Everbright Securities Company Limited - Proxy Solicitation & Information Statement 2020

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect about 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 Everbright Securities Company Limited , you should at once hand this circular, together with the enclosed form of proxy and reply slip, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was affected for transmission to the purchaser or transferee.

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

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光大證券股份有限公司 Everbright Securities Company Limited

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

(Stock Code: 6178)

(1) PROPOSED AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS
(2) ELECTION OF DIRECTORS OF THE SIXTH SESSION OF THE BOARD OF THE COMPANY
(3) ELECTION OF SUPERVISORS OF THE SIXTH SESSION OF THE SUPERVISORY COMMITTEE OF THE COMPANY AND

(4) NOTICE OF 2020 THIRD EXTRAORDINARY GENERAL MEETING

The 2020 third extraordinary general meeting (the “ EGM ”) of Everbright Securities Company Limited (the “ Company ”) will be held at 2:30 p.m. on Tuesday, December 15, 2020 at the Jing’an International Plaza, No. 1508 Xinzha Road, Jing’an District, Shanghai, PRC. A notice convening the EGM is set out on pages 10 to 14 of this circular.

Whether or not you are able to attend the EGM, you are advised to read the notice of the EGM and to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as early as possible. For H Shareholders, the form of proxy or any other authorization documents should be returned to the Company’s H share registrar, Computershare Hong Kong Investor Services Limited, whereas A Shareholders should return the form of proxy to the Company’s Board office, and in any event in person or by post no later than 24 hours before the time appointed for convening the EGM (i.e. before 2:30 p.m. on Monday, December 14, 2020) or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending in person and voting at the EGM or at any adjourned meeting if you so wish.

As stated in the reply slip published on October 28, 2020, 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 (for H Shareholders) on or before Wednesday, November 25, 2020.

November 27, 2020

CONTENTS

			Page
Definitions . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			3
Notice of 2020 Third Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . .			10
Appendix I	–	Comparison Table of the Amendments to
		the Rules Governing the Management of
		Related Party Transactions of
		Everbright Securities Company Limited. . . . . . . . . . . . . .	15
Appendix II	–	The Rules Governing the Management of
		Related Party Transactions of Everbright Securities
		Company Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Appendix III	–	Biographies of the Candidates for Executive and
		Non-executive Directors. . . . . . . . . . . . . . . . . . . . . . . . . . .	54
Appendix IV	–	Biographies of the Candidates for Independent
		Non-executive Directors. . . . . . . . . . . . . . . . . . . . . . . . . . .	57
Appendix V	–	Biographies of the Candidates for Supervisors . . . . . . . . . .	59

– i –

DEFINITIONS

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

“A Shareholders”
holders of A Shares
“A Shares” domestic shares of the Company with a nominal value of RMB1.00 each, which are listed on the Shanghai Stock Exchange and traded in RMB
“Articles of Association” the articles of association of the Company
“Board” or “Board of Directors” the board of Directors of the Company
“Company” Everbright Securities Company Limited (光大證券股份有限公司), a joint stock company incorporated in the PRC with limited liability and whose H Shares and A Shares are listed on the main board of the Stock Exchange (stock code: 6178) and the SSE (stock code: 601788), respectively
“CSRC” China Securities Regulatory Commission
“Director(s)” the director(s) of the Company
“EGM” the 2020 third extraordinary general meeting of the Company to be held at 2:30 p.m. on Tuesday, December 15, 2020
“H Shareholders” holders of H Shares
“H Shares” ordinary shares of the Company with a nominal value of RMB1.00 each, which are issued outside the PRC, listed on the Stock Exchange and traded in Hong Kong Dollars (stock code: 6178)
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange (as amended from time to time)
“PRC” the People’s Republic of China

– 1 –

DEFINITIONS

“Shareholders”	shareholders of the Company, including A Shareholders
	and H Shareholders
“Shares”	shares of the Company, including A Shares and H Shares
“SSE”	Shanghai Stock Exchange
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Supervisor(s)”	the supervisor(s) of the Company
“Supervisory Committee”	the supervisory committee of the Company
“SZSE”	Shenzhen Stock Exchange

If there is any inconsistency between the Chinese and English versions of this circular, the Chinese version shall prevail.

– 2 –

LETTER FROM THE BOARD

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光大證券股份有限公司 Everbright Securities Company Limited

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

(Stock Code: 6178)

Mr. Yan Jun (Chairman, Executive Director)

Mr. Liu Qiuming (Executive Director)

Mr. Song Bingfang (Non-executive Director)
Mr. Yin Lianchen (Non-executive Director)
Mr. Chan Ming Kin (Non-executive Director)

Mr. Xue Keqing (Non-executive Director)

Mr. Xu Jingchang (Independent Non-executive Director)

Registered office and principal place of business in the PRC: No. 1508 Xinzha Road, Jing’an District, Shanghai, PRC

Mr. Xiong Yan (Independent Non-executive Director)

Mr. Li Zheping (Independent Non-executive Director) Mr. Au Sing Kun (Independent Non-executive Director) Mr. Wang Yong (Independent Non-executive Director)

Place of business in Hong Kong: 12/F, Everbright Centre, 108 Gloucester Road, Wan Chai, Hong Kong

November 27, 2020

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS
(2) ELECTION OF DIRECTORS OF THE SIXTH SESSION OF THE BOARD OF THE COMPANY
(3) ELECTION OF SUPERVISORS OF THE SIXTH SESSION OF THE SUPERVISORY COMMITTEE OF THE COMPANY AND
(4) NOTICE OF 2020 THIRD EXTRAORDINARY GENERAL MEETING

I. INTRODUCTION

On behalf of the Board, I would like to invite you to attend the EGM to be held at 2:30 p.m. on Tuesday, December 15, 2020 at the Jing’an International Plaza, No. 1508 Xinzha Road, Jing’an District, Shanghai, PRC. The purpose of this circular is to give you notice of the EGM and to provide you with information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolution to be proposed at the EGM.

– 3 –

LETTER FROM THE BOARD

At the EGM, ordinary resolutions will be proposed to approve (if thought fit) the resolution in relation to the (i) proposed amendments to the Rules Governing the Management of Related Party Transactions of Everbright Securities Company Limited, (ii) the election of Directors of the sixth session of the Board of the Company, (iii) the election of independent non-executive Directors of the sixth session of the Board of the Company, and (iv) election of supervisors of the sixth session of the supervisory committee of the Company.

Ordinary Resolutions:

1. To Consider and Approve the Resolution Regarding the Amendments to the Rules Governing the Management of Related Party Transactions of Everbright Securities Company Limited

In order to continuously regulate the management of related party transactions of Company, and further improve its corporate governance in accordance with the Administrative Procedures on the Information Disclosures of Listed Companies issued by the CSRC and Implementation Guidelines for Related Party Transactions of Listed Companies on Shanghai Stock Exchange and other laws and regulations, the Company proposes to amend the Rules Governing the Management of Related Party Transactions of Everbright Securities Company Limited (the “ Rules Governing the Management of Related Party Transactions ”). A comparison table of the key amended terms is set out in Appendix I to this circular for reference. An updated full set of the Rules Governing the Management of Related Party Transactions is set out in Appendix II to this circular for reference.

The above proposal has been considered and approved by the Board on October 28, 2020 and is hereby presented to the EGM for consideration and approval.

2. To Consider and Approve the Resolution Regarding the Election of Directors of the Sixth Session of the Board of the Company

The term of the fifth session of the Board of Directors of the Company will soon expire according to the Articles of Association. On October 28, 2020, the 27th meeting of the fifth session of the Board approved the resolution to propose the following candidates for the Directors of the sixth session of the Board:

Mr. Yan Jun (executive Director)
Mr. Liu Qiuming (executive Director)
Mr. Song Bingfang (non-executive Director)
Mr. Fu Jianping (non-executive Director)
Mr. Yin Lianchen (non-executive Director)

– 4 –

LETTER FROM THE BOARD

Mr. Chan Ming Kin (non-executive Director)
Mr. Tian Wei (non-executive Director)
Mr. Yu Mingxiong (non-executive Director)

The biographies of the candidates for the above Directors are set out in Appendix III to this circular. The Articles of Association provide that the Board shall comprise 13 members. The aforesaid eight candidates for the Directors to be considered and approved by the EGM shall form the sixth session of the Board of the Company together with the five candidates for independent non-executive Directors elected at the EGM. Following the expiry of the term of the current session of the Board on October 16, 2020, the relevant Directors shall continue to perform their duties until the candidates for the Directors being elected at the EGM.

If appointed, each of the aforementioned proposed Directors will enter into Director’s service agreements with the Company, with their term of office commencing on the date when the resolutions on their respective appointments as Directors are approved at the EGM and ending on the expiry of the term of the sixth session of the Board, and they shall be eligible for re-election and re-appointment upon the expiry of the term. The remuneration of the executive Directors is determined by the remuneration system of the Company, reviewed and approved by the Remuneration, Nomination and Credentials Committee of the Board and is closely connected with the position and the performance. The non-executive Directors do not receive remuneration from the Company.

To the best knowledge of the Directors and save as disclosed in this circular, each of the aforementioned proposed Directors did not hold any directorship in the last three years in any other public companies, the securities of which are listed on any securities market in Hong Kong or overseas; and they do not have any relationship with any Director, Supervisor, senior management or substantial or controlling shareholder of the Company and their respective subsidiaries nor do they hold any position with the Company or any of its subsidiaries. None of the aforementioned proposed Directors has any interest in any shares of the Company or its associated corporations within the meaning of Part XV of the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong) as at the date of this circular.

Save as disclosed in this circular, each of the aforementioned proposed Directors has confirmed that there is no information that is required to be disclosed pursuant to the requirements set out in Rules 13.51(2)(h) to (v) of the Listing Rules, nor is there any matter that needs to be brought to the attention of the Shareholders. They have also confirmed that they have not been subject to any penalty by the CSRC or other related departments or punishment by any stock exchanges.

The Board hereby proposed the resolutions regarding the election of Mr. Yan Jun, Mr. Liu Qiuming, Mr. Song Bingfang, Mr. Fu Jianping, Mr. Yin Lianchen, Mr. Chan Ming Kin, Mr. Tian Wei, Mr. Yu Mingxiong as the Directors of the sixth session of the Board at the EGM for consideration and approval.

– 5 –

LETTER FROM THE BOARD

3. To Consider and Approve the Resolution Regarding the Election of Independent non-executive Directors of the Sixth Session of the Board of the Company

Mr. Wang Yong (independent non-executive Director)
Mr. Po Wai Kwong (independent non-executive Director)
Mr. Ren Yongping (independent non-executive Director)
Mr. Yin Junming (independent non-executive Director)
Mr. Liu Yunhong (independent non-executive Director)

The Board considers that all said candidates for independent non-executive Directors have a basic knowledge of the operation of listed companies, are familiar with relevant laws, administrative regulations, rules and other regulatory documents, and have years of working experience in the areas of law, economy, finance and management or other working experience required for performing independent non-executive Directors’ duties. In addition, each candidate for independent non-executive Directors has confirmed their independence in accordance with Rule 3.13 of the Listing Rules. The Board also considers that each candidate for independent non-executive Director is in line with the independence guidelines set out in Rule 3.13 of the Listing Rules and is independent in accordance with the terms of the guidelines.

The biographies of the candidates for the independent non-executive Directors are set out in Appendix IV to this circular. The Articles of Association provide that the Board shall comprise 13 members. The aforesaid five proposed candidates for independent non-executive Directors to be considered and approved by the EGM shall form the sixth session of the Board of the Company together with the eight candidates for Directors to be elected at the EGM. Following the expiry of the term of the current session of the Board on October 16, 2020, the relevant Directors shall continue to perform their duties before the candidates for the Directors being elected at the EGM and having obtained the relevant qualifications for their positions.

If appointed, each of the aforementioned proposed Directors will enter into Director’s service agreements with the Company, with their term of office commencing on the date when the resolutions on their respective appointments as Directors are approved at the EGM and ending on the expiry of the term of the sixth session of the Board, and they shall be eligible for re-election and re-appointment upon the expiry of the term. The annual remuneration of the independent non-executive Directors is determined with reference to that of other listed companies in the same industry and the actual circumstances of the Company.

– 6 –

LETTER FROM THE BOARD

To the best knowledge of the Directors and save as disclosed in this circular, each of the aforementioned proposed independent non-executive Directors did not hold any directorship in the last three years in any other public companies, the securities of which are listed on any securities market in Hong Kong or overseas; and they do not have any relationship with any Director, Supervisor, senior management or substantial or controlling shareholder of the Company and their respective subsidiaries nor do they hold any position with the Company or any of its subsidiaries. None of the aforementioned proposed independent non-executive Directors has any interest in any shares of the Company or its associated corporations within the meaning of Part XV of the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong) as at the date of this circular.

Save as disclosed in this circular, each of the aforementioned proposed independent non-executive Directors has confirmed that there is no information that is required to be disclosed pursuant to the requirements set out in Rules 13.51(2)(h) to (v) of the Listing Rules, nor is there any matter that needs to be brought to the attention of the Shareholders. They have also confirmed that they have not been subject to any penalty by the CSRC or other related departments or punishment by any stock exchanges.

The Board hereby proposed the resolutions regarding the election of Mr. Wang Yong, Mr. Po Wai Kwong, Mr. Ren Yongping, Mr. Yin Junming and Mr. Liu Yunhong as the independent non-executive Directors of the sixth session of the Board at the EGM for consideration and approval.

4. To Consider and Approve the Resolution Regarding the Election of Supervisors of the Sixth Session of the Supervisory Committee of the Company

The term of the fifth session of the Supervisory Committee of the Company will soon expire according to the Articles of Association. The Company convened the 17th meeting of the fifth session of the Supervisory Committee on October 28, 2020 at which the resolution regarding the nomination of Mr. Liu Jiping, Mr. Wu Chunsheng, Mr. Wang Hongyang, Mr. Yang Weirong, Mr. Zhu Wuxiang and Mr. Cheng Fengchao, as candidates for the Supervisors of the sixth session of the Supervisory Committee were considered and approved.

The biographies of the candidates of the Supervisors are set out in Appendix V to this circular.

