China Galaxy Securities Co., Ltd. — Governance Information 2013

May 22, 2013

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(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 06881)

NOMINATION AND REMUNERATION COMMITTEE OF THE BOARD TERMS OF REFERENCE

Chapter 1 General

Article 1 These terms of reference of China Galaxy Securities Co, Ltd. (the “Company”) were formulated in accordance with the Company Law of the People’s Republic of China, Securities Law of the People’s Republic of China, Code of Corporate Governance for Securities Companies, Code of Corporate Governance for Listed Companies and the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited, the Articles of Association and rules of procedures of board meetings based on the situation of the Company to regulate the decision-making mechanism and refi ne the corporate governance of the Company.

Article 2 The nomination and remuneration committee of the board of directors (the “Committee”) is set up by the board of directors pursuant to the Articles of Association. It shall assist the board of directors in performing duties pursuant to these terms of reference and shall be accountable to the board of directors.

Chapter 2 Composition

Article 3 The Committee shall comprise at least three directors, a majority of whom shall be independent directors. The Committee shall have a chairman who shall be an independent director.

Article 4 The members of the Committee shall be nominated by the chairman of the board of directors, more than half of the independent directors or more than one-third of all directors. The chairman shall be nominated by the chairman of the board of directors and elected by the majority of the members of the Committee.

The appointment of the chairman and members of the Committee shall be subject to the approval of the board of directors.

Article 5 The term of offi ce of the members of the Committee shall be the same as that of the directors. A member of the Committee may serve consecutive terms if re-elected upon the expiry of his/her term of offi ce. If any member ceases to be a director of the Company during his/her term of offi ce, he/she shall ipso facto and immediately cease to hold the position of the member of the Committee. In the event that the number of members of the Committee falls below the quorum provided herein, the vacancy shall be fi lled up by the board of directors in accordance with these terms of reference.

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Where the composition of the Committee fails to meet the requirement specifi ed in Article 3, the board of directors shall promptly explain the details and reasons of such deviation by means of announcement according to the requirements of the securities regulatory authorities at the place where the shares of the Company are listed, and shall satisfy the requirements within three months from the date of failing to meet those requirements.

Article 6 The chairman of the Committee shall be in charge of the work of the Committee, whose principal duties are as follows:

(1) to lead the Committee and ensure the effi cient operation and performance of duty of the Committee;

(2) to convene and chair meetings of the Committee;

(3) to ensure that all members of the Committee know clearly about the matters to be deliberated at the meeting and have access to complete and reliable information;

(4) to ensure each proposal deliberated by the Committee be resolved with clear and concise conclusion;

(5) to arrange other affairs conferred by the board of directors; and

(6) other functions as stipulated herein.

In the event that the chairman of the Committee absent from the meeting or fail to discharge his/her duties, a member of the Committee, who shall be an independent director, may be elected by other members to perform the duties of the chairman.

Article 7 The members of the Committee shall acquire professional knowledge, experience and skills as required for the performance of duties of the Committee. The principal duties of the members of the Committee are as follows:

(1) to propose resolutions at the meetings of the Committee;

(2) to attend the meetings of the Committee on time and to express opinions on the resolutions or matters deliberated at the meetings and exercise their voting rights;

(3) to attend relevant meetings of the Company for obtaining relevant information of the Company; and

(4) to perform other functions as stipulated herein.

Article 8 Any member of the Committee may be replaced or dismissed by the board of directors if any one of the following situations occurs:

(1) the member tenders his/her resignation in writing;

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(2) the member is involved in gross misconduct or in violation of the laws and regulations, the Articles of Association or these terms of reference during the his/her term of offi ce;

(3) other circumstances in which the board of directors considers that the member is not fi t to take up the position as a member of the Committee.

Chapter 3 Duties

Article 9 The primary duties of the Committee include the following:

(1) to make recommendations to the board of directors on the size and composition of the board of directors and the Board committees based on the Company’s operation, total amount of assets and equity structure;

(2) to make recommendations to the board of directors on the number and composition of the senior management based on the Company’s requirements of business operation, as well as the requirements of the regulatory authorities;

(3) to review the selection criteria and procedures for the directors and senior management and to make recommendations to the board of directors; to conduct evaluation on the structure, size and composition (including skills, knowledge and experience) of the board of directors at least once a year and to make recommendations on any proposed changes to the board of directors for the purpose of implementing the corporate strategy;

(4) to study and formulate the selection criteria and procedures of the members of the committees under the board of directors, and to make recommendations to the Board on the appointment, reappointment and succession plans of directors (especially for the chairman and the General Manager (President));

(5) to search broadly for qualifi ed individuals as candidates for directors and senior management;

