China Railway Group Limited — Proxy Solicitation & Information Statement 2012

Nov 11, 2012

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in China Railway Group Limited, you should at once hand this circular and the accompanying form of proxy and the reply slip to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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中國中鐵股份有限公司 CHINA RAILWAY GROUP LIMITED

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

(Stock Code: 390)

(1) PROPOSED AMENDMENTS TO THE ARTICLES (2) PROPOSED ADOPTION OF SHAREHOLDERS’ RETURN PLAN FOR THE NEXT THREE YEARS (2012 to 2014)

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening the EGM to be held at 10:00 a.m. on Thursday, 27 December 2012 at the Conference Room, China Railway Square, No. 69 Fuxing Road, Haidian District, Beijing, PRC, is set out on pages 15 to 16 of this circular.

If you intend to appoint a proxy to attend the EGM, you are required to complete and return the accompanying proxy form in accordance with the instructions printed thereon. For holder of H Shares, the proxy form should be returned to Computershare Hong Kong Investor Services Limited in person, by post or by facsimile not less than 24 hours before the time appointed for holding the EGM or any adjourned meeting thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or at any adjourned meeting should you so wish, but in such event the instrument appointing a proxy should be deemed to be revoked.

If you intend to attend the EGM in person or by proxy, you are required to complete and return the reply slip to Computershare Hong Kong Investor Services Limited or to the Company’s Board of Directors’ Office on or before 7 December 2012.

12 November 2012

TABLE OF CONTENTS

	Page
DEFINITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2. PROPOSED AMENDMENTS TO THE ARTICLES . . . . . . . . . . . . . . . . .	3
3. PROPOSED ADOPTION OF SHAREHOLDERS’ RETURN PLAN
FOR THE NEXT THREE YEARS (2012 TO 2014) . . . . . . . . . . . . . . . . .	4
4. THE EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX I — PROPOSED AMENDMENTS TO THE ARTICLES . . . . . .	6
APPENDIX II — SHAREHOLDERS’ RETURN PLAN FOR THE NEXT
THREE YEARS (2012 TO 2014) . . . . . . . . . . . . . . . . . . . .	13
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . .	15

DEFINITION

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

• “A Shares”

• ordinary shares of RMB1.00 each in the share capital of the Company which are listed on the Shanghai Stock Exchange and traded in RMB

• “Articles”

• the articles of association of the Company from time to time

• “Board”

the board of directors of the Company

• “the Company”

• 中國中鐵股份有限公司 (China Railway Group Limited), a joint stock limited company incorporated in the PRC and the H Shares and A Shares of which are listed on the Hong Kong Stock Exchange (stock code: 390) and the Shanghai Stock Exchange (stock code: 601390), respectively

• “Directors” the directors of the Company

• “EGM”

• the extraordinary general meeting of the Company to be held on 27 December 2012

• “H Shares”

• overseas listed foreign shares of RMB1.00 each in the share capital of the Company which are listed on the Hong Kong Stock Exchange and traded in Hong Kong dollars

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Hong Kong Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Mandatory Provisions”

• the Mandatory Provisions for Companies Listing Overseas issued on 27 August 1994 by the State Council Securities Policy Committee and the State Commission for Restructuring the Economic System

• “PRC”

• the People’s Republic of China

• “CSRC”

• China Securities Regulatory Commission

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DEFINITION

“RMB” Renminbi, the lawful currency of the PRC “Shareholders” holders of A Shares and/or H Shares “Shares” A Shares and/or H Shares

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LETTER FROM THE BOARD

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中國中鐵股份有限公司 CHINA RAILWAY GROUP LIMITED

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

(Stock Code: 390)

Executive Directors: Mr. LI Changjin (Chairman) Mr. BAI Zhongren Mr. YAO Guiqing

Registered Office: 1 Xing Huo Road, Fengtai District, Beijing 100070 PRC

Non-executive Director: Mr. HAN Xiuguo

Independent non-executive Directors: Mr. HE Gong Mr. GONG Huazhang Mr. WANG Taiwen Mr. SUN Patrick

