China Galaxy Securities Co., Ltd. - Proxy Solicitation & Information Statement 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in China Galaxy Securities Co., Ltd., you should at once hand this circular and the accompanying forms of proxy and reply slips to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

This circular is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

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.

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(A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 06881)

PROPOSED A SHARE OFFERING AMENDMENTS TO ARTICLES OF ASSOCIATION AND

NOTICES OF EXTRAORDINARY GENERAL MEETING, DOMESTIC SHARE CLASS MEETING AND H SHARE CLASS MEETING

The notices convening the EGM, the Domestic Share Class Meeting and the H Share Class Meeting of China Galaxy Securities Co., Ltd. to be held at Donghua Hall, 11th Floor, Beijing Minzu Hotel, No.51 Fuxingmen Inner Street, Xicheng District, Beijing, the PRC on Friday, 25 April 2014 at 9:30 a.m., 10:30 a.m. or immediately after the conclusion of the EGM or any adjournment thereof (whichever is the later), and 11:10 a.m. or immediately after the conclusion of the Domestic Share Class Meeting or any adjournment thereof (whichever is the later), respectively, are set out on pages 12 to 30 of this circular.

If you intend to appoint a proxy to attend the EGM, the Domestic Share Class Meeting and/or the H Share Class Meeting, please complete the enclosed forms of proxy in accordance with the instructions printed thereon and return the same to Computershare Hong Kong Investor Services Limited (for holders of H Shares) and the Office of the Board of Directors of the Company (for holders of Domestic Shares) not less than 24 hours before the time appointed for holding the meetings or any adjournment thereof in person or by post. Completion and return of the forms of proxy will not preclude you from attending and voting in person at the meetings or any adjournment thereof if you so wish.

If you intend to attend the EGM, the Domestic Share Class Meeting and/or the H Share Class Meeting in person or by proxy, please complete the enclosed reply slips and return the same to Computershare Hong Kong Investor Services Limited (for holders of H Shares) and the Office of the Board of Directors of the Company (for holders of Domestic Shares) on or before Friday, 4 April 2014.

11 March 2014

			Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			3
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . .			12
NOTICE OF DOMESTIC SHARE CLASS MEETING . . . . . . . . . . . . . . . . . . . . . .			21
NOTICE OF H SHARE CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			26
APPENDIX I	–	RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS
		AFTER INITIAL PUBLIC OFFERING AND LISTING OF
		A SHARES OF CHINA GALAXY
		SECURITIES CO., LTD. . . . . . . . . . . . . . . . . . . . . . . . . . . .	31
APPENDIX II	–	PLAN OF PRICE STABILIZATION OF A
		SHARES WITHIN 3 YEARS AFTER
		INITIAL PUBLIC OFFERING AND LISTING OF
		A SHARES OF CHINA GALAXY
		SECURITIES CO., LTD.. . . . . . . . . . . . . . . . . . . . . . . . . . . .	36
APPENDIX III	–	LETTER OF UNDERTAKING OF CHINA
		GALAXY SECURITIES CO.,
		LTD. REGARDING REPURCHASE OF NEW
		A SHARES UNDER INITIAL PUBLIC OFFERING . . . . . .	40
APPENDIX IV	–	LETTER OF UNDERTAKING OF CHINA
		GALAXY SECURITIES CO.,
		LTD. REGARDING COMPENSATION FOR
		THE LOSSES OF INVESTORS ACCORDING
		TO LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41

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DEFINITIONS

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

“A Shares” ordinary shares that are proposed to be issued under the A Share Offering by the Company, which will be listed on the Shanghai Stock Exchange and traded in RMB
“A Share Offering” the Company’s proposed initial public offering of not more than 1,693,510,473 A Shares which are to be listed on the Shanghai Stock Exchange
“Announcement” the announcement of the Company dated 1 March 2014 in relation to the A Share Offering
“Articles of Association” the articles of association of the Company (as amended from time to time)
“Board” or “Board of Directors” the board of directors of the Company
“Company”
China Galaxy Securities Co., Ltd., a joint stock company incorporated in the PRC on 26 January 2007, whose H Shares are listed on the Stock Exchange
“CSRC” China Securities Regulatory Commission
“Domestic Shares” issued ordinary shares 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 to be held by the Company at Donghua Hall, 11th Floor, Beijing Minzu Hotel, No.51 Fuxingmen Inner Street, Xicheng District, Beijing, the PRC, on Friday, 25 April 2014 at 10:30 a.m. or immediately after the conclusion of the EGM or any adjournment thereof (whichever is the later)
“EGM” or “Extraordinary General Meeting”
the first extraordinary general meeting of 2014 to be held by the Company at Donghua Hall, 11th Floor, Beijing Minzu Hotel, No.51 Fuxingmen Inner Street, Xicheng District, Beijing, the PRC, on Friday, 25 April 2014 at 9:30 a.m.
“Group”
the Company and its subsidiaries

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DEFINITIONS

“H Shares” overseas listed foreign shares in the share capital of the Company, with a nominal value of RMB1.00 each, which are listed on the Stock Exchange and traded in Hong Kong dollars
“H Share Class Meeting” the H Share class meeting to be held by the Company at Donghua Hall, 11th Floor, Beijing Minzu Hotel, No.51 Fuxingmen Inner Street, Xicheng District, Beijing, the PRC, on Friday, 25 April 2014 at 11:10 a.m. or immediately after the conclusion of the Domestic Share Class Meeting or any adjournment thereof (whichever is the later)
“HK$” or “HK dollars” Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“Latest Practicable Date” 7 March 2014, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange, as amended from time to time
“PRC” or “China” the People’s Republic of China, but for the purposes of this circular, excluding Hong Kong, Macau Special Administrative Region and Taiwan
“Prospectus” the Company’s prospectus of H Shares dated 9 May 2013
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“Shareholders” shareholders of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited

In case of any discrepancy between the Chinese version and the English version of this circular, the Chinese version shall prevail.

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LETTER FROM THE BOARD

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(A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 06881)

The Board of Directors: Non-executive Directors: Mr. CHEN Youan (Chairman) Mr. XU Guoping Mr. LI Chenghui Mr. SHI Xun Ms. QI Xiaoli

Executive Directors:

Mr. GU Weiguo (Vice Chairman and President)

Registered Office and Head Office in the PRC: 2-6F, Tower C, Corporate Square 35 Finance Street Xicheng District, Beijing, the PRC

Principal place of business in Hong Kong: Unit 3501-07, 3513-14 35/F, Cosco Tower 183 Queen’s Road Central, Sheung Wan Hong Kong

Mr. WU Chengming

Independent Non-executive Directors:

Mr. WANG Shiding Mr. LIU Feng Mr. ZHOU Ruijin Mr. WU Yuwu

11 March 2014

To the Shareholders

Dear Sir or Madam,

PROPOSED A SHARE OFFERING AND AMENDMENTS TO ARTICLES OF ASSOCIATION

INTRODUCTION

Reference is made to the Prospectus and the Announcement.

As disclosed in the Prospectus, the Company is in the process of preparing for the A Share Offering, which has been approved by Shareholders by way of special resolutions at the extraordinary general meeting held on 16 November 2012.

As disclosed in the Announcement, at the Board meeting held on 1 March 2014, the Board resolved to revise the terms of the A Share Offering and in this connection, the following resolutions have been passed: 1. amendments to the A Share Offering Plan; 2. granting of authorizations to the Board to deal with specific matters concerning the A Share Offering; 3. amendments to the Articles of Association in connection with the A Share

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LETTER FROM THE BOARD

Offering; 4. return plan for Shareholders in 3 years after the A Share Offering; 5. plan of price stabilization of A Shares of the Company within 3 years after the A Share Offering; 6. letter of undertaking regarding repurchase of new A Shares under the A Share Offering; and 7. letter of undertaking regarding compensation for the losses of investors according to law.

The above resolutions are subject to approval by Shareholders at the EGM by way of special resolutions, and among which, the resolutions numbered 1, 2, 5 and 6 shall be approved by Shareholders at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting by way of special resolutions, respectively. Furthermore, the A Share Offering is subject to the approvals from the CSRC and other regulatory authorities.

In addition to the A Share Offering mentioned above, the Company intends to amend the description of the business scope in its Articles of Association and the following resolution will be proposed: 8. Other amendments to the Articles of Association. The resolution shall be approved by Shareholders at the EGM by way of a special resolution.

The purpose of this circular is to provide you with the notices of the EGM, the Domestic Share Class Meeting and the H Share Class Meeting and the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the proposed resolutions or abstain from voting at the meetings.

A SHARE OFFERING

Resolutions in relation to the A Share Offering

1. Amendments to the A Share Offering Plan

In accordance with the requirements of Opinions Regarding Further Promotion of Structural Reforms on Issue of New Shares （《關於進一步推進新股發行體制改革的意見》）issued by CSRC in November 2013 and its accompanying documents and taking into account the actual situation of the Company, it intends to make amendments to the A Share Offering Plan as follows:

1.1 Place of listing

Shanghai Stock Exchange

1.2 Type of securities to be issued and nominal value

A Shares of RMB1.00 each

1.3 Proportion of issue

The numbers of A Shares to be issued will be not more than 1,693,510,473 shares (including any shares that may be issued under the over-allotment option) and will not exceed 18.35% of the total share capital of the Company immediately after the A Share Offering. The total size of actual issue, over-allotment and proportion of allotment will be determined by the Board pursuant to the authorizations from the general meeting of

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LETTER FROM THE BOARD

the Company, based on the capital requirements of the Company, communication with the regulatory authorities and the prevailing market conditions at the time of the issuance.