(6) to conduct preliminary review of the qualifi cations and conditions (including the independence of the independent directors) of the candidates for directors (including independent directors) based on the selection criteria and procedures and to make recommendations to the board of directors;

(7) to review the qualifi cations and conditions of the candidates for General Manager (President), Chief Compliance Offi cer and secretary to the board of directors nominated by the chairman, as well as the Vice General Manager (Vice President) and senior management, including Chief Financial Offi cer, as nominated by the General Manager (President) based on the selection criteria and procedures and to make recommendations to the board of directors;

(8) to make recommendations to the board of directors on the candidates for the members of other committees under the board of directors;

(9) to formulate development plans of the senior management and training plans of key candidates and to make recommendations to the board of directors;

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(10) to review and provide opinion on the assessment and remuneration management system for directors and senior management;

(11) to formulate the criteria and the procedure for the review of the performance of directors and senior management; to implement and provide opinion on the performance review of directors and senior management;

(12) according to the policy and target set by the board of directors, to formulate incentive policy and plans for the directors (including non-executive directors) and senior management following the formal and transparent procedures and taking into consideration the salaries paid by comparable companies, responsibilities, time commitment, as well as the terms of employment of other positions of the Company (including controlled subsidiaries) and to make recommendations to the board of directors;

(13) to make recommendations to the board of directors on the special remuneration packages (including non-monetary benefi ts, pension as well as compensation for any loss or termination of offi ce or appointment) of executive directors, supervisors and senior management;

(14) to review and approve the compensation to be paid to executive directors or senior management for any loss or termination of offi ce or appointment and to ensure it is consistent with contractual terms and is otherwise fair and not excessive;

(15) to review and approve compensation arrangements relating to dismissal or removal of directors for misconduct and to ensure that they are consistent with contractual terms and are otherwise reasonable and appropriate;

(16) to ensure that no director or his associate is involved in the determination of his own remuneration;

(17) to provide opinion on the directors service agreements to be approved by the shareholders. The above-mentioned agreements include agreements with a service term of more than three years, agreements that require a notice period of more than one year or compensation in the amount of more than one year’s remuneration or other payments in case of termination of the agreement by the Company, or agreements as required by the securities regulatory authorities where the shares of the Company is listed;

(18) to review the Company’s fundamental remuneration management system and policies and to evaluate its effectiveness; and

(19) other matters as authorized by the board of directors.

The Committed may make proposals to the board of directors within the scope of the above duties.

Article 10 The management and departments of the Company shall assist and coordinate with the Committee, promptly and accurately provide the necessary information for the Committee for the performance of its responsibilities, and respond to the inquiries raised by the Committee on relevant matters. The Committee shall consult the chairman of the board of directors regarding the remuneration policy for other executive directors.

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Article 11 The Committee shall evaluate the implementation of fundamental remuneration management system and policies of the Company.

The Committee shall study the investigation results and feedbacks from the management or relevant persons-in-charge, and report to the board of directors of the investigation results and make suggestions.

Article 12 The Committee shall oversee and monitor the implementation of resolutions approved by the shareholders’ meeting and the board meeting within the scope of its duties.

Article 13 The Committee shall, in accordance with its duties, submit relevant materials and information in forms of report, proposal and summary to the board of directors for consideration and decision-making.

The Committee shall report to the chairman of the board of directors of relevant materials and information during the adjournment of board meetings.

Article 14 The Committee shall submit the annual work report to the board of directors.

Article 15 The Committee shall be provided with suffi cient resources to perform its duties. The Committee may engage intermediary fi rms to provide independent and professional advices or organize and assign departments or employees of the Company to conduct specifi c researches at the expense of the Company.

Chapter 4 Rules of Procedures

Article 16 The Committee shall convene at least two meetings each year by way of physical meeting or communication.

Article 17 The meeting notice shall be issued 5 days before the date of meeting, unless otherwise agreed by at least two thirds of the members of the Committee.

Article 18 The meeting notice shall contain the following details:

(1) date and venue of the meeting;

• (2) duration of the meeting;

• (3) agenda and relevant materials of the meeting; and

• (4) date of the notice.

Article 19 The meeting notice may be despatched by hand, fax, registered mail or e-mail.

Article 20 Upon the approval by the chairman of the Committee, interim proposals may be added to the agenda of the meeting after the issuance of the meeting notice, and relevant materials shall be served as soon as possible.

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Article 21 Quorum of the committee meeting shall be over half of all the committee members. The Committee may invite other parties who are not committee members to attend the meeting as and when necessary.

Article 22 Members of the Committee shall attend meetings in person and shall not appoint others to attend on his/her behalf.

