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Huatai Securities Co., Ltd Proxy Solicitation & Information Statement 2023

Oct 30, 2023

10502_rns_2023-10-30_f9946bb2-bc0a-42b2-b714-3b4dfd3681bd.pdf

Proxy Solicitation & Information Statement

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NOTICE OF THE 2023 SECOND EXTRAORDINARY GENERAL MEETING

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(GDR under the symbol "HTSC")

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the EGM will be held by the Company at the Conference Room, Renaissance Nanjing Olympic Centre Hotel, No. 139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the PRC on Friday, November 24, 2023 at 2:40 p.m., to consider the following issues:

SPECIAL RESOLUTION

  1. To consider and approve the resolution on the cancellation of the repurchased A Shares and reduction of registered capital

ORDINARY RESOLUTIONS

  1. To consider and approve the resolution on the Amendments to the Working System for Independent Directors

  2. To consider and approve the resolution on the election of Mr. Liu Changchun as a non-executive director of the sixth session of the Board

– 1–

DEFINITIONS

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

  • “A Share(s)”

  • domestic Shares in the share capital of the Company, with a nominal value of RMB1.00 each, which are subscribed for or credited as paid up in RMB and are listed and traded on the Shanghai Stock Exchange

  • “A Share Class Meeting”

  • the 2023 third A Share class meeting to be held by the Company at the Conference Room, Renaissance Nanjing Olympic Centre Hotel, No. 139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the PRC on Friday, November 24, 2023 at 2:40 p.m. (or immediately after the conclusion of the EGM or any adjournment thereof)

  • “Articles of Association”

  • Articles of Association of the Company, as amended, supplemented or otherwise modified from time to time

  • “Board”

  • the board of directors of the Company

  • “Class Meetings”

  • A Share Class Meeting and H Share Class Meeting

  • “Company”

a joint stock company incorporated in the PRC with limited liability under the corporate name 華泰證券股份 有限公司 (Huatai Securities Co., Ltd.), converted from its predecessor 華泰證券有限責任公司 (Huatai Securities Limited Liability Company) on December 7, 2007, carrying on business in Hong Kong as “HTSC”, and was registered as a registered non-Hong Kong company under Part 16 of the Companies Ordinance under the Chinese approved name of “華泰六八八六股份有限公司” and English name of “Huatai Securities Co., Ltd.”; the H Shares of which have been listed on the main board of the Hong Kong Stock Exchange since June 1, 2015 (Stock Code: 6886); the A Shares of which have been listed on the Shanghai Stock Exchange since February 26, 2010 (Stock Code: 601688); the global depository receipts of which have been listed on the London Stock Exchange plc since June 2019 (Symbol: HTSC), unless the context otherwise requires, including its predecessor

“Company Law”

the Company Law of the PRC, as amended, supplemented or otherwise modified from time to time

– 2 –

DEFINITIONS

“CSRC” China Securities Regulatory Commission (中國證券監督 管理委員會)

  • “Director(s)” the director(s) of the Company

  • “EGM” the 2023 second extraordinary general meeting to be held by the Company at the Conference Room, Renaissance Nanjing Olympic Centre Hotel, No. 139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the PRC on Friday, November 24, 2023 at 2:40 p.m.

  • “GDR(s)” global depositary receipt(s)

  • “Group” the Company and its subsidiaries, and their respective predecessors

  • “H Share(s)” foreign Shares in the share capital of the Company with a nominal value of RMB1.00 each, which are subscribed for and traded in HK$ and are listed on the Hong Kong Stock Exchange

  • “H Share Class Meeting” the 2023 third H Share Class Meeting to be held by the Company at the Conference Room, Renaissance Nanjing Olympic Centre Hotel, No. 139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the PRC on Friday, November 24, 2023 at 2:40 p.m. (or immediately after the conclusion of the EGM and the A Share Class Meeting or any adjournment thereof)

  • “HK$” Hong Kong dollars, the lawful currency of Hong Kong

  • “Hong Kong”

  • the Hong Kong Special Administrative Region of the PRC

  • “Hong Kong Listing Rules” The Rules Governing the Listing of Securities on the Hong Kong Stock Exchange, as amended, supplemented or otherwise modified from time to time

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

  • “Jiangsu SASAC”

State-owned Assets Supervision and Administration Commission of Jiangsu Provincial Government (江蘇省 政府國有資產監督管理委員會)

– 3 –

DEFINITIONS

“Latest Practicable Date” October 30, 2023, being the latest practicable date for the purpose of ascertaining certain information contained in this circular prior to its publication “PRC” or “China” the People’s Republic of China, excluding, for the purposes of this circular, Hong Kong, Macau Special Administrative Region of the PRC and Taiwan “RMB” Renminbi, the lawful currency of the PRC “SFO” the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong), as amended, supplemented or otherwise modified from time to time “Share(s)” the ordinary share(s) of RMB1.00 each in the share capital of the Company, comprising A Share(s) and H Share(s) “Shareholder(s)” the holder(s) of the Share(s) “SOHO Holdings” Jiangsu SOHO Holdings Group Co., Ltd. “SSE” or “Shanghai Stock Shanghai Stock Exchange Exchange” “Supervisor(s)” the supervisor(s) of the Company “Supervisory Committee” the supervisory committee of the Company “Working System for Independent the Working System for Independent Directors of Huatai Directors” Securities Co., Ltd., as amended, supplemented or otherwise modified from time to time “%” per cent.

– 4 –

Special Resolution:

1. Resolution on the cancellation of the repurchased A Shares and reduction of registered capital

Reference is made to the announcement of the Company dated October 30, 2023 in relation to the cancellation of repurchased A Shares and reduction of registered capital.

I. Overview of share repurchase

On March 30, 2020, the Board considered and approved the Resolution on the Repurchase of A Shares of the Company through Centralized Price Bidding (《關於以集中競價交易方式回 購公司A股股份方案的議案》). According to the Report on Repurchase of A Shares by Huatai Securities Co., Ltd. through Centralized Price Bidding (《華泰證券股份有限公司關於以集中 競價交易方式回購A股股份的回購報告書》), the repurchase plan of shares is: the Company shall use self-owned funds to repurchase the A Shares of the Company by way of centralized price bidding, the total funds for such repurchase shall not exceed RMB2,615 million, and the repurchase price shall not exceed RMB28.81 per Share (In the event of any dividend distribution, conversion of capital reserve into share capital, bonus issue, stock split or reverse stock split during the repurchase period, the Company will adjust the price for share repurchase accordingly pursuant to relevant requirements of the CSRC and the SSE). The shares to be repurchased are intended to be used for the restricted stock incentive plan. If the Company fails to achieve the above-mentioned purpose within 36 months after the publication of repurchase results and announcement of changes in shares, the unused shares repurchased will be cancelled, which will be implemented specifically in accordance with relevant laws, regulations and policies.

On January 8, 2021, the Company completed the repurchase, and had actually repurchased 90,766,495 A Shares of the Company, representing 0.9999999% of the total share capital of the Company. The highest repurchase price was RMB23.08 per Share, the lowest repurchase price was RMB17.19 per Share, and the average repurchase price was RMB18.46 per Share. The total amount of funds used was RMB1,675,361,296.88 (excluding transaction costs).

– 5 –

II. Reasons and quantity of the Cancellation

Pursuant to the relevant provisions of the Company Law, the Rules on the Share Repurchase by Listed Companies (《上市公司股份回購規則》), the Guidelines No. 7 of the Shanghai Stock Exchange for the Self-regulation of Listed Companies – Share Repurchase (《上海證券交易所上市公司自律監管指引第7號 – 回購股份》) and the Company’s share repurchase plan, if the Company fails to achieve the purpose of the repurchased shares in accordance with the share repurchase plan within 36 months after the publication of the repurchase results and announcement of changes in shares, the unused repurchased shares will be cancelled. Considering that the aforementioned 36-month period is about to expire, the Company intends to cancel the remaining 45,278,495 A Shares repurchased in total (the “ Cancellation ”). Upon the cancellation of the remaining repurchased shares, the registered capital of the Company will be reduced accordingly.