1.4 Target subscribers

Target subscribers of A Shares are qualified natural persons and institutional investors.

If any of the aforesaid persons are connected persons of the Company, the Company will take all necessary measures to comply with the listing rules of the jurisdictions where the shares of the Company are listed.

1.5 Strategic allotment

According to the business cooperation and scale of financing needs, the Company intends to implement strategic allotment under the A Share Offering so as to allot some of the shares to investors that satisfy the requirements of the laws and regulations and meet the development and strategic needs of the Company. The detailed proportion of allotment will be determined based on the requirements of the laws and regulations and subject to market conditions.

1.6 Method of pricing

Taking into account the actual situation of the capital markets and of the Company at the time of the issuance of the A Shares, the issue price will be fixed through making enquiries with off-line investors or directly fixed through negotiation between the lead underwriter(s) and the Company, or by any other legal and feasible methods.

The issue price of the A Shares will be determined on the basis of the conditions of domestic and overseas securities markets at the time of the A Share Offering, taking into account the interests of all Shareholders as a whole, and in accordance with relevant PRC regulations and the listing rules of the Shanghai Stock Exchange. Upon receiving the approval of the A Share Offering from the CSRC, the issue price range will be determined by making preliminary price consultations with qualified price consultation participants, and the issue price will be determined within the issue price range based on the cumulative bidding price consultations (or by other means of determining the issue price recognized by the CSRC); alternatively, the issue price will be directly fixed through negotiation between the lead underwriter(s) and the Company according to the conditions of domestic and overseas securities markets at the time of the A Share Offering, or by any other legal and feasible methods.

1.7 Method of issue

It is proposed that the A Share Offering will be conducted by issuance of new shares.

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LETTER FROM THE BOARD

1.8 Use of proceeds

The proceeds raised from the A Share Offering, after deduction of the issue expenses, will all be used for strengthening the capital base of the Company and supplementing the working capital of the Company.

1.9 Transfer of state-owned shares

In accordance with the Implementing Measures for the Transfer of Some State-owned Shares from the Domestic Securities Market to the National Social Security Fund （《境內證券市場轉持部分國有股充實全國社會保障基金實施辦法》） and the relevant regulations, the state-owned shareholders of the Company shall fulfill their obligations to transfer 10% of the A Shares actually issued by the Company under the A Share Offering to the National Social Security Fund. The detailed scheme of transfer will be determined and implemented pursuant to the approval from the relevant authorities of the PRC.

1.10 Conversion into a joint stock company with limited liability with domestic and overseas listed shares

According to the plan of A Share Offering and taking into account the H Shares in issue, the Company will apply for the conversion into a joint stock company with limited liability with domestic and overseas listed shares.

1.11 Validity of the resolution

The A Share Offering Plan shall be valid for 12 months from the date of passing of such resolution at the general meeting and the class meetings.

2. Granting of authorizations to the Board to deal with specific matters concerning the A Share Offering

For the purposes of the A Share Offering, a proposal will be put forward to the general meeting to authorize the Board, or its delegation to the Chairman (who may delegate to other directors), to deal with the relevant matters concerning the A Share Offering, including but not limited to:

2.1 Amending and improving specific schemes and measures of the A Share Offering and organizing their implementation based on the advices from the relevant government agencies and regulatory authorities and subject to market environment, and to the extent authorized by the general meeting, determining (including but not limited to) specific offering scale, number of shares transferred from state-owned shares, offering price (including price range and final price), time, method and target subscribers of the offering, strategic allotment and over-allotment and proportion of allotment, plan for use of proceeds and other matters relating to the implementation of the schemes concerning offering and listing.

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LETTER FROM THE BOARD

2.2 Drafting, modifying and executing the applications, memoranda, relevant reports or materials relating to the A Share Offering and submitting the same to government agencies and regulatory authorities in connection with the A Share Offering (including but not limited to the Ministry of Finance of the PRC, CSRC, Shanghai Stock Exchange, Beijing Regulatory Bureau of CSRC, National Council for Social Security Fund, China Securities Depository and Clearing Co., Ltd., Shanghai Office), handling the procedures relating to the A Share Offering including review and examination, registration, filing, approval and consent and issuing statements and undertakings relating to the A Share Offering, and performing such acts as it deems necessary, expedient or appropriate with respect to the A Share Offering.
2.3 Preparing, amending, signing, submitting and disclosing the Prospectus, signing, amending, implementing, suspending or terminating the agreements, contracts and documents relating to the A Share Offering, engaging sponsors (lead underwriters), legal counsels, auditors, receiving banks and other institutions relating to the A Share Offering.
2.4 Authorizing the Board to amend the provisions in the Articles of Association relating to the A Share Offering or amending the same in accordance with the requirements of securities regulatory authorities, stock exchanges and securities depository and clearing institutions, after completion of the A Share Offering, handling approval, change, filing and other matters in respect of the amendments of the Articles of Association and the change of the registered capital with securities regulatory authorities, administrations for industry and commerce, securities registration authorities and other relevant government departments.

Any amendments to the Articles of Association to be made by the Board pursuant to the authorization of the general meeting shall be subject to the examination and approval procedures at the general meeting immediately following the amendments.

2.5 Should there be any new provisions and polices issued by the state and securities regulatory departments with respect to the initial public offering and listing, to the extent authorized by the general meeting, authorizing the Board to make corresponding amendments to the A Share Offering Plan in accordance with such new provisions and polices.
2.6 Authorizing relevant persons to handle matters relating to the A Share Offering as and when needed.
2.7 All other matters relating to the A Share Offering.
2.8 The authorizations shall be valid for 12 months from the date of passing of such authorizations at the general meeting and the class meetings.

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LETTER FROM THE BOARD

3. Amendments to the Articles of Association in connection with the A Share Offering

In accordance with the Guidance of the State Council on Trial Issuance of Preferred Shares （《國務院關於開展優先股試點的指導意見》）issued by the State Council in November 2013 and the Measures for Administration of Pilot Project for Preferred Shares (Draft) （《優先股試點管理辦法（徵求意見稿）》） issued by CSRC in December 2013, the articles of associations of the companies that issue preferred shares shall contain certain specific provisions. Given that the Company has no concrete plan for the issuance of preferred shares, such provisions cannot be clearly defined in the Articles of Association of the Company. However, for its future participation in the issuance of preferred shares, the Company intends to make minor amendments to Article 13 of the Articles of Association.

In addition, according to the Opinion Regarding Further Promotion of Structural Reforms on Issue of New Shares and Guideline No.3 on Supervision and Administration of Listed Companies – Cash Dividends of Listed Companies （《上市公司監管指引第 3 號 – 上市公司現金分紅》）issued by CSRC in November 2013 and the Guidelines on Distribution of Cash Dividends by Listed Companies （《上市公司現金分紅指引》） issued by Shanghai Stock Exchange in January 2013, the Company intends to amend the provisions concerning profit distribution plan in the Articles of Association (Articles 244 and 245).

The above amendments to the Articles of Association are subject to approval of and/or filing with the relevant regulatory authorities in the PRC, and will come into force upon completion of the A Share Offering. The full text of the amendments is set out in the notice of EGM of the Company dated 11 March 2014.

4. Return plan for Shareholders in 3 years after the A Share Offering

In accordance with relevant requirements of the Guideline No.3 on Supervision and Administration of Listed Companies – Cash Dividends of Listed Companies issued by CSRC in November 2013 and the Guidelines on Distribution of Cash Dividends by Listed Companies issued by Shanghai Stock Exchange in January 2013, and in order to further clarify the plan for providing reasonable investment returns to Shareholders by the Company, improve the transparency and operability of decision-making on profit distribution, and facilitate Shareholders to supervise the Company’s operation and profit distribution, the Board proposes to further refine the provisions regarding the policies of profit distribution in the Articles of Association, and has formulated the Return Plan for Shareholders in 3 years after Initial Public Offering and Listing of A Shares of China Galaxy Securities Co., Ltd. （《中國銀河證券股份有限公司首次公開發行 A 股股票並上市後三年股東回報規劃》）. The full text of the plan is set out in Appendix I to this circular.

5. Plan of price stabilization of A Shares of the Company within 3 years after the A Share Offering

According to the requirements of the Company Law of the People’s Republic of China, Securities Law of the People’s Republic of China, Opinion Regarding Further Promotion of Structural Reforms on Issue of New Shares issued by CSRC in November 2013 and other laws and regulations, the Company has drawn up the Plan of Price Stabilization of A Shares within 3 Years after Initial Public Offering and Listing of A Shares of China Galaxy

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LETTER FROM THE BOARD

Securities Co., Ltd. （《中國銀河證券股份有限公司首次公開發行 A 股股票並上市後三年內穩定公司 A 股股價的預案》）so as to strengthen the fiduciary duties of the Company and its controlling shareholder(s), directors and senior management and protect the interests of minority shareholders. The full text of the plan is set out in Appendix II to this circular.

6. Letter of undertaking regarding repurchase of new A Shares under the A Share Offering

In accordance with the requirements of Opinion Regarding Further Promotion of Structural Reforms on Issue of New Shares issued by CSRC in November 2013 and its accompanying documents, the Company shall undertake in its prospectus of A Shares that in the event that there are any false contents, misleading statements or material omission in the prospectus, which would result in material or substantial impact on assessing whether the Company satisfies the issuance conditions as required by laws, the Company will, after preparing the share repurchase scheme and submitting it to the general meeting and the class meetings for approval, repurchase all new A Shares under the A Share Offering according to law. The full text of the letter of undertaking is set out in Appendix III to this circular.