If appointed, the aforementioned proposed Supervisors will enter into service agreements with the Company, with their term of office commencing on the date when the resolutions on their respective appointments as Supervisors are approved at the EGM and ending on the expiry of the term of the sixth session of the Supervisory Committee, and they shall be eligible for re-election and re-appointment upon expiry of the term. The remuneration of the chief supervisor is determined in accordance with the remuneration system of the Company. The remuneration of the employee Supervisors is determined in accordance with the remuneration

– 7 –

LETTER FROM THE BOARD

system of the Company, which is closely linked to the position and performance of the individual. The annual remuneration of the external Supervisors is determined with reference to that of other listed companies in the same industry and the actual circumstances of the Company.

To the best knowledge of the Directors and save as disclosed in this circular, the aforementioned proposed Supervisors did not hold any directorship in the last three years in any other public companies, the securities of which are listed on any securities market in Hong Kong or overseas; and they do not have any relationship with any director, supervisor, senior management or substantial or controlling shareholder of the Company or their respective subsidiaries nor do they hold any position with the Company or any of its subsidiaries. None of the aforementioned proposed Supervisors has any interest in any shares of the Company or its associated corporations within the meaning of Part XV of the Securities and Futures Ordinance (Cap.571 of the laws of Hong Kong) as at the date of this circular.

Save as disclosed in this circular, the aforementioned proposed Supervisors have confirmed that there is no information that is required to be disclosed pursuant to the requirements set out in Rules 13.51(2)(h) to (v) of the Listing Rules nor is there any matter that needs to be brought to the attention of the Shareholders. They have also confirmed that they have not been subject to any penalty by the CSRC or other related departments or punishment by any stock exchanges.

The resolutions regarding the election of Mr. Liu Jiping, Mr. Wu Chunsheng, Mr. Wang Hongyang, Mr. Yang Weirong, Mr. Zhu Wuxiang and Mr. Cheng Fengchao, as the Supervisors of the sixth session of the Supervisory Committee of the Company are hereby proposed at the EGM for consideration and approval.

II. THE EGM

The EGM will be held at 2:30 p.m. on Tuesday, December 15, 2020 at the Jing’an International Plaza, No. 1508 Xinzha Road, Jing’an District, Shanghai, PRC, to consider and, if thought fit, approve the aforesaid resolutions. The notice of the EGM is set out on pages 10 to 14 of this circular.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the EGM, you are advised to read the notice of EGM and to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as early as possible. For H Shareholders, the form of proxy or any other authorization documents should be returned to the Company’s H share registrar, Computershare Hong Kong Investor Services Limited, whereas A Shareholders should return the form of proxy to the Company’s Board office, and in any event in person or by post no later than 24 hours before the time appointed for convening the EGM (i.e. before 2:30 p.m. on Monday, December 14, 2020) or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending in person and voting at the EGM or at any adjourned meeting if you so wish.

– 8 –

LETTER FROM THE BOARD

As stated in the reply slip published on October 28, 2020, if you intend to attend the EGM in person or by proxy, you are required to return the completed and signed reply slip to the Company’s H share registrar, Computershare Hong Kong Investor Services Limited (for H Shareholders), or to the Company’s Board office (for A Shareholders), on or before Wednesday, November 25, 2020 in person, by mail or by fax.

The address of the Company’s Board office is No. 1508 Xinzha Road, Jing’an District, Shanghai, PRC (Postcode: 200040, Telephone: (86) 21 2216 9914, Fax: (86) 21 2216 9964). Computershare Hong Kong Investor Services Limited, the Company’s H share registrar, is located at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (Telephone: (852) 2862 8555).

III. CUMULATIVE VOTING

According to the Articles of Association, the aforesaid Directors, independent nonexecutive Directors and Supervisors will be elected through cumulative voting. The number of total votes that a shareholder can exercise is decided by the following factors: (i) the number of shares held by such shareholder; and (ii) the number of Directors, independent nonexecutive Directors and Supervisors to be elected. For every share held by a shareholder who participates in the voting, the shareholder will have the same number of voting rights which equals the number of Directors, independent non-executive Directors and Supervisors to be elected. A shareholder may give all his or her votes to one candidate or divide his or her votes among several candidates. Directors, independent non-executive Directors and Supervisors are elected at the EGM based on the total number of votes he or she receives.

IV. VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote by Shareholders at a general meeting must be taken by poll. Therefore, the resolutions to be proposed at the EGM will be voted by poll. Results of the poll voting will be posted on the website of the Company at www.ebscn.com and on the HKEXnews website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk upon the conclusion of the EGM.

V. RECOMMENDATION

The Board considers that the aforesaid resolutions are in the best interests of the Company and the Shareholders as a whole and accordingly recommends you to vote in favor of such resolutions to be proposed at the EGM.

By order of the Board Everbright Securities Company Limited Yan Jun Chairman

Shanghai, the PRC

– 9 –

NOTICE OF 2020 THIRD EXTRAORDINARY GENERAL MEETING

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

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光大證券股份有限公司 Everbright Securities Company Limited

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

(Stock Code: 6178)

NOTICE OF 2020 THIRD EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2020 third extraordinary general meeting (the “ EGM ”) of Everbright Securities Company Limited (the “ Company ”) will be held at 2:30 p.m. on Tuesday, December 15, 2020 at Jing’an International Plaza, No. 1508, Xinzha Road, Jing’an District, Shanghai, PRC, to consider and, if thought fit, approve the following resolutions.

ORDINARY RESOLUTIONS

To consider and approve the resolution regarding the proposed amendments to the Rules Governing the Management of Related Party Transactions of Everbright Securities Company Limited.
To consider and approve the resolution regarding the election of directors of the sixth session of the board of the Company.
2.1 To consider and approve the resolution regarding the election of Mr. Yan Jun as an executive director of the sixth session of the board of the Company.
2.2 To consider and approve the resolution regarding the election of Mr. Liu Qiuming as an executive director of the sixth session of the board of the Company.
2.3 To consider and approve the resolution regarding the election of Mr. Song Bingfang as a non-executive director of the sixth session of the board of the Company.
2.4 To consider and approve the resolution regarding the election of Mr. Fu Jianping as a non-executive director of the sixth session of the board of the Company.

– 10 –

NOTICE OF 2020 THIRD EXTRAORDINARY GENERAL MEETING

2.5 To consider and approve the resolution regarding the election of Mr. Yin Lianchen as a non-executive director of the sixth session of the board of the Company.
2.6 To consider and approve the resolution regarding the election of Mr. Chan Ming Kin as a non-executive director of the sixth session of the board of the Company.
2.7 To consider and approve the resolution regarding the election of Mr. Tian Wei as a non-executive director of the sixth session of the board of the Company.
2.8 To consider and approve the resolution regarding the election of Mr. Yu Mingxiong as a non-executive director of the sixth session of the board of the Company.
To consider and approve the resolution regarding the election of independent non-executive directors of the sixth session of the board of the Company.
3.1 To consider and approve the resolution regarding the election of Mr. Wang Yong as an independent non-executive director of the sixth session of the board of the Company.
3.2 To consider and approve the resolution regarding the election of Mr. PO Wai Kwong as an independent non-executive director of the sixth session of the board of the Company.
3.3 To consider and approve the resolution regarding the election of Mr. Ren Yongping as an independent non-executive director of the sixth session of the board of the Company.
3.4 To consider and approve the resolution regarding the election of Mr. Yin Junming as an independent non-executive director of the sixth session of the board of the Company.
3.5 To consider and approve the resolution regarding the election of Mr. Liu Yunhong as an independent non-executive director of the sixth session of the board of the Company.

– 11 –

NOTICE OF 2020 THIRD EXTRAORDINARY GENERAL MEETING

To consider and approve the resolution regarding the election of supervisors of the sixth session of the supervisory committee of the Company.
4.1 To consider and approve the resolution regarding the election of Mr. Liu Jiping as a supervisor of the sixth session of the supervisory committee of the Company.
4.2 To consider and approve the resolution regarding the election of Mr. Wu Chunsheng as a supervisor of the sixth session of the supervisory committee of the Company.
4.3 To consider and approve the resolution regarding the election of Mr. Wang Hongyang as a supervisor of the sixth session of the supervisory committee of the Company.
4.4 To consider and approve the resolution regarding the election of Mr. Yang Weirong as a supervisor of the sixth session of the supervisory committee of the Company.
4.5 To consider and approve the resolution regarding the election of Mr. Zhu Wuxiang as a supervisor of the sixth session of the supervisory committee of the Company.
4.6 To consider and approve the resolution regarding the election of Mr. Cheng Fengchao as a supervisor of the sixth session of the supervisory committee of the Company.

By order of the Board Everbright Securities Company Limited Yan Jun Chairman

Shanghai, the PRC October 29, 2020

As at the date of this notice, the Board of the Company comprises Mr. Yan Jun (Chairman, Executive Director), Mr. Liu Qiuming (Executive Director), Mr. Song Bingfang (Non-executive Director), Mr. Yin Lianchen (Non-executive Director), Mr. Chan Ming Kin (Non-executive Director), Mr. Xue Keqing (Non-executive Director), Mr. Xu Jingchang (Independent Nonexecutive Director), Mr. Xiong Yan (Independent Non-executive Director), Mr. Li Zheping (Independent Non-executive Director), Mr. Au Sing Kun (Independent Non-executive Director) and Mr. Wang Yong (Independent Non-executive Director).

– 12 –

NOTICE OF 2020 THIRD EXTRAORDINARY GENERAL MEETING

Notes:

1. Eligibility for Attending the EGM and Closure of Register of Members for H Shares

The H Share register of members of the Company will be closed for the purpose of determining H Shareholders’ entitlement to attend the EGM from Saturday, November 14, 2020 to Tuesday, December 15, 2020 (both days inclusive), during which period no transfer of H Shares will be registered. In order to attend the EGM, H Shareholders should ensure that all transfer documents, accompanied by the relevant share certificates, are lodged with the Company’s H share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on Friday, November 13, 2020 to complete registration.

The Company will announce separately on the Shanghai Stock Exchange for details of A Shareholders’ eligibility for attending the EGM.

2. Proxy

(1) Any Shareholder entitled to attend and vote at the EGM is entitled to appoint one or more proxies to attend and vote at the meeting on his or her behalf. A proxy need not be a Shareholder.
(2) The instrument appointing a proxy must be in writing by the appointor or his attorney duly authorized in writing, or if the appointor is a legal entity, either under seal or signed by a director or a duly authorized attorney.

To be valid, for H Shareholders, the form of proxy or other documents of authorization must be delivered to Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 24 hours before the time fixed for the EGM (i.e. 2:30 p.m. on Monday, December 14, 2020) (the proxy form for the EGM is enclosed herewith).

Completion and return of the form of proxy will not preclude the Shareholders from attending and voting at the EGM or at any adjourned meeting if they so wish.

3. Registration Procedures for Attending the EGM

(1) A Shareholder or his proxy should produce proof of identity when attending the EGM. If a Shareholder is a legal person, its legal representative or other person authorized by the board of directors or other governing body of such Shareholder may attend the EGM by producing a copy of the resolution of the board of directors or other governing body of such Shareholder appointing such person to attend the meeting.
(2) Shareholders intending to attend the EGM in person or by their proxies should return the completed and signed reply slip for attending the EGM in person, by post or by fax to Computershare Hong Kong Investor Services Limited (for H Shareholders), or to the Company’s Board office (for A Shareholders) on or before Wednesday, November 25, 2020.

4. Voting by Poll

According to Rule 13.39(4) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, any vote of shareholders at a general meeting must be taken by poll. Accordingly, the chairman of the EGM will exercise his power under the Articles of Association to demand a poll in relation to all the resolutions to be proposed at the EGM. Results of the poll voting will be posted on the website of the Company at www.ebscn.com and on the HKEXnews website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk upon the conclusion of the EGM.

5. Cumulative Voting

According to the Articles of Association, the aforesaid Directors, independent non-executive Directors and Supervisors will be elected through cumulative voting. The number of total votes that a shareholder can exercise is decided by the following factors: (i) the number of shares held by such shareholder; and (ii) the number of Directors, independent non-executive Directors and Supervisors to be elected. For every share held by a shareholder who participates in the voting, the shareholder will have the same number of voting rights which equals the number of Directors, independent non-executive Directors and Supervisors to be elected. A shareholder may give all his or her votes to one candidate or divide his or her votes among several candidates. Directors, independent non-executive Directors and Supervisors are elected at the EGM based on the total number of votes he or she receives.

– 13 –

NOTICE OF 2020 THIRD EXTRAORDINARY GENERAL MEETING

6. Miscellaneous

(1) The duration of the EGM is expected not to exceed half a day. Shareholders who attend the EGM shall arrange for their own transportation and accommodation at their own expenses.
(2) The address of Computershare Hong Kong Investor Services Limited is at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (Telephone: (852) 2862 8555, Fax: (852) 2865 0990).
(3) The address of the Company’s Board office is at No. 1508 Xinzha Road, Jing’an District, Shanghai, PRC (Postcode: 200040, Telephone: (86) 21 2216 9914, Fax: (86) 21 2216 9964).

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APPENDIX I

COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

Articles before amendments	Articles after amendments	Basis of Amendments	Basis of Amendments
–	Chapter 1 General provisions	Newly-added chapter title
Article 1To regulate the decision-	Article 1 To regulate the decision-	Added the relevant rules of CSRC
making procedures for related	making procedures for related	and the	rules governing the listing
party transactions between	transactions between Everbright	of stocks on the stock exchanges on
Everbright Securities Company	Securities Company Limited (the	which the shares of the Company
Limited (the “Company “) and its	“Company “) and its controlling	are listed.
controlling subsidiaries and	subsidiaries and related parties of
related parties of the Company, to	the Company, to prevent related
prevent related party transactions	transactions from harming the
from harming the interests of the	interests of the Company and
Company and medium and small	medium and small shareholders,
shareholders, these rules are	these rules are hereby formulated in
hereby formulated in accordance	accordance with the Company Law
with the Company Law of the	of the People’s Republic of China,
People’s Republic of China, the	the Securities Law of the People’s
Securities Law of the People’s	Republic of China, the Code of
Republic of China, the Code of	Corporate Governance for Listed
Corporate Governance for Listed	Companies issued by China
Companies issued by China	Securities Regulatory Commission
Securities Regulatory	(the “CSRC”), the Code of
Commission (the “CSRC”), the	Corporate Governance for
Code of Corporate Governance for	Securities Companies, the Rules of
Securities Companies, the Rules	General Meetings for Listed
of General Meetings for Listed	Companies, the Administrative
Companies, the rules governing	Measures for the Disclosure of
the listing of stocks on the stock	Information of Listed Companies,
exchanges on which the shares of	the rules governing the listing of
the Company are listed, the	stocks on the stock exchanges on
Shanghai Stock Exchange	which the shares of the Company
Implementing Guidelines for	are listed (the Rules Governing the
Related Party Transactions of	Listing of Stocks on Shanghai Stock
Listed Companies (the	Exchange and the Rules Governing
“Implementing Guidelines for	the Listing of Securities on The
Related Party Transactions”) and	Stock Exchange of Hong Kong
the Accounting Standard for	Limited), the Shanghai Stock
Business Enterprises 36 – Related	Exchange Implementing Guidelines
Party Disclosures and other laws,	for Related Party Transactions of
regulations and regulatory	Listed Companies (the
documents (hereinafter	“Implementing Guidelines for
collectively referred to as	Related Party Transactions”) and
“relevant laws and regulations”)	the Accounting Standard for
and the Articles of Association of	Business Enterprises 36 – Related
Everbright Securities Company	Party Disclosures and other laws,
Limited (hereinafter referred to as	regulations and regulatory
the “Articles of Association”).	documents (hereinafter collectively
	referred to as “relevant laws and
	regulations”) and the Articles of
	Association of Everbright Securities
	Company Limited (hereinafter
	referred to as the “Articles of
	Association”).