III. Changes in shares after the Cancellation

Upon completion of the Cancellation, the total number of shares of the Company will be changed from 9,074,663,335 shares to 9,029,384,840 shares. The changes in the share capital structure of the Company are as follows:

Type of shares
A Shares
– Floating shares not
subject to selling
restrictions
Of which: repo-securities
account
– Shares subject to selling
restrictions
H Shares
Total		 Before the Cancellation
Quantity
Proportion
(shares)
(%)
7,355,617,655
81.06
7,326,339,263
80.73
45,278,495
0.50
29,278,392
0.32
1,719,045,680
18.94
9,074,663,335
100.00		 Increase/
decrease
-45,278,495
-45,278,495
-45,278,495
–
–
-45,278,495		 After the Cancellation
Quantity
Proportion
(shares)
(%)
7,310,339,160
80.96
7,281,060,768
80.64
–
–
29,278,392
0.32
1,719,045,680
19.04
9,029,384,840
100.00		 After the Cancellation
Quantity
Proportion
(shares)
(%)
7,310,339,160
80.96
7,281,060,768
80.64
–
–
29,278,392
0.32
1,719,045,680
19.04
9,029,384,840
100.00
100.00
  • Note 1: The above share capital structure represents the share capital of the Company as of the Latest Practicable Date. The change in the share capital structure of the Company after the Cancellation is subject to the share capital structure table issued by the Shanghai Branch of China Securities Depository and Clearing Corporation Limited after the completion of the cancellation of repurchased Shares.

Note 2: Any discrepancies in the mantissa between some of the totals and the sum of the breakdowns in the above table are due to rounding.

– 6 –

IV. The impact of the Cancellation on the Company

The Cancellation will not result in a change in the control of the Company’s de facto controller, will not have a significant impact on the financial position and operating results of the Company, and will not impact on the interests of the Company and all its Shareholders. Upon completion of the Cancellation, the equity distribution of the Company will still conform to the listing requirements. The Cancellation will not affect the Company’s listing status.

V. The adjustment of the Company’s registered capital and amendments to Articles of Association

After the completion of the Cancellation, the registered capital of the Company will be reduced by RMB45,278,495, and the relevant provisions of Articles of Association shall be amended accordingly. Upon consideration and approval by the EGM and Class Meetings, the management of the Company shall be authorized to handle the procedures of change of industrial and commercial registration regarding the registered capital of the Company, and the relevant provisions in Articles of Association shall be amended accordingly.

This resolution was considered and approved by the Board on October 30, 2023 and is hereby proposed at the EGM and the Class Meetings for consideration and approval.

Ordinary Resolutions:

2. Resolution on the amendments to the Working System for Independent Directors

In order to further regulate the conduct of independent Directors, give full play to the role of independent Directors in corporate governance, strengthen the restraint and supervision mechanism on internal Directors and senior management, protect the rights and interests of minority Shareholders and stakeholders, and promote the standardized operation of the Company, the Company proposes to amend certain provisions of the current Working System for Independent Directors according to the relevant requirements of relevant laws, regulations, rules and normative documents such as the Measures for the Administration of Independent Directors of Listed Companies (《上市公司獨立董事管理辦法》), the Measures for the Supervision and Administration of Directors, Supervisors, Senior Management Officers and Practitioners of Securities Fund Operation Institutions (《證券基金經營機構董事、監事、高 級管理人員及從業人員監督管理辦法》) of CSRC, and the Guidelines No. 1 of the Shanghai Stock Exchange for the Self-regulation of Listed Companies – Standard Operation (上海證券 交易所《上市公司自律監管指引第1號 – 規範運作》), as well as the actual situation of the Company.

Details of the explanation table of the proposed amendments to the Working System for Independent Directors are set out in Appendix I to this circular.

– 7 –

The proposed amendments to the Working System for Independent Directors are subject to consideration and approval by the Shareholders of the Company at the EGM. The amended Working System for Independent Directors shall become effective from the date of consideration and approval at the EGM. Prior to that, the current Working System for Independent Directors shall remain effective.

This resolution was considered and approved by the Board on October 30, 2023 and is hereby proposed at the EGM for consideration and approval.

3. Resolution on the election of Mr. Liu Changchun as a non-executive director of the sixth session of the Board

Reference is made to the announcement of the Company dated October 30, 2023 in relation to, among other things, the Board’s proposed election of Mr. Liu Changchun as a non-executive director of the sixth session of the Board.

According to the relevant requirements of the Rules for Governance of Securities Companies (《證券公司治理準則》) promulgated by the CSRC and Articles of Association, Shareholders(s) severally or jointly holding no less than 3% of the outstanding voting Shares of the Company may recommend candidates for Directors (non-employee representative Directors) to the Board.

Recently, SOHO Holdings, a Shareholder holding no less than 3% of the outstanding voting Shares of the Company, has nominated Mr. Liu Changchun as a candidate for non-executive Director of the sixth session of the Board.

Upon passing of the resolution on the election of Mr. Liu Changchun as a candidate for non-executive Director of the sixth session of the Board at the EGM of the Company, Mr. Liu Changchun will conclude a service contract with the Company to officially perform his duty as a non-executive Director of the sixth session of the Board for a term until the end of the term of the current session of the Board. Pursuant to Articles of Association, Mr. Liu Changchun shall be eligible for re-election upon the expiry of his term of office.

The biographical details of Mr. Liu Changchun and other information related to his election are set out below:

Mr. Liu Changchun , born in April 1974, holds bachelor’s and master’s degrees and is a senior political engineer. He served as a cadre, staff member and senior staff member of the Counsellors’ Office of Jiangsu Provincial People’s Government from August 1996 to July 2003; senior staff member of the General Division of the Elderly Cadre Bureau of CPC Jiangsu Provincial Committee from July 2003 to August 2004; senior staff member, principal staff member and deputy director of the General Division (Policy and Regulations Division) of the office of Jiangsu SASAC (Party Committee Office) from August 2004 to January 2015; deputy general manager (department general manager level), general manager of the strategic planning department, director of the Party Committee office, secretary to the board of directors, director of the office of the board of directors, general manager of the human resources department

– 8 –

(organization department of the Party Committee) and deputy director of the Inspection Work Office of the Party Committee of SOHO Holdings from January 2015 to August 2020; vice president, member of the Party Committee and secretary to the board of directors of SOHO Holdings from August 2020 to September 2020. He has served as the vice president, a member of the Party Committee, secretary to the board of directors and general counsel of SOHO Holdings since September 2020.

SOHO Holdings, where Mr. Liu Changchun works, is a wholly-owned subsidiary of Jiangsu SASAC, which is the de facto controller of the Company.

Mr. Liu Changchun will not receive remuneration from the Company during his term of office as a non-executive Director.

As of the Latest Practicable Date, Mr. Liu Changchun has not been subject to any punishment from the CSRC or other relevant authorities or any penalty from stock exchanges in the past three years. Save as disclosed in this circular, Mr. Liu Changchun does not have other relationship with Directors, Supervisors, senior management, substantial Shareholders or controlling Shareholders of the Company; he does not hold any other position in any member of the Group; he does not have any interest in the shares of the Company within the meaning of Part XV of the SFO; he did not hold any directorship of any other listed companies in the last three years; there is no information required to be disclosed pursuant to Rule 13.51(2)(h) to Rule 13.51(2)(v) of the Hong Kong Listing Rules; and there are no other matters that need to be brought to the attention of the Shareholders.

The resolution is considered and approved at the Board meeting on October 30, 2023, and is proposed at the EGM for consideration and approval.