7. Letter of undertaking regarding compensation for the losses of investors according to law

In accordance with the requirements of Opinion Regarding Further Promotion of Structural Reforms on Issue of New Shares issued by CSRC in November 2013 and its accompanying documents, the Company shall undertake in its prospectus of A Shares that in the event that there are any false contents, misleading statements or material omission in the prospectus, which would result in the investors suffering losses in securities trading, the Company will make compensation for the losses of investors according to law. The full text of the letter of undertaking is set out in Appendix IV to this circular.

The resolution no.1 (A Share Offering Plan) is the basis of the A Share Offering, while resolution nos. 2 to 7 in relation to the A Share Offering are supporting documents for the A Share Offering Plan. Pursuant to the requirements of the Opinion Regarding Further Promotion of Structural Reforms on Issue of New Shares promulgated by CSRC in November 2013 and other relevant regulations, any company intending to issue A shares is required to amend its articles of association, formulate a return plan for shareholders in 3 years after the A share offering, formulate a plan of price stabilization of A shares within 3 years after the A share offering, sign a letter of undertaking regarding repurchase of new A shares under the A share offering, sign a letter of undertaking regarding compensation for the losses of investors, in accordance with such new requirements. Resolution nos. 2 to 7 in relation to the A Share Offering do not form part of the A Share Offering Plan and the passing of any one of the 7 resolutions is not conditional upon any other resolutions; however, if any one of the 7 resolutions is not passed, the application documents for the A Share Offering may not be able to meet the requirements of CSRC, which will effectively constitute an impediment to the successful application of the A Share Offering of the Company.

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LETTER FROM THE BOARD

Effects of the A Share Offering on the shareholding structure of the Company

Assuming that a total of 1,693,510,473 A Shares are permitted for issuance under the A Share Offering and the share capital of the Company remains unchanged prior to completion of the A Share Offering, the shareholding structure of the Company as at the Latest Practicable Date and immediately after the completion of the A Share Offering is set out as follows:

Domestic Shares Domestic Shares in issue A Shares under the A Share Offering H Shares Total	As at the Latest Practicable Date Number of shares Approximate percentage of the Company’s issued share capital 5,846,274,124 77.56% – – 1,690,984,633 22.44% 7,537,258,757 100%	Immediately after completion of the A Share Offering Number of shares Approximate percentage of the Company’s issued share capital 5,846,274,124 63.33% 1,693,510,473 18.35% 1,690,984,633 18.32% 9,230,769,230 100%	Immediately after completion of the A Share Offering Number of shares Approximate percentage of the Company’s issued share capital 5,846,274,124 63.33% 1,693,510,473 18.35% 1,690,984,633 18.32% 9,230,769,230 100%
			100%

As at the Latest Practicable Date, based on the publicly available information and within the directors’ knowledge, all the H Shares were held in the public hands, and the Company’s public float satisfied the minimum percentage prescribed in the conditions imposed in the waiver granted by the Stock Exchange from strict compliance with Rule 8.08 of the Listing Rules.

EGM, DOMESTIC SHARE CLASS MEETING AND H SHARE CLASS MEETING

The forms of proxy and the reply slips of the EGM, the Domestic Share Class Meeting and the H Share Class Meeting are enclosed.

VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of the Shareholders at the Shareholders’ general meeting must be taken by poll. As such, the chairman of the meetings will exercise his power under the Articles of Association to demand a poll for all resolutions proposed at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting.

RECOMMENDATION

The Board considers that all resolutions proposed at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting are in the interests of the Company and its Shareholders as a whole. As such, the Board recommends you to vote in favour of all resolutions proposed at those meetings.

ADDITIONAL INFORMATION

Your attention is drawn to the other information set out in the Appendices to this circular.

The A Share Offering may or may not proceed to completion. Shareholders and potential investors are advised to exercise caution in dealing in the H Shares. The Company will disclose further details and development with respect to the A Share Offering in due course.

Yours faithfully, By Order of the Board China Galaxy Securities Co., Ltd. Chen Youan Chairman

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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(A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 06881)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the First Extraordinary General Meeting of 2014 of China Galaxy Securities Co., Ltd. (the “Company”) will be held at Donghua Hall, 11th Floor, Beijing Minzu Hotel, No.51 Fuxingmen Inner Street, Xicheng District, Beijing, the PRC, on Friday, 25 April 2014 at 9:30 a.m. for the following purposes. Unless the context otherwise requires, expressions used in this notice shall have the same meaning set out in the circular of the Company dated 11 March 2014.

SPECIAL RESOLUTIONS

To consider and approve the amendments to the A Share Offering Plan as follows:
1.1 Place of listing

Shanghai Stock Exchange

1.2 Type of securities to be issued and nominal value

A Shares of RMB1.00 each

1.3 Proportion of issue

1.4 Target subscribers

Target subscribers of A Shares are qualified natural persons and institutional investors.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

1.5 Strategic allotment

1.6 Method of pricing

1.7 Method of issue

It is proposed that the A Share Offering will be conducted by issuance of new shares.

1.8 Use of proceeds

1.9 Transfer of state-owned shares

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NOTICE OF EXTRAORDINARY GENERAL MEETING

their obligations to transfer 10% of the A Shares actually issued by the Company under the A Share Offering to the National Social Security Fund. The detailed scheme of transfer will be determined and implemented pursuant to the approval from the relevant authorities of the PRC.

1.10 Conversion into a joint stock company with limited liability with domestic and overseas listed shares

1.11 Validity of the resolution

The A Share Offering Plan shall be valid for 12 months from the date of passing of such resolution at the general meeting and the class meetings.

To authorize the Board, or its delegation to the Chairman (who may delegate to other directors), to deal with the relevant matters concerning the A Share Offering, including but not limited to:
2.1 Amending and improving specific schemes and measures of the A Share Offering and organizing their implementation based on the advices from the relevant government agencies and regulatory authorities and subject to market environment, and to the extent authorized by the general meeting, determining (including but not limited to) specific offering scale, number of shares transferred from state-owned shares, offering price (including price range and final price), time, method and target subscribers of the offering, strategic allotment and over-allotment and proportion of allotment, plan for use of proceeds and other matters relating to the implementation of the schemes concerning offering and listing.
2.2 Drafting, modifying and executing the applications, memoranda, relevant reports or materials relating to the A Share Offering and submitting the same to government agencies and regulatory authorities in connection with the A Share Offering (including but not limited to the Ministry of Finance of the PRC, CSRC, Shanghai Stock Exchange, Beijing Regulatory Bureau of CSRC, National Council for Social Security Fund, China Securities Depository and Clearing Co., Ltd., Shanghai Office), handling the procedures relating to the A Share Offering including review and examination, registration, filing, approval and consent and issuing statements and undertakings relating to the A Share Offering, and performing such acts as it deems necessary, expedient or appropriate with respect to the A Share Offering.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

2.3 Preparing, amending, signing, submitting and disclosing the Prospectus, signing, amending, implementing, suspending or terminating the agreements, contracts and documents relating to the A Share Offering, engaging sponsors (lead underwriters), legal counsels, auditors, receiving banks and other institutions relating to the A Share Offering.
2.4 Authorizing the Board to amend the provisions in the Articles of Association relating to the A Share Offering or amending the same in accordance with the requirements of securities regulatory authorities, stock exchanges and securities depository and clearing institutions, after completion of the A Share Offering, handling approval, change, filing and other matters in respect of the amendments of the Articles of Association and the change of the registered capital with securities regulatory authorities, administrations for industry and commerce, securities registration authorities and other relevant government departments.

2.5 Should there be any new provisions and polices issued by the state and securities regulatory departments with respect to the initial public offering and listing, to the extent authorized by the general meeting, authorizing the Board to make corresponding amendments to the A Share Offering Plan in accordance with such new provisions and polices.
2.6 Authorizing relevant persons to handle matters relating to the A Share Offering as and when needed.
2.7 All other matters relating to the A Share Offering.
2.8 The authorizations shall be valid for 12 months from the date of passing of such authorizations at the general meeting and the class meetings.
To consider and approve the amendments to the Articles of Association in connection with the A Share Offering as follows:
3.1 Article 13 of the Articles of Association is amended as:
- “Article 13

The share of the Company is in the form of stock.

The Company shall have ordinary shares at any time; and it may have other varieties of shares including preferred shares as required in accordance with law.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Each share of the Company in the same class shall enjoy equal rights in any distribution made through dividends or in any other forms.”

3.2 Article 244 of the Articles of Association is amended as:
“Article 244

The specific policies of profit distribution of the Company are as follows:

(1) The Company may distribute dividends in cash, shares or in a combination of cash and shares. The Company shall prioritize profit distribution by way of cash dividend if it satisfies the relevant conditions. If the relevant conditions are satisfied, interim profit distribution may be made by the Company.
(2) Save for any significant capital expenditure arrangement of the Company or other special circumstances approved at the general meeting, if the Company makes profit for the year and its accumulative undistributed profit is positive, the profit to be distributed in cash per annum should not be less than 10% of the distributable profit of the parent company realized in that year.

The Board shall take into account various factors such as features of the industries where the Company operates, stage of development, its own business model, profitability and whether there is significant capital expenditure arrangement, to distinguish the following situation and put forward differentiated policies of cash dividend policy in accordance with the procedures as required by the Articles of Association.

