CRRC CORPORATION LIMITED

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in CRRC Corporation Limited, you should at once hand this circular, the enclosed form of proxy and reply slip for attending the AGM and the 2015 annual report (if applicable) to the purchaser or the transferee or to the bank, licensed dealer in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this document, 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 document. CRRC CORPORATION LIMITED (a joint stock limited company incorporated in the People s Republic of China with limited liability) (Stock code: 1766) ANNUAL GENERAL MEETING A notice convening the AGM of CRRC Corporation Limited to be held at Empark Grand Hotel, No. 69 Banjing Road, Haidian District, Beijing, the PRC at 2:00 p.m. (registration will begin at 1:30 p.m.) on Thursday, 16 June 2016 is set out on pages 7 to 11 of this circular. If you intend to attend the AGM in person or by proxy, you are required to complete and return the reply slip to the Company s H Share Registrar, Computershare Hong Kong Investor Services Limited, on or before Thursday, 26 May Whether or not you are able to attend the AGM, you are advised to read the notice of the AGM. If you intend to attend the AGM by proxy, you are required to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company s H Share Registrar, Computershare Hong Kong Investor Services Limited, in person or by post not less than 24 hours before the time stipulated for convening the AGM or any adjourned meeting thereof in any event. Completion and return of the form of proxy will not preclude you from attending, and voting at, the AGM or at any adjourned meeting if you so wish. 28 April 2016

2 CONTENTS DEFINITIONS... 1 LETTER FROM THE BOARD... 4 NOTICE OF THE ANNUAL GENERAL MEETING... 7 APPENDIX I ANNEX A 2015 WORK REPORT OF THE BOARD ANNEX B 2015 WORK REPORT OF THE SUPERVISORY COMMITTEE i

3 DEFINITIONS In this circular, unless the context otherwise requires, the following expressions have the following meanings: A Share(s) domestic share(s) with a nominal value of RMB 1.00 each in the share capital of the Company which are listed on the Shanghai Stock Exchange (Stock Code: ) A Shareholders holders of A Shares AGM the annual general meeting of the Company to be held at 2:00 p.m. (registration will begin at 1:30 p.m.) on Thursday, 16 June 2016 at Empark Grand Hotel, No. 69 Banjing Road, Haidian District, Beijing, the PRC Articles of Association Board CNRG CNR Company or CRRC Company Law CSR CSR Finance CSRG the Articles of Association of the Company the Board of Directors of the Company the former China Northern Locomotive & Rolling Stock Industry (Group) Corporation ( ) the former China CNR Corporation Limited ( ) CRRC Corporation Limited, a joint stock limited company incorporated in the PRC with limited liability, whose H Shares and A Shares are listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange, respectively the Company Law of the People s Republic of China as amended from time to time the former CSR Corporation Limited ( ) the former CSR Finance Co., Ltd ( ) the former CSR Group ( ) CRRC Group CRRC Group ( ), a large-scale wholly state-owned enterprise and controlling shareholder of the Company CSRC China Securities Regulatory Commission 1

4 DEFINITIONS Debentures Director(s) Finance Company one or a portfolio of debt financing instruments proposed to be issued by the Company, including corporate bonds, ultra-short-term debentures, short-term debentures, medium-term notes, perpetual bonds, overseas bonds denominated in RMB, bonds denominated in USD, A Share convertible bonds, H Share convertible bonds or other new types of bonds issued in the PRC in one or multiple tranches, with the total outstanding balance of repayment not exceeding the equivalent of RMB60 billion the director(s) of the Company CNR Financial Corp., Ltd. ( ), a subsidiary of the Company H Share(s) overseas listed foreign invested share(s) with a nominal value of RMB1.00 each in the share capital of the Company which are listed on the Hong Kong Stock Exchange and traded in HK dollars (Stock Code: 1766) H Shareholders holders of H Shares Hong Kong HK dollars Hong Kong Listing Rules Hong Kong Stock Exchange Independent non-executive Directors or Independent Directors PRC RMB the Hong Kong Special Administrative Region of the PRC Hong Kong dollars, the lawful currency of Hong Kong the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as amended from time to time The Stock Exchange of Hong Kong Limited independent non-executive Directors of the Company the People s Republic of China, excluding, for the purpose of this circular only, Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan Renminbi, the lawful currency of the PRC SASAC the State-owned Assets Supervision and Administration Commission of the State Council of the PRC SSE Share(s) Shanghai Stock Exchange A Share(s) and H Share(s) 2