VOTING ARRANGEMENT

The above-mentioned resolution 1 is a special resolution to be passed by the affirmative votes representing at least two-thirds of the total number of Shares held by the attending Shareholders having voting rights; resolution 2 and resolution 3 are ordinary resolutions to be passed by the affirmative votes representing at least one half of the total number of Shares held by the attending Shareholders having voting rights.

– 9 –

NOTICE OF THE 2023 THIRD A SHARE CLASS MEETING

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(GDR under the symbol "HTSC")

NOTICE OF THE 2023 THIRD A SHARE CLASS MEETING

NOTICE IS HEREBY GIVEN that the A Share Class Meeting of the Company will be held at Conference Room, Renaissance Nanjing Olympic Centre Hotel, No. 139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the PRC on Friday, November 24, 2023 at 2:40 p.m. (or immediately after the conclusion of the EGM or anyadjournment thereof) to consider the following issue:

SPECIAL RESOLUTION

  1. To consider and approve the resolution on the cancellation of the repurchased A Shares and reduction of registered capital

– 10 –

APPENDIX I EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

Explanation Table of the Proposed Amendments to the Working System for Independent Directors of Huatai Securities Co., Ltd.

1. Amendments to the following articles of the Working System for Independent Directors

Original Provisions of Amended Provisions of the
the System System **Basis ** of Amendments
Article 1The Company establishes Article 1The Company establishes Amended in accordance with
independent
directors
and		 independent
directors
and		 Article 1 of the Measures for the
formulates
this
system
in		 formulates
this
system
in		 Administration of Independent
accordance
with
relevant		 accordance
with
relevant		 Directors of Listed Companies (《上
laws,
administrative
regulations,		 laws,
administrative
regulations,		 市公司獨立董事管理辦法》) of the
departmental
rules,
normative		 departmental
rules,
normative		 CSRC, with the related abolished
documents, rules and Articles of documents, rules and Articles of documents removed.
Association, such as the Rules for Association, such as the Measures
Independent Directors of Listed for
the
Administration
of
Companies (《上市公司獨立董事規 Independent Directors of Listed
則》)
of
China
Securities		 Companies (《上市公司獨立董事管
Regulatory
Commission		 理辦法》)
of
China
Securities
(hereinafter referred to as CSRC), Regulatory
Commission
with an aim to further optimize the (hereinafter referred to as CSRC),
structure of corporate governance with an aim to further optimize the
of
the
Company,
improve
the		 structure of corporate governance
structure of the Board, strengthen the of
the
Company,
improve
the
mechanism
of
restraint
and		 structure of the Board,regulate the
supervision
on
the
internal		 act of independent directors, fully
directors andmanagers, protect the perform
the
functions
of
interest
of
the
minority		 independent
directors
in
shareholders and stakeholders, and corporate governance, strengthen
regulate the operation and conduct the mechanism of restraint and
of the Company. supervision
on
the
internal
directors and senior management,
protect the interest of the minority
shareholders and stakeholders, and
regulate the operation and conduct
of the Company.
Article 2 An independent director Article 2 An independent director Amended in accordance with
refers to a director who does not refers to a director who does not Article 2 of the Measures for the
take
up
any
position
in
the		 take
up
any
position
in
the		 Administration of Independent
Company other than as a director Company other than as a director Directors of Listed Companies (《上
and
does
not
have
any		 and has no direct or indirect 市公司獨立董事管理辦法》) of the
relationship with the Company, its interest
in
the
Company,
its		 CSRC.
substantial shareholders which may substantial shareholders, or actual
obstruct
him/her
from
making		 controller, or no other relationship
independent
and
objective		 that may obstruct him/her from
judgments. making independent and objective
judgments.

– 1 1 –

EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of the System

Amended Provisions of the System

Article 4 An independent director shall assume the obligation of fidelity and diligence to the Company and all the shareholders. An independent director shall, in accordance with the requirements of relevant laws, regulations and Articles of Association, conscientiously perform his/her duties in order to protect the overall interests of the Company, particularly without prejudice to the legitimate rights and interests of minority shareholders. An independent director must perform his/her duties independently, without being influenced by the Company’s substantial shareholders, actual controller, and any other units or individuals who have an interest in his/her relationship with the Company.

Article 4 An independent director Article 4 An independent director shall assume the obligation of shall assume the obligation of fidelity and diligence to the loyalty and diligence to the Company and all the shareholders. Company and all the shareholders. An independent director shall, in An independent director shall, in accordance with the requirements accordance with the requirements of relevant laws, regulations and of relevant laws, regulations and Articles of Association, Articles of Association, conscientiously perform his/her conscientiously perform his/her duties in order to protect the overall duties, play the role of interests of the Company, participating in decision-making, particularly without prejudice to conducting supervision, checks the legitimate rights and interests and balances, and providing of minority shareholders. An professional advice in the board independent director must perform of directors, in order to protect the his/her duties independently, overall interests of the Company, without being influenced by the particularly without prejudice to Company’s substantial the legitimate rights and interests shareholders, actual controller, and of minority shareholders. An any other units or individuals who independent director must perform have an interest in his/her his/her duties independently, relationship with the Company. without being influenced by the Company’s substantial An independent director may take shareholders, actual controller, and his/her role as independent director any other units or individuals who in up to five domestic and overseas have an interest in his/her listed companies concurrently , and relationship with the Company. any person may serve as an independent director for two In principle, an independent securities and fund business director may take his/her role as institutions at the most. Where the independent director in up to three laws and regulations, the CSRC domestic listed companies, and any shall otherwise require, such person may serve as an independent provisions shall prevail. An director for two securities and fund independent director shall ensure business institutions at the most. his/her effective performance of Where the laws and regulations, the duties as independent director with provisions of the stock exchange sufficient time and efforts devoted. on which the Company is listed and that of the CSRC shall otherwise require, such provisions shall prevail. An independent director shall ensure his/her effective performance of duties as independent director with sufficient time and efforts devoted.

Basis of Amendments Amended in accordance with Article 3 and Article 8 of the Measures for the Administration of Independent Directors of Listed Companies (《上市公司獨立董事管 理辦法》) of the CSRC.

– 1 2 –

EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of Amended Provisions of the
the System System Basis of Amendments
Article
5
A
candidate
for		 Article
5
A
candidate
for		 Amended in
accordance		 with
independent
director
shall
have		 independent
director
shall
have		 Article 3.5.5 of Guidelines No. 1
none of the following bad records: none of the following bad records: for the Self-regulation of Listed
Companies – Standard Operation
(1)
administrative
punishment		 (1)
subject
to
administrative		 (Amendments in August 2023) (《上
imposed by the CSRC in the past penalties by the CSRC or criminal 市公司自律監管指引第1號– 規範
36 months; penalties by judicial authorities 運作(2023年8月修訂)》) of the
for violation of laws or crime, in Shanghai Stock Exchange.
(2) in the period that is publicly respect of securities and futures,
recognized by the Shanghai Stock in the past 36 months;
Exchange as not appropriate for
serving as a director of a listed (2) a case has been filed for
company; investigation by the CSRC or by
judicial authorities for violation
(3) open denunciation or over 2 of laws or crime, in respect of
circulated
criticisms
by
the		 securities and futures, and no
Shanghai Stock Exchange in the clear
conclusion
has
been
past 36 months; reached;
(4)
failure
to
attend
board		 (3)
open
denunciation
or
over
meetings for 2 consecutive times 3
circulated
criticisms
by
the
or failure to attend over one third Shanghai Stock Exchange in the
of the board meetings of the past 36 months;
current year in person during
his/her service as independent (4) has bad records of major
director; dishonest;
(5) obvious discrepancy of his/her (5) removal of his/her duties on a
independent opinions from the general meeting proposed to be
facts during his/her service as convened
by
the
board
of
independent director; directors due to failure to neither
attend
two
consecutive
board
(6) other conditions as determined by meetings in person nor to entrust
the stock exchanges on which the other independent directors to
Company is listed. attend board meetings on his/her
behalf during his/her service as
independent director, which was
less than 12 months;
(6) other conditions as determined
by the stock exchanges on which
the Company is listed.