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COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX I

Articles before amendments Articles after amendments – Chapter 2 Related party transactions and related parties Article 2 ~~According to the~~ Article 2 The Company classifies ~~relevant regulations of CSRC and~~ the related party transactions as ~~the Shanghai Stock Exchange,~~ the those defined by CSRC, by the stock related party transactions referred exchange where the shares of the to in the rules are ~~the transfer of~~ Company are listed (Shanghai Stock ~~resources or obligations~~ between Exchange and The Stock Exchange the Company and its controlling of Hong Kong Limited) and by subsidiaries and the Company’s Accounting Standards for Business related ~~parties, including but not~~ Enterprises. ~~limited to the following transactions:~~

The related party transactions referred to in the Rules are transactions between the Company or its controlling subsidiaries and the related parties of the Company.

~~(I) acquisition or disposal of assets;~~
~~(II) external investment (including consigned financial management, consigned loan, etc.);~~
~~(III) provision of financial assistance;~~

Refer to the appendix of the Measures for the definition of related party transactions.

Basis of Amendments Newly-added chapter title

The related party transactions are further improved in accordance with the relevant requirements of CSRC, the Listing Rules of the Shanghai Stock Exchange, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the definitions of the Accounting Standards for Business Enterprises.

~~(IV) provision of guarantee;~~
~~(V) rent or lease of assets;~~
~~(VI) asset and business management as consignor or consignee;~~
~~(VII) donating or taking of assets;~~
~~(VIII) credit and debt reorganization;~~
~~(IX) conclusion of franchise agreements;~~
~~(X) transfer of research and development projects as transferor or transferee;~~
~~(XI) purchase of raw materials, fuels and power;~~
~~(XII) sale of products and goods; (XIII) provision or receipt of labour services;~~

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COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX I

	Articles before amendments	Articles after amendments	Basis of Amendments	Basis of Amendments
	~~(XIV)~~ ~~sales consignment or sales~~
	~~on commission;~~
	~~(XV)~~ ~~co-investment~~ ~~with~~ ~~the~~
	~~related parties;~~
	~~(XVI)~~ ~~other~~ ~~matters~~ ~~that~~ ~~may~~
	~~cause~~ ~~the~~ ~~transfer~~ ~~of~~
	~~resources~~ ~~or~~ ~~obligations~~
	~~through agreements.~~
	~~According to the Rules Governing~~
	~~the Listing of Securities on The~~
	~~Stock Exchange of Hong Kong~~
	~~Limited (the “Hong Kong Listing~~
	Rules”), the connected
	~~transactions~~ ~~are~~ ~~transactions~~
	~~between the Company or any of its~~
	~~subsidiaries~~ ~~and~~ ~~connected~~
	~~persons, and specified categories~~
	~~of transactions with third parties~~
	~~that~~ ~~may~~ ~~confer~~ ~~benefits~~ ~~on~~
	~~connected persons through their~~
	~~interests in the entities involved in~~
	~~the transactions. They may be~~
	~~one-off transactions or continuing~~
	~~transactions.~~ ~~“Transactions”~~
	~~include both capital and revenue~~
	~~nature transactions, whether or not~~
	conducted in the ordinary and
	~~usual course of business of the~~
	~~Company,~~ ~~this~~ ~~includes~~ ~~the~~
	~~following types of transactions:~~
	~~(I)~~ ~~acquisition or disposal of~~
	~~assets~~ ~~by~~ ~~the~~ ~~Company,~~
	~~including~~ ~~a~~ ~~deemed~~
	~~disposal;~~
	~~(II)~~
	~~i~~ ~~the~~ ~~Company~~ ~~granting,~~
	~~accepting,~~ ~~exercising,~~
	~~transferring or terminating~~
	~~an option to acquire or~~
	~~dispose~~ ~~of~~ ~~assets~~ ~~or~~ ~~to~~
	~~subscribe for securities; or~~
	~~ii~~ ~~the Company deciding not~~
	~~to exercise an option to~~
	~~acquire or dispose of assets~~
	~~or~~ ~~to~~ ~~subscribe~~ ~~for~~
	~~securities;~~

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COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX I

	Articles before amendments	Articles before amendments	Articles after amendments Basis of Amendments	Articles after amendments Basis of Amendments	Articles after amendments Basis of Amendments	Articles after amendments Basis of Amendments
	~~(III)~~	~~entering into or terminating~~
		~~finance leases or operating~~
		~~leases or sub-leases;~~
	~~(IV)~~	~~granting an indemnity or~~
		~~providing~~ ~~or~~ ~~receiving~~
		~~financial~~ ~~assistance,~~
		~~“financial~~ ~~assistance~~ ~~“~~
		~~includes~~ ~~granting~~ ~~credit,~~
		~~lending~~ ~~money,~~ ~~or~~
		~~providing~~ ~~an~~ ~~indemnity~~
		~~against obligations under a~~
		~~loan, or guaranteeing or~~
		~~providing~~ ~~security~~ ~~for~~ ~~a~~
		~~loan;~~
	~~(V)~~	~~entering into an agreement~~
		~~or arrangement to set up a~~
		~~joint venture in any form~~
		~~(e.g. a partnership or a~~
		~~company),~~ ~~or~~ ~~any~~ ~~other~~
		~~form of joint arrangement;~~
	~~(VI)~~	~~issuing new securities of~~
		the Company;
	~~(VII)~~	~~providing,~~ ~~receiving~~ ~~or~~
		~~sharing services; or~~
	~~(VIII)~~	~~acquiring or providing raw~~
		~~materials,~~ ~~intermediate~~
		~~products~~ ~~and/or~~ ~~finished~~
		~~goods.~~
	~~The~~	~~detailed~~ ~~definitions~~ ~~of~~
	~~specified~~ ~~categories~~ ~~of~~
	~~transactions~~ ~~and~~ ~~continuing~~
	~~connected transactions with third~~
	~~parties have been set out in the~~
	~~appendix of the rules.~~

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COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX I

Articles before amendments	Articles before amendments	Articles after amendments		Basis of Amendments	Basis of Amendments	Basis of Amendments
Article 3 Within the scope as		Article 3 Within the scope as	Amended		pursuant to Article		53	of
permitted by the laws and		permitted by the laws and	the Implementation Guidelines					on
regulations, the following matters		regulations, the following matters	Related		Parties Transactions			of
are	exempted from handling as	are exempted from handling as	Listed	Companies of the Shanghai
related transactions:		related transactions:	Stock		Exchange,	the	Rules
			Governing the Listing			of Securities
(I)	when one party subscribes	(I) when one party subscribes in	on the	Shanghai Stock		Exchange
	in cash for the public	cash for the public offering of
	offering of shares,	shares, corporate bonds or
	corporate bonds or	enterprise bonds, convertible
	enterprise bonds,	corporate bonds or other
	convertible corporate bonds	types of derivative products
	or other types of derivative	of the other party;
	products of the other party;
		(II) when one party acts as a
(II)	when one party acts as a	member of the underwriting
	member of the underwriting	(other than the lead
	(other than the lead	underwriter) consortium to
	underwriter) consortium to	underwrite the public
	underwrite the public	offering of shares, corporate
	offering of shares,	bonds or enterprise bonds,
	corporate bonds or	convertible corporate bonds
	enterprise bonds,	or other types of derivative
	convertible corporate bonds	products of the other party;
	or other types of derivative
	products of the other party;	(III) when one party collects
		dividends, bonus or returns
(III)	when one party collects	according to the resolution of
	dividends, bonus or returns	a general meeting of the other
	according to the resolution	party;
	of a general meeting of the
	other party;	(IV) other transactions exempted
		by the stock exchange where
(IV)	when one party participates	the shares of the Company
	in transactions via public	are listed;
	tenders, public auctions and
	other activities, the	When the Company conducts the
	Company may apply to the	following transactions with related
	stock exchange where the	parties, the Company may apply to
	shares of the Company are	the Shanghai Stock Exchange for
	listed for exemption from	exemption from consideration and
	handling as the related	disclosure as related transactions:
	party transaction;	when one party participates in
		related transactions via public
~~(V)~~	~~other~~ ~~circumstances~~	tenders, public auctions and other
	~~identified~~ ~~by~~ ~~the~~ ~~stock~~ ~~exchange where the shares~~ ~~of the Company are listed.~~	activities targeted non-specific objects; when the prices involved in the common related transactions conducted between the parties are
		determined by the state.

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COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX I

Articles before amendments Articles after amendments Basis of Amendments Article 4 The related parties Article 4 The Company classifies Related parties are further illustrates referred to herein is the related the related parties as those defined pursuant to relevant requirements of parties as defined in the rules by CSRC, by the stock exchange on CRSC, the Rules Governing the governing the listing of stocks on which the shares of the Company Listing of Securities on the the stock exchange on which the are listed (Shanghai Stock Exchange Shanghai Stock Exchange, the shares of the Company are listed. and The Stock Exchange of Hong Listing Rules Governing the Listing Kong Limited) and by Accounting of Securities on The Stock Standards for Business Enterprises. Exchange of Hong Kong Limited The related parties referred to and definitions of Accounting herein is the related parties as Standards for Business Enterprises. defined in the Rules Governing the Listing of Securities on the stock exchange where the shares of the Company are listed. Details of related parties as defined by the Shanghai Stock Exchange and Hong Kong Stock Exchange are set out in the Appendix.

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COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX I

Articles before amendments	Articles before amendments		Basis of Amendments
~~Article 5 Legal persons or other~~		Original article will be removed and
~~organisations of which any of the~~		consolidated into amended Article
~~following circumstances apply are~~		3.
~~regarded as related legal persons~~
~~of the ~~	~~Company:~~	Subsequently, order of articles will
		be	adjusted orderly.
~~(I)~~	~~legal~~ ~~persons~~ ~~or~~ ~~other~~
	~~organisations~~ ~~that~~ ~~have~~
	~~direct or indirect control of~~
	~~the Company;~~
~~(II)~~	~~legal~~ ~~persons~~ ~~or~~ ~~other~~
	~~organisations~~ ~~that~~ ~~are~~
	~~directly~~ ~~or~~ ~~indirectly~~
	~~controlled~~ ~~by~~ ~~the~~ ~~legal~~
	~~persons as mentioned in~~
	~~Clause~~ ~~(I)~~ ~~above,~~ ~~but~~
	~~excludes the Company and~~
	~~its controlling subsidiaries;~~
~~(III)~~	~~legal~~ ~~persons~~ ~~or~~ ~~other~~
	~~organisations~~ ~~who~~ ~~are~~
	~~directly~~ ~~or~~ ~~indirectly~~
	~~controlled by the related~~
	~~natural~~ ~~persons~~ ~~of~~ ~~the~~
	~~Company;~~ ~~or~~ ~~whose~~
	~~directors~~ ~~and~~ ~~senior~~
	~~management~~ ~~officers~~ ~~are~~
	~~related natural persons, but~~
	~~excludes the Company and~~
	~~its controlling subsidiaries;~~
~~(IV)~~	~~legal~~ ~~persons~~ ~~or~~ ~~other~~
	~~organisations~~ ~~who~~ ~~hold~~
	~~more than 5% of the shares~~
	~~of the Company;~~
~~(V)~~	~~legal~~ ~~persons~~ ~~or~~ ~~other~~
	~~organisations (including the~~
	~~controlling~~ ~~shareholders,~~
	~~the de facto controllers and~~
	~~the~~ ~~major~~ ~~upstream~~ ~~and~~
	~~downstream enterprises of~~
	~~their~~ ~~controlling~~
	~~enterprises) who may have~~
	~~interests of the Company~~
	~~tilted towards them due to~~
	~~their special relations with~~
	~~the Company as identified~~
	~~by the CSRC, the stock~~
	~~exchange or the Company~~
	~~based on the substance over~~
	~~form principle.~~

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COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX I

	Articles before amendments		Basis of Amendments
~~Article 6 Natural persons that~~		Original article will be removed and
~~meet~~	~~any~~ ~~of~~ ~~the~~ ~~following~~	consolidated into amended Article
~~conditions are regarded as the~~		3.
~~related natural persons of the~~
~~Company:~~		Subsequently, order of articles will
		be	adjusted orderly.
~~(I)~~	~~natural~~ ~~persons~~ ~~who~~
	~~directly or indirectly hold~~
	~~more~~ ~~than~~ ~~5%~~ ~~of~~ ~~the~~
	~~Company’s shares;~~
~~(II)~~	~~the~~ ~~Company’s~~ ~~directors,~~
	~~supervisors~~ ~~and~~ ~~senior~~
	~~management officers;~~
~~(III)~~	~~the~~ ~~Company’s~~ ~~directors,~~
	~~supervisors~~ ~~and~~ ~~senior~~
	~~management officers of the~~
	~~legal persons as set out in~~
	~~Clause (I) under Article 5;~~
~~(IV)~~	~~Family members that have~~
	~~close~~ ~~relations~~ ~~with~~
	~~person(s) stated in Clause~~
	~~(I) and Clause (II) of this~~
	~~Article, including spouse,~~
	~~parents~~ ~~and~~ ~~parents~~ ~~of~~
	~~spouse, siblings and their~~
	~~spouse, children who are~~
	~~over 1 8 years old and their~~
	~~spouse, siblings and parents~~
	~~of children’s spouse;~~
~~(V)~~	~~Natural persons who may~~
	~~have~~ ~~interests~~ ~~of~~ ~~the~~
	~~Company~~ ~~tilted~~ ~~towards~~
	~~them due to their special~~
	~~relations with the Company~~
	~~as identified by the CSRC,~~
	~~the stock exchange or the~~
	~~Company~~ ~~based~~ ~~on~~ ~~the~~
	~~substance~~ ~~over~~ ~~form~~
	~~principle.~~