Article 23 The Committee may request relevant departments and personnel to conduct a briefi ng or express opinion on the matters being considered at a meeting. The relevant departments and personnel shall attend such meeting.

Article 24 The Committee shall adopt the abstention system.

Committee members in any of the following circumstances shall make disclosure to the Committee in advance and apply for abstention from discussion of the Committee. Other members of the Committee may also require him/her to withdraw from discussion:

(1) the member or his/her close relatives is proposed for nomination;

(2) the performance and remuneration of the member is proposed for evaluation and discussion; and

(3) other circumstances that may affect members of the Committee to make objective and fair judgments.

The close relatives referred to herein shall include parents, spouse, siblings and their spouses, adult children and their spouses, parents of spouse, siblings of spouse and their spouses, siblings of parents and their spouse, adult children and their spouse of siblings of parents.

If there is dispute over the aforesaid circumstance, the dispute shall be solved by poll with more than half of the votes of other committee members.

If the meeting is convened to discuss a number of matters, such member shall only be abstained from the discussion of the matter he/she is involved and he/she shall perform his/her duties on other matters.

If resolution cannot be formed due to the abstention of members, the Committee shall submit such matter to the board of directors for consideration.

Article 25 Any voting at the meetings of the Committee shall be taken by poll. Each member shall have one vote. A resolution of the meeting of the Committee shall be passed by more than half of the votes.

Article 26 Resolution of the meeting of the Committee shall be formed upon voting. The resolution shall contain the following details:

(1) the date, venue and name of the convener of the meeting;

• (2) the number of members who shall attend and actual number of attendees of the meeting;

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(3) the legal validity of the proceedings and resolutions of the meeting;

• (4) the contents of the proposals considered and voted at the meeting and the voting results;

(5) other matters that shall be explained and recorded in the resolution.

The resolution shall be signed by all members present at such meeting. The resolution and the relevant proposals in written form shall be submitted to the board of directors and, where necessary, delivered to the relevant departments of the Company.

Article 27 The Committee shall keep minutes of the meetings, which shall record the details of the matters considered and resolutions formed at the meetings of the Committee, including any concerns or opposing opinions raised by members of the Committee. Subsequent to the conclusion of a meeting, the draft of the meeting minutes and the fi nal minutes shall be delivered to the members for their comments and record respectively within reasonable period of time. The meeting minutes shall be signed by the members of the Committee present at a meeting and the secretary of the meeting.

Article 28 The resolutions and minutes of the meetings of the Committee shall be important documents of the Committee and shall be kept by the secretary to the board of directors. During the subsistence of the Company, these documents shall be kept for not less than 20 years. The meeting minutes of the Committee shall be available for inspection by a director upon request.

Article 29 Members of the Committee, persons attending the meeting and other participants of the meeting shall undertake confi dentiality obligations for all items discussed at the meeting. Relevant information shall not be disclosed without permission. In the event of any breach of confi dentiality, the concerned person shall bear legal liabilities in accordance with the laws and regulations.

Chapter 5 Coordination and Communication

Article 30 The offi ce of the board of director is the working unit of the Committee, and its major duties shall include the followings:

(1) to manage daily operation and liaison of the Committee;

(2) to arrange committee meetings and prepare meeting minutes;

(3) to collect and prepare relevant materials for the committee meetings;

(4) to coordinate relevant departments of the Company to conduct researches as necessary for the performance of duties by a member of the Committee upon request;

(5) to assist members in acquiring relevant information and coordinate relevant departments of the Company to provide related materials; and

(6) to coordinate the works between the Committee and other committees of the board of directors.

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Article 31 The human resources department of the Company is the supporting department for the decision-making of the Committee. They shall provide related materials, draft relevant documents and make recommendations upon the request of the Committee.

Chapter 6 Supplementary Provisions

Article 32 Unless otherwise specifi ed, the terms used herein shall have the same meaning ascribed thereto under the Articles of Association.

Article 33 In the event that any matters are covered by these terms of reference or any of these terms of reference being inconsistent with the relevant laws and regulations of the state, the listing rules of the place where the shares of the Company are listed and the Articles of Association, such laws and regulations and listing rules and the Articles of Association shall prevail.

Article 34 Amendments to these terms of reference shall be proposed by the Committee for approval by the board of directors.

Article 35 These terms of reference shall be interpreted by the board of directors.

Article 36 These terms of reference were considered and approved by the board of directors and shall become effective on the date of the initial public offering and listing of the Company.

The original terms of reference of the Nomination and Remuneration Committee of the board of directors of the Company shall lapse automatically on the same date when these terms of reference become effective.

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