– 1 3 –

EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of Amended Provisions of the
the System System **Basis of ** Amendments
Article 6 An independent director Article 6 An independent director Supplemented and amended in
shall
meet
the
following
basic		 shall
meet
the
following
basic		 respect of the requirements related
qualification requirements : qualification requirements : to work experiences of independent
directors
in		 accordance with
(1) having the qualifications as (1) having the qualifications as Article 7 of the Measures for the
director of listed companies and director of listed companies and Administration of Independent
securities companies in accordance securities companies in accordance Directors of Listed Companies (《上
with
the
laws,
administrative		 with
the
laws,
administrative		 市公司獨立董事管理辦法》) of the
regulations
and
other
relevant		 regulations
and
other
relevant		 CSRC.
provisions; provisions;
(2) being independent as required (2) being independent as required
by relevant laws and regulations, by relevant laws and regulations,
this
system
and
Articles
of		 this
system
and
Articles
of
Association; Association;
(3) having the basic knowledge on (3) having the basic knowledge on
the operation of listed companies the operation of listed companies
and financial enterprises, knowing and financial enterprises, knowing
well relevant laws, administrative well relevant laws, administrative
regulations, rules and regulations; regulations, rules and regulations;
(4) having over five years of work (4) having over five years of work
experience in legal, economics, experience required for performing
accounting,
finance,		 the
duties
of
an
independent
administration or other required director in fields such as legal,
for performing the duties of an accounting or economics;
independent director;
(5)
having
good
personal
(5)
having
no
circumstances		 integrity and has no bad records,
specified
in
Article
7
of
the		 such as major dishonest acts;
Measures for the Supervision and
Administration
of
Directors,		 (6)
having
no
circumstances
Supervisors, Senior Management specified
in
Article
7
of
the
Officers
and
Practitioners
of		 Measures for the Supervision and
Securities
Fund
Operating		 Administration
of
Directors,
Institutions (《證券基金經營機構董 Supervisors, Senior Management
事、監事、高級管理人員及從業人 Officers
and
Practitioners
of
員監督管理辦法》); Securities
Fund
Operating
Institutions (《證券基金經營機構董
(6) having at least one independent 事、監事、高級管理人員及從業人
director of the Company ordinarily 員監督管理辦法》);
reside in Hong Kong;
(7) having at least one independent
(7) other qualification requirements director of the Company ordinarily
prescribed by laws and regulations reside in Hong Kong;
and Articles of Association.
(8)
fulfilling
other
conditions
prescribed by laws,administrative
regulations,
rules
of
CSRC,
business rules of stock exchanges,
and Articles of Association.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of the System

Amended Provisions of the System Article 7 Independent directors must be independent and the following persons cannot hold the post of independent director:

Article 7 Independent directors must be independent and the following persons cannot hold the post of independent director:

(1) The person who holds a position (1) The person who holds a position in the Company or its affiliated in the Company or its affiliated enterprises or the related parties of enterprises or the related parties of the Company in the past three the Company in the past three years; years;

(2) The person whose direct relatives and major social relations hold a position in the Company and its affiliated enterprises or related parties of the Company ;

(2) The person whose direct relatives and major social relations hold a position in the Company and its related parties (direct relatives refer to his/her spouse, father, mother and children; major social relations refer to his/her brothers, sisters, father-in-law, mother-in-law, daughter-in-law, son-in-law, spouse of his/her brothers and sisters, and his/her spouse’s brothers and sisters) ;

(3) The person who directly or indirectly holds over 1% of the issued shares of the Company or who is a natural person shareholder among the top 10 shareholders of the Company and his/her direct relatives;

(3) The person who directly or indirectly holds over 1% of the issued shares of the Company or who is a natural person shareholder among the top 10 shareholders of the Company and his/her direct relatives;

(4) The person who holds a position in a corporate shareholder who directly or indirectly holds over 5% of the issued shares of the Company or in any of the top 5 corporate shareholders of the Company and his/her direct relatives;

(4) The person who holds a position in a corporate shareholder who directly or indirectly holds over 5% of the issued shares of the Company or in any of the top 5 corporate shareholders of the Company and his/her direct relatives;

(5) The person who holds a position in the affiliated enterprise of the controlling shareholders or actual controller of the Company and his/her direct relatives ;

Basis of Amendments Amended in accordance with Article 9 of the Measures for the Supervision and Administration of Directors, Supervisors, Senior Management Officers and Practitioners of Securities Fund Operating Institutions (《證券基金 經營機構董事、監事、高級管理人 員及從業人員監督管理辦法》) of the CSRC and Article 6 of the Measures for the Administration of Independent Directors of Listed Companies (《上市公司獨立董事管 理辦法》) issued by the CSRC.

(5) The person who holds a position in the actual controller and its affiliated enterprise of the Company;

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of Amended Provisions of the
the System System Basis of Amendments
(6)
The
person
who
provides		 (6)
The
person
who
provides
services such as finance, law and services
such
as
finance,
consultancy to the Company and its law, consultancy and sponsorship
controlling
shareholders
or
their		 to the Company and its controlling
respective
affiliated
enterprises,		 shareholders, actual controllers or
including all members of the project their
respective
affiliated
team,
reviewers
at
all
levels,		 enterprises,
including
but
not
persons who sign on the reports, limited to all members of the
partners and principal responsible project
team,
reviewers
at
all
persons
of
agencies
providing		 levels, persons who sign on the
services; reports, partners, directors, senior
management officersand principal
(7) The person who has interests responsible persons of agencies
with
the
senior
management		 providing services;
officers, other directors, supervisors
and other key personnel of the (7) The person who has interests
Company and its related parties; with
the
senior
management
officers, other directors, supervisors
(8) The person who holds a position and other key personnel of the
in
an
organization
which
has		 Company and its related parties;
business relationship or interest
relationship with the Company or (8) The person who holds a position
its affiliated enterprises; in
an
organization
which
has
business relationship or interest
(9) The person who serves as a relationship with the Company or
director,
supervisor
or
senior		 its affiliated enterprises;
management officer in companies
which
have
major
business		 (9)
The
person
who
has
relationship with the Company’s major business relationship with
controlling shareholders or their the Company and its controlling
affiliated
enterprises
or
in
the		 shareholder, actual controller or
corporate controlling shareholder their
respective
affiliated
of such companies with business enterprises, or the person who
relationship; holds a position in an entity and
its
controlling
shareholder
or
(10) The person holds a position actual
controller,
with
major
other than being an independent business relationship;
director in other securities fund
operating institutions; (10) The person holds a position
other than being an independent
(11) The person, within the latest 1 director in other securities fund
year,
falls
under
any
of
the		 operating institutions;
circumstances
outlined
in
the
aforementioned items (2) to (10); (11) The person, within the latest 1
year,
falls
under
any
of
the
circumstances
outlined
in
the
aforementioned items (2) to (10);