5 DEFINITIONS Shareholders USD A Shareholders and H Shareholders United States dollars, the lawful currency of the United States of America 3

6 LETTER FROM THE BOARD CRRC CORPORATION LIMITED (a joint stock limited company incorporated in the People s Republic of China with limited liability) (Stock code: 1766) Executive Directors: Mr. Cui Dianguo Mr. Zheng Changhong Mr. Liu Hualong Mr. Xi Guohua Mr. Fu Jianguo Registered office: No. 16, Central West Fourth Ring Road, Haidian District, Beijing, the PRC Postal code: Non-executive Director: Mr. Liu Zhiyong Independent Non-executive Directors: Mr. Li Guo an Mr. Zhang Zhong Mr. Sun Patrick Mr. Wu Zhuo Mr. Chan Ka Keung, Peter Place of Business in Hong Kong: Unit H, 41/F., Office Tower, Convention Plaza, No. 1 Harbour Road, Hong Kong 28 April 2016 To the H Shareholders Dear Sirs, 1. INTRODUCTION On behalf of the Board, I hereby invite you to attend the AGM to be held at Empark Grand Hotel, No. 69 Banjing Road, Haidian District, Beijing, the PRC at 2:00 p.m. (registration will begin at 1:30 p.m.) on Thursday, 16 June The purpose of this circular is to provide you with the notice of the AGM and to provide you with all the information reasonably necessary to enable you to make informed decisions on whether to vote for or against the proposed resolutions at the AGM. 2. The items of matters to be considered at the AGM are described in detail in the notice of AGM set out in pages 7 to 11 of this circular. At the AGM, the following will be proposed for approval as ordinary resolutions: (1) the 2015 Work Report of the Board of the Company; (2) the 2015 Work Report of the Supervisory Committee of the Company; (3) the resolution in relation to the

7 LETTER FROM THE BOARD final accounts report of the Company; (4) the resolution in relation to the termination of certain projects funded by proceeds and the use of remaining proceeds to supplement the working capital on a permanent basis; (5) the resolution in relation to the arrangement of guarantees by the Company for 2016; (6) the resolution in relation to the entering into of the related party transaction agreements by the Company and CRRC Group; (7) the resolution in relation to the entering into of the Financial Services Framework Agreement by the Finance Company and CRRC Group; (8) the resolution in relation to the 2015 profit distribution plan of the Company; (9) the resolution in relation to the remuneration of the Directors and Supervisors of the Company for 2015; (10) the resolution in relation to the appointment of auditors of the Company for 2016, and the following will be proposed for approval as special resolutions: (11) the resolution in relation to the issue of debt financing instruments by the Company for 2016; and (12) the resolution in relation to the grant of a general mandate to the Board to issue new A Shares and H Shares of the Company. In order to enable you to have a better understanding on the resolutions to be proposed at the AGM and to make informed decisions thereof with sufficient and necessary information, we have provided the Shareholders with detailed information in Appendix I to this circular, including information and explanations of the resolutions to be proposed at the AGM for approval. Pursuant to the requirements under the Rules of Shareholders Meeting of Listed Companies issued by CSRC, the Independent Directors shall make a duty report for the preceding year at the AGM. Such report will be submitted to the Shareholders for consideration but not for Shareholders approval. 3. AGM If you intend to attend the AGM in person or by proxy, you are required to complete and return the reply slip to the Company s H Share Registrar, Computershare Hong Kong Investor Services Limited, on or before Thursday, 26 May If you intend to attend the AGM by proxy, you are required to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company s H Share Registrar, Computershare Hong Kong Investor Services Limited, in person or by post not less than 24 hours before the time stipulated for convening the AGM or any adjourned meeting thereof in any event. The Company s H Share Registrar, Computershare Hong Kong Investor Services Limited, is located at 17M Floor, Hopewell Centre, 183 Queen s Road East, Wan Chai, Hong Kong (Telephone: (852) ). Completion and return of the form of proxy will not preclude you from attending, and voting at, the AGM or at any adjourned meeting if you so wish. 5

8 LETTER FROM THE BOARD 4. VOTING BY WAY OF POLL In accordance with the requirements of the Hong Kong Listing Rules, the resolutions set out in the notice of the AGM will be voted on by way of poll. Voting results will be uploaded to the website of the Company at and the website of Hong Kong Exchanges and Clearing Limited at upon the conclusion of the AGM. 5. RECOMMENDATIONS The Directors (including Independent non-executive Directors) consider that the resolutions as set out in the notice of the AGM are in the interests of the Company and its Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the above proposed resolutions. Yours faithfully, By order of the Board of CRRC Corporation Limited Cui Dianguo Chairman 6

