DFZQ — Governance Information 2019

Mar 28, 2019

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this announcement, 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 announcement.

(A joint stock company incorporated in the People’s Republic of China with limited liability under the Chinese corporate name “ 東方證券股份有限公司 ” and carrying on business in Hong Kong as “ 東方證券 ” (in Chinese) and “DFZQ” (in English))

(Stock Code: 03958)

PROPOSED CHANGE OF ADDRESS OF THE COMPANY AND PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Reference is made to the announcement dated October 19, 2018 of 東方證券股份有限公司 (the “ Company ”) in relation to the relocation and change of part of the business address of the Company. The board of directors of the Company (the “ Board ”) hereby announces that, according to the Company’s actual situation and operating and management requirements, the Company is proposed to change its address from “22F, 23F and 25-29F, Building 2, No. 318, South Zhongshan Road, Shanghai” to “Orient Securities Building, No. 119, South Zhongshan Road, Shanghai”. Above change will come into effect subject to the consideration and approval of the shareholders’ general meeting of the Company, the approval by the China Securities Regulatory Commission (the “ CSRC ”) and the completion of relevant industrial and commercial changes.

In addition, in order to further improve the corporate governance structure of the Company, according to the latest amendments to the “Company Law of the People’s Republic of China” (the “ Company Law ”), the “Code of Corporate Governance for Listed Companies” and the requirements of other laws, regulations and regulatory documents, the Company proposes to amend certain provisions in the articles of association of the Company (the “ Articles of Association ”). The Board considered and approved a resolution with respect to proposed amendments to the Articles of Association and submitted the same to the shareholders’ general meeting for consideration, details of which are as follows:

	Original articles		Amended articles	Reasons for the amendments
	Article 5 Company: B u i l d i n g		Article 5 The address of the C o m p a n y :O r i e n t S e c u r i t i e s Building, No. 119 , South Zhongshan Road, Shanghai; Postal code: 2 0 0 0 1 0 ; T e l e p h o n e n u m b e r : 0 2 1 - 6 3 3 2 5 8 8 8 ; F a x n u m b e r : 021-63326010.	The Company’s latest office address

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	Original articles		Amended articles	Reasons for the amendments
	Article 26 The Company may, in the following circumstances, repurchase shares of the Company in accordance with the procedures p r o v i d e d i n t h e A r t i c l e s o f Association and with the approval of the relevant authorities of the PRC: (1)canceling shares in order to reduce the registered capital of the Company; (2) merging with other companies holding shares of the Company; (3)awarding shares to employees of the Company; (4) s h a r e h o l d e r s o b j e c t i n g t o resolutions of the shareholders’ g e n e r a l m e e t i n g c o n c e r n i n g merger or division of the Company r e q u e s t i n g t h e C o m p a n y t o repurchase their shares; (5) other circumstances approved by laws, administrative regulations and the securities regulatory authority in the place where the Company’s Shares are listed. The Company shall not trade its shares unless in the aforesaid circumstances. Where the Company purchases its shares due to reasons stated in previous Clause (1)to Clause (3) ,a resolution by the shareholders’ general meeting is required.		Article 26 The Company may, in the following circumstances, repurchase shares of the Company: (1)reducing the registered capital of the Company; (2) merging with other companies holding shares of the Company; (3)using the shares in the employee share ownership plan or as share incentive; ( 4 ) a c q u i r i n g s h a r e s h e l d b y shareholders (upon their request) who vote against any resolution proposed in any shareholders’ general meeting on the merger or division of the Company; (5)using the shares to satisfy the conversion of those corporate bonds convertible into shares issued by the Company; (6) safeguarding corporate value and shareholders’ equity as the Company deems necessary; (7) other circumstances approved by laws, administrative regulations and the securities regulatory authority in the place where the Company’s Shares are listed.	The revised “Company Law”

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Original articles		Amended articles	Reasons for the amendments
		The Company shall not trade its shares unless in the aforesaid circumstances. Any purchase of the shares of the Company under provisionsset out in Clauses (1) and(2) referred to above shall be resolved at a shareholders’ general meeting; any purchase of the shares of the Company under provisions set out in Clauses (3), (5) and (6) referred to above shall be resolved by the Board’s meeting where over two-thirds of the directors are present. Where the laws, administrative r e g u l a t i o n s , d e p a r t m e n t a l rules, provisions of the Articles of Association and securities regulatory authorities of the listing places of the Company provide otherwise in terms of the matters involved in share repurchase, such relevant provisions thereof shall prevail.