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of Original Provisions of Original Provisions of Original Provisions of Original Provisions of Amended Provisions of the
the System System **Basis of ** Amendments
(12) Other persons as specified in, (12) Other persons as specified
inter alia, laws, administrative in laws, administrative regulations,
regulations, Articles of Association provisions of the CSRC, business
and departmental rules; rules
of
stock
exchanges
and
Articles of Association.
**(13) ** **Other ** persons stipulated by
the CSRC or the stock exchanges The affiliated enterprises of the
on which the Company is listed. controlling
shareholders
and
actual controller of the Company
mentioned in items (5), (6) and (9)
in the preceding paragraph do
not
include
enterprises
under
common
control
of
the
same
state-owned asset administrative
authority and do not constitute
related
relationship
with
the
Company
according
to
the
relevant provisions.
Independent
directors
shall
conduct
self-evaluation
on
independence
on
annual
basis
and submit the self-evaluation
findings to the board of directors.
The
board
of
directors
shall
conduct
assessment
on
the
independence
of
independent
directors of current session on
annual basis and issue specific
opinions for disclosure together
with the annual report.
Article 8 The board of directors of Article 8 The board of directors of Supplemented and
amended		 in
the Company, supervisory the
Company,
supervisory		 respect of the requirements related
committee and shareholders committee
and
shareholders		 to the nominees in accordance with
individually or jointly holding over individually or jointly holding over Article 9 of the Measures for
1% of the issued shares of the
Company may nominate candidates
of
independent
directors
for		 1% of the issued shares of the
Company may nominate candidates
of
independent
directors
for		 the Administration of Independent
Directors of Listed Companies (《上
市公司獨立董事管理辦法》) of the
decision through election in the decision by election in the general CSRC.
general meeting. meeting.
Investor protection institutions
established in accordance with
laws
may
publicly
request
shareholders
to
entrust
those
institutions
to
exercise
the
right to nominate independent
directors on their behalf.
The nominator as specified in
paragraph 1 shall not nominate
any
person
who
has
interest
relationship with him/her or any
other person in close relationship
that may affect independence in
performing duties as a candidate
of independent directors.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of the System

Amended Provisions of the

System

Article 9 The nominator of an Article 9 The nominator of an independent director shall obtain independent director shall obtain the consent of the nominee before the consent of the nominee before nomination. The nominator shall nomination. The nominator shall have a full understanding of the have a full understanding of the profession, academic credentials, profession, academic credentials, job title, detailed work experiences job title, detailed work experiences, and all part-time jobs of the all part-time jobs of the nominee nominee and express an opinion on and whether there is any adverse the qualification and record such as material breach independence of the nominee to of trust and express an opinion on be an independent director. The his/her satisfaction of other nominee shall issue an requirements on independence independence statement that there and being an independent director. does not exist any relationship The nominee shall issue an open between him/her and the statement on his/her satisfaction Company that may influence of other requirements on his/her independent and objective independence and being an judgment . Prior to the independent director . Prior to the shareholders’ general meeting for shareholders’ general meeting for election of independent directors, election of independent directors, the board of directors of the the board of directors of the Company shall publish the Company shall publish the aforesaid information as required. aforesaid information as required. The Company is required to submit The Company is required to submit the independence statement as a his/her relevant statements as filing material to the relevant filing materials to the relevant delegated authorities of the CSRC. delegated authorities of the CSRC.

Basis of Amendments Amended in accordance with Article 10 of the Measures for the Administration of Independent Directors of Listed Companies (《上 市公司獨立董事管理辦法》) of the CSRC.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of the System

Article 10 Prior to the announcement of the notice of the general meeting for election of independent directors, the Company shall submit the relevant materials of the nominees to the Shanghai Stock Exchange. If the board of directors of the Company has any objection to the nominees, opinions of the board of directors shall also be submitted in writing. When the Company proposes to appoint a new independent director, the Company must publish the appointment as soon as practicable, and include in the announcement the details of the new independent director required to be published by the Hong Kong Listing Rules.

The Shanghai Stock Exchange shall examine the qualifications and independence of the candidates for independent directors. In the event the independent director candidates are objected by the Shanghai Stock Exchange, the Company shall not submit them to the general meeting for election as independent directors, and shall postpone or cancel the general meeting or cancel the relevant proposals of the general meeting in accordance with the Rules for the General Meetings of Shareholders of Listed Companies (《上市公司股東大會規 則》) issued by the CSRC and the Hong Kong Listing Rules. At the general meeting for election of independent directors, the board of directors of the Company shall declare whether the candidates for independent directors are objected by the Shanghai Stock Exchange.

Amended Provisions of the

System

Article 10 The Nomination Committee of the board of directors of the Company shall conduct a review on the qualifications of the nominee for appointment and form definite review opinions.

Prior to the announcement of the notice of the general meeting for election of independent directors, the Company shall submit the relevant materials of the nominees to the Shanghai Stock Exchange.

If the board of directors of the Company has any objection to the nominees, opinions of the board of directors shall also be submitted in writing. When the Company proposes to appoint a new independent director, the Company must publish the appointment as soon as practicable, and include in the announcement the details of the new independent director required to be published by the Hong Kong Listing Rules.

The Shanghai Stock Exchange shall examine the qualifications and independence of the candidates for independent directors. In the event the independent director candidates are objected by the Shanghai Stock Exchange, the Company shall not submit them to the general meeting for election as independent directors, and shall postpone or cancel the general meeting or cancel the relevant proposals of the general meeting in accordance with the Rules for the General Meetings of Shareholders of Listed Companies (《上市公司股東大會規 則》) issued by the CSRC and the Hong Kong Listing Rules. At the general meeting for election of independent directors, the board of directors of the Company shall declare whether the candidates for independent directors are objected by the Shanghai Stock Exchange.

Basis of Amendments Amended in accordance with Article 11 of the Measures for the Administration of Independent Directors of Listed Companies (《上 市公司獨立董事管理辦法》) of the CSRC, and with reference to paragraph (IV) of Article 32 of the Working Rules of the Special Committees of the Board of Directors of Huatai Securities Co., Ltd. (《華泰證券股份有限公司董事 會專門委員會工作細則》).

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of Original Provisions of Original Provisions of Amended Provisions of the
the System System **Basis of ** Amendments
— Article
11
When
the
general		 Amended in accordance
with
meeting of the Company conducts Article 12 of the Measures for the
election
for
more
than
two		 Administration of Independent
independent
directors,
the		 Directors of Listed Companies (《上
cumulative voting system shall be 市公司獨立董事管理辦法》) of the
implemented,
the
specific		 CSRC.
implementation details shall be
provided
in
Articles
of
Association.
The
votes
of
minority
shareholders
shall
be
counted
separately and disclosed.
Article 13 If an independent director Article 14 Independent directors Amended in accordance
with
fails to attend three board meetings shall attend board meetings in Article 20 of the Measures for the
consecutively in person,the board of person.
If
an
independent		 Administration of Independent
directors shall propose
a		 director is unable to attend a Directors of Listed Companies (《上
replacement of
the		 director at meeting in person for any reason, 市公司獨立董事管理辦法》) of the
**a general meeting. ** Prior to the materials for the meeting shall be CSRC, and some contents of the
expiration of the term of office of an read in advance to form a definite original Article have been adjusted
independent director, the Company opinion and appoint in writing to set out in Article 15 of this
**may remove ** **him/her ** from his/her another independent director(s) system.
position through legal procedures. to attend the meeting on his/her
In case of an early termination, it behalf.
**shall be disclosed ** as a special
disclosure issue by the Company. If If an independent director fails
the
independent		 director
so		 to
attend
two
board
meetings
removed considers that the reason consecutively in person, and fails
for his/her removal is not proper, he to appoint another independent
or she can make a public statement. director
to
attend
on
his/her
behalf, the board of directors
shall
propose
to
convene
a
general meeting within 30 days
from the date of occurrence of
such
facts
to
remove
such
independent
director
from
his/her position.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of the System

Article 14 An independent director may tender resignation before expiration of his/her term of office. An independent director shall resign by submitting a written resignation report to the board of directors, and providing an explanation of any conditions in relation to his/her resignation or which are considered by him/her as necessary to draw the attention of shareholders and creditors of the Company. If the proportion of independent directors in the board of directors of the Company is lower than the minimum requirements specified in this system due to the resignation of an independent director or there is no accounting professional among independent directors, the independent director shall continue to perform his/her duties until the date when a new independent director is appointed. The original nominator of the independent director or the board of directors of the Company shall nominate a new independent director candidate within three months from the date of resignation of the independent director.