Principal Place of Business in Hong Kong: Unit 1201–1203 12th Floor, APEC Plaza 49 Hoi Yuen Road, Kwun Tong Kowloon Hong Kong

12 November 2012

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED AMENDMENTS TO THE ARTICLES

(2) PROPOSED ADOPTION OF SHAREHOLDERS’ RETURN PLAN FOR THE NEXT THREE YEARS (2012 to 2014) AND NOTICE OF EXTRAORDINARY GENERAL MEETING

1 INTRODUCTION

The purpose of this circular is to provide your with information regarding (i) the proposed amendments to the Articles; (ii) the proposed adoption of the Shareholders’ Return Plan for the Next Three Years (2012 to 2014) to be considered at the EGM, and to set out the notice of the EGM.

2 PROPOSED AMENDMENTS TO THE ARTICLES

Pursuant to the requirements of the relevant regulatory documents including the “Notice regarding Further Implementation of Cash Dividends Distribution of Listed

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LETTER FROM THE BOARD

Companies (Zheng Jian Fa [2012] No. 37)” 《關於進一步落實上市公司現金分紅有關事項的( 通知》(證監發[2012]37號) promulgated and issued by CSRC and “Notice on Further Completing the Cash Dividends Distribution of Listed Companies” (Jing Zheng Gong Si Fa [2012] No. 101) 《關於進一步完善上市公司現金分紅有關事項的通知》( (京證公司發 [2012]101號) issued by The Beijing Securities Regulatory Bureau (北京證監局), together with the actual operation of the Company, the Board resolved to amend the relevant articles relating to profit distribution (the “ Proposed Amendments ”) in the Articles.

The Proposed Amendments is subject to the approval of the Shareholders by special resolution at the EGM. Please refer to Appendix I for details of the Proposed Amendments.

The Company has received a confirmation from its PRC legal adviser, Jia Yuan Law Firm, that the Articles, as amended, do not violate the requirements of the Company Law, the Mandatory Provisions and other applicable laws and regulations of the PRC. The Company has received a confirmation from its Hong Kong legal adviser, Linklaters, that the Articles, as amended, comply with the requirements of the Hong Kong Listing Rules.

3 PROPOSED ADOPTION OF SHAREHOLDERS’ RETURN PLAN FOR THE NEXT THREE YEARS (2012 TO 2014)

In order to improve transparency of profit distribution policy and establish an expectation of stable return to the investors, pursuant to the requirements of the relevant regulatory documents including the “Notice regarding Further Implementation of Cash Dividends Distribution of Listed Companies (Zheng Jian Fa [2012] No. 37)” 《關於進一步( 落實上市公司現金分紅有關事項的通知》(證監發[2012]37號) promulgated and issued by CSRC and “Notice on Further Completing the Cash Dividends Distribution of Listed Companies” (Jing Zheng Gong Si Fa [2012] No. 101) 《關於進一步完善上市公司現金分紅有( 關事項的通知》(京證公司發[2012]101號) issued by The Beijing Securities Regulatory Bureau (北京證監局) and after taking into consideration of various factors including strategic development targets, operation plan, profitability, cash flow of the Company and the external financing environment, the Board formulated the Shareholders’ Return Plan for the Next Three Years (2012 to 2014).

The Shareholders’ Return Plan for the Next Three Years (2012 to 2014) is subject to the approval of the Shareholders by ordinary resolution at the EGM. Please refer to Appendix II for details of such plan.

4 THE EGM

The EGM will be held at 10:00 a.m. on Thursday, 27 December 2012 at the Conference Room, China Railway Square, No. 69 Fuxing Road, Haidian District, Beijing, PRC.

If you intend to appoint a proxy to attend the EGM, you are required to complete and return the accompanying proxy form in accordance with the instructions printed thereon. For holder of H Shares, the proxy form should be returned to Computershare Hong Kong Investor Services Limited in person, by post or by facsimile not less than 24 hours before the time appointed for holding the EGM or any adjourned meeting thereof.

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LETTER FROM THE BOARD

Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or at any adjourned meeting should you so wish, but in such event the instrument appointing a proxy should be deemed to be revoked.