If the Company is at the mature stage of development and has no significant capital expenditure arrangement, the proportion of cash dividends in the profit distribution shall be at least 80% when the profit distribution is made.
If the Company is at the mature stage of development and has significant capital expenditure arrangement, the proportion of cash dividends in the profit distribution shall be at least 40% when the profit distribution is made.
If the Company is at the growing stage and has significant capital expenditure arrangement, the proportion of cash dividends in the profit distribution shall be at least 20% when the profit distribution is made.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

If it is difficult to distinguish the Company’s stage of development but if it has significant capital expenditure arrangement, the profit distribution may be dealt with pursuant to the preceding provisions.

Significant capital expenditure includes major investment and other significant capital expenditure. Major investment refers to the one-off total investment (or total disposed assets) or total accumulative investment (or total disposed assets) within four months reaches 10% of the Company’s latest audited net assets, or 5% of the Company’s latest audited own assets (whichever reaches first); other significant capital expenditure refers to other one-off total expenditures reach 10% of the Company’s latest audited net assets, or 5% of the Company’s latest audited own assets (whichever reaches first).

(3) In formulating the plan of profit distribution, full consideration shall be given to whether the net capital of the Company after profit distribution conforms to the provisions of the Measures for the Administration of Risk Control Indicators of Securities Companies （《證券公司風險控制指標管理辦法》）with respect to the risk control indicators of net capital. If any alert from risk control indicators arises due to profit distribution, the profit proportion shall be adjusted.
(4) Where the Company is under a good operating condition, and the Board considers that the share price of the Company does not reflect its share capital size and distributing dividends in shares will be in the interest of all Shareholders of the Company as a whole, the Company may carry out profit distribution through payment of dividends in shares taking into account genuine and reasonable factors such as the cash flow position, business growth and net asset value per share of the Company.

If the Company does not carry out profit distribution or adjust its proportion due to the circumstances described in (2) and (3) of this article, it shall be approved by way of special resolution at the general meeting of the Company.”

3.3 Article 245 of the Articles of Association is amended as:

“Article 245

The Company’s profit distribution plan shall be carried out according to the following review procedures:

(1) The Company’s profit distribution plan shall be submitted to the Board for consideration by the general manager (the president). The Board shall thoroughly discuss its rationality, seek opinions widely from Shareholders, independent directors and supervisors, and form a special

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NOTICE OF EXTRAORDINARY GENERAL MEETING

resolution on the basis of providing continuous and stable returns to all shareholders and submit it to the general meeting for consideration upon expressing views by independent directors.

(2) When convening the general meeting for purpose of considering the profit distribution plan, the Company shall take the initiative to communicate and exchange ideas with shareholders, in particular with the minority shareholders, through various channels (including but not limited to communication through telephone, fax and email or inviting minority shareholders to attend meetings), and fully listen to the opinions and appeals from minority shareholders and respond to the questions which they are concerned about promptly.
(3) If the Company fails to determine its plan of profit distribution of the year to which it relates according to the established policies or the lowest proportion of cash dividends under special circumstances, the Company shall disclose the specific reasons, purposes and plan for the use of the retained capital that has not been applied for cash dividends distribution in announcements of the Board resolution and annual report of the Company, and independent directors shall express their independent opinions on the rationality of no cash dividends or lower proportion of cash dividends. In such case, the profit distribution plan for the year shall be submitted to the general meeting by way of special resolution.
(4) The board of supervisors shall supervise the implementation of the profit distribution policies by the Board and the management as well as the plan of shareholders’ return and the decision-making processes.”
To consider and approve the return plan for Shareholders in 3 years after the A Share Offering
To consider and approve the plan of price stabilization of A Shares of the Company within 3 years after the A Share Offering
To consider and approve the letter of undertaking regarding repurchase of new A Shares under the A Share Offering
To consider and approve the letter of undertaking regarding compensation for the losses of investors according to law

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NOTICE OF EXTRAORDINARY GENERAL MEETING

To consider and approve other amendments to the Articles of Association as follows:

Article 12 of the Articles of Association is amended as:

“Subject to the approval by the CSRC and the approval and registration with the company registration authority, the business scope of the Company shall include: securities brokerage, consulting on securities investment, financial advisory service in relation to securities trading and securities investment, securities underwriting and sponsorship, proprietary securities trading, margin trading and short selling, acting as an agent for distribution of open-ended securities investment fund, provision of intermediary services to Galaxy Futures, acting as an agent for distribution of financial products and other businesses approved by the CSRC. The Company shall operate its business within the approved business scope. If the Company changes its business scope, it shall obtain approval from the CSRC and these Articles shall be amended in accordance with the statutory procedures and such changes shall be registered with the company registration authority accordingly.”

By order of the Board China Galaxy Securities Co., Ltd. Chen Youan Chairman

Beijing, the PRC, 11 March 2014

Notes:

Any shareholder entitled to attend and vote at the EGM convened by the above notice is entitled to appoint one or more proxies to attend and vote instead of him/her. A proxy need not be a shareholder of the Company.
In order to be valid, the form of proxy together with the notarized power of attorney or other documents of authorization, if any, must be completed and returned to the Office of the Board of Directors of the Company (for holders of Domestic Shares) or the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited (for holders of H Shares), not less than 24 hours before the time appointed for holding the EGM or any adjournment thereof. Computershare Hong Kong Investor Services Limited is located at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong. Completion and return of the form of proxy will not preclude a shareholder from attending and voting in person at the EGM or any adjournment thereof should he/she so wish.
Domestic shareholders whose names appear in the register of domestic shareholders of the Company at 4:30 p.m. on Tuesday, 25 March 2014 shall be entitled to attend the EGM.
The H Share register of members of the Company will be closed, for the purpose of determining the entitlement of holders of H Shares to attend the EGM, from Wednesday, 26 March 2014 to Friday, 25 April 2014 (both days inclusive), during which period no transfer of H Shares will be registered. In order to attend the EGM, all share certificates, together with the instruments of transfers, must be lodged for registration with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited (for holders of H Shares) at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, not later than 4:30 p.m. on Tuesday, 25 March 2014. Holders of H Shares who are registered with Computershare Hong Kong Investor Services Limited on or before the aforementioned date are entitled to attend the EGM.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Where there are joint holders of any shares, the one whose name stands first in the register of members shall be entitled to attend and vote at the EGM in respect of such shares.
Shareholders of the Company intending to attend the EGM in person or by their proxies should return the reply slip for attending the EGM in person or by post to the Office of the Board of Directors of the Company (for holders of Domestic Shares) or the Company’s H Share registrar, Computershare Hong Kong Investors Services Limited (for holders of H Shares) on or before Friday, 4 April 2014. The address of Computershare Hong Kong Investor Services Limited is 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.
Shareholder or his proxy shall produce proof of identity when attending the EGM:
(1) Legal representatives of legal person shareholders who attend the meeting shall produce their own identity cards and effective proof of their capacity as legal representatives. Proxies of legal person shareholders shall produce their own identity cards and the form of proxy duly signed by the legal representatives or the board of directors or other governing body of the legal person shareholders according to laws.
(2) Individual shareholders who attend the meeting in person shall produce their identity cards or other effective document or proof of identity and stock account cards. Proxies of individual shareholders shall produce effective proof of identity and form of proxy.
The EGM is expected to be held for less than half a day. Shareholders who attend the meeting in person or by proxy shall bear their own travelling and accommodation expenses.
The Office of the Board of Directors of the Company is located at Tower C, Corporate Square, 35 Finance Street, Xicheng District, Beijing, the PRC

Tel. no.: 86 (10) 6656 8888 Fax no.: 86 (10) 6656 8640

In case of any discrepancy between the Chinese version and the English version of this notice, the Chinese version shall prevail.

As at the date of this notice, the non-executive Directors of the Company are Mr. CHEN Youan, Mr. XU Guoping, Mr. LI Chenghui, Mr SHI Xun and Ms. QI Xiaoli; the executive Directors are Mr. GU Weiguo and Mr. WU Chengming; and the independent non-executive Directors are Mr. WANG Shiding, Mr. LIU Feng, Mr. ZHOU Ruijin and Mr. WU Yuwu.

– 20 –

NOTICE OF DOMESTIC SHARE CLASS MEETING

==> picture [246 x 31] intentionally omitted <==

(A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 06881)

NOTICE OF DOMESTIC SHARE CLASS MEETING

NOTICE IS HEREBY GIVEN that the Domestic Share Class Meeting of China Galaxy Securities Co., Ltd. (the “Company”) will be held at Donghua Hall, 11th Floor, Beijing Minzu Hotel, No.51 Fuxingmen Inner Street, Xicheng District, Beijing, the PRC, on Friday, 25 April 2014 at 10:30 a.m. or immediately after the conclusion of the EGM or any adjournment thereof (whichever is the later) for the following purposes. Unless the context otherwise requires, expressions used in this notice shall have the same meaning set out in the circular of the Company dated 11 March 2014.

SPECIAL RESOLUTIONS

To consider and approve the amendments to the A Share Offering Plan as follows:
1.1 Place of listing

Shanghai Stock Exchange

1.2 Type of securities to be issued and nominal value

A Shares of RMB1.00 each

1.3 Proportion of issue

1.4 Target subscribers

Target subscribers of A Shares are qualified natural persons and institutional investors.

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NOTICE OF DOMESTIC SHARE CLASS MEETING

1.5 Strategic allotment

1.6 Method of pricing

1.7 Method of issue

It is proposed that the A Share Offering will be conducted by issuance of new shares.