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COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX I

Articles before amendments Articles after amendments	Articles before amendments Articles after amendments		Basis of Amendments
~~Article 7 Any of the following~~		Original article will be removed and
~~legal ~~	~~persons or natural persons~~	consolidated into amended Article
~~shall ~~	~~be regarded as connected~~	3.
~~persons of the Company:~~
		Subsequently, order of articles will
~~(I)~~	~~legal~~ ~~persons~~ ~~or~~ ~~natural~~	be	adjusted orderly.
	~~persons who have entered~~
	~~into~~ ~~agreements~~ ~~or~~
	~~arrangements~~ ~~with~~ ~~a~~
	~~connected person of the~~
	~~Company, and according to~~
	~~such~~ ~~agreement~~ ~~or~~
	~~arrangement,~~ ~~they~~ ~~will~~
	~~become such legal persons~~
	~~or~~ ~~natural~~ ~~persons~~ ~~as~~
	~~described in Article 5 or~~
	~~Article~~ ~~6~~ ~~when~~ ~~the~~
	~~agreement~~ ~~or~~ ~~the~~
	~~arrangement~~ ~~comes~~ ~~into~~
	~~effect,~~ ~~or~~ ~~within~~ ~~the~~
	~~forthcoming~~ ~~twelve~~
	~~months;~~
~~(II)~~	~~legal~~ ~~persons~~ ~~or~~ ~~natural~~
	~~persons who used to be~~
	~~those~~ ~~as~~ ~~described~~ ~~in~~
	~~Article 5 or Article 6 in the~~
	~~previous twelve months.~~

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COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX I

Articles before amendments	Articles before amendments
~~Article 8 The connected persons~~		Original article will be removed and
~~within ~~	~~the meaning of the Hong~~	consolidated into amended Article
~~Kong ~~	~~Listing Rules include the~~	3.
~~following:~~
		Subsequently, order of articles will
~~(I)~~	~~each “director” (including~~	be	adjusted orderly.
	~~persons who were directors~~
	~~of the Company in the past~~
	~~12 months), “supervisor”,~~
	~~“the chief executive” and~~
	~~“substantial shareholder” of~~
	~~the~~ ~~Company~~ ~~and~~ ~~its~~
	~~subsidiaries;~~
~~(II)~~	~~any~~ ~~“associates”~~ ~~of~~ ~~any~~
	~~persons as set out in Clause~~
	~~(I) above;~~
~~(III)~~	~~a~~ ~~non-wholly~~ ~~owned~~
	~~subsidiary of the Company,~~
	~~where~~ ~~any~~ ~~connected~~
	~~persons of the Company to~~
	~~be listed (except for those~~
	~~at~~ ~~subsidiary~~ ~~level),~~ ~~is~~
	~~entitled to, individually or~~
	~~together,~~ ~~exercise~~ ~~(or~~
	~~control the exercise) of ten~~
	~~per cent (10%) or more of~~
	~~the voting rights at any~~
	~~general meeting of the non-~~
	~~wholly owned subsidiary;~~
~~(IV)~~	~~any subsidiary company of~~
	~~a~~ ~~non-wholly~~ ~~owned~~
	~~subsidiary~~ ~~company~~
	~~referred to in Clause (III)~~
	~~above (in Clause (III) and~~
	~~Clause (IV), each referred~~
	~~to~~ ~~as~~ ~~a~~ ~~“connected~~
	~~subsidiary”); and~~
~~(V)~~	~~a~~ ~~person~~ ~~deemed~~ ~~to~~ ~~be~~
	~~connected by Hong Kong~~
	~~Stock Exchange.~~
~~More ~~	~~detailed description of the~~
~~definitions of the term connected~~
~~person and related terminologies~~
~~in the Hong Kong Stock Exchange~~
~~are set~~	~~out in the appendix to these~~
~~Rules.~~

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APPENDIX I

COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

		Articles after amendments	Articles after amendments
–	Article 5The directors, supervisors,			Newly-added article, pursuant to the
	senior		management, shareholders	relevant provisions of Article 48 of
	holding more than 5% of Company			the Administrative Measures for the
	shares		and their parties acting in	Disclosure of Information of Listed
	concert, and the actual controller			Companies of the CSRC.
	shall		promptly submit the list of
	associates and the statement on the
	respective relationships with the
	Company to the Company’s Board.
–	Chapter 3 Basic norms of related			Newly-added chapter title
	party		transactions
–	Article 9When setting the price for			Newly-added article, pursuant to the
	related party transactions based on			relevant requirements of Article 32
	Clause (III), (IV) or (V) of the			of the Shanghai Stock Exchange
	preceding article, the Company may			Implementing Guidelines	for
	use	one of the following pricing		Related Party Transactions of Listed
	methods, depending on the nature of			Companies.
	related party transactions:
	(I)		cost-plus method, which
			prices related party
			transactions at the reasonable
			cost of related party
			transactions plus the gross
			profit of comparable
			unrelated party transactions,
			and which is applicable to
			procurement, sale, transfer
			and use of tangible assets,
			provision of services,
			financing and other related
			party transactions;
	(II)		resale price method where the
			fair price at which the related
			parties purchases goods is the
			price at which it resells the
			goods to the unrelated parties
			less the gross profit of
			comparable unrelated party
			transactions. This method
			applies to the simple
			processing of goods by the
			reseller other than any
			substantial value-added
			processing that changes the
			look, property, structure or
			trademark of the goods, or
			the outright purchase and sale
			of the same;

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COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX I

	Articles after amendments	Articles after amendments		Basis of Amendments
	(III)	comparable uncontrolled
		price method, which prices
		related party transactions	at
		the level for a business
		activity between unrelated
		parties the same as or similar
		with related party
		transactions in question. This
		method applies to all the
		types of related party
		transactions;
	(IV)	transactional net margin
		method, which determines
		the net margin of related
		party transactions using the
		margin of comparable
		unrelated party transactions.
		This method is applicable	to
		procurement, sale, transfer
		and use of tangible assets,
		provision of services, and
		other related party
		transactions;
	(V)	profit split method, which
		calculates attributable profits
		of the Company and the
		related parties based on their
		respective contribution to the
		consolidated profit	in
		connection with related party
		transactions. This method	is
		applied where related party
		transactions are highly
		integrated and where the
		results of the transactions are
		difficult to be assessed
		separately for each party	to
		the transactions.
–	Chapter 4 Review procedures and			Newly-added chapter title
	disclosure standards of related
	party	transactions
–	Chapter 5 Others			Newly-added chapter title

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THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

APPENDIX II

Rules Governing the Management of Related Party Transactions of Everbright Securities Company Limited (2020 Revised Draft)

CHAPTER 1 GENERAL PROVISIONS

Article 1 To regulate the decision-making procedures for related transactions between Everbright Securities Company Limited (the “Company”) and its controlling subsidiaries and related parties of the Company, to prevent related transactions from harming the interests of the Company and medium and small shareholders, these rules are hereby formulated in accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Code of Corporate Governance for Listed Companies issued by China Securities Regulatory Commission (the “CSRC”), the Code of Corporate Governance for Securities Companies, the Rules of General Meetings for Listed Companies, the Administrative Measures for the Disclosure of Information of Listed Companies, the rules governing the listing of stocks on the stock exchanges on which the shares of the Company are listed (the Rules Governing the Listing of Stocks on Shanghai Stock Exchange and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited), the Shanghai Stock Exchange Implementing Guidelines for Related Party Transactions of Listed Companies (the “Implementing Guidelines for Related Party Transactions”) and the Accounting Standard for Business Enterprises 36 – Related Party Disclosures and other laws, regulations and regulatory documents (hereinafter collectively referred to as “relevant laws and regulations”) and the Articles of Association of Everbright Securities Company Limited (hereinafter referred to as the “Articles of Association”).

CHAPTER 2 RELATED PARTY TRANSACTIONS AND RELATED PARTIES

Article 2 The Company classifies the related party transactions as those defined by the CSRC, by the stock exchange where the shares of the Company are listed (Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited) and by Accounting Standards for Business Enterprises. The related party transactions referred to in the Rules are transactions between the Company or its controlling subsidiaries and the related parties of the Company.

Refer to the appendix to the Measures for the definition of related party transactions.

Article 3 Within the scope as permitted by the laws and regulations, the following matters are exempted from handling as related transactions:

(I) when one party subscribes in cash for the public offering of shares, corporate bonds or enterprise bonds, convertible corporate bonds or other types of derivative products of the other party;

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(II) when one party acts as a member of the underwriting (other than the lead underwriter) consortium to underwrite the public offering of shares, corporate bonds or enterprise bonds, convertible corporate bonds or other types of derivative products of the other party;
(III) when one party collects dividends, bonus or returns according to the resolution of a general meeting of the other party;
(IV) other transactions exempted by the stock exchange where the shares of the Company are listed.

When the Company conducts the following transactions with related parties, the Company may apply to the Shanghai Stock Exchange for exemption from consideration and disclosure as related transactions: when one party participates in related transactions via public tenders, public auctions and other activities targeted non-specific objects; when the prices involved in the common related transactions conducted between the parties are determined by the state.

Article 4 The Company classifies the related parties as those defined by the CSRC, by the stock exchange on which the shares of the Company are listed (Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited) and by Accounting Standards for Business Enterprises. The related parties referred to herein is the related parties as defined by the CSRC and in the rules governing the listing of stocks on the stock exchanges on which the shares of the Company are listed.

Details of related parties are set out in the appendix to the Measures.

Article 5 The directors, supervisors, senior management, shareholders holding more than 5% of Company shares and their parties acting in concert, and the actual controller shall promptly submit the list of associates and the statement on the respective relationships with the Company to the Company’s board of directors.

CHAPTER 3 BASIC NORMS OF RELATED PARTY TRANSACTIONS

Article 6 A written agreement shall be entered into with respect to the related party transactions between the Company and the related parties which specifies the pricing policies of the related party transactions. The related party transaction agreements shall be entered into following the principles of fairness, willingness, equivalence of value and with consideration. The contents of the agreements shall be clear and specific. The Company shall disclose the circumstances of entering into, variation, termination and performance of the agreements in accordance with the rules governing the listing of stocks on the stock exchanges on which the shares of the Company are listed and other applicable laws, regulations and regulatory documents. Where, during the implementation process of the related party transactions, there are significant changes to the transaction prices and other key terms of the agreements, the Company shall perform the corresponding examination and approval procedures again based on the revised transaction amounts.

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Article 7 Effective measures shall be adopted by the Company to prevent related parties from interrupting the operations of the Company and jeopardizing its interests by ways of monopoly on procurement and sales channels, etc. Related party transactions shall be conducted following the business principles, and their pricing shall not deviate from the market prices or charging standards of independent third parties and shall be executed in accordance with Article 8 herein. Related party transactions shall be submitted to the board of directors or general meetings of the Company accompanied by the basis therefor and the opinions on whether they are fair. The Company shall make sufficient disclosures regarding the pricing basis for related party transactions.

Article 8 The pricing of the related party transactions of the Company shall be fair and executed with reference to the following principles:

(I) where the transactions implement the government pricing, such prices apply directly;
(II) where the transactions implement the government-guided prices, the transaction price may be determined reasonably within the range of the government-guided prices;
(III) except where the government pricing or the government-guided prices apply, if there is a comparable independent third-party market price or charging standard, the transaction price may be determined with reference to such price or standard with priority;
(IV) where there is no comparable independent third-party market price, the transaction price may be determined with reference to the price of a non-related party transaction occurring between the related party and a third party independent of such related party;
(V) if there is neither independent third-party market price nor independent non-related party transaction price for reference, a reasonable price could be served as the pricing basis, the formed price is the reasonable cost plus the reasonable profit.

Article 9 When setting the price for related party transactions based on Clause (III), (IV) or (V) of the preceding article, the Company may use one of the following pricing methods, depending on the nature of related party transactions:

(I) cost-plus method, which prices related party transactions at the reasonable cost of related party transactions plus the gross profit of comparable unrelated party transactions, and which is applicable to procurement, sale, transfer and use of tangible assets, provision of services, financing and other related party transactions;

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(II) resale price method where the fair price at which the related parties purchases goods is the price at which it resells the goods to the unrelated parties less the gross profit of comparable unrelated party transactions. This method applies to the simple processing of goods by the reseller other than any substantial value-added processing that changes the look, property, structure or trademark of the goods, or the outright purchase and sale of the same;
(III) comparable uncontrolled price method, which prices related party transactions at the level for a business activity between unrelated parties the same as or similar with related party transactions in question. This method applies to all the types of related party transactions;
(IV) transactional net margin method, which determines the net margin of related party transactions using the margin of comparable unrelated party transactions. This method is applicable to procurement, sale, transfer and use of tangible assets, provision of services, and other related party transactions;
(V) profit split method, which calculates attributable profits of the Company and the related parties based on their respective contribution to the consolidated profit in connection with related party transactions. This method is applied where related party transactions are highly integrated and where the results of the transactions are difficult to be assessed separately for each party to the transactions.

Article 10 Where the related party transaction of the Company cannot be priced based on the above principles, the pricing principle and method of such related party transaction shall be disclosed, and an explanation as to the fairness of such pricing shall be given.

Article 11 In operational fund transactions between the Company’s controlling shareholder and other related parties with the Company, appropriation of funds of the Company shall be strictly restricted. The controlling shareholder and other related parties shall not require the Company to pay advance fees such as salary, benefits, insurance, advertising, etc., and they shall not undertake costs and other expenses on each other’s behalf.

Article 12 The Company shall not directly or indirectly provide funds to the controlling shareholder and other related parties for their use in the following ways:

(I) providing loans at call with or without compensation to the controlling shareholder and other related parties;
(II) providing entrusted loans to related parties through banks or non-bank financial institutions;
(III) entrusting the controlling shareholder and other related parties to conduct investment activities;

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(IV) issuing commercial acceptance bills without real trading for the controlling shareholder and other related parties;
(V) making repayment for debts on behalf of the controlling shareholder and other related parties;
(VI) other ways as identified by the securities regulatory authorities and the stock exchanges where the shares of the Company are listed.