If an independent director resigns or is removed during his/her term of office, the independent director and the Company shall provide written explanations to the relevant delegated authorities of the CSRC and the general meeting within 20 working days.

Amended Provisions of the System Basis of Amendments Article 15 Prior to the expiration Amended in accordance with of the term of office of an Article 14 of the Measures for the independent director, the Administration of Independent Company may remove him/her Directors of Listed Companies (《上 from his/her position in 市公司獨立董事管理辦法》) of the accordance with legal CSRC. procedures. In case of an early termination of an independent director from his/her duties, the Company shall disclose the specific reasons and grounds in a timely manner. If the independent director raises an objection, the Company shall disclose in a timely manner. If an independent director fails to satisfy the requirements in item (1) or (2) of Article 6 of this system, he/she shall stop performing his/her duties immediately and resign from his/her position. If he/she fails to resign, after the board of directors has knowledge of such circumstances or should have known the occurrence of such facts, it shall remove him/her from office immediately according to these provisions.

If the resignation or removal of an independent director due to the circumstances as stipulated in the preceding paragraph has rendered the proportion of independent directors in the board of directors or its special committees fall below the minimum requirements specified in this system or there is no accounting professional among independent directors, the Company shall complete the election for replacement within 60 days from the date of occurrence of the aforesaid facts.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

**Original ** **Provisions ** of of Amended Provisions of the
**the ** System System Basis of Amendments
Article 16An independent director Amended in accordance with
may
tender
resignation
before		 Article 15 of the Measures for the
expiration of his/her term of office. Administration of Independent
An
independent
director
shall		 Directors of Listed Companies (《上
resign
by
submitting
a
written		 市公司獨立董事管理辦法》) of the
resignation report to the board of CSRC.
directors,
and
providing
an
explanation of any conditions in
relation to his/her resignation or
which are considered by him/her as
necessary to draw the attention of
shareholders and creditors of the
Company.
The
Company
shall
disclose the reasons and matters
for attention in relation to the
resignation
of
an
independent
director.
If
the
resignation
of
an
independent director will render
the
proportion
of
independent
directors in the board of directors
or
its
special
committees
fall
below the minimum requirements
specified in this system or there
is
no
accounting
professional
among independent directors, the
independent director who tenders
resignation
shall
continue
to
perform his/her duties until the
date
when
a
new
independent
director
is
appointed.
The
Company
shall
complete
the
election for replacementwithin60
daysfrom the date of resignation of
the independent director.
Article
17
If
an
independent		 Some contents of the original
director
resigns
or
is
removed		 Article have been adjusted to set
during his/her term of office, the out in Article 17 of this system.
independent
director
and
the
Company
shall
provide
written
explanations
to
the
relevant
delegated authorities of the CSRC
and the general meeting within 20
working days.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

**Original ** **Provisions ** of Amended Provisions of the
**the ** System System Basis of Amendments
— Article 18 Independent directors In accordance with Article 17 of the
shall
perform
the
following		 Measures for the Administration
duties: of Independent Directors of Listed
Companies (《上市公司獨立董事管
(1) Participating in the decision- 理辦法》) of the CSRC, summarized
making of the board of directors duties of independent directors are
and offering specific opinions on added.
the matters deliberated;
(2)
Supervising
the
matters
considered
by
the
board
of
directors
and
its
specific
committees,
the
matters
on
potential
material
conflicts
of
interest between the Company
and its controlling shareholder,
actual controller, directors, and
senior
management
officers,
urging the decision-making of the
board of directors in the overall
interests of the Company, and
protecting
the
lawful
rights and interests of minority
shareholders;
(3) Providing professional and
objective advice on the operation
and development of the Company
and promoting the improvement of
the decision-making level of the
board of directors;
(4)
Performing
other
duties
prescribed by laws, administrative
regulations,
provisions
of
the
CSRC, business rules of stock
exchanges
and
Articles
of
Association.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of the System

Amended Provisions of the System

Article 15 An independent director shall have the following special functions and powers in addition to those granted to directors by the Company Law and other relevant laws and regulations :

Article 19 An independent director may exercise the following special functions and powers:

(1) independently engaging intermediaries for auditing, consultation or inspection on issues regarding specific issues in the Company;

(1) significant related party transactions shall be approved by the independent directors before being submitted; before the independent directors make judgment, an intermediary agency can be engaged to produce a report of independent financial advisor, which will serve as the basis for the independent directors’ judgement;

( 2 ) proposing to the board of directors the convening an extraordinary general meeting; ( 3 ) proposing the convening of board meetings;

( 4 ) publicly soliciting shareholders’ rights from shareholders in accordance with laws; (5) giving independent opinions on matters that may damage the rights and interests of the Company or minority shareholders; (6) other functions and powers prescribed by laws, administrative regulations, provisions of the CSRC, business rules of stock exchanges and Articles of Association.

(2) proposing to the board of directors for the appointment or dismissal of accounting firms;

(3) proposing to the board of directors the convening of extraordinary general meetings; (4) proposing the convening of board meetings; (5) publicly soliciting shareholders’ voting rights before convening of general meetings;

(6) independently engaging an external auditor or consultancy firms for auditing or consultation on issues regarding specific issues in the Company;

firms for auditing or consultation Independent directors shall seek the on issues regarding specific issues in consent of a majority of all the the Company; independent directors before exercising the functions and powers (7) other functions and powers under items (1) to (3) of the prescribed by laws, regulations, the preceding paragraph. CSRC, relevant requirements of the stock exchanges of the place where The Company shall make a the Company is listed and Articles of disclosure in a timely manner if Association. an independent director exercises the functions and powers Independent directors shall seek the specified in paragraph 1 of this consent of a majority of all article. If the aforesaid functions the independent directors before and powers cannot be performed exercising the functions and powers normally, the Company shall under items (1) to (5) above and shall disclose the specific seek the consent of all the circumstances and reasons independent directors before therefor. exercising the functions and powers under item (6) above, with related Fees for the engagement of expenses to be borne by intermediaries by independent the Company. If the aforesaid directors and other expenses proposals are not accepted or necessary to exercise those the functions and powers cannot be functions and powers shall be performed normally, the Company borne by the Company. should disclose the related details .

Basis of Amendments Amended in accordance with Article 3.5.17 of Guidelines No. 1 for the Self-regulation of Listed Companies – Standard Operation (Amendments in August 2023) (《上 市公司自律監管指引第1號 – 規範 運作(2023年8月修訂)》) of the Shanghai Stock Exchange.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of Amended Provisions of the the System System Basis of Amendments Article 16 In addition to — Amended in accordance with the performing the above duties, the Measures for the Administration of independent directors shall give Independent Directors of Listed independent opinions to the board Companies (《上市公司獨立董事管 of directors or General Meetings in 理辦法》) of the CSRC and the respect of the following matters: Guidelines No. 1 for the Selfregulation of Listed Companies – (1) the nomination, appointment Standard Operation (上海證券交易所 and dismissal of a director; 《上市公司自律監管指引第1號 – 規 範運作》) of the Shanghai Stock (2) the employment and dismissal of Exchange. a senior management staff; (3) the remunerations of the directors and senior management staff; (4) the engagement or dismissal of an accounting firm; (5) changes in accounting policies, accounting estimates or correction of significant accounting errors resulting from reasons other than changes in accounting standards; (6) production of non-standard unqualified audit opinions by an accounting firm on the financial reports of the Company and internal control; (7) appraisal report on internal control; (8) the proposal that related parties undertaking to the changes; (9) the impacts of issuing preference shares on the equities of shareholders of the Company in each class;

(10) formulating profit distribution policies, profit distribution plans and cash dividend plans;

(11) material matters that require disclosure such as related party transactions, provision of guarantees (excluding guarantees provided for subsidiaries consolidated in the statements), entrusted financial management, provision of financial assistance, use of proceeds, investment in stocks and their derivatives, etc.;