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Original articles		Amended articles	Reasons for the amendments
Article 27 The Company may repurchase its shares in any of the following ways: (1) making a general offer to r e p u r c h a s e s h a r e s f r o m a l l shareholders on a pro rata basis; (2) repurchasing shares through open transactions in the stock exchange; (3) repurchasing shares based on an off-market agreement; (4) in other forms approved by laws, administrative regulations and competent authorities.		Article 27 r e p u r c h a	The revised “Company Law”

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	Original articles		Amended articles	Reasons for the amendments
	Article 29After repurchasing its shares according to the aforesaid provisions, where it is in the circumstance stated in Clause (1) in Article 26 of the Articles of Association, the Company shall cancel such shares within ten days from the date of repurchase; where it is in the circumstances stated in Clause (2) or Clause (4), the Company shall transfer or cancel such shares within six months. Where the registered capital is changed, the Company shall register the change of the registered capital with the State Administration for Industry & Commerce. The total par value of the cancelled shares shall be reduced accordingly from the registered capital of the Company.Where the Company repurchases its Shares in accordance with Clause (3) in Article 26 of the Articles of Association, such repurchased shares shall not exceed 5% of the issued shares of the Company. The payment for the repurchase shall be made out of the after-tax profits of the Company and such r e p u r c h a s e d s h a r e s s h a l l b e transferred to employees within one year from the repurchase.		Article 29After repurchasing its shares according to the aforesaid provisions, where it is in the circumstance stated in Clause (1) in Article 26 of the Articles of Association, the Company shall cancel such shares within ten days from the date of repurchase; where it is in the circumstances stated in Clause (2) or Clause (4), the Company shall transfer or cancel such shares within six months; in case of circumstances set out in clauses (3), (5) and (6), the total shares held by the Company shall not exceed 10% of the total shares issued by the Company, and such shares shall be transferred or cancelled within 3 years . Where the registered capital is changed, the Company shall register the change of the registered capital with the State Administration for Industry & Commerce. The total par value of the cancelled shares shall be reduced accordingly from the registered capital of the Company.	The revised “Company Law”

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Original articles		Amended articles	Reasons for the amendments
Article 62 The shareholders’ general meeting is the authority of the Company and shall exercise the following functions and powers in accordance with the laws: (1) to determine the operating policies and investment plans of the Company; ...... (19) to consider such other matters to be resolved at shareholders’ general meeting as required by laws, regulations, listing rules of the places where the shares of the Company are listed or the Articles of Association. ......		Article 62 The shareholders’ general meeting is the authority of the Company and shall exercise the following functions and powers in accordance with the laws: (1) to determine the operating policies and investment plans of the Company; ...... (19)to pass resolutions on purchase of the shares of the Company because of the circumstances (1) and (2) as required in Article 26 of the Articles of Association ; (20) to consider such other matters to be resolved at shareholders’ general meeting as required by laws, regulations, listing rules of the places where the shares of the Company are listed or the Articles of Association. ......	The revised “Company Law”

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	Original articles		Amended articles	Reasons for the amendments
	Article 109The list of candidates for Directors and Supervisors shall be submitted to the shareholders’ general meeting for voting by way of proposal. When a voting is made on election of Directors or Supervisors at a shareholder’s general meeting, the cumulative voting system may be adopted in accordance with the requirements of the Articles of Association or the resolutions of the shareholders’ general meeting. In respect of the election of Directors or Supervisors, the cumulative voting system shall be adoptedwhen the largest shareholder holds 30% or above or the connected persons together hold 50% or above of the total shares of the Company .The cumulative voting system as referred to in the preceding paragraph means that when Directors or Supervisors are elected at a shareholders’ general meeting, each share shall carry the same number of voting right as the number of Directors or Supervisors to be elected, and the voting rights owned by shareholders may be cumulatively used. The Board of Directors shall announce the resumes and basic information of the director or supervisor candidates to shareholders.		Article 109The list of candidates for Directors and Supervisors shall be submitted to the shareholders’ general meeting for voting by way of proposal. When a voting is made on election of Directors or Supervisors at a shareholder’s general meeting, the cumulative voting system may be adopted in accordance with the requirements of the Articles of Association or the resolutions of the shareholders’ general meeting. In respect of the election of Directors or Supervisors, the cumulative voting system shall be adoptedwhen sole shareholder and its concert party are interested in 30% or more in shares of the Company . The cumulative voting system as referred to in the preceding paragraph means that when Directors or Supervisors are elected at a shareholders’ general meeting, each share shall carry the same number of voting right as the number of Directors or Supervisors to be elected, and the voting rights owned by shareholders may be cumulatively used. The Board of Directors shall announce the resumes and basic information of the director or supervisor candidates to shareholders.	A c c o r d i n g t o t h e C o d e o f C o r p o r a t e Governance for Listed Companies issued on 30 September 2018