CHAPTER 4 REVIEW PROCEDURES AND DISCLOSURE STANDARDS OF RELATED PARTY TRANSACTIONS

Article 13 The Company’s division of authority is as follows when it considers the related party transactions which meet the approval requirements of the Rules Governing the Listing of Stocks on Shanghai Stock Exchange (hereinafter referred to as the “SSE Listing Rules”):

(I) material related party transaction with an amount of over RMB30 million and accounting for over 5% of the absolute value of the latest audited net assets of the Company, or provision of guarantees by the Company to related parties, in addition to being disclosed in a timely manner, shall be submitted to the general meeting for review by the board of directors after its review and decision. Where the Company proposes to enter into a material related party transaction, it shall provide audit or assessment report which is issued by the securities service institutions with qualifications to execute securities and futures related business, in respect of the object of the transaction. For the object of transaction involved in the related party transaction which is relevant to the daily operations as stated in Chapter 7 of the Implementing Guidelines for Related Party Transactions, there can be no audit or assessment. The Company’s internal audit department shall conduct an audit on the material related party transaction item by item to ensure the truthfulness, accuracy and completeness of the information of the audit report. Audit report shall be submitted to the board of directors for review;
(II) related party transaction with an amount of over RMB3 million and accounting for over 0.5% of the absolute value of the latest audited net assets of the Company (and failing to meet the standards in Clause (I) of this Article) is submitted to the board of directors for review and decision and shall be disclosed timely. Related party transaction below such standard is decided by the president;
(III) related party transaction occurring between the Company and the connected natural persons with an amount of over RMB300,000 (and failing to meet the standards in Clause (I) of this Article) is considered and decided by the board of directors and shall be disclosed timely; and related party transaction with an amount below RMB300,000 is decided by the president.

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Article 14 When the Company’s board of directors considers matters relating to related party transactions, related directors shall abstain from voting, and shall not act on behalf of other directors to exercise their voting rights. Such board meeting can be held when more than half of the non-related directors are present, and the resolutions of the board meeting must be passed by more than half of the non-related directors. If the number of non-related directors present at the board meeting is less than three, such matter shall be submitted to the general meeting for review.

Related directors refer to the related directors as defined under the rules governing the listing of stocks on the stock exchanges on which the shares of the Company are listed.

Article 15 When matters relating to related party transactions are considered at a general meeting, the related shareholders shall abstain from voting, and the number of voting shares held by them shall not be counted toward the total number of valid votes.

Any vote on matters relating to related party transactions at a general meeting shall be valid only when such matters are passed by more than half of the voting rights represented by the non-related shareholders (including the proxies of such shareholders) present at the general meeting; but, if such matters are subject to decision at the general meeting by way of special resolutions as provided in the Articles of Association, then the vote thereon shall be valid only when they are passed by more than two thirds of the voting rights represented by the non-related shareholders (including the proxies of such shareholders) present at the general meeting.

Article 16 Connected transactions with related parties as defined by the Hong Kong Stock Exchange:

The Company shall meet the reporting, announcement and approval requirements under the Hong Kong Listing Rules in respect of various types of connected transactions defined therein by the Hong Kong Stock Exchange, namely, fully-exempted connected transactions, partially-exempted connected transactions and non-exempt connected transactions.

(I) Fully-exempted connected transactions shall be subject to the annual review requirement under Article 19.
(II) Partially-exempted one-off connected transactions shall be dealt with in accordance with the announcement requirement under Clause (III) (1) (A) of this Article and the reporting requirement under Clause (III) (1) (F) of this Article. Partially-exempted continuing connected transactions shall be dealt with in accordance with the requirement under Clause (III) (2) (A) of this Article. Partially-exempted financial assistance shall be dealt with in accordance with the requirements of partiallyexempted one-off connected transactions or of partially-exempted continuing connected transactions, depending whether it is a one-off or continuing connected transaction.

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(III) Non-exempt connected transactions shall be subject to the reporting, announcement and independent shareholders’ approval requirements.
(1) Non-exempt one-off connected transactions shall be subject to the reporting, announcement and independent shareholders’ approval requirements, and shall be conducted on the following principles:
- (A) they shall firstly be approved by the board of directors of the Company, and the Company shall issue an announcement on the day after obtaining the approval of the board of directors.
- (B) upon approval of the board of directors and the publication of an announcement, the independent financial adviser shall confirm that the connected transactions are fair and reasonable and in the interests of the Company and its shareholders as a whole, and submit its opinion to the independent directors for review. The independent directors shall then hold a separate meeting to confirm that the connected transactions are fair and reasonable and in the interests of the Company and its shareholders as a whole. If there is a disagreement among independent directors, the majority and minority opinions shall be listed. The abovementioned opinions of the independent financial adviser and the independent directors shall be included in the circular to be dispatched to the shareholders.
- (C) the circular shall be dispatched to the shareholders within 15 business days after the publication of the announcement. Prior to dispatching the circular to the shareholders, the proposed final proof of the circular shall be submitted to the Hong Kong Stock Exchange for review, and the Company shall then dispatch the circular to the shareholders after the circular has been confirmed by the Hong Kong Stock Exchange to be in compliance with the Hong Kong Listing Rules. The circular shall be made available in both English and Chinese versions. Any amendments to the circular or supplemental circular and/or relevant information shall be dispatched to the shareholders not less than 10 business days before the date of the general meeting (or such earlier dates required by the Articles of Association).

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(D) connected transactions shall be submitted to the general meeting for review. Connected transactions are subject to approval at the general meeting. At the general meeting, any connected parties with a material interest shall abstain from voting. Independent shareholders’ approval shall be conducted by way of a poll. The Company shall issue an announcement on newspapers to disclose the voting results on the first business day immediately after the date of the meeting. For connected transactions exempted from convening a general meeting, independent shareholders may grant approval in writing.
(E) approved connected transactions shall be reported to the board of directors for filing.
(F) a report shall be made based on the following principles: the date of a connected transaction, the relevant parties to the transaction and a description of their connected relationships, description of the transaction and its purpose, the consideration and terms (including interest rate, repayment term and security), and the nature and extent of the connected parties’ interests in the transaction shall be disclosed in the first annual report and accounts after the connected transaction has been concluded.
(2) Non-exempt continuing connected transactions shall be dealt with on the following principles:
(A) a maximum annual cap shall be set in respect of each connected transaction and its calculation basis shall be disclosed.
(B) written agreement(s) shall be entered into with the related parties in respect of each connected transaction. The agreement must reflect normal commercial terms and set out the basis of the calculation of the payments to be made. The duration of the agreement must be fixed and must not exceed 3 years. Where the nature of the transaction requires the agreement to have a duration longer than 3 years, it is required to obtain a confirmation in writing from the financial adviser.
(C) such transactions are subject to the reporting, announcement and independent shareholders’ approval requirements, relevant approval procedures under the Company’s internal authorization and filing with the board of directors at the same time.
(D) such transactions are subject to the relevant requirements regarding the annual review of continuing connected transactions described in Article 19.

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(3) Where a non-exempt financial assistance is a one-off connected transaction, it shall be dealt with in accordance with Clause (III) (1) of this Article. Where a non-exempt financial assistance is a continuing connected transaction, it shall be dealt with in accordance with Clause (III) (2) of this Article.

Exemptions from the connected transaction requirements are available for the following types of transactions according to the Hong Kong Listing Rules:

(I) de minimis transactions;
(II) financial assistance;
(III) issue of new securities by listed group company;
(IV) dealings in securities on stock exchanges;
(V) directors’ service contracts and insurance;
(VI) repurchases of securities by listed group company;
(VII) buying or selling of consumer goods or services;
(VIII) sharing of administrative services;
(IX) transactions with associates of passive investors; and
(X) transactions with connected persons at the subsidiary level.

Article 17 Annual review requirements are as follows:

(I) The Company’s independent directors must review the continuing connected transactions every year and confirm in the annual report and the accounts whether the transactions have been entered into:
(1) in the ordinary and usual course of business of the Company;
(2) on normal commercial terms or terms no less favourable to the Company than terms available to or from independent third parties (as the case may be) if the comparable transactions are not sufficient to determine whether the terms of the transactions are on normal commercial terms; and
(3) according to the agreement governing them on terms that are fair and reasonable and in the interests of the Company’s shareholders as a whole.

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(II) The auditors must provide a letter (a copy must be sent to the Hong Kong Stock Exchange at least 10 business days before the bulk printing of the Company’s annual report) to the Company’s board of directors every year confirming that the continuing connected transactions:
(1) have been approved by the Company’s board of directors;
(2) were entered into in accordance with the pricing policies of the Company (if the transactions involve the provision of goods or services by the Company);
(3) were entered into in accordance with the relevant agreement governing the transactions; and
(4) have not exceeded the cap disclosed in the previous announcements.
(III) The Company must allow, and procure the counterparties to the continuing connected transactions allow, the auditors sufficient access to the Company’s records for the purpose of reporting on the transactions under these Rules. The Company’s board of directors must indicate in the annual report whether its auditors have confirmed the matters as required in Clause (II) above.
(IV) The Company must promptly notify the Hong Kong Stock Exchange and publish an announcement if it is aware or has reason to believe that the independent directors and/or the auditors cannot confirm the matters as required in Clause (I) or Clause (II) above, respectively. The Company may be required to re-comply with the requirements of Article 18 and additional conditions deemed appropriate by the Hong Kong Stock Exchange.
(V) If the Company has entered into an agreement for continuing transactions, and the transactions subsequently become continuing connected transactions (for any reason, for example, one of the parties to the transactions becomes a director of the Company), the Company must promptly after becoming aware of this fact, comply with all applicable reporting, annual review and disclosure requirements under this Chapter for all these continuing connected transactions. If the agreement is modified or renewed, the Company must fully comply with all applicable reporting, annual review, disclosure, and independent shareholders’ approval requirements under the Measures for all continuing connected transactions that have taken effect after such modification or renewal.

Article 18 When the Company conducts daily related party transactions with related parties, it shall disclose and perform corresponding review procedures in accordance with relevant provisions stipulated by the rules governing the listing of stocks on the stock exchanges on which the shares of the Company are listed.

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“Daily related party transactions” mentioned in the preceding paragraph refer to the daily related party transactions within the meaning of the rules governing the listing of stocks on the stock exchanges on which the shares of the Company are listed.

Article 19 When the Company continues to conduct the related party transactions mentioned in the Article 18 with the related parties in the following years, it shall conduct a reasonable estimation for the total amount of daily related party transactions to be occurred no later than the date when disclosing the annual report, and submit to the latest meeting of the board of directors or shareholders for deliberation in accordance with the results of estimation and approval authority as stipulated in Article 13 of these Rules.

Article 20 Where the transaction amount of a related party transaction which has been deliberated and approved by the Company under the provisions of Article 18 and 19, in the process of executing, does not exceed the predicted amount, each specific transaction has no need to be submitted to the board of directors or the general meeting for deliberation and decision, but the Company shall make necessary statement on the execution of related party transactions during the reporting period in the regular disclosure reports and make comparisons with the disclosed estimations to indicate whether there is a difference and why.

Where the transaction amount of a related party transaction which has been deliberated and approved by the Company under the provisions of Article 19 and 20, in the process of executing, exceeds the predicted total amount, it shall be submitted to the board of directors or general meeting for deliberation in accordance with the excess amount and the approval authority as stipulated in Article 13 of these Rules.

Article 21 According to the SSE Listing Rules, similar related party transactions relating to the same subject matter of the transaction of the Company for a period of consecutive twelve months shall be aggregated and apply the provisions of Article 13 of these Rules.

The Hong Kong Stock Exchange will aggregate a series of transactions and treat them as if they were one transaction if they were all entered into or completed within a twelve-month period or are otherwise related. The Company must comply with the applicable connected transaction requirements based on the classification of the connected transactions when aggregated and make appropriate disclosures. The aggregation period will cover 24 months if the connected transactions are a series of acquisitions of assets being aggregated which may constitute a reverse takeover. Factors that the Hong Kong Stock Exchange will consider for aggregation of a series of connected transactions include whether:

(I) they are entered into by the Company with the same party, or parties who are connected with one another;
(II) they involve the acquisition or disposal of parts of one asset, or securities or interests in a company (or group of companies);

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(III) they together lead to substantial involvement by the Company in a new business activity.

The Hong Kong Stock Exchange may aggregate all continuing connected transactions with a connected person.

Article 22 Where a director as an individual or other companies in which he/she works for is directly or indirectly interested in an existing or proposed contract, transaction or arrangement (other than employment contract) of the Company, he/she shall declare the nature and extent of his/her interest to board of directors at the earliest opportunity, whether or not the relevant issues under ordinary situation shall be otherwise subject to approval of board of directors.

Unless an interested director has disclosed his interests to board of directors in accordance with the preceding paragraph of this Article, and such issue was approved by board of directors at a meeting at which such interested director was not counted in the quorum and abstained from voting, such contract, transaction or arrangement is voidable at the discretion of the Company, except in the event that he acts as a bona fide third party.

Article 23 Where the business personnel cannot determine whether a transaction constitutes a related party transaction and the Company’s internal approval procedures should be fulfilled, under the principle of prudence the matter should be reported to the secretary to the board of directors of the Company, who shall determine whether the transaction belongs to a related party transaction in accordance with the relevant provisions and the internal approval procedures that should be fulfilled. If the secretary to the board of directors cannot make the judgement, the secretary to the board of directors shall seek the opinion from the stock exchanges where the Company’s shares are listed or the relevant intermediaries, in order to determine whether the transaction is a related party transaction and the internal approval procedures that should be fulfilled.

Article 24 Independent directors shall issue opinions on the fairness and compliance of the material related party transactions. Where the independent directors consider that it is difficult to make the judgement on the fairness of the conditions of the related party transaction proposed and agreed between the Company and the related parties in reliance upon the information presented to the board of directors or general meeting for consideration, they can, at the Company’s expenses, solely or jointly engage an independent professional advisor to review the conditions of the related party transaction and obtain the professional report or consultancy opinions so provided.

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Article 25 When the Company and the related parties are under a related party transaction, timely disclosure shall be made in accordance with the requirements under the rules governing the listing of stocks on the stock exchanges on which the shares of the Company are listed, the contents and issues of which shall be in compliance with the requirements under the rules governing the listing of stocks on the stock exchanges on which the shares of the Company are listed.