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

**Original ** **Original ** **Original ** Provisions of Provisions of Provisions of Provisions of **Amended ** **Amended ** **Provisions ** **Provisions ** **Provisions ** of the
**the ** System System **Basis of ** Amendments
**(12) material ** assets reorganization
proposal, acquisition of
management, share incentive
scheme, employee share
ownership plan, share repurchase
**plan, the ** **scheme of ** repaying
**debts with ** **non-cash assets by ** the
related parties
of		 listed
companies;
(13) the Company proposes that
its
shares		 will
no		 longer be
transacted on the Shanghai Stock
Exchange;
**(14) matters ** **considered by ** the
independent directors to be likely
to
prejudice		 the legitimate
interests of the minority
shareholders;
(15) other matters as required by
**laws, regulations and ** relevant
requirements of
the		 stock
**exchanges ** **of ** **the place ** **where ** the
Company is listed.
— **Article 21 ** The following matters Amended in accordance
with
**shall be submitted ** to the board Article 23 of the Measures for
of directors for consideration the Administration of Independent
**after approval by a majority ** of Directors of Listed Companies (《上
**all ** **independent directors of ** the 市公司獨立董事管理辦法》) of the
Company: CSRC.
(1) Related transactions
that
**should be ** disclosed;
(2) **The Company ** and the related
**parties’ plan ** **to change ** or waive
**the ** undertaking;
(3) The decisions made
and
**measures ** **taken ** by the board
of directors of the acquired
company regarding the
acquisition;
**(4) ** **Other ** **matters ** **stipulated ** by
laws, administrative regulations,
**provisions ** **of ** **the ** **CSRC, ** business
rules
of		 stock exchanges
and
**Articles of ** Association.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

**Original ** **Original ** **Provisions ** of Amended Provisions of the
**the ** System System **Basis of ** Amendments
— Article 22 The Company shall, Amended in accordance with
on a periodical or unscheduled Article 24 of the Measures for the
basis, convene meetings attended Administration of Independent
solely by independent directors Directors of Listed Companies (《上
(hereinafter referred to as special 市公司獨立董事管理辦法》) of the
meetings
of
independent		 CSRC, this article is added with
directors). Matters as specified in inclusion of matters
to		 be
items (1) to (3) of paragraph 1 considered by the special meetings
under Article 19 and Article 21 of of independent directors.
this system shall be considered
by
the
special
meetings
of
independent directors.
Special meetings of independent
directors shall be convened and
presided over by an independent
director
jointly
elected
by
a
majority
of
the
independent
directors;
two
or
more
independent directors may, by
themselves, convene and elect a
representative to preside over the
meetings where the convenor fails
to or is unable to perform his/her
duties.
The Company shall facilitate and
support the convening of special
meetings of independent directors.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

**Original ** **Original ** **Provisions ** of Amended Provisions of the
**the ** System System Basis of Amendments
— Article 23 Independent directors In accordance with Article 25 of the
shall perform their duties of the Measures for the Administration of
special committees of the board Independent Directors of Listed
of directors of the Company in Companies (《上市公司獨立董事管
accordance
with
laws,		 理辦法》) of the CSRC, this article
administrative
regulations,		 is added with inclusion of matters
provisions of the CSRC, business on performance of independent
rules of the stock exchanges and directors’ duties.
Articles
of
Association.
Independent
directors
shall
attend meetings of these special
committees
in
person;
failing
which (with grounds), materials
for the meeting shall be read in
advance
to
form
a
definite
opinion and appoint in writing
another independent director(s)
to attend the meeting on their
behalf.
Where
any
material
matters of the Company, which
fall within the scope of duties of
the special committees, has come
to
the
attention
of
the
independent
directors
when
performing
their
duties,
discussions
and
considerations
can be proposed to and conducted
by
the
special
committees
in
accordance with the procedures
in a timely manner.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

**Original ** **Provisions ** **Provisions ** of Amended Provisions of the
**the ** System System **Basis of ** Amendments
— Article 24 Independent directors In accordance with Article 30 of the
shall
work
on
site
at
the		 Measures for the Administration of
Company for no less than 15 days Independent Directors of Listed
each year. Companies (《上市公司獨立董事管
理辦法》) of the CSRC, this article
In addition to attending general is added with inclusion of matters
meetings, meetings of the board on the requirements for onsite work
of
directors
and
its
special		 and ways of performance of duties
committees and special meetings of independent directors.
of
independent
directors
as
required,
independent
directors
may
perform
their
duties
in
various ways, such as regularly
obtaining
information
on
the
operation
of
the
Company,
listening
to
reports
from
the
management, and communicating
with the person in charge of the
internal
audit
firm
and
the
accounting firm responsible for
performing
audit
for
the
Company and other intermediary
agencies,
performing
on-site
inspections, and communicating
with minority shareholders.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

**Original ** **Provisions ** of Amended Provisions of the
**the ** System System Basis of Amendments
— Article 25 Minutes of meetings of In accordance with Article 31 of the
the Company’s board of directors Measures for the Administration of
and its special committees, and Independent Directors of Listed
of
the
special
meetings
of		 Companies (《上市公司獨立董事管
independent directors shall be 理辦法》) of the CSRC, this article
prepared as required, with the is added with inclusion of matters
inclusion of the opinions of the on requirements for independent
independent directors, who shall directors to make work records and
sign to confirm the minutes of the keep the performance of duties on
meetings. records.
Independent
directors
shall
compile work records to record in
detail the performance of their
duties. Information obtained by
independent
directors
in
the
course of performing their duties,
relevant minutes of meetings, and
communication records with the
staff
of
the
Company
and
intermediary agencies form an
integral part of the work records.
Independent
directors
may
request relevant personnel, such
as the secretary to the board of
directors, to sign and confirm the
important contents in the work
records, and the Company and
relevant
personnel
shall
cooperate
with
them
in
this
respect.
Work
records
of
independent
directors
and
information
provided by the Company to the
independent directors shall be
kept for at least ten years.
— Article
26
The
Company		 In accordance with Article 32 of the
shall improve the communication Measures for the Administration of
mechanism between independent Independent Directors of Listed
directors
and
minority		 Companies (《上市公司獨立董事管
shareholders, where independent 理辦法》) of the CSRC, this article
directors can verify the issues is added with inclusion of matters
raised
by
investors
with
the		 on communication mechanism for
Company in a timely manner. minority shareholders.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of Amended Provisions of the
the System System Basis of Amendments
Article 18 Independent directors Article 27 Independent directors The work report of independent
shall prepare an annualperformance shall prepare an annualworkreport directors has been amended and
report and submit it to the general and submit it to the general meeting supplemented in accordance with
meeting for consideration and file for consideration and file for future Article 33 of the Measures for
for future reference, stating the reference, stating the performance the Administration of Independent
performance of their duties, and of their duties, and focusing on Directors of Listed Companies (《上
focusing on corporate governance corporate governance matters such 市公司獨立董事管理辦法》) of the
matters such as internal control as internal control of the Company, CSRC.
of
the
Company,
standardized		 standardized operation and protection
operation and protection of the of the rights and interests of small
rights and interests of small and and medium investors.
medium investors.
The work report of independent
The work report of independent directors shall include:
directors shall include:
(1)
the
means
and
number
of
(1)
the
means
and
number
of		 attendance and votes at the board of
attendance and votes at the board of directors,
and
the
number
of
directors,
and
the
number
of		 attendances at the general meetings
attendances at the general meetings during the year;
during the year;
(2)
the
information
on
the
(2)
the
information
on		 participation
in
the
work
independent opinions expressed; of
special
committees
of
the board of directors and special
(3) the information on on-site meetings
of
independent
inspection; directors;
(4) the information on proposals (3)
the
review
of
matters
for
convening
board
meetings,		 considered
by
the
board
of
appointment
or
dismissal
of		 directors
and
its
special
accounting
firms,
independent		 committees and the exercise of
engagement of external auditors, the special functions and powers
consulting firms, etc.; of
independent
directors
as
required by laws and regulations;
(5) other works in protecting the
legitimate rights and interests of (4) the information on major
minority shareholders. matters, methods and results of
the
communication
with
the
The work report of independent internal audit institution and the
directors
shall
be
signed
and		 accounting firm providing audit
confirmed
by
the
independent		 services to the Company on the
directors themselves and submitted financial and business conditions
to
the
Company
for
archive		 of the Company;
together with the information of the
annual general meeting for filing. (5)
communications
with
minority shareholders;
(6) the time and description of the
work on-site at the Company;
(7) other information in respect
of the performance of duties.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of Amended Provisions of the the System System Basis of Amendments The annual work report of the independent directors shall be disclosed no later than the issuance of the notice of annual general meeting by the Company. The work report of independent directors shall be signed and confirmed by the independent directors themselves and submitted to the Company for archive together with the information of the annual general meeting for filing. Article 21 The Company Article 30 The Company shall Amended and supplemented based guarantees that independent directors guarantee that independent directors on the actual circumstances of the have an equal right to information have an equal right to information Company in accordance with as other directors. The independent as other directors. The independent Article 35, Article 36 and Article directors shall be notified in directors shall be notified in 37 of the Measures for the advance of all matters to be advance of all matters to be Administration of Independent resolved at the board meeting and resolved at the board meeting and Directors of Listed Companies (《上 be provided with true, accurate and be provided with true, accurate and 市公司獨立董事管理辦法》) of the complete information before the complete information before the CSRC. expiry of the statutory notice expiry of the statutory notice period period. The independent director is and shall ensure that the entitled to request supplementary independent directors have information if he/she considers the access to sufficient resources and information provided is insufficient. necessary professional advice in performing their duties. Whenever 2 or more independent directors consider the information If 2 or more independent directors provided is insufficient or the consider the meeting materials are discussion is not clear enough , incomplete, or the discussion is they may jointly submit to the insufficient or not provided in a board of directors a request in timely manner, they may submit to writing to postpone the convention the board of directors a request in of the board meeting or to writing to postpone the convention postpone the consideration of such of the meeting or to postpone the matters. The board of directors consideration of such matters. The should accept such requests. The board of directors shall accept such information provided by the requests. Company to the independent directors shall be kept by the Company and the independent directors for at least 5 years.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of the System Article 24 The Company shall grant appropriate allowances to the independent directors. The standard of allowances shall be planned by the board of directors, considered and approved at general meeting, and disclosed in the annual report of the Company. In addition to the aforesaid allowances, independent directors should not obtain any additional, undisclosed benefits, including equity incentives, from the Company and its affiliated enterprises, substantial shareholders or interested organizations and persons.