9 NOTICE OF THE ANNUAL GENERAL MEETING CRRC CORPORATION LIMITED (a joint stock limited company incorporated in the People s Republic of China with limited liability) (Stock code: 1766) NOTICE OF THE ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the annual general meeting for the financial year ended 31 December 2015 (the AGM or Annual General Meeting ) of CRRC Corporation Limited (the Company ) will be held at Empark Grand Hotel, No. 69 Banjing Road, Haidian District, Beijing, the PRC at 2:00 p.m. on Thursday, 16 June 2016 (registration will begin at 1:30 p.m.) for the purpose of considering and approving, if appropriate, the following resolutions (unless otherwise indicated, capitalized terms used in this notice shall have the same meanings as those defined in the circular of the Company dated 28 April 2016): ORDINARY RESOLUTIONS 1. To consider and approve the 2015 Work Report of the Board of the Company 2. To consider and approve the 2015 Work Report of the Supervisory Committee of the Company 3. To consider and approve the resolution in relation to the 2015 financial accounts report of the Company 4. To consider and approve the resolution in relation to the termination of certain projects funded by proceeds and the use of remaining proceeds to supplement the working capital on a permanent basis 5. To consider and approve the resolution in relation to the arrangement of guarantees by the Company for To consider and approve the resolution in relation to the entering into of the related party transaction agreements by the Company and CRRC Group 7. To consider and approve the resolution in relation to the entering into Financial Services Framework Agreement by the Finance Company and CRRC Group 8. To consider and approve the resolution in relation to the 2015 profit distribution plan of the Company 9. To consider and approve the resolution in relation to the remuneration of the Directors and Supervisors of the Company for To consider and approve the resolution in relation to the appointment of auditors of the Company for

10 NOTICE OF THE ANNUAL GENERAL MEETING SPECIAL RESOLUTIONS 11. To consider and approve the resolution in relation to the issue of debt financing instruments by the Company for To consider and approve the resolution in relation to the grant of a general mandate to the Board to issue new A Shares and H Shares of the Company REPORTING MATTER The Independent Directors of the Company will submit their 2015 work report to the Shareholders for consideration but not for approval at the AGM. By order of the Board Cui Dianguo Chairman 28 April 2016 Notes: 1. Details of the above resolutions are set out in Appendix I to this circular regarding the Company s AGM dated 28 April Pursuant to the requirements under the Rules of Shareholders Meeting of Listed Companies issued by CSRC, the Independent Directors shall issue a duty report for the preceding year at the AGM. Such report will be submitted to the Shareholders for consideration but not for Shareholders approval. 3. The Board has recommended a final dividend of RMB0.15 per Share (tax inclusive) for the year ended 31 December 2015 and, if such dividend is declared by the Shareholders upon passing the resolution No. 8, it is expected to be paid on a certain business day (excluding Saturday, Sunday or public holidays in Hong Kong or the PRC) on or before 12 August 2016 to those Shareholders whose names appear on the register of members of the Company on Monday, 27 June Under relevant regulations of China Securities Depository and Clearing Corporation Limited Shanghai Branch and in line with the market practice regarding dividend distribution of A Shares, the Company will publish a separate announcement in respect of its final dividend distribution to holders of A Shares after the Company s AGM, which will set out the record date and ex-dividend date for final dividend distribution to holders of A Shares. Timetable arrangements such as the record date, the ex-dividend date and the date of distribution of cash dividend for the investors of northbound trading will be the same as holders of A Shares of the Company. Timetable arragements such as the record date, the ex-dividend date and the date of distribution of cash dividend for the investors of southbound trading will be the same as holders of H Shares of the Company. 8