If you intend to attend the EGM in person or by proxy, you are required to complete and return the reply slip to Computershare Hong Kong Investor Services Limited or to the Company’s Board of Directors’ Office on or before 7 December 2012.

Yours faithfully,

By Order of the Board of China Railway Group Limited Li Changjin Chairman

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APPENDIX I

PROPOSED AMENDMENTS TO THE ARTICLES

The Articles are written in Chinese. The English version of this Appendix I is an unofficial translation and is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

Article No. Existing after Article No. Amendment Existing Provisions Article 226 Article 226 The Company’s profit distribution policy is to distribute dividends in the form of cash or stock or any combination thereof. The Company may make interim distributions in cash and shall maintain continuous and stable policies for its profit distribution.

Provisions after Amendment

The basic principles of profit distribution policy of the Company and the precise policy are as follows:

1. Taking full account of return to investors and distributing dividend to shareholders per annum in proportion to the distributable profit for the year attributable to the shareholders of the Company.

2. Maintaining the continuity and stability of the Company’s dividend distribution policy, while at the same time take care of the interest of the Company in the long term, the interest of the shareholders as a whole, as well as the sustainable development of the Company.

3. Giving priority to dividend distribution in cash.

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APPENDIX I

PROPOSED AMENDMENTS TO THE ARTICLES

Article No. Existing after Article No. Amendment Existing Provisions New Article 227 –

Provisions after Amendment

Dividend distribution policies of the Company are to be specified as follows:

1. Dividend shall be distributed in the following manner: the Company may distribute dividends in cash, in shares or in a combination of both cash and shares. Subject to conditions, interim profit distribution may be made by the Company.

2. Specific conditions for and proportion of distributing dividends in cash: if the Company’s profit for the year and its cumulative undistributed profit are positive, the Company may distribute dividend in cash, the total profit to be distributed in cash in the past three consecutive years will not be less than 30% of the average annual distributable profit realized in the past three years; the profit to be distributed in cash per annum will not be less than 10% of the distributable profit realized for that year. The Company may not distribute dividends in cash in the following exceptional circumstances.

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APPENDIX I

PROPOSED AMENDMENTS TO THE ARTICLES

Article No. Existing after Article No. Amendment Existing Provisions

Provisions after Amendment

• (1) Where the auditing firm issues a non-standard unqualified audit opinion on the financial report of the Company for the year.

• (2) Where the operating net cash flow of the Company is negative.

• Conditions for distributing dividends in shares by the Company:

Where the Company’s business is in a sound condition, and the board of directors considers that the stock price of the Company does not match with its share capital size and distributing dividend in shares will be favourable to all shareholders of the Company as a whole, provided that the above conditions for cash dividends are fully met, the Company may propose dividend distribution in shares.

The existing Articles 227, 228, 229 are renumbered as Articles 228, 229 and 230.

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PROPOSED AMENDMENTS TO THE ARTICLES

APPENDIX I

Article No. Existing after Article No. Amendment

Article 230 Article 231

Existing Provisions

After the general meeting of shareholders of the Company has adopted the resolution with respect to profit distribution, the board of directors of the Company shall complete the distribution of dividends (or shares) within two (2) months after the general meeting of shareholders.

Provisions after Amendment

Procedures for considering the profit distribution plan of the Company

1. The profit distribution plan of the Company shall be submitted to the board of directors and the supervisory committee for review after it is drafted by the management based on the actual profitability, cash flow, future operating plan and other relevant factors of the Company. The board of directors shall hold a thorough discussion with respect to the reasonableness of the profit distribution plan, and the independent directors shall give their explicit opinions. Upon the review and adoption of the board of directors and the supervisory committee, the profit distribution plan shall be submitted to the general meeting of shareholders for review.

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APPENDIX I

PROPOSED AMENDMENTS TO THE ARTICLES

Article No. Existing after Article No. Amendment Existing Provisions

Provisions after Amendment

1. The general meeting of shareholders of the Company shall take the opinions and demands of minority shareholders into full consideration when reviewing the profit distribution plan. In addition to collecting shareholders’ opinions at the general meeting of shareholders, the Company shall also take the initiative to communicate with shareholders, in particular minority shareholders by way of shareholders hotline and the interactive investor relationship platform, and respond timely to the concerns of minority shareholders.