1.8 Use of proceeds

1.9 Transfer of state-owned shares

In accordance with the Implementing Measures for the Transfer of Some State-owned Shares from the Domestic Securities Market to the National Social Security Fund （《境內證券市場轉持部分國有股充實全國社會保障基金實施辦法》） and the relevant regulations, the state-owned shareholders of the Company shall fulfill

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NOTICE OF DOMESTIC SHARE CLASS MEETING

1.10 Conversion into a joint stock company with limited liability with domestic and overseas listed shares

1.11 Validity of the resolution

The A Share Offering Plan shall be valid for 12 months from the date of passing of such resolution at the general meeting and the class meetings.

To authorize the Board, or its delegation to the Chairman (who may delegate to other directors), to deal with the relevant matters concerning the A Share Offering, including but not limited to:
2.1 Amending and improving specific schemes and measures of the A Share Offering and organizing their implementation based on the advices from the relevant government agencies and regulatory authorities and subject to market environment, and to the extent authorized by the general meeting, determining (including but not limited to) specific offering scale, number of shares transferred from state-owned shares, offering price (including price range and final price), time, method and target subscribers of the offering, strategic allotment and over-allotment and proportion of allotment, plan for use of proceeds, and other matters relating to the implementation of the schemes concerning offering and listing.
2.2 Drafting, modifying and executing the applications, memoranda, relevant reports or materials relating to the A Share Offering and submitting the same to government agencies and regulatory authorities in connection with the A Share Offering (including but not limited to the Ministry of Finance of the PRC, CSRC, Shanghai Stock Exchange, Beijing Regulatory Bureau of CSRC, National Council for Social Security Fund, China Securities Depository and Clearing Co., Ltd., Shanghai Office), handling the procedures relating to the A Share Offering including review and examination, registration, filing, approval and consent and issuing statements and undertakings relating to the A Share Offering, and performing such acts as it deems necessary, expedient or appropriate with respect to the A Share Offering.

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NOTICE OF DOMESTIC SHARE CLASS MEETING

2.3 Preparing, amending, signing, submitting and disclosing the Prospectus, signing, amending implementing, suspending or terminating the agreements, contracts and documents relating to the A Share Offering, engaging sponsors (lead underwriters), legal counsels, auditors, receiving banks and other institutions relating to the A Share Offering.
2.4 Authorizing the Board to amend the provisions in the Articles of Association relating to the A Share Offering or amending the same in accordance with the requirements of securities regulatory authorities, stock exchanges and securities depository and clearing institutions, after completion of the A Share Offering, handling approval, change, filing and other matters in respect of the amendments of the Articles of Association and the change of the registered capital with securities regulatory authorities, administrations for industry and commerce, securities registration authorities and other relevant government departments.

2.5 Should there be any new provisions and polices issued by the state and securities regulatory departments with respect to the initial public offering and listing, to the extent authorized by the general meeting, authorizing the Board to make corresponding amendments to the A Share Offering Plan in accordance with such new provisions and polices.
2.6 Authorizing relevant persons to handle matters relating to the A Share Offering as and when needed.
2.7 All other matters relating to the A Share Offering.
2.8 The authorizations shall be valid for 12 months from the date of passing of such authorizations at the general meeting and the class meetings.
To consider and approve the plan of price stabilization of A Shares of the Company within 3 years after the A Share Offering
To consider and approve the letter of undertaking regarding repurchase of new A Shares under the A Share Offering

By order of the Board China Galaxy Securities Co., Ltd. Chen Youan Chairman

Beijing, the PRC, 11 March 2014

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NOTICE OF DOMESTIC SHARE CLASS MEETING

Notes:

Any shareholder entitled to attend and vote at the Domestic Share Class Meeting convened by the above notice is entitled to appoint one or more proxies to attend and vote instead of him/her. A proxy need not be a shareholder of the Company.
In order to be valid, the form of proxy together with the notarized power of attorney or other documents of authorization, if any, must be completed and returned to the Office of the Board of Directors of the Company, not less than 24 hours before the time appointed for holding the Domestic Share Class Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude a shareholder from attending and voting in person at the Domestic Share Class Meeting or any adjournment thereof should he/she so wish.
Domestic shareholders whose names appear in the register of domestic shareholders of the Company at 4:30 p.m. on Tuesday, 25 March 2014 shall be entitled to attend the Domestic Share Class Meeting.
Where there are joint holders of any shares, the one whose name stands first in the register of members shall be entitled to attend and vote at the Domestic Share Class Meeting in respect of such shares.
Shareholders of the Company intending to attend the Domestic Share Class Meeting in person or by their proxies should return the reply slip for attending the Domestic Share Class Meeting in person or by post to the Office of the Board of Directors of the Company on or before Friday, 4 April 2014.
Shareholder or his proxy shall produce proof of identity when attending the Domestic Share Class Meeting:
(1) Legal representatives of legal person shareholders who attend the meeting shall produce their own identity cards and effective proof of their capacity as legal representatives. Proxies of legal person shareholders shall produce their own identity cards and the form of proxy duly signed by the legal representatives or the board of directors or other governing body of the legal person shareholders according to laws.
(2) Individual shareholders who attend the meeting in person shall produce their identity cards or other effective document or proof of identity and stock account cards. Proxies of individual shareholders shall produce effective proof of identity and form of proxy.
The Domestic Share Class Meeting is expected to be held for less than half a day. Shareholders who attend the meeting in person or by proxy shall bear their own travelling and accommodation expenses.
The Office of the Board of Directors of the Company is located at Tower C, Corporate Square, 35 Finance Street, Xicheng District, Beijing, the PRC

Tel. no.: 86 (10) 6656 8888 Fax no.: 86 (10) 6656 8640

In case of any discrepancy between the Chinese version and the English version of this notice, the Chinese version shall prevail.

As at the date of this notice, the non-executive Directors of the Company are Mr. CHEN Youan, Mr. XU Guoping, Mr. LI Chenghui, Mr. SHI Xun and Ms. QI Xiaoli; the executive Directors are Mr. GU Weiguo and Mr. WU Chengming; and the independent non-executive Directors are Mr. WANG Shiding, Mr. LIU Feng, Mr. ZHOU Ruijin and Mr. WU Yuwu.

– 25 –

NOTICE OF H SHARE CLASS MEETING

==> picture [246 x 31] intentionally omitted <==

(A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 06881)

NOTICE OF H SHARE CLASS MEETING

NOTICE IS HEREBY GIVEN that the H Share Class Meeting of China Galaxy Securities Co., Ltd. (the “Company”) will be held at Donghua Hall, 11th Floor, Beijing Minzu Hotel, No.51 Fuxingmen Inner Street, Xicheng District, Beijing, the PRC, on Friday, 25 April 2014 at 11:10 a.m. or immediately after the conclusion of the Domestic Share Class Meeting or any adjournment thereof (whichever is the later) for the following purposes. Unless the context otherwise requires, expressions used in this notice shall have the same meaning set out in the circular of the Company dated 11 March 2014.

SPECIAL RESOLUTIONS

To consider and approve the amendments to the A Share Offering Plan as follows:
1.1 Place of listing

Shanghai Stock Exchange

1.2 Type of securities to be issued and nominal value

A Shares of RMB1.00 each

1.3 Proportion of issue

1.4 Target subscribers

Target subscribers of A Shares are qualified natural persons and institutional investors.

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NOTICE OF H SHARE CLASS MEETING

1.5 Strategic allotment

1.6 Method of pricing

1.7 Method of issue

It is proposed that the A Share Offering will be conducted by issuance of new shares.

1.8 Use of proceeds

1.9 Transfer of state-owned shares

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NOTICE OF H SHARE CLASS MEETING

1.10 Conversion into a joint stock company with limited liability with domestic and overseas listed shares

1.11 Validity of the resolution

The A Share Offering Plan shall be valid for 12 months from the date of passing of such resolution at the general meeting and the class meetings.

To authorize the Board, or its delegation to the Chairman (who may delegate to other directors, to deal with the relevant matters concerning the A Share Offering, including but not limited to:
2.1 Amending and improving specific schemes and measures of the A Share Offering and organizing their implementation based on the advices from the relevant government agencies and regulatory authorities and subject to market environment, and to the extent authorized by the general meeting, determining (including but not limited to) specific offering scale, number of shares transferred from state-owned shares, offering price (including price range and final price), time, method and target subscribers of the offering, strategic allotment and over-allotment and proportion of allotment, plan for use of proceeds and other matters relating to the implementation of the schemes concerning offering and listing.
2.2 Drafting, modifying and executing the applications, memoranda, relevant reports or materials relating to the A Share Offering and submitting the same to government agencies and regulatory authorities in connection with the A Share Offering (including but not limited to the Ministry of Finance of the PRC, CSRC, Shanghai Stock Exchange, Beijing Regulatory Bureau of CSRC, National Council for Social Security Fund, China Securities Depository and Clearing Co., Ltd., Shanghai Office), handling the procedures relating to the A Share Offering including review and examination, registration, filing, approval and consent and issuing statements and undertakings relating to the A Share Offering, and performing such acts as it deems necessary, expedient or appropriate with respect to the A Share Offering.

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NOTICE OF H SHARE CLASS MEETING

2.3 Preparing, amending, signing, submitting and disclosing the Prospectus, signing, amending, implementing, suspending or terminating the agreements, contracts and documents relating to the A Share Offering, engaging sponsors (lead underwriters), legal counsels, auditors, receiving banks and other institutions relating to the A Share Offering.
2.4 Authorizing the Board to amend the provisions in the Articles of Association relating to the A Share Offering or amending the same in accordance with the requirements of securities regulatory authorities, stock exchanges and securities depository and clearing institutions, after completion of the A Share Offering, handling approval, change, filing and other matters in respect of the amendments of the Articles of Association and the change of the registered capital with securities regulatory authorities, administrations for industry and commerce, securities registration authorities and other relevant government departments.