Article 26 The management of the Company is authorised by the Company to manage self-owned capital, the deposit and interest income of transaction settlement funds of the customers in China Everbright Bank and ordinary businesses such as borrowed funds, loan business and interest expense of Everbright Bank and fund transaction settlement business.

CHAPTER 5 OTHERS

Article 27 If a transaction is a related party transaction under the SSE Listing Rules as well as a connected transaction under Chapter 14A of Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (hereafter referred as to “Hong Kong Listing Rules”), such transaction shall be more strictly subject to the provisions of these Rules. If a transaction is only a related party transaction under the SSE Listing Rules, or only a connected transaction under Chapter 14A of the Hong Kong Listing Rules, such transaction shall be applicable to the provisions of these Rules relating to such transactions.

Article 28 Where each department, subsidiary of the Company and its relevant personnel violate the regulations of these Rules, investigation on the responsibility towards relevant responsible persons shall be made in accordance with the requirements of the laws, regulations and regulatory documents.

Article 29 These Rules shall take effect as at the date of approval by the general meeting of the Company, and thus the original Rules Governing the Management of Related Party Transaction of the Company shall automatically lapse.

Article 30 These Rules shall be modified and explained by the general meeting, unfinished issues of which shall be managed in accordance with relevant laws and regulations. If these Rules is inconsistent with the requirements of relevant laws and regulations, the requirements of relevant laws and regulations shall prevail.

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ANNEX

I. RELATED PARTY TRANSACTION DEFINED BY DOMESTIC RELEVANT REGULATORY REQUIREMENTS

Pursuant to the relevant requirements of the CSRC and Shanghai Stock Exchange, the related party transactions in these Rules are the transfer of resources, labour services or obligations between the Company and its controlling subsidiaries and the Company’s related parties, including but not limited to the following transactions:

(I) acquisition or disposal of assets;
(II) external investments (including entrusted financial management, entrusted loans, etc.);
(III) provision of financial assistance;
(IV) provision of guarantees;
(V) rent or lease of assets;
(VI) entrusting or being entrusted with assets and business management;
(VII) donating assets or receiving donated assets;

(VIII) creditor’s rights or debt restructuring;

(IX) entering into license agreements;
(X) transfer or acceptance of research and development projects;
(XI) purchase of raw materials, fuels and power;
(XII) sale of products and commodities;
(XIII) provision or receipt of labour services;
(XIV) sales consignment or sales on commission;
(XV) co-investment with the related parties;

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Pursuant to Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (hereafter referred as to “Hong Kong Listing Rules”), a connected transaction refers to any transactions of the Company or its subsidiaries with the connected persons; and the designated type transactions, which enable the connected persons to obtain profit through the rights and interests of the entity involved in such transaction, with the third party. A connected transaction can be a one-off transaction or continuing transaction. A “transaction” includes a transaction with the nature of capital and profit, whether or not such transaction is carried out in the ordinary business of the Company, including the following types of transactions:

(I) acquisition or disposal of assets by the Company, including the transactions deemed to be the disposal;
(II) i. grant, receipt, exercise, transfer or termination of an option by the Company in order to acquire or dispose assets, or to subscribe securities; or
ii. no exercise of an option decided by the Company for the consideration of acquisition or disposal of assets, or subscription of securities;
(III) entering into or terminating financial leases or operating leases or sub-leases;
(IV) providing indemnity or guarantee, or providing or receiving financial assistance. “Financial assistance” includes grant of credit, borrowings, or providing indemnity, guarantee, assurance or pledge in terms of loans;
(V) entering into any agreement or arrangement to set up a joint venture in any form (e.g. in form of a partnership or a company) or in any other form of joint arrangement;
(VI) issuing new securities of the Company;
(VII) providing, receiving or sharing services; or
(VIII) purchasing or providing raw materials, intermediate products and/or finished products.

The designated type transactions with the third party and continuing connected transactions are defined particularly as set out in the annex of these Rules.

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Pursuant to the requirements of the Accounting Standard for Business Enterprises 36 – Related Party Disclosures, a related party transaction refers to the transferring resources, labour services or obligations conducted by related parties, whether or not any amount is received, including:

(I) purchase or sales of goods.
(II) purchase or sales of other assets other than goods.
(III) provision or receipt of labour services.
(IV) guarantees.
(V) provision of funds (loans or share capital investments).
(VI) leases.
(VII) agency.
(VIII) transfer of research and development projects.
(IX) license agreements.
(X) debt settlement on behalf of enterprises or by enterprises on behalf of other parties.
(XI) remuneration of key management personnel.

II. RELATED PARTY DEFINED BY THE REGULATORY REQUIREMENTS IN MAINLAND CHINA

In accordance with the relevant regulations of the CSRC and SSE, legal persons or other organisations of which any of the following circumstances apply are regarded as related legal persons of the Company:

(I) legal persons or other organisations who have direct or indirect control of the Company;
(II) legal persons or other organisations who are directly or indirectly controlled by the legal persons mentioned in Clause (I) above, but excludes the Company and its controlling subsidiaries;

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(III) legal persons or other organisations who are directly or indirectly controlled by the related natural persons of the Company; or whose directors and senior management officers are related natural persons, but excludes the Company and its controlling subsidiaries;
(IV) legal persons or other organisations as well as their persons acting in concert who hold more than 5% of the shares of the Company;
(V) legal persons or other organisations who may have interests of the Company tilted towards them due to their special relations with the Company as identified by the CSRC, the stock exchange or the Company based on the “substance over form” principle, including the controlling shareholders, the de facto controllers and the major upstream and downstream enterprises of their controlling enterprises.
(VI) The persons who satisfy any circumstances above in the next 12 months or in accordance with the relevant agreement and arrangement in the past 12 months.

In accordance with the relevant regulations of the CSRC and SSE, the natural person that meets any of the following conditions shall be regarded as the related natural person of the Company:

(I) The natural person that directly or indirectly holds more than 5% of the Company’s shares;
(II) The director, supervisor and senior management personnel of the Company;
(III) The director, supervisor and senior management personnel of the legal person listed in subparagraph (I) of Article 5;
(IV) The close family member(s) of the ones referred in the subparagraphs (I) and (II) of this paragraph, including spouses, children at the age of 18 or above and also his/her/their spouse(s), parents, parents-in-law, brother(s) and sister(s) and also his/her/their spouse(s), brother(s) and sister(s) of spouse(s) as well as parents-in-law of the children;
(V) Natural person who may have interests of the Company tilted towards him/her due to his/her special relations with the Company as identified by the CSRC, the stock exchange or the Company based on the “substance over form” principle.

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In accordance with the relevant regulations of the CSRC and SSE, the legal person or natural person that meets any of the following conditions shall be regarded as the related party of the Company:

(I) According to the agreement or arrangement with the Company or related party of the Company, the legal person or natural person will meet one of the conditions specified in Article 5 or Article 6 after the agreement or arrangement comes into effect or in the next twelve months;
(II) The legal person or natural person that once met one of the conditions specified in Article 5 or Article 6 in the past twelve months.

The connected persons within the meaning of the Hong Kong Listing Rules include the following:

(I) each “director” (including person who was a director of the Company in the past 12 months), “supervisor”, the “chief executive” and “substantial shareholder” of the Company and/or its subsidiaries;
(II) any “associate(s)” of any persons as set out in Clause (I) above;
(III) a non-wholly owned subsidiary of the Company, where any connected persons of the company to be listed (except for those at subsidiary level), are entitled to, individually or together, exercise (or control the exercise) of ten per cent (10%) or more of the voting rights at any general meeting of the non-wholly owned subsidiary;
(IV) any subsidiary company of a non-wholly owned subsidiary company referred to in Clause (III) above (in Clause (III) above and this Clause (IV), each referred to as a “connected subsidiary”); and
(V) a person deemed to be connected by Hong Kong Stock Exchange.

More detailed description of the definitions of the term “connected person” and related terminologies in the Hong Kong Stock Exchange are set out in the appendix to these Rules.

In accordance with the relevant regulations of the Accounting Standard for Business Enterprises 36 – Related Party Disclosures, if a party has the power to control, jointly control or exercise significant influence over another party, or where two or more parties are subject to common control, joint control or significant influence from another party, they are considered to be related parties.

Control is the right to determine an enterprise’s financial and operating policies, and based on which to obtain benefits from business operations of such enterprise.

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Joint control is the contractually agreed sharing of control of an arrangement, which exists only when significant financial and operational decisions about the relevant activities require unanimous consent of the parties sharing control.

Significant influence is the power to participate in the financial and operating policy decisions of an enterprise, except to control or joint control the formulation of such policies together with other parties.

A party is considered to be a related party of an enterprise if the party is:

(I) a parent of the enterprise.
(II) a subsidiary of the enterprise.
(III) other enterprise which is under control of the same parent.
(IV) an investor which jointly controls the enterprise.
(V) an investor which exercises significant influence over the enterprise.
(VI) a joint venture of the enterprise.
(VII) an associated company of the enterprise.
(VIII) A key individual investor of the enterprise and the close members of the family of the individual. The reference of a key individual investor means an individual who has the ability to control or jointly control or exercise significant influence over an enterprise.
(IX) a member of the key management personnel of the enterprise or of a parent of the enterprise and the close members of the family of the person. The reference of key management personnel means those persons having authority and responsibility in planning, directing and controlling the activities of the enterprise. Close members of the family of a key individual investor or a member of the key management personnel are those family members who may be expected to influence, or be influenced by, that person in their dealings with the enterprise.
(X) such other enterprise which is controlled, jointly controlled or significantly influenced by a key individual investor or a member of the key management personnel of the enterprise or their close family members.

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APPENDIX II

III. CONNECTED PARTIES AND CONNECTED TRANSACTION AS DEFINED BY OVERSEAS REGULATORS

The following sets out the briefs of certain definitions in relation to connected transaction made in accordance with the Hong Kong Listing Rules. The underlined terms will be further defined elsewhere in this annex.

1. Specified type of transaction with third party

The “specified type of transaction” between the listed group company and third party which meets the conditions of connected transaction includes:

(a) Financial assistance provided by the listed group company to, or received by the listed group company from, a commonly held entity. A “commonly held entity” is a company whose shareholders include:
(i) the listed group company; and
(ii) any connected person(s) at the company to be listed level who, individually or together, can exercise or control the exercise of 10% or more of the voting power at the company’s general meeting. This 10% excludes any indirect interest held by the person(s) through the company to be listed; and
(b) The listed group company acquiring an interest in a company (the “target company”) from a person who is not a connected person is a connected transaction if the target company’s substantial shareholder:
(i) is, or is proposed to be, a controller; or
(ii) is, or will, as a result of the transaction, become, an associate of a controller or proposed controller.

Note : Acquiring the target company’s assets is also a connected transaction if these assets account for 90% or more of the target company’s net assets or total assets.

Clause (b) does not apply to proposed acquisition of the company to be listed if the controller or his or its associate(s) is or are together the target company’s substantial shareholders only because of their indirect shareholdings in the target company held through the listed group company.

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2. Continuing connected transaction

Continuing connected transactions are connected transactions involving the provision of goods or services or financial assistance, which are carried out on a continuing or recurring basis and are expected to extend over a period of time. They are usually connected transactions in the ordinary and usual course of business of the listed group company.

3. Subsidiary

The Listing Rules divide the definition of subsidiary into three parts including:

(a) A “subsidiary undertaking” as defined under the Companies Ordinance (Cap. 622) includes subsidiary.

A company shall be deemed to be a subsidiary of another company, if

(i) that other company:
(A) controls the composition of the board of directors of the first-mentioned company; or
(B) controls more than half of the voting rights of the first-mentioned company; or
(C) holds more than half of the issued share capital of the first-mentioned company (excluding any part of it which carries no right to participate beyond a specified amount in a distribution of either profits or capital); or
(ii) the first-mentioned company is a subsidiary of any company which is that other company’s subsidiary;

A “subsidiary undertaking” also includes a partnership or an unincorporated association carrying on a trade or business, whether for profit or not. For a subsidiary undertaking, the parent undertaking (except for others) has the right to exercise a dominant influence over the subsidiary undertaking by virtue of the document constituting the subsidiary undertaking or a “control contract”. An undertaking shall not be regarded as having the right to “exercise a dominant influence” over another undertaking unless it has a right to give directions with respect to the operating and financial policies of that other undertaking which the directors are, or a majority of the directors is, obliged to comply with whether or not they are for the benefit of that other undertaking.

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(Please note that the above is general description of the provisions under the Companies Ordinance. If necessary, please refer to the Companies Ordinance and all provisions under the Companies Ordinance).

(b) any entity which is accounted for and consolidated in the audited consolidated accounts of another entity as a subsidiary pursuant to applicable Hong Kong Financial Reporting Standards or International Financial Reporting Standards; and
(c) any entity which will, as a result of acquisition of its equity interest by another entity, be accounted for and consolidated in the next audited consolidated accounts of such other entity as a subsidiary pursuant to applicable Hong Kong Financial Reporting Standards or International Financial Reporting Standards.

4. Connected person

“Connected person” includes:

(a) a director, supervisor, chief executive or substantial shareholder of the listed group company;
(b) a person who was a director of the listed group company in the last 12 months;
(c) an associate of the persons under the above (a) and (b);
(d) connected subsidiary; and
(e) a person deemed to be connected by the Hong Kong Stock Exchange.

The above Clauses (a) and (b) do not include a director, chief executive, substantial shareholder or supervisor of the insignificant subsidiary or subsidiaries of the company to be listed. For this purpose:

(i) an “insignificant subsidiary” is a subsidiary whose total assets, profits and revenue compared to that of the listed group are less than:
(A) 10% under the percentage ratios (as defined in the Listing Rules) for each of the latest three financial years (or if less, the period since the incorporation or establishment of the subsidiary); or
(B) 5% under the percentage ratios (as defined in the Listing Rules) for the latest financial year;

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APPENDIX II

(ii) if the person is connected with two or more subsidiaries of the company to be listed, the Hong Kong Stock Exchange will aggregate the subsidiaries’ total assets, profits and revenue to determine whether they are together “insignificant subsidiaries” of the company to be listed; and
(iii) when calculating the percentage ratios, 100% of the subsidiary’s total assets, profits and revenue will be used. If a percentage ratio produces an anomalous result, the Hong Kong Stock Exchange may disregard the calculation and consider alternative test(s) provided by the company to be listed.