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Original articles		Amended articles	Reasons for the amendments
Article 152The Board of Directors shall perform the following duties: (1) t o c o n v e n e s h a r e h o l d e r s ’ general meetings and to report to shareholders’ general meetings; ...... (7) to formulate plans for any substantial acquisition by the Company,repurchase of Shares or merger, division, and dissolution of the Company; ...... (18) other duties and powers granted by the laws, regulations and the Articles of Association. ......		Article 152The Board of Directors shall perform the following duties: (1) t o c o n v e n e s h a r e h o l d e r s ’ general meetings and to report to shareholders’ general meetings; ...... (7) to formulate plans for any substantial acquisition by the C o m p a n y ,r e p u r c h a s e o f t h e shares of the Company, because of the circumstances (1) and (2) as required in Article 26 of the Articles of Association or merger, division, and dissolution of the Company; ...... (18)to decide on repurchase of shares of the Company under circumstances as prescribed under items (3), (5) and (6) of Article 26 of the Articles of Association; (19) other duties and powers granted by the laws, regulations and the Articles of Association. ......	The revised “Company Law”
Article 163 The quorum of the meeting of the Board of Directors shall be over half of the Directors. Each Director shall have one voting right. Unless otherwise provided in the Articles of Association, the resolutions of the Board of Directors shall be passed with the approval of over half of all Directors. ......		Article 163 The quorum of the meeting of the Board of Directors shall be over half of the Directors unless otherwise stipulated in the Articles of Association .Each Director shall have one voting right. Unless otherwise provided in the Articles of Association, the resolutions of the Board of Directors shall be passed with the approval of over half of all Directors. ......	The revised “Company Law”

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	Original articles	Amended articles	Reasons for the amendments
	Article 309 These Articles were adopted by a special resolution of the shareholders’ general meeting of the Company with its important clause approved by the CSRC and shall be effective on the date on whichthe overseas listed foreign shares (H shares) of the Company under the public offering are listed on the Hong Kong Exchange Stock .From the effective date of these Articles, the existing Articles of the Company and amendments thereto shall lapse automatically.	Article 309 These Articles were adopted by a special resolution of the shareholders’ general meeting o f t h e C o m p a n y a n d s h a l l b e effective on the date on which the CSRC approved the important clauses of these Articles. From the effective date of these Articles, the existing Articles of the Company and amendments thereto shall lapse automatically.	Actual circumstances of the Company

Such amendments to the Articles of Association shall be proposed at the shareholders’ general meeting of the Company for consideration and approval. At the same time, it will be proposed at the shareholders’ general meeting to authorise the Board and agree the Board to re-authorise the management to adjust wording based on the opinions of the regulatory authorities. After the amendment of the Articles of Association has been approved by the shareholders general meeting, the material articles therein will come into effect as at the date of approval by the CSRC.

A circular containing, among other things, details of the above resolutions, together with the notice of the shareholders’ general meeting, will be despatched to the shareholders of the Company in due course.

By order of the Board of Directors PAN Xinjun Chairman

Shanghai, PRC March 28, 2019

As at the date of this announcement, the Board of Directors comprises Mr. PAN Xinjun and Mr. JIN Wenzhong as executive Directors; Mr. LIU Wei, Mr. WU Junhao, Mr. CHEN Bin, Mr. LI Xiang, Ms. XIA Jinghan, Mr. XU Jianguo and Mr. DU Weihua as non-executive Directors; and Mr. XU Guoxiang, Mr. TAO Xiuming, Mr. WEI Anning, Mr. XU Zhiming and Mr. JIN Qinglu as independent non-executive Directors.

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