2.5 Should there be any new provisions and polices issued by the state and securities regulatory departments with respect to the initial public offering and listing, to the extent authorized by the general meeting, authorizing the Board to make corresponding amendments to the A Share Offering Plan in accordance with such new provisions and polices.
2.6 Authorizing relevant persons to handle matters relating to the A Share Offering as and when needed.
2.7 All other matters relating to the A Share Offering.
2.8 The authorizations shall be valid for 12 months from the date of passing of such authorizations at the general meeting and the class meetings.
To consider and approve the plan of price stabilization of A Shares of the Company within 3 years after the A Share Offering
To consider and approve the letter of undertaking regarding repurchase of new A Shares under the A Share Offering

By order of the Board China Galaxy Securities Co., Ltd. Chen Youan Chairman

Beijing, the PRC, 11 March 2014

– 29 –

NOTICE OF H SHARE CLASS MEETING

Notes:

Any shareholder entitled to attend and vote at the H Share Class Meeting convened by the above notice is entitled to appoint one or more proxies to attend and vote instead of him/her. A proxy need not be a shareholder of the Company.
In order to be valid, the form of proxy together with the notarized power of attorney or other documents of authorization, if any, must be completed and returned to the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited, not less than 24 hours before the time appointed for holding the H Share Class Meeting or any adjournment thereof. Computershare Hong Kong Investor Services Limited is located at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong. Completion and return of the form of proxy will not preclude a shareholder from attending and voting in person at the H Share Class Meeting or any adjournment thereof should he/she so wish.
The H Share register of members of the Company will be closed, for the purpose of determining the entitlement of holders of H Shares to attend the H Share Class Meeting, from Wednesday, 26 March 2014 to Friday, 25 April 2014 (both days inclusive), during which period no transfer of H Shares will be registered. In order to attend the H Share Class Meeting, all share certificates, together with the instruments of transfers, must be lodged for registration with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, not later than 4:30 p.m. on Tuesday, 25 March 2014. Holders of H Shares who are registered with Computershare Hong Kong Investor Services Limited on or before the aforementioned date are entitled to attend the H Share Class Meeting.
Where there are joint holders of any shares, the one whose name stands first in the register of members shall be entitled to attend and vote at the H Share Class Meeting in respect of such shares.
Shareholders of the Company intending to attend the H Share Class Meeting in person or by their proxies should return the reply slip for attending the H Share Class Meeting in person or by post to the Company’s H Share registrar, Computershare Hong Kong Investors Services Limited (for holders of H Shares) on or before Friday, 4 April 2014. The address of Computershare Hong Kong Investor Services Limited is 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.
Shareholder or his proxy shall produce proof of identity when attending the H Share Class Meeting:
(1) Legal representatives of legal person shareholders who attend the meeting shall produce their own identity cards and effective proof of their capacity as legal representatives. Proxies of legal person shareholders shall produce their own identity cards and the form of proxy duly signed by the legal representatives or the board of directors or other governing body of the legal person shareholders according to laws.
(2) Individual shareholders who attend the meeting in person shall produce their identity cards or other effective document or proof of identity and stock account cards. Proxies of individual shareholders shall produce effective proof of identity and form of proxy.
The H Share Class Meeting is expected to be held for less than half a day. Shareholders who attend the meeting in person or by proxy shall bear their own travelling and accommodation expenses.
In case of any discrepancy between the Chinese version and the English version of this notice, the Chinese version shall prevail.

– 30 –

APPENDIX I RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

==> picture [246 x 31] intentionally omitted <==

(A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 06881)

RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

According to relevant requirements of the Circular on Further Implementing Matters Relevant to the Cash Dividend Distribution by Listed Companies （《關於進一步落實上市公司現金分紅有關事項的通知》）issued by CSRC and the Circular on Further Improving Matters Relevant to the Cash Dividend Distribution by Listed Companies （《關於進一步完善上市公司現金分紅有關事項的通知》）issued by Beijing Regulatory Bureau of CSRC, and taking into account the five-year strategic plan and other documents of China Galaxy Securities Co., Ltd. (the “Company”), the Board of the Company formulated the Return Plan for Shareholders in 3 Years after Initial Public Offering and Listing of Shares of China Galaxy Securities Co., Ltd. , which has been considered and approved at the fourth extraordinary general meeting of the Company of 2012.

In accordance with relevant requirements of the Guideline No.3 on Supervision and Administration of Listed Companies – Cash Dividends of Listed Companies （《上市公司監管指引第 3 號 – 上市公司現金分紅》）issued by CSRC and the Guidelines on Distribution of Cash Dividends by Listed Companies （《上市公司現金分紅指引》） issued by Shanghai Stock Exchange, and in order to further clarify the Company’s plan for providing reasonable investment returns to Shareholders, improve the transparency and operability of decision-making on profit distribution and facilitate Shareholders to supervise the Company’s operation and profit distribution, the Board proposes to further refine the provisions regarding the policies of profit distribution in the Articles of Association of China Galaxy Securities Co., Ltd. (the “Articles of Association”), and has formulated the new Return Plan for Shareholders in 3 years after Initial Public Offering and Listing of A Shares of China Galaxy Securities Co., Ltd. (the “Plan”), the detailed contents of which are set out below:

I. Factors considered in formulating the Plan

The Company is committed to long-term and sustainable development. It establishes sustainable and stable return plan and mechanism for its investors on the basis of comprehensive analysis of the Company’s actual conditions of operation and development, Shareholders’ concerns and requirements, cost of social capital and external financing environment after taking into consideration its current and future profitability, cash flow position, stage of development, fund requirements for project investment, bank credit and debt financing environment, so as to make systematic arrangement for the profit distribution to ensure the continuity and stability of its profit distribution policies.

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APPENDIX I RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

II. Principles for formulation of the Plan

Subject to relevant national laws and regulations and the Articles of Association, returns to investors, continuity and stability of the Company’s profit distribution policies, as well as the Company’s long-term interests, the overall interests of all shareholders and the Company’s sustainable development are fully considered in formulating this plan. The Company shall fully consider the opinions of independent directors and public investors in the study, demonstration and decision-making process of its profit distribution policies.

III. Concrete Plan of Shareholders’ Return in the 3 Years after Listing

The Company may distribute dividends in cash, shares or in a combination of cash and shares. The Company shall prioritize profit distribution by way of cash dividend if it satisfies the relevant conditions. If the relevant conditions are satisfied, interim profit distribution may be made by the Company.
Save for any significant capital expenditure arrangement of the Company or other special circumstances approved at the general meeting, if the Company makes profit for the year and its accumulative undistributed profit is positive, the profit to be distributed in cash per annum should not be less than 10% of the distributable profit of the parent company realized in that year.
The Board shall take into account various factors such as features of the industries where the Company operates, stage of development, its own business model, profitability and whether there is significant capital expenditure arrangement, to distinguish the following situations and put forward differentiated cash dividend policies in accordance with the procedures as required by the Articles of Association:
(1) If the Company is at the mature stage of development and has no significant capital expenditure arrangement, the proportion of cash dividends in the profit distribution shall be at least 80% when the profit distribution is made;
(2) If the Company is at the mature stage of development and has significant capital expenditure arrangement, the proportion of cash dividends in the profit distribution shall be at least 40% when the profit distribution is made;
(3) If the Company is at the growing stage and has significant capital expenditure arrangement, the proportion of cash dividends in the profit distribution shall be at least 20% when the profit distribution is made;
(4) If it is difficult to distinguish the Company’s stage of development but if it has significant capital expenditure arrangement, the profit distribution may be dealt with pursuant to the preceding provisions.

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APPENDIX I RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

Significant capital expenditure includes major investment and other significant capital expenditure. Major investment refers to the foreign investment or capital expenditure of which the gross amount of an one-off total investment (or total disposed assets) or total accumulative investment (or total disposed assets) within four months reaches 10% of the Company’s latest audited net assets, or 5% of the Company’s latest audited own assets (whichever reaches first); other significant capital expenditure refers to other one-off total expenditures reach 10% of the Company’s latest audited net assets, or 5% of the Company’s latest audited own assets (whichever reaches first).

The Company is currently at the growing stage. If there is significant capital expenditure arrangement in next twelve months, the proportion of cash dividends in the profit distribution shall be at least 20% when the profit distribution is made. If there is no significant capital expenditure arrangement in next twelve months, the proportion of cash dividend shall be at least 40% when the profit distribution is made.

If any of the following events occurs, and on the condition that this will not contravene any relevant laws and regulations, the Company may adjust the proportion of cash dividends after the approval at the general meeting by way of special resolution:
(1) When there is any change or adjustment to the relevant laws or regulations.
(2) When alert arises from risk control indicators of net capital. Under the prevailing regulatory background of taking net capital as a core indicator in securities industry, the Company, when making the profit distribution plan, shall fully evaluate the impact of the profit distribution plan on its risk control indicators and business operation, and conduct sensitivity analysis to ensure such indicators shall be not lower than the criteria specified in the Measures for the Administration of Risk Control Indicators of Securities Companies （《證券公司風險控制指標管理辦法》）after the plan is implemented. If any alert from risk control indicators arises due to profit distribution size and further affects the size and development of various businesses of the Company, the proportion of profit distribution shall be adjusted.
Where the Company is under a good operating condition, and the Board considers that the share price of the Company does not reflect its share capital size and distributing dividends in shares will be in the interest of all Shareholders of the Company as a whole, the Company may carry out profit distribution through payment of dividends in shares taking into account genuine and reasonable factors such as the cash flow position, business growth and net asset value per share of the Company.