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APPENDIX I

PROPOSED AMENDMENTS TO THE ARTICLES

	Article No.
Existing	after
Article No.	Amendment	Existing Provisions	Provisions after Amendment
			3.	Where the Company, due
				to the special
				circumstances set out
				under Paragraph 2 of
				Article 227 above, fails to
				distribute dividends in
				cash, the board of
				directors shall make
				special explanations on
				the specific reasons for
				such failure, the accurate
				usage of the retained
				profits of the Company,
				projected investment
				earnings and other
				relevant issues, submit
				such explanations to the
				general meeting of
				shareholders for review
				after the independent
				directors express their
				opinions, and disclose the
				same in those media
				designated by the
				Company.
New	Article 232	–	Implementation of the profit
			distribution plan of the
			Company
			After the profit distribution
			plan has been resolved at a
			general meeting of
			shareholders of the Company,
			the board of directors shall
			complete dividend (or share)
			distribution within two
			months after the general
			meeting of shareholders.

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APPENDIX I

PROPOSED AMENDMENTS TO THE ARTICLES

Article No. Existing after Article No. Amendment Existing Provisions Provisions after Amendment New Article 233 – Alteration of the Company’s profit distribution policy In case of force majeure events such as war, natural disasters, or changes to the Company’s external operational environment resulting in material impact on its production and operation, or relatively significant changes to the Company’s operational position, the Company may adjust its profit distribution policy.

The board of directors shall conduct specific discussion over adjustment to the Company’s profit distribution policy, provide detailed reasons for such adjustment, form a written report to be considered by independent directors, and then submit to the general meeting of shareholders for approval by way of a special resolution.

Article numbers after Article 231 are renumbered hereafter.

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APPENDIX II

SHAREHOLDERS’ RETURN PLAN FOR THE NEXT THREE YEARS (2012 TO 2014)

The Shareholders’ Return Plan for the Next Three Years (2012 to 2014) are written in Chinese. The English version of this Appendix II is an unofficial translation and is for reference only. In case of any inconsistency between the English and Chinese versions, the Chinese version shall prevail.

1. Considerations in the formulation of the shareholders’ return plan

The profit distribution of the Company is committed to realize long-term and sustainable development of the Company. In combination of the Company’s strategic development targets, and on the basis of consensus of Shareholders, after taking into consideration of various factors including the profitability, cash flow, business development plan and the development stage of the Company, capital need, social investment costs and external financing environment, the Company establishes sustainable, stable and scientific return plan and mechanism for its investors and makes systematic arrangement for profit distribution pursuant to the requirements of the Articles to ensure the continuity and stability of its profit distribution policy.

2. Principles for formulation of the shareholders’ return plan

The Company shall, upon meeting the capital demand for its current operation and project investment, after taking into account the interest of the Shareholders, implement reasonable profit distribution plan while at the same time take care of the short term interest and long term development of the Company.

3. Shareholders’ return plan for 2012 to 2014

If the Company’s profit for the year and its cumulative undistributed profit are positive, the Company may distribute dividend in cash, the total profit to be distributed in cash in the past three consecutive years will not be less than 30% of the average annual distributable profit realized in the past three years; the profit to be distributed in cash per annum will not be less than 10% of the distributable profit realized for that year. The Company may not distribute dividends in cash in the following exceptional circumstances.

• (1) Where the auditing firm issues a non-standard unqualified audit opinion on the financial report of the Company for the year; or

• (2) Where the operating net cash flow of the Company is negative.

4. The term for formulating the Shareholders’ return plan and relevant decision making mechanism

• (1) The Company shall review the Shareholders’ Return Plan for the Next Three Years at least every three years, in order to ascertain whether any amendment is required for the current Shareholders’ return plan.

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APPENDIX II

SHAREHOLDERS’ RETURN PLAN FOR THE NEXT THREE YEARS (2012 TO 2014)

• (2) The profit distribution plan of the Company shall be submitted to the Board and the supervisory committee for review after it is drafted by the management based on the actual profitability, cash flow, future operating plan and other relevant factors of the Company. Upon the review and adoption of the Board and the supervisory committee, the profit distribution plan shall be submitted to the general meeting of shareholders for review.