In addition, the Hong Kong Stock Exchange may from time to time determine that certain persons or entities should be treated as connected persons of a PRC issuer for purposes of the connected transaction provisions of Chapter 14A. The Hong Kong Stock Exchange will not normally treat a PRC Governmental Body as a connected person. The Hong Kong Stock Exchange may request a company to be listed to explain its relationship with a PRC Governmental Body and why it should not be treated as a connected person. If the Hong Kong Stock Exchange decides to treat the PRC Governmental Body as a connected person, the company to be listed must comply with any additional requirements requested by the Hong Kong Stock Exchange.

5. Supervisor

“Supervisor” is a member elected to the supervisory committee of a listed company which under PRC law performs a supervisory function in relation to such listed company’s board of directors, the manager and other officers.

6. Substantial shareholder

In relation to a company means a person who is entitled to exercise, or control the exercise of, 10% or more of the voting power at any general meeting of the company.

7. Controller

A “controller” is a director, chief executive or controlling shareholder of the listed group company.

8. Controlling shareholder

“Controlling shareholder” means any person who is or group of persons who are together entitled to exercise or control the exercise of 30% (or such other amount as may from time to time be specified in the Takeovers Code as being the level for triggering a mandatory general offer) or more of the voting power at general meetings of the company to be listed or who is or are in a position to control the composition of a majority of the board of directors of the company to be listed.

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“Controlling shareholder” means any shareholder or other person or group of persons together entitled to exercise, or control the exercise of 30% (or such other amount as may from time to time be specified in applicable PRC law as being the level for triggering a mandatory general offer or for otherwise establishing legal or management control over a business enterprise) or more of the voting power at general meetings of the company to be listed or who is in a position to control the composition of a majority of the board of directors of the company to be listed. The Hong Kong Stock Exchange will normally not consider a “PRC Governmental Body” as a “controlling shareholder” of a PRC issuer.

9. Associate

(a) An associate is an individual includes:
(i) his spouse; his (or his spouse’s) child or step-child, natural or adopted, under the age of 18 years (each an “immediate family member”);
(ii) the trustees, acting in their capacity as trustees of any trust of which the individual or his immediate family member is a beneficiary or, in the case of a discretionary trust, is (to his knowledge) a discretionary object (other than a trust which is an employees’ share scheme or occupational pension scheme established for a wide scope of participants and the connected persons’ aggregate interests in the scheme are less than 30%) (the “trustees”); or
(iii) a 30%-controlled company held, directly or indirectly, by the individual, his immediate family members and/or the trustees (individually or together), or any of its subsidiaries; (it should be noted that a 30%-controlled company held by a person will not be regarded as his or its associate if the person’s and his or its associates’ interests in the company, other than those indirectly held through the listed group company, are together less than 10%.); or
(iv) a person cohabiting with him as a spouse, or his child, step-child, parent, stepparent, brother, step-brother, sister or step-sister (each a “family member”); or
(v) a majority-controlled company held, directly or indirectly, by the family members (individually or together), or held by the family members together with the individual, his immediate family members and/or the trustees, or any of its subsidiaries.
(b) An associate which is a company includes:
(i) its subsidiary or controlling company, or a fellow subsidiary of the controlling company; or

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APPENDIX II

(ii) the trustees, acting in their capacity as trustees of any trust of which the company is a beneficiary or, in the case of a discretionary trust, is (to its knowledge) a discretionary object (the “trustees”); or
(iii) a 30%-controlled company held, directly or indirectly, by the company, the companies referred to in (b) (i) above, and/or the trustees (severally or jointly), or any of its subsidiaries of such 30%-controlled company (it should be noted that a 30%-controlled company held by a person will not be regarded as his or its associate if the person’s and his or its associates’ interests in the company, other than those indirectly held through the listed group company, are together less than 10%.).
(c) A “30%-controlled company” means a company held by a person who can:
(i) exercise or control the exercise of 30% (or an amount for triggering a mandatory general offer under the Takeovers Code, or for PRC issuers only, an amount for triggering a mandatory general offer or establishing legal or management control over a business enterprise under the PRC law) or more of the voting power at general meetings; or
(ii) control the composition of a majority of the board of directors;
(d) A “majority-controlled company” means a company held by a person who can exercise or control the exercise of more than 50% of the voting power at general meetings, or control the composition of a majority of the board of directors;
(e) For PRC issuers only, a person’s associates include any joint venture partner of a cooperative or contractual joint venture (whether or not it is a separate legal entity) where:
(i) the person (being an individual), his immediate family members and/or the trustees; or
(ii) the person (being a company), any company which is its subsidiary or controlling company or a fellow subsidiary of the controlling company, and/or the trustees, jointly directly or indirectly hold 30% (or an amount that would trigger a mandatory general offer or establish legal or management control over a business enterprise under the PRC law) or more in the joint venture’s capital or assets contributions, or the contractual share of its profits or other income.

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APPENDIX II

10. Connected subsidiary

A “connected subsidiary” is:

(a) a non wholly-owned subsidiary of the company to be listed where any connected person(s) at the level of company to be listed, individually or together, can exercise or control the exercise of 10% or more of the voting power at the subsidiary’s general meeting. This 10% excludes any indirect interest in the subsidiary which is held by the connected person(s) through the company to be listed; or
(b) any subsidiary of a non wholly-owned subsidiary referred to in (a) above.

11. “Deemed connected person”

(a) A deemed connected person includes a person:
(i) who has entered, or proposes to enter into:
- (A) a transaction with the listed group company; and
- (B) an agreement, arrangement, understanding or undertaking (whether formal or informal and whether express or implied) with a director (or a person who was in the past 12 months a director), a chief executive, a substantial shareholder or a supervisor of the listed group company with respect to the transaction; and
(ii) who, in the Hong Kong Stock Exchange’s opinion, should be considered as a connected person.
(b) A deemed connected person also includes a person:
(i) who is:
- (A) a father in-law, mother-in-law, son-in-law, daughter-in-law, brother-inlaw, sister-in-law, grandparent, grandchild, uncle, aunt, cousin, nephew or niece (each a “relative”) of a director (or a person who was in the past 12 months a director), a chief executive, a substantial shareholder or a supervisor of the listed group company; or

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APPENDIX II

(B) a majority-controlled company held, directly or indirectly, by the relatives (severally or jointly) or held by the relatives together with a director (or a person who was in the past 12 months a director), a chief executive, a substantial shareholder or a supervisor of the listed group company, the trustees, his immediate family members and/or family members, or any subsidiary of that majority-controlled company; and
(iii) whose association with the connected person is such that, in the Hong Kong Stock Exchange’s opinion, the proposed transaction should be subject to the connected transaction requirements.

12. PRC Governmental Body

“PRC Governmental Body” includes (but not limited to):

(a) PRC Central Government, including the State Council of the PRC (中國國務院), State Ministries and Commissions (國家部委), Bureaus and Administrations directly under the State Council (國務院直屬機構), State Council Offices and Institutions (國務院辦事機構及直屬國務院事業單位), Bureaus supervised by State Ministries and Commissions (國家部委代管局);
(b) PRC Provincial-level Governments, including Provincial Governments (省政府), Municipalities directly under the Central Government (直轄市) and Autonomous Regions (自治區), together with their respective administrative arms, agencies and institutions;
(c) PRC local governments immediately under the PRC Provincial-level Governments, including prefectures (區), municipalities (市) and counties (縣), together with their respective administrative arms, agencies and institutions.

Note: For clarity, entities under the PRC Government that are engaging in commercial business or operating another commercial entity will be excluded from this definition.

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BIOGRAPHIES OF THE CANDIDATES FOR EXECUTIVE AND NON-EXECUTIVE DIRECTORS

APPENDIX III

Mr. Yan Jun , born in 1970, with a doctorate degree in industrial economics, successively graduated from Tianjin University, Nankai University and Chinese Academy of Social Sciences and obtained a bachelor’s degree in Science, a master’s degree in Economics and a doctorate degree in Economics. Mr. Yan currently serves as the chairman and executive Director of the Company. He previously served at the head office of Industrial and Commercial Bank of China Limited (“ ICBC ”) as customer manager, deputy director, director and vice general manager, as the executive director and vice president of ICBC Financial Leasing Co., Ltd., member of the party committee and vice president of Jiangxi Branch of ICBC and general manager of special financing department of the head office of ICBC; the officer of deepening reform and the executive deputy director of the Central Leading Group for Comprehensively Deepening Reforms of Everbright Group, the vice president of the Company.

Mr. Liu Qiuming , born in 1976, obtained a master’s degree from Shanghai University of Finance and Economics and an EMBA from China Europe International Business School. Mr. Liu currently serves as the executive Director and the president of the Company. He previously served as the head of the institutional customer business of Shenyin & Wanguo Securities Co., Ltd (currently known as Shenwan Hongyuan Group Co., Ltd. (申萬宏源集團股份有限公司), a company listed on the SZSE and the Stock Exchange, SZSE stock code: 000166, Stock Exchange stock code: 6806), the managing director of UBS Securities Co., Limited (瑞銀証券有限責任公司), an executive member of Ping An Insurance (Group) Company of China, Ltd. (中國平安保險(集團)股份有限公司, a company listed on the SSE and the Hong Kong Stock Exchange, SSE stock code: 601318, Hong Kong Stock Exchange stock code: 2318), the vice president of Ping An Securities Co., Ltd. (平安證券有限責任公司), and the chairman of the board and president of CMIG Capital Company Limited (中民投資本管理有限公司).

Mr. Song Bingfang , born in 1971, obtained a doctorate degree from Southwestern University of Finance and Economics and is a senior economist. Mr. Song is currently a non-executive Director of the Company and a deputy director (director level) in the board office of China Everbright Group Ltd.. He was a cadre of the business development department of China Investment Bank (中國投資銀行), a cadre of the market and industry analysis bureau of China Development Bank (國家開發銀行), a cadre, deputy head, head and senior manager of corporate business department of Everbright Bank, (during the same period, he took a temporary post as an assistant to director of the financial affairs office of the People’s Government of Inner Mongolia Autonomous Region) and the director and assistant to the general manager of the strategic planning department of China Everbright (Group) Corporation, assistant to the director and deputy director of the office of the Board of Directors (and the Supervisory Committee), the deputy director of the office of the Board of Directors and senior specialist of China Everbright Group Ltd..

Mr. Fu Jianping , born in 1971, successively graduated from Shanxi Institute of Finance and Economics (山西財經學院), Shanxi University of Finance and Economics (山西財經大學) and Chinese Academy of Social Sciences, obtained a bachelor’s degree in Economics, a master’s degree in Economics and a doctor’s degree in Management, respectively, and is a senior economist. Mr. Fu currently serves as vice general manager of the investment and

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APPENDIX III

restructuring department of Everbright Group and the vice president of Everbright Yunfu Internet Co., Ltd. (光大雲付互聯網股份有限公司). He previously served at Everbright Bank as senior deputy manager of the strategic management department, as deputy director and director of the equity management department of China Everbright (Group) Corporation and as vice general manager of the equity management department of Everbright Group.

Mr. Yin Lianchen , born in 1966, obtained a master’s degree in Economics from Nankai University. Mr. Yin is currently a non-executive Director of the Company, chief investment officer and a member of the Management Decision Committee, executive Director, and a member of the Executive Committee and the Strategy Committee of Everbright Limited (a company listed on the Hong Kong Stock Exchange, stock code: 165) and a supervisor of Everbright Bank (a company listed on the SSE and the Hong Kong Stock Exchange, SSE stock code: 601818, Hong Kong Stock Exchange stock code: 6818). He held various positions in Everbright Limited, including the general manager of the insurance agency department and general manager of the corporate planning and communications department. Mr. Yin worked as chief representative of China region of America Moody KMV Company, vice president of Beijing Yangde Investment Co., Ltd. (北京揚德投資有限公司), director of the general division of the general office of Everbright Group and assistant general manager and member of the management committee of Everbright Limited.

Mr. Chan Ming Kin , born in 1969, obtained a master degree in corporate governance from The Hong Kong Polytechnic University. Mr. Chan is currently a non-executive Director of the Company, chief legal counsel and company secretary and a member of the management decision committee and investment decision committee of Everbright Limited (a company listed on the Hong Kong Stock Exchange, stock code: 165). He served as a Supervisor of the Company. Mr. Chan is a Hong Kong lawyer with more than 24 years experience in private practice and in-house lawyer, also a fellow of the Institute of Chartered Secretaries and Administrators and the Hong Kong Institute of Chartered Secretaries.

Mr. Tian Wei , born in 1973, obtained a bachelor’s degree in Economics from Dongbei University of Finance and Economics. Mr. Tian currently serves as director of the office of China State Construction Engineering Corporation Limited (中國建築股份有限公司, a company listed on the SSE, stock code: 601668). Mr. Tian has served as assistant general manager of the financial department of China State Construction Engineering Corporation, deputy chief financial officer (team member) of China Construction America, Inc., assistant general manager, vice general manager and general manager of the investment department, and general manager of the financial department of China State Construction Engineering Corporation Limited (中國建築股份有限公司).

Mr. Yu Mingxiong , born in 1977, graduated from Zhongnan University of Economics and obtained dual bachelor’s degrees in economics and laws. Mr. Yu is a senior political engineer and a non-practising member of Chinese Institute of Certified Public Accountants. Mr. Yu currently serves as the director and general manager of China Shipbuilding Capital Limited (中國船舶資本有限公司). He previously served as the deputy secretary of the Youth League

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APPENDIX III

Committee, secretary of the Youth League Committee, deputy director of the party member office of party member department, and director of the second audit office of the audit department of Aerospace Times Instrument Company (航天時代儀器公司) under China Aerospace Science and Technology Corporation, the director of discipline inspection and supervision legal office of the general department and deputy secretary of Discipline Inspection Commission of China Academy of Space Technology (中國空間技術研究院) under China Aerospace Science and Technology Corporation, the head of the audit and supervision department, the office director of major project and the head of the strategic planning department of AVIC Heavy Machinery Co., Ltd (中航重機股份有限公司, a company listed on the SSE, stock code: 600765) under Aviation Industry Corporation of China, the director (part-time) of AVIC Shaanxi Hongyuan Aviation Forging Company Ltd. as well as the director (part-time) of Guizhou Anda Aviation Forging Co., Ltd., the secretary of Party Committee, vice general manager and director (temporary post) of Jiangxi Jinghang Aviation Forging & Casting Co., Ltd., and he worked as deputy director of the audit department of China Shipbuilding Industry Corporation and the director, general manager and the secretary to the Communist Party of China Party Branch of China Heavy Shipping Finance Co., Limited (中船重工財務有限責任公司).