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APPENDIX I RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

IV. Decision-making and Supervision Mechanisms Regarding the Plan of Shareholders’ Return

The Company shall formulate profit distribution plan each year based on the provisions of the Articles of Association, profit-making situation, fund requirement and plan of shareholders’ return of the Company. It shall be submitted by the general manager (the president) to the Board for consideration.

The Board shall thoroughly discuss the rationalities of the profit distribution plan, seek opinions widely from Shareholders, independent directors and supervisors, and form a special resolution on the basis of providing continuous and stable returns to all shareholders and submit it to the general meeting for consideration after independent directors express their opinions in this regard.

The Board may suggest the Company to distribute interim cash dividends according to its profit-making situation and fund requirement.

When convening the general meeting for the purpose of considering the profit distribution plan, the Company shall take the initiative to communicate and exchange ideas with shareholders, in particular with the minority shareholders, through various channels (including but not limited to communication through telephone, fax and email or inviting minority shareholders to attend meetings), and fully listen to the opinions and appeals from minority shareholders and respond to the questions which they are concerned about promptly.
If the Company fails to determine its plan of profit distribution of the year to which it relates according to the established policies or the lowest proportion of cash dividends under special circumstances, the Company shall disclose the specific reasons, purposes and plan for the use of the retained capital that has not been applied for cash dividends distribution in announcements of the Board resolution and annual report of the Company, and independent directors shall express their independent opinions on the rationality of no cash dividends or lower proportion of cash dividends. The profit distribution plan for the year shall be submitted to the general meeting by way of special resolution.
The board of supervisors shall supervise the implementation of the profit distribution policies by the Board and the management as well as the plan of shareholders’ return and the decision-making process.

V. Implementation of Profit Distribution Plan

After the Company’s general meeting has passed a resolution on the profit distribution plan, the Board must complete the dividend distribution within two months after the general meeting.

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APPENDIX I RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

VI. Formulation Period and Adjustment Mechanism of the Plan of Shareholders’ Return
The Company shall formulate the plan of shareholders’ return according to the profit distribution policies specified in the Articles of Association, and ensure to prepare the plan every three years as well as to formulate the profit distribution policies for next three years. The Board shall make proper, necessary adjustment to the profit distribution plan being implemented based on the Company’s current situation and opinions of shareholders, especially those of the public shareholders, independent directors and supervisors, so as to specify the plans of shareholders’ return for the corresponding years. The profit distribution policies and plan of shareholders’ return in three years made by the Board shall not be implemented until they are approved by the general meeting upon submission.
In the case of significant changes of the Company due to the external operating environment or its internal operating condition, or war, natural disasters and other force majeures, which may result in the adjustment of formulated profit distribution policies and plan of shareholders’ return, the Board shall, based on the principle protection of shareholders’ interests, carry out specific discussion, detailed demonstration and explain the reasons, form a written report and submit it to the Board after independent directors express their opinions, and agree to submit to the general meeting for voting by way of a special resolution. In considering any alteration to the profit distribution policy, the Company shall make available Internet voting method to Shareholders.
VII. Matters not covered in this Plan shall be implemented in accordance with relevant laws and regulations, regulatory documents and the Articles of Association. The Plan shall be interpreted by the Board, and it shall come into force following approval at the general meeting and from the date of the initial public offering and listing of A Shares of the Company. From the date when this Plan comes into force, the Return Plan for Shareholders in the 3 years after Initial Public Offering and Listing of Shares of China Galaxy Securities Co., Ltd. , which was considered and approved at the fourth extraordinary general meeting of the Company in 2012, shall be terminated.

In case of any discrepancy between the Chinese version and the English version of this appendix, the Chinese version shall prevail.

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APPENDIX II PLAN OF PRICE STABILIZATION OF A SHARES WITHIN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

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(A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 06881)

PLAN OF PRICE STABILIZATION OF A SHARES WITHIN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

According to the requirements of the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Opinion Regarding Further Promotion of Structural Reforms on Issue of New Shares （《關於進一步推進新股發行體制改革的意見》）and other laws and regulations, and the listing rules of the jurisdictions where the shares of the Company are listed, this plan is formulated to strengthen the fiduciary duties of China Galaxy Securities Co., Ltd. (the “Company”) and its controlling shareholder(s), directors and senior management and protect the interests of minority shareholders.

I. Concrete conditions for initiating measures for stabilizing share price

If, within 3 years after the listing of A Shares of the Company, the closing prices of A Shares of the Company for 20 consecutive trading days are lower than its latest audited net asset value per share (if after the date of the audit for the latest period, net assets or the total number of shares of the Company are changed due to payment of dividends, bonus issuance, conversion of capital reserve into share capital, share split, additional issuance, placing of shares or reverse split, the net asset value per share shall be adjusted accordingly, hereinafter the same) not for the reason of force majeure, subject to the relevant laws and regulations and the listing rules of the jurisdictions where the shares of the Company are listed and under the condition that the equity distribution of the Company is in compliance with listing conditions, the Company and its controlling shareholder(s), directors (other than independent directors and directors not entitled to receive remunerations from the Company, hereinafter the same) and senior management and other relevant bodies will launch stabilization actions for the share price of the Company. The above-mentioned trading day when the closing price is lower than net asset value per share of the Company for the 20th time is called the date which triggers measures for stabilizing share price (the “Triggering Date”).

Measures for stabilizing share price aim to match share price with share value, and to procure that the closing price of shares of the Company equals to or exceeds the latest audited net asset value per share as much as possible. After the Triggering Date, if the closing prices are higher than the latest audited net asset value per share for 10 consecutive trading days, then the measures for stabilizing share price may be suspended; if after such suspension, the situation, being the closing prices lower than the latest audited net asset value per share for 20 consecutive trading days, occurs again, then the measures for stabilizing share price shall be continually implemented.

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APPENDIX II PLAN OF PRICE STABILIZATION OF A SHARES WITHIN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

II. Concrete measures for stabilizing share price of the Company

The controlling shareholder(s), the Company, directors and senior management shall assume the obligations to stabilize share prices.

Increase in holding of shares by the controlling shareholder(s)

Within 7 trading days from the day immediately following the Triggering Date, the controlling shareholder(s) shall notify the Company in writing whether there is any specific plan as to the increase in their holding of A Shares of the Company and such announcements shall be made by the Company. Specific plan, if any, shall cover the scope of number, price range, time for completion and other information relating to the increase in holding. In respect of additional holding plan, the controlling shareholder(s) shall additionally hold A Shares of the Company by way of centralized competitive bidding transactions at the stock exchange, and the total amount of shares additionally held in such plan shall be no less than RMB30 million.

2. Measures of the Company for stabilizing share price

If the controlling shareholder(s) fails to announce the concrete additional holding plan as mentioned above within the stipulated time or clearly express that there is no additional holding plan at all, the Board of the Company shall, within 10 trading days from the day immediately following the Triggering Date, prepare and announce the proposal for stabilizing the share price; if the implementation period for the additional holding plan announced by the controlling shareholder(s) expires but it has not been implemented, the Board of the Company shall, within 10 trading days from the day immediately following the date when the term for implementing additional holding plan expires, prepare and announce the proposal for stabilizing share price of the Company. Proposal for stabilizing share price of the Company includes but not limited to the proposal for repurchase shares of the Company by way of centralized competitive bidding transactions at the stock exchange (the total amount of repurchase shall be no less than RMB30 million) or other proposals in compliance with the relevant laws and regulations and the listing rules of the jurisdictions where the shares of the Company are listed. The implementation of this plan shall be subject to consideration and approval at the general meeting and class meetings.

3. Increase in holding of shares by directors and senior management

If the Board of the Company fails to announce the proposal for stabilizing share price as mentioned above within the stipulated time, the directors and senior management shall announce the proposal for increasing holding of A Shares of the Company within 10 trading days from the day immediately following the date when the Board should have announced but fails to announce the proposal for stabilizing share price, subject to the relevant laws and regulations and the listing rules of the jurisdictions where the shares of the Company are listed; if the proposal for stabilizing share price of the Company announced by the Board fails to be adopted at the general

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APPENDIX II PLAN OF PRICE STABILIZATION OF A SHARES WITHIN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

meeting and/or class meeting(s), directors and senior management shall, within 10 trading days from the day immediately following the date when the proposal for stabilizing share price fails to be adopted at the general meeting and/or class meeting(s), announce the proposal for additional holding of A Shares of the Company. Directors and senior management shall, within 5 trading days from the announcement (if there are N trading days in the period restricting direct or indirect sale or purchase of shares by directors and senior management, the period for additional holding shall be postponed to N+5 trading days), utilize 20% of the total compensations (after tax) received from the Company in the last year to increase in holding of A Shares of the Company.

Within 120 trading days after any of the three proposals for stabilizing share price as mentioned above are implemented, the obligations of controlling shareholder(s), the Company, directors and senior management to stabilize share price shall be automatically released. From the 121st trading day after performance of any of the three obligations to stabilize share price as mentioned above are completed, if the closing prices of A Shares of the Company are still lower than the latest audited net asset value per share for 20 consecutive days, the obligations of controlling shareholder(s), the Company, directors and senior executives to stabilize share price shall be automatically incurred in accordance with the sequence mentioned in 1, 2, and 3 above.