• (3) The plan should be implemented according to the relevant laws and regulations, regulatory documents and the Articles.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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中國中鐵股份有限公司 CHINA RAILWAY GROUP LIMITED

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

(Stock Code: 390)

EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (“ EGM ”) of China Railway Group Limited (the “ Company ”) will be held at the Conference Room, China Railway Square, No. 69 Fuxing Road, Haidian District, Beijing, PRC on Thursday, 27 December 2012 at 10:00 a.m. to consider and approve the following as appropriate:

By way of special resolution:

1. To consider and approve the amendments to the Articles of Association of the Company as set out in Appendix I to the circular of the Company dated 12 November 2012.

By way of ordinary resolution:

1. To consider and approve the adoption of Shareholders’ Return Plan for the Next Three Years (2012 to 2014) as set out in Appendix II to the circular of the Company dated 12 November 2012.

By Order of the Board China Railway Group Limited Yu Tengqun Tam Chun Chung Joint Company Secretaries

Beijing, the PRC

12 November 2012

Notes:

1. Closure of register of members and eligibility for attending the EGM

• Shareholders who submit their share transfer application forms to the Company’s share registrar before close of business on Friday, 7 December 2012 and become registered as shareholders on the register of members of the Company are entitled to attend the EGM.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Holders of the Company’s H shares are advised that the register of members will be closed from Monday, 10 December 2012 to Thursday, 27 December 2012 (both days inclusive). Holders of H shares whose names appear on the register of members of the Company maintained in Hong Kong at the close of business on Friday, 7 December 2012 are entitled to attend the EGM.

Holders of H shares who wish to attend the EGM but have not registered the transfer documents are required to deposit the transfer document together with the relevant share certificates at the H share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong at or before 4:30 p.m., Friday, 7 December 2012.

2. Registration procedures for attending the EGM

Shareholders attending the EGM in person or by proxy shall present their identity certification. If the attending shareholder is the authorised legal representative of the Company’s shareholder, the Board or other decision making authority, then such attending shareholder shall present a copy of the relevant resolution of the Board or other decision making authority appointing it as its authorised legal or official representative in order to attend the EGM on behalf of such company.

3. Notice of attendance

Shareholders who intend to attend the EGM in person or by proxy should return the reply slip in person, by post or by facsimile to Computershare Hong Kong Investor Services Limited or the Company’s Board of Directors’ Office on or before Friday, 7 December 2012.

The Company’s Board of Directors’ Office is located at Room 511, Block A, China Railway Square, No. 69 Fuxing Road, Haidian District, Beijing 100039, PRC (Contact persons: Mr. Wan Ming / Ms. Duan Yinhua, Tel: (8610) 5187 8197 / 5187 8069, Fax: (8610) 5187 8417).

The address of Computershare Hong Kong Investor Services Limited is 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong (Tel: (852) 2862 8555, Fax: (852) 2865 0990).

4. Proxy

Shareholders entitled to attend and vote at the EGM may appoint one or more proxies to attend and vote in their stead. A proxy need not be a shareholder of the Company.

The instrument appointing a proxy must be in writing under the hand of a shareholder or his attorney duly authorised in writing. If the shareholder is a corporate body, the proxy form must be either executed under its common seal or under the hand of its director(s) or duly authorised attorney(s). If the proxy form is signed by an attorney of the shareholder, the power of attorney authorising that attorney to sign or other authorisations document must be notarised.

To be valid, the form of proxy together with the power of attorney or other authorisation document (if any) signed by the authorised person or notarially certified power of attorney must be delivered to Computershare Hong Kong Investor Services Limited for holders of H shares not less than 24 hours before the designated time for the holding of the EGM.

Completion and return of a form of proxy will not preclude a shareholder from attending in person and voting at the EGM if he so wishes, but in such event the instrument appointing a proxy shall be deemed to be revoked.

5. Other business

Shareholders and their proxies attending the EGM shall be responsible for their own travelling and accommodation expenses.

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