant Grantee.

13. Alteration of the Scheme

13.1 Subject to the Listing Rules and all applicable laws, the terms and conditions of the Scheme may be waived or altered in any respect by resolution of the Board (by its absolute discretion when it deems fit) from time to time except that the definition of “Grantee” and “Participants” and the provisions of the Scheme relating to matters contained in Rule 17.03 of the Listing Rules shall not be altered to extend the class of persons eligible for the grant of Options or to the advantage of Grantees or Participants except with the prior approval of the shareholders in general meeting, with Grantees and their close associates abstaining from voting. No such alteration shall operate to affect adversely or abolish the terms of issue of any Option granted or agreed to be granted prior to such alteration except with the consent or sanction of such majority of the Grantees as would be required of the shareholders of the Company under the articles of association for the time being of the Company for a variation of the rights attached to the Shares.
13.2 Any alterations to any terms of the Options granted or to the terms and conditions of the Scheme, which are of a material nature or change the authority of the Board in relation to any alteration to the terms of the Scheme, shall be approved by the shareholders of the Company, except where the alterations take effect automatically under the existing terms of the Scheme.
13.3 The amended terms of the Scheme or the Options must still comply with the relevant requirements of Chapter 17 of the Listing Rules.
13.4 Any change to the authority of the directors of the Company or scheme administrators, if any, in relation to any alteration to the terms of the Scheme must be approved by the shareholders of the Company at general meeting.

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APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

14. Termination

The Company by special resolution in general meeting or the Board may at any time terminate the operation of the Scheme and in such event no further Options shall be offered but in all other respects the provisions of the Scheme shall remain in full force and effect. Options granted during the Scheme Period and which remain unexpired immediately prior to such termination but not exercised shall continue to be valid and exercisable subject to and in accordance with the Scheme.

15. Cancellation of Options granted

The Board may, with the consent of the relevant Grantee and such consent shall not be unreasonably withheld, at any time cancel any Option granted but not exercised. Where the Company cancels Options and offers new Options to the same Option holder, the offer of such new Options may only be made under this Scheme with available Options (to the extent not yet granted and excluding the cancelled Options) within the Scheme Mandate Limit and the Renewal Limit approved by the shareholders of the Company as mentioned in clause 9.

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AI assistant

Central China Securities Co., Ltd. — Proxy Solicitation & Information Statement 2015

49885_rns_2015-05-29_0b016ae6-8c94-49a6-9bf8-6c2316e0361b.pdf

Central China Securities Co., Ltd.

PROPOSED ISSUE OF NEW H SHARES UNDER SPECIFIC MANDATE; PROPOSED ADOPTION OF SHARE OPTION SCHEME AND PROPOSED CONSEQUENTIAL AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Joint Placing Agents

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

Central China Securities Co., Ltd.

PROPOSED ISSUE OF NEW H SHARES UNDER SPECIFIC MANDATE; PROPOSED ADOPTION OF SHARE OPTION SCHEME AND PROPOSED CONSEQUENTIAL AMENDMENTS TO THE ARTICLES OF ASSOCIATION

INTRODUCTION

PROPOSED ISSUE OF NEW H SHARES UNDER SPECIFIC MANDATE

(1) Class of Shares to be issued

(2) Size of issuance

(3) Time of issuance

(4) Method of issuance

(5) Target placees

(6) Pricing mechanism

(7) Method of subscription

(8) Accumulated profits

(9) Use of proceeds

(10) Validity period of the resolutions

(11) Authorization of consequential amendments to the Articles of Association

“Article 24

LETTER FROM THE BOARD

(12) Other relevant authorization

Conditions to the New H Share Issue

Reasons for and Benefits of the New H Share Issue

(1) Changes in domestic securities industry and regulatory environment since the listing of H Shares of the Company

(2) Facilitate the business development and implementation of strategies of the Company

LETTER FROM THE BOARD

(3) Enhance, transform and innovate the domestic business of the Company and supplement to the net capital of the Company for overseas business expansion

Effects of the New H Share Issue on the Shareholding Structure of the Company

Fund Raising Activities since Listing

Application for Listing

REPORT ON USE OF PROCEEDS FROM PREVIOUS FUND RAISING ACTIVITY

PROPOSED ADOPTION OF SHARE OPTION SCHEME

LETTER FROM THE BOARD

Reasons for Adoption of the Share Option Scheme

Value of the Options

Scheme Mandate Limit

Maximum Number of Shares

Conditions of the Adoption of the Share Option Scheme

Application for Listing

Document available for inspection

Authorization of consequential amendments to the Articles of Association

“ Article 3

“ Article 24

EGM, DOMESTIC SHARE CLASS MEETING AND H SHARE CLASS MEETING

LETTER FROM THE BOARD

VOTING

RECOMMENDATION

RESPONSIBILITY STATEMENT

APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

1. Purposes

2. Participants

3. Conditions

4. Duration and administration

5. Grant of Options

6. Subscription Price

7. Exercise of Options

APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

8. Lapse of Options

9. Maximum number of Shares available for subscription

APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

10. Reorganisation of capital structure

11. Share Capital

12. Disputes

13. Alteration of the Scheme

14. Termination

15. Cancellation of Options granted

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Central China Securities Co., Ltd. Proxy Solicitation & Information Statement 2015