III. Constraint measures for failure to perform plans for stabilizing share price

If the controlling shareholder(s) fails to provide or implement proposal for stabilizing share price not for reasons of force majeure, the lock-up period for shares held by them shall be extended for six months after the expiration thereof.

If the Board of the Company fails to prepare or implement proposal for stabilizing share price that shall be implemented by the Company, the Board shall state specific reasons therefore to investors, and the Company shall assume corresponding responsibilities according to provisions of the relevant laws and regulations, the listing rules of the jurisdictions where the shares of the Company are listed and the requirements of regulatory departments.

If directors and senior management fail to implement proposal for stabilizing share price, the Company shall, from the month when such directors and senior management fail to perform the agreed obligations, deduct 20% of monthly compensation of relevant parties concerned until the accumulated amount of deduction reach 20% of compensations received from the Company in the fiscal year preceding to the year when obligations to stabilize share price shall be performed.

If the controlling shareholder(s), the Company, directors and senior management are unable to perform their obligations to stabilize share price within a certain period by virtue of the relevant laws and regulations and the listing rules of the jurisdictions where the shares of the Company are listed (including but not limited to requirements on the minimum

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APPENDIX II PLAN OF PRICE STABILIZATION OF A SHARES WITHIN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

shareholding ratio of public shareholders) as well as other objective reasons, the relevant responsible bodies may be exempted from the punishment as mentioned above but shall proactively implement other measures to stabilize share price.

IV. Miscellaneous

In performing obligations to stabilize share price, the controlling shareholder(s), the Company, directors and senior management shall be in compliance with the relevant laws and regulations and the listing rules of the jurisdictions where the shares of the Company are listed, take into full account of protecting the legitimate rights of both domestic and overseas shareholders, and perform corresponding information disclosure obligations.
This plan shall be submitted to the general meeting and class meetings of the Company for consideration and approval, and shall be adopted by the shareholders presenting at the general meeting and class meetings, respectively, who represent over two-thirds of the total voting right shares.
This plan shall automatically apply to the directors and senior management newly appointed during the period from the date when this plan is approved at the general meeting and class meetings to three years after the listing of A Shares of the Company.
If any provisions of relevant laws and regulations and the listing rules of the jurisdictions where the shares of the Company are listed otherwise stipulate when this plan is implemented, the Company shall abide by such provisions.
This plan shall be valid for 36 months from the date of the initial public offering of A Shares and listing of the Company.

In case of any discrepancy between the Chinese version and the English version of this appendix, the Chinese version shall prevail.

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APPENDIX III

LETTER OF UNDERTAKING OF CHINA GALAXY SECURITIES CO., LTD. REGARDING REPURCHASE OF NEW A SHARES UNDER INITIAL PUBLIC OFFERING

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(A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 06881)

LETTER OF UNDERTAKING OF CHINA GALAXY SECURITIES CO., LTD. REGARDING REPURCHASE OF NEW A SHARES UNDER INITIAL PUBLIC OFFERING

China Galaxy Securities Co., Ltd. (the “Company”) undertakes that:

In the event that there are any false contents, misleading statements or material omission in the prospectus of initial public offering and listing of the A Shares of the Company, which would result in material or substantial impact on assessing whether the Company satisfies the issuance conditions as required by laws, the board of directors of the Company will prepare a share repurchase scheme and submit it to the general meeting and class meetings for consideration and approval within five business days upon the securities regulatory departments making determination or penalty decisions in respect of the above facts according to law, and the Company will repurchase all new A Shares under the initial public offering according to law at a price not less than the sum of the offering price and the interests calculated at the prevailing time deposit interest rate of banks. In the event that there occurs any matter regarding ex-dividend and ex-entitlement such as payment of dividend, bonus issue, capital increase from conversion of capital reserve to share capital and placing of shares during the period of repurchase, the shares repurchased shall include all new A Shares under the initial public offering and shares derived therefrom, and the issue price shall be adjusted accordingly on an ex-dividend and ex-entitlement basis.

If the Company fails to fulfill the above undertakings, it shall be liable for corresponding responsibilities according to the relevant laws and regulations and requirements of the regulatory bodies. Should the relevant laws and regulations and the listing rules of the jurisdictions where the shares of the Company are listed have other requirements in respect of the Company’s performance of the above undertaking, the Company shall comply with such regulatory requirements.

We hereby make the above undertakings.

China Galaxy Securities Co., Ltd. (Seal)

Legal representative (Signature):

Date:

In case of any discrepancy between the Chinese version and the English version of this appendix, the Chinese version shall prevail.

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APPENDIX IV

LETTER OF UNDERTAKING OF CHINA GALAXY SECURITIES CO., LTD. REGARDING COMPENSATION FOR THE LOSSES OF INVESTORS ACCORDING TO LAW

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

(Stock Code: 06881)

LETTER OF UNDERTAKING OF CHINA GALAXY SECURITIES CO., LTD. REGARDING COMPENSATION FOR THE LOSSES OF INVESTORS ACCORDING TO LAW

China Galaxy Securities Co., Ltd. (the “Company”) undertakes that:

In the event that there are any false contents, misleading statements or material omission in the prospectus of initial public offering and listing of the A Shares of the Company, which would result in the investors suffering losses in securities trading, the Company will make compensation for the losses of investors according to law.

If the Company fails to fulfill the above undertakings, it shall be liable for corresponding responsibilities according to relevant laws and regulations and requirements from the regulatory bodies. Should the relevant laws and regulations and the listing rules of the jurisdictions where the shares of the Company are listed have other requirements in respect of the Company’s performance of the above undertaking, the Company shall comply with such regulatory requirements.

We hereby make the above undertakings.

China Galaxy Securities Co., Ltd. (Seal)

Legal representative (Signature):

Date:

In case of any discrepancy between the Chinese version and the English version of this appendix, the Chinese version shall prevail.

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AI assistant

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

51069_rns_2014-03-10_a612692a-abb8-4a67-b534-62c3e794aa1a.pdf

PROPOSED A SHARE OFFERING AMENDMENTS TO ARTICLES OF ASSOCIATION AND

NOTICES OF EXTRAORDINARY GENERAL MEETING, DOMESTIC SHARE CLASS MEETING AND H SHARE CLASS MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

To the Shareholders

PROPOSED A SHARE OFFERING AND AMENDMENTS TO ARTICLES OF ASSOCIATION

INTRODUCTION

LETTER FROM THE BOARD

A SHARE OFFERING

Resolutions in relation to the A Share Offering

1. Amendments to the A Share Offering Plan

1.3 Proportion of issue

1.4 Target subscribers

1.5 Strategic allotment

1.6 Method of pricing

1.7 Method of issue

1.8 Use of proceeds

1.9 Transfer of state-owned shares

2. Granting of authorizations to the Board to deal with specific matters concerning the A Share Offering

LETTER FROM THE BOARD

3. Amendments to the Articles of Association in connection with the A Share Offering

4. Return plan for Shareholders in 3 years after the A Share Offering

5. Plan of price stabilization of A Shares of the Company within 3 years after the A Share Offering

LETTER FROM THE BOARD

6. Letter of undertaking regarding repurchase of new A Shares under the A Share Offering

7. Letter of undertaking regarding compensation for the losses of investors according to law

Effects of the A Share Offering on the shareholding structure of the Company

OTHER AMENDMENTS TO THE ARTICLES OF ASSOCIATION

EGM, DOMESTIC SHARE CLASS MEETING AND H SHARE CLASS MEETING

VOTING BY POLL

RECOMMENDATION

ADDITIONAL INFORMATION

NOTICE OF EXTRAORDINARY GENERAL MEETING

SPECIAL RESOLUTIONS

1.3 Proportion of issue

1.5 Strategic allotment

1.6 Method of pricing

1.7 Method of issue

1.8 Use of proceeds

1.9 Transfer of state-owned shares

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE OF DOMESTIC SHARE CLASS MEETING

SPECIAL RESOLUTIONS

1.3 Proportion of issue

1.4 Target subscribers

1.5 Strategic allotment

1.6 Method of pricing

1.7 Method of issue

1.8 Use of proceeds

1.9 Transfer of state-owned shares

NOTICE OF DOMESTIC SHARE CLASS MEETING

NOTICE OF H SHARE CLASS MEETING

SPECIAL RESOLUTIONS

1.3 Proportion of issue

1.4 Target subscribers

1.5 Strategic allotment

1.6 Method of pricing

1.7 Method of issue

1.8 Use of proceeds

1.9 Transfer of state-owned shares

NOTICE OF H SHARE CLASS MEETING

NOTICE OF H SHARE CLASS MEETING

RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

I. Factors considered in formulating the Plan

APPENDIX I RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

II. Principles for formulation of the Plan

III. Concrete Plan of Shareholders’ Return in the 3 Years after Listing

APPENDIX I RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

APPENDIX I RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

IV. Decision-making and Supervision Mechanisms Regarding the Plan of Shareholders’ Return

V. Implementation of Profit Distribution Plan

APPENDIX I RETURN PLAN FOR SHAREHOLDERS IN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

APPENDIX II PLAN OF PRICE STABILIZATION OF A SHARES WITHIN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

PLAN OF PRICE STABILIZATION OF A SHARES WITHIN 3 YEARS AFTER INITIAL PUBLIC OFFERING AND LISTING OF A SHARES OF CHINA GALAXY SECURITIES CO., LTD.

I. Concrete conditions for initiating measures for stabilizing share price

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