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BIOGRAPHIES OF THE CANDIDATES FOR INDEPENDENT NON-EXECUTIVE DIRECTORS

APPENDIX IV

Mr. Wang Yong , born in 1966, obtained a doctorate degree from Tsinghua University. Mr. Wang is currently an independent non-executive Director of the Company, the assistant to the dean of the School of Economics and Management, Tsinghua University. He is also the office director of the Business Scholars Program, director of the Cooperative Development Office and director of the Executive Committee of the China Enterprise Development and M&A Research Center. He is also an independent non-executive director of Rici Healthcare Holdings Limited (瑞慈醫療服務控股有限公司, a company listed on the Hong Kong stock exchange, stock code: 1526). He served as the project director of the Institute of Mechanical and Electrical, the deputy manager of the Mechanical and Electrical Equipment Plant, the manager of Water and Power Equipment Model Plant of China Institute of Water Resources and Hydropower Research (中國水利水電科學院), the deputy general manager of SRIT NETech Co., Ltd. (國研網絡數據科技有限公司), an independent director of Shenzhen Clou Electronics Co., Ltd. (深圳市科陸電子科技股份有限公司) (a company listed on SZSE, stock code: 002121) and Shenzhen Ocean’s King Lighting Science & Technology Co., Ltd. (深圳市海洋王照明科技股份有限公司, a company listed on SZSE, stock code: 002724).

Mr. Po Wai Kwong , born in 1957, graduated from the Chinese University of Hong Kong with a bachelor of business administration and a master of business administration and is an accountant. Mr. Po currently serves as a member of the International Advisory Council of the CSRC and the Advisory Committee of the Hang Seng Index in Hong Kong. He previously served as the executive director of the Hong Kong Insurance Authority, senior director of the Securities and Futures Commission (“ SFC ”) and director of the agency supervision division of the SFC, chairman of the No. 3 committee of supervision of market agencies of the International Organization of Securities Commissions.

Mr. Ren Yongping , born in 1963, obtained a doctor’s degree in accounting of Xiamen University and is a non-practising member of Chinese Institute of Certified Public Accountants. Mr. Ren is a professor of Shanghai University, doctoral supervisor, academic director of MBA Center of Shanghai University. He currently serves as the independent director of Jiangsu Hengshun Vinegar Industry Co., Ltd. (江蘇恆順醋業股份有限公司, a company listed on SSE, stock code: 600305), Kama Co., Ltd. (恒天凱馬股份有限公司, a company with B shares listed on SSE, stock code: 900953), Wuxi Longsheng Technology Co., Ltd. (無錫隆盛科技股份有限公司, a company listed on SZSE, stock code: 300680), Kehua Holdings Co., Ltd. (科華控股股份有限公司, a company listed on SSE, stock code: 603161). He previously served as vice dean of management school and secretary of Party Committee of Shanghai University, lecturer, associate professor and professor of Jiangsu University, director of Xingyuan Environment Technology Co., Ltd., and independent director of Tengda Construction Group Co., Ltd. (騰達建設集團股份有限公司, a company listed on SSE, stock code: 600512) and other companies.

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BIOGRAPHIES OF THE CANDIDATES FOR INDEPENDENT NON-EXECUTIVE DIRECTORS

APPENDIX IV

Mr. Yin Junming , born in 1972, is a doctor of management (accounting) from Xi’an Jiaotong University, post doctor of business administration from Nanjing University, and visiting scholar of McMaster University in Canada and Curtin Business School in Australia. Mr. Yin is a non-practising member of Chinese Institute of Certified Public Accountants, a senior member of Accounting Society of China, the executive director of the Jiangsu Institute of Certified Public Accountants, vice chairman of Jiangsu Management Accounting Professional Committee, and expert consultant. He currently serves as the dean and professor of the accounting school of Nanjing Audit University and the independent director of Jiangsu Canlon Building Materials Co., Ltd. (江蘇凱倫建材股份有限公司, a company listed on the SZSE, stock code: 300715), Shuangdeng Group Co., Ltd., Anhui Shenjian New Materials Co., Ltd (安徽神劍新材料股份有限公司, a company listed on the SZSE, stock code: 002361), and Suning Universal Co., Ltd. (蘇寧環球股份有限公司, a company listed on SZSE, stock code: 000718). He was an associate professor at the Sias International College of Zhengzhou University and an accountant in the aircraft section of Nanchang Railway Bureau.

Mr. Liu Yunhong , born in 1976, obtained a post-doctoral degree in law, and is a post-doctoral fellow in economics and a research fellow by professional title. Mr. Liu currently serves as the deputy head of the Institute of International M&A and Investment of Renmin University of China and the head of Foresea Life Insurance (Shanghai) Research Institute, an independent director of Shanghai Aerospace Automobile Electromechanical Co., Ltd. (上海航天汽車機電股份有限公司, a company listed on the SSE, stock code: 600151), Bank of Guiyang Co., Ltd. (貴陽銀行股份有限公司, a company listed on the SSE, stock code: 601997) and Sinolink Securities Co., Ltd. (國金證券股份有限公司, a company listed on the SSE, stock code: 600109), an adjunct professor and tutor of postgraduates of Renmin University of China, Shanghai University of Finance and Economics and East China University of Political Science and Law. Mr. Liu has served as the head of Legal and Compliance Division of Guotai Asset Management Co., Ltd., the general manager of Investment Banking Department of Aerospace Securities Co., Ltd., the general manager of the Investment Banking Department and the assistant to president of Hwabao Securities Co. Ltd.

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BIOGRAPHIES OF THE CANDIDATES FOR SUPERVISORS

APPENDIX V

Mr. Liu Jiping , born in 1964, graduated from Huainan Mining Institute (currently known as Anhui University of Science and Technology), Nankai University and University of Strathclyde in the United Kingdom and obtained a bachelor’s degree in engineering, master’s degree in economics and science, respectively. Mr. Liu was certified as a Certified Information Systems Auditor (CISA), Certified Internal Auditor (CIA) and senior auditor. Mr. Liu currently serves as the chief supervisor of the Company. Mr. Liu previously served as a deputy director and a director of the investment and audit division of the State Auditing Administration, a chief supervisor and a director of Shanghai Everbright Convention & Exhibition Center Co., Ltd. (上海光大會展中心有限公司), a director, deputy head and head of the audit department of the Everbright Group, a supervisor of Everbright Investment and Management Limited (中國光大投資管理有限公司), and a director of Everbright Financial Holding Asset Management Co., Ltd. (光大金控資產管理有限公司).

Mr. Wu Chunsheng , born in 1963, graduated from Renmin University of China Branch No.1 (中國人民大學第一分校) with a bachelor’s degree in economics and obtained an on-job postgraduate from Renmin University of China. Mr. Wu is a certified public accountant, senior auditor, and International Certified Internal Auditor. He currently serves as a senior expert of audit center, deputy general manager of audit department and the deputy secretary of the Disciplinary Committee of the Group. He previously served as the deputy director of finance department of Beijing Municipal Audit Bureau, deputy general manager of securities department and general manager of Gucheng Road sales department of China Jingu International Trust Co., Ltd. (中國金谷國際信託投資公司), director and assistant to the general manager of the audit department of Everbright Group.

Mr. Wang Hongyang , born in 1977, graduated from Beijing Foreign Studies University with a bachelor’s degree in arts. He is a non-practicing member of the Chinese Institute of Certified Public Accountants. He is currently a supervisor of the Company, deputy chief financial officer of China Everbright Limited. He was an auditor, assistant manager, manager, senior manager and partner of KPMG Huazhen LLP (Special General Partnership).

Mr. Yang Weirong , born in 1975, graduated from China Coal Economic College and Sun Yat-sen University with a bachelor’s degree in management and a master’s degree in accounting. He is a senior accountant and economist. He is currently a minister of audit department of Guangdong Hengjian Investment Holding Co., Ltd., a supervisor of Baosteel Zhanjiang Iron & Steel Co., Ltd. (寶鋼湛江鋼鐵有限公司), China Aviation Industry General Aircraft Co., Ltd. (中航通用飛機有限責任公司), Guangdong Architectural Design & Research Institute Co., Ltd. (廣東省建築設計研究院有限公司), Guangdong Yueao Cooperation and Development Fund Management Co., Ltd. (廣東粵澳合作發展基金管理有限公司) and Guangdong Hengfu Finance Leasing Co., Ltd. (廣東恒孚融資租賃有限公司) and a director of Guangdong Hengwan Equity Investment Fund Management Co., Ltd. (廣東恒萬股權投資基金管理有限公司). He was a vice minister of finance management department and audit department of Guangdong Hengjian Investment Holding Co., Ltd. (廣東恒健投資控股有限公司).

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BIOGRAPHIES OF THE CANDIDATES FOR SUPERVISORS

APPENDIX V

Mr. Zhu Wuxiang , born in 1965, graduated from Tsinghua University with a bachelor’s degree in engineering, a master’s degree in engineering and a doctor’s degree in economics. He is currently an external supervisor of the Company, a professor and doctoral supervisor of the Department of Finance of the School of Economics and Management of Tsinghua University. He is an independent director of China Cinda Asset Management Co., Ltd. (中國信達資產管理股份有限公司, a company listed on the Hong Kong Stock Exchange, stock code: 1359 and 4607 (preference shares)), Beijing Properties (Holdings) Co., Ltd. (北京建設(控股)有限公司, a company listed on the Hong Kong Stock Exchange, stock code: 925), Visual (China) Cultural Development Co., Ltd. (視覺(中國)文化發展股份有限公司, a company listed on the SZSE, stock code: 000681) and Shanghai Paineng Energy Technology Co., Ltd., a supervisor of Unisplendour Corporation Limited (紫光股份有限公司, a company listed on the SZSE, stock code: 000938). He was an independent director of ZTE Corporation Co., Ltd. (中興通訊股份有限公司, a company listed on the SZSE and the Hong Kong Stock Exchange, SZSE stock code: 000063, Hong Kong Stock Exchange stock code: 763), Dongxing Securities Co., Ltd. (東興證券股份有限公司, a company listed on the SSE, stock code: 601198), China Fortune Land Development Co., Ltd. (華夏幸福基業股份有限公司, a company listed on the SSE, stock code: 600340), Rongxin Power Electronic Co., Ltd. (榮信電力電子股份有限公司, a company listed on the SZSE, stock code: 002123), Offshore Oil Engineering Co., Ltd. (海洋石油工程股份有限公司, a company listed on the SSE, stock code: 600583) and other companies.

Mr. Cheng Fengchao , born in 1959, graduated from Hunan University with a doctor’s degree in management. He is a financial science researcher, Chinese certified public accountant, certified public valuer. He is currently a chairman of Zhongguancun Guorui Financial and Industrial Development Research Institute, vice chairman of the second session of the Mergers and Acquisitions Financing Committee of the China Association for Public Companies, a doctoral supervisor of Hunan University, a distinguished professor of the Chinese Academy of Social Sciences, independent director of Minmetals Capital Co., Ltd. (五礦資本股份有限公司, a company listed on the SSE, stock code: 600390), independent director of Beijing GeoEnviron Engineering & Technology, lnc (北京高能時代環境技術股份有限公司, a company listed on the SSE, stock code: 603588) and external supervisor of China Huarong Asset Management Co., Ltd (中國華融資產管理股份有限公司, a company listed on the Hong Kong Stock Exchange, stock code: 2799). He served as a director of the Industrial and Commercial Bank of China and a director of the Agricultural Bank of China assigned by Central Huijin Investment Ltd., and supervisor of China Everbright Group.

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AI assistant

Everbright Securities Company Limited — Proxy Solicitation & Information Statement 2020

50989_rns_2020-11-26_26487e26-6443-48c7-aca3-6789b27b72b5.pdf

光大證券股份有限公司 Everbright Securities Company Limited

(Stock Code: 6178)

(4) NOTICE OF 2020 THIRD EXTRAORDINARY GENERAL MEETING

DEFINITIONS

光大證券股份有限公司 Everbright Securities Company Limited

To the Shareholders

I. INTRODUCTION

Ordinary Resolutions:

4. To Consider and Approve the Resolution Regarding the Election of Supervisors of the Sixth Session of the Supervisory Committee of the Company

LETTER FROM THE BOARD

II. THE EGM

III. CUMULATIVE VOTING

IV. VOTING BY POLL

V. RECOMMENDATION

光大證券股份有限公司 Everbright Securities Company Limited

NOTICE OF 2020 THIRD EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTIONS

By order of the Board Everbright Securities Company Limited Yan Jun Chairman

1. Eligibility for Attending the EGM and Closure of Register of Members for H Shares

2. Proxy

3. Registration Procedures for Attending the EGM

4. Voting by Poll

5. Cumulative Voting

6. Miscellaneous

COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

COMPARISON TABLE OF THE AMENDMENTS TO THE RULES GOVERNING THE MANAGEMENT OF RELATED PARTY TRANSACTIONS OF EVERBRIGHT SECURITIES COMPANY LIMITED

Rules Governing the Management of Related Party Transactions of Everbright Securities Company Limited (2020 Revised Draft)

CHAPTER 1 GENERAL PROVISIONS

CHAPTER 2 RELATED PARTY TRANSACTIONS AND RELATED PARTIES

CHAPTER 3 BASIC NORMS OF RELATED PARTY TRANSACTIONS

CHAPTER 4 REVIEW PROCEDURES AND DISCLOSURE STANDARDS OF RELATED PARTY TRANSACTIONS

CHAPTER 5 OTHERS

ANNEX

I. RELATED PARTY TRANSACTION DEFINED BY DOMESTIC RELEVANT REGULATORY REQUIREMENTS

II. RELATED PARTY DEFINED BY THE REGULATORY REQUIREMENTS IN MAINLAND CHINA

III. CONNECTED PARTIES AND CONNECTED TRANSACTION AS DEFINED BY OVERSEAS REGULATORS

1. Specified type of transaction with third party

2. Continuing connected transaction

3. Subsidiary

4. Connected person

5. Supervisor

6. Substantial shareholder

7. Controller

8. Controlling shareholder

9. Associate

10. Connected subsidiary

11. “Deemed connected person”

12. PRC Governmental Body

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Everbright Securities Company Limited Proxy Solicitation & Information Statement 2020