Reasonable expenses incurred by independent directors in the performance of their duties shall be borne by the companies in which they hold office. Independent directors are entitled to request advances from the Company for reasonable expenses incurred in connection with the performance of their duties.

Amended Provisions of the System Basis of Amendments Article 32 The Company shall Independent directors’ allowances grant allowances to the independent and expenses for the performance directors commensurate with of duties have been amended and their duties and responsibilities. supplemented in accordance with The standard of allowances shall Article 41 of the Measures for be formulated by the board of the Administration of Independent directors, considered and approved Directors of Listed Companies (《上 at general meetings, and disclosed 市公司獨立董事管理辦法》) of in the annual report of the CSRC. Company.

In addition to the aforesaid allowances, independent directors shall not obtain any additional, undisclosed benefits, including equity incentives, from the Company and its affiliated enterprises, substantial shareholders, de facto controllers or interested entities and persons.

Reasonable expenses incurred by independent directors in the performance of their duties shall be borne by the companies in which they hold office. Independent directors are entitled to request advances from the Company for reasonable expenses incurred in connection with the performance of their duties.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

**Original ** **Provisions ** of Amended Provisions of the
**the ** System System Basis of Amendments
— Article 34 In this system, the This article has been added to
following terms shall have the accommodate the
specific
following meanings: circumstances of the Company in
accordance with Article 47 of the
(1) Substantial shareholders refer Measures for the Administration of
to the shareholders holding more Independent Directors of Listed
than 5% of the shares of the Companies (《上市公司獨立董事管
Company, or shareholders who 理辦法》) of CSRC.
hold less than 5% of the shares
but have significant influence on
the Company;
(2) Minority shareholders refer to
shareholders who individually or
collectively hold less than 5% of
the Company’s shares and do not
serve as directors, supervisors
and senior management officers
of the Company;
(3) Affiliated enterprises refer to
the enterprises that are directly
or indirectly controlled by related
entities;
(4)
Direct
relatives
refer
to
spouse, parents and children;
(5) Major social relations refer to
siblings
and
their
spouses,
parents of spouse, siblings of
spouse,
spouses
of
children,
parents of children’s spouses, etc.

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EXPLANATION TABLE OF THE PROPOSED AMENDMENTS TO THE WORKING SYSTEM FOR INDEPENDENT DIRECTORS

APPENDIX I

Original Provisions of Amended Provisions of the
the System System Basis of Amendments
Article
27
The
supporting		 Article
36
The
supporting		 The contents of this article have
documents of this system include: documents of this system include: been added in accordance with the
current system of the Company, and
1.
External
regulations:		 1. External regulations: Measures the abolished external regulation
Rules for Independent Directors for
the
Administration		 of has been removed.
of Listed Companies (《上市公司 Independent Directors of Listed
獨立董事規則》), Measures for the Companies (《上市公司獨立董事管
Supervision and Administration of 理辦法》),
Measures
for
the
Directors,
Supervisors,
Senior		 Supervision and Administration of
Management
Officers
and		 Directors,
Supervisors,
Senior
Practitioners of Securities Fund Management
Officers
and
Operating Institutions (《證券基金 Practitioners of Securities Fund
經營機構董事、監事、高級管理人 Operating Institutions (《證券基金
員及從業人員監督管理辦法》), 經營機構董事、監事、高級管理人
Code of Corporate Governance for 員及從業人員監督管理辦法》),
Listed Companies (《上市公司治 Code of Corporate Governance for
理準則》), Rules for Governance Listed Companies (《上市公司治
of Securities Companies (《證券公 理準則》), Rules for Governance
司治理準則》), Rules Governing of Securities Companies (《證券公
the Listing of Stocks on Shanghai 司治理準則》), Rules Governing
Stock Exchange (《上海證券交易 the Listing of Stocks on Shanghai
所股票上市規則》) and Guidelines Stock Exchange (《上海證券交易
No.
1
of
the
Shanghai
Stock		 所股票上市規則》),
Guidelines
Exchange for the Self-regulation of No.
1
of
the
Shanghai
Stock
Listed
Companies
–
Standard		 Exchange for the Self-regulation of
Operation (《上海證券交易所上市 Listed
Companies
–
Standard
公司自律監管指引第1號– 規範運 Operation (《上海證券交易所上市
作》) and Hong Kong Listing Rules 公司自律監管指引第1號– 規範運
作》), and Hong Kong Listing
2. Internal regulation: Articles of Rules;
Association of Huatai Securities
Co., Ltd. (《華泰證券股份有限公 2. Internal regulations: Articles of
司章程》) Association of Huatai Securities
Co., Ltd. (《華泰證券股份有限公
司章程》) **and Working Rules ** of
the Special Committees of the
Board of Directors of Huatai
Securities Co., Ltd. (《華泰證券
股份有限公司董事會專門委員會工
作細則》).

2. The serial number of articles under each section in the Working System for Independent Directors of the Company shall be adjusted in accordance with the above-mentioned amendments of the Working System for Independent Directors of the Company.

– 3 5 –

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