11 NOTICE OF THE ANNUAL GENERAL MEETING To determine the identity of the Shareholders entitled to receive the final dividend, the Company s register of members will be closed from Wednesday, 22 June 2016 to Monday, 27 June 2016 (both days inclusive), during which period no transfer of H Shares will be registered. In order to be entitled to the final dividend, H Shareholders of the Company who have not registered the transfer documents are required to deposit the transfer documents together with the relevant share certificates with the H Share Registrar of the Company, Computershare Hong Kong Investor Services Limited, at Rooms , 17th Floor, Hopewell Centre, 183 Queen s Road East, Wan Chai, Hong Kong no later than 4:30 p.m. on Tuesday, 21 June According to the Law on Enterprise Income Tax of the People s Republic of China and its implementing rules which came into effect on 1 January 2008 and the Notice of the Issues Concerning Withholding the Enterprise Income Tax on the Dividends Paid by Chinese Resident Enterprises to H-share Holders Which Are Overseas Non-resident Enterprises issued by the State Administration of Taxation (Guo Shui Han [2008] No. 897), the Company is required to withhold enterprise income tax at the rate of 10% before distributing the final dividend to non-resident enterprise shareholders as appearing on the H Share register of members of the Company. The enterprise income tax shall be withheld for the dividends of any H shares under the name of non-individual shareholders (any H shares of the Company registered in the name of HKSCC Nominees Limited, other nominees and trustees, or other organizations and institutions, shall be deemed as shares held by non-resident enterprise shareholders). According to Guo Shui Han [2011] No. 348 issued by the State Administration of Taxation, the Company shall withhold and pay the individual income tax for dividend payable to the individual H Shareholders. The individual H Shareholders are entitled to the relevant preferential tax treatment pursuant to the provisions in the tax agreements between the countries where they are residents and China or the tax arrangements between mainland China and Hong Kong (Macau). If the individual H Shareholders are Hong Kong or Macau residents or residents of the countries having an agreed dividend tax rate of 10% with China, the Company shall withhold and pay the individual income tax at a rate of 10%. Should the individual H Shareholders be residents of the countries having an agreed dividend tax rate of less than 10% with China, the Company would apply for entitlement of the relevant agreed preferential tax treatment on their behalf in accordance with the Notice of the State Administration of Taxation in Relation to the Administrative Measures on Preferential Treatment Entitled by Non-residents under Tax Treaties (Tentative) (Guo Shui Fa [2009] No. 124) ( < ( )> ). Should the individual H Shareholders be residents of the countries having an agreed dividend tax rate exceeding 10% but lower than 20% with China, the Company shall withhold and pay the individual income tax at the actual agreed rate. In case the individual H Shareholders are residents of the countries having not entered into any tax agreement with China or otherwise, the Company shall withhold and pay the individual income tax at a rate of 20%. The Company shall take the registered address (hereinafter referred to as Registered Address ) as recorded in the register of members of the Company on 27 June 2016 to determine the residence of the individual H Shareholders, and accordingly withhold and pay the individual income tax. Should the residence of the individual H Shareholders be inconsistent with the 9

12 NOTICE OF THE ANNUAL GENERAL MEETING Registered Address, they should notify the Company s H Share Registrar on or before 4:30 p.m. on 21 June 2016 and provide relevant supporting documents, and the correspondence details are as follows: Computershare Hong Kong Investor Services Limited of 17M Floor, Hopewell Centre, 183 Queen s Road East, Wanchai, Hong Kong (Tel: (852) ). For the individual H Shareholders who failed to provide relevant supporting documents to the Company s H Share Registrar within the time period stated above, the Company will determine their residence according to the whatsoever Registered Address as recorded in the register of members on 27 June The Company assumes no responsibility and will not entertain any claims arising from any delay in, or inaccurate determination of, the status of the Shareholders or any dispute over the arrangement of withholding and payment of tax. 4. In accordance with the requirements of the Hong Kong Listing Rules, the resolutions set out in the notice of AGM will be voted on by way of poll. Voting results will be uploaded to the website of the Company at and the website of Hong Kong Exchanges and Clearing Limited at upon the conclusion of the AGM. 5. Any Shareholder entitled to attend and vote at the AGM convened by the above notice is entitled to appoint one or more proxies to attend and vote on behalf of him/her. A proxy needs not be a Shareholder of the Company. 6. In order to be valid, the instrument appointing a proxy together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or authority, should be completed and deposited at the H Share Registrar of the Company, Computershare Hong Kong Investor Services Limited (for H Shareholders), at least 24 hours before the AGM or any adjourned meeting thereof. Computershare Hong Kong Investor Services Limited is located at 17M Floor, Hopewell Centre, 183 Queen s Road East, Wan Chai, Hong Kong. Completion and return of the proxy form will not preclude a Shareholder from attending in person and voting at the AGM or any adjournment thereof should he/she so wish. 7. The H Share register of members of the Company will be closed, for the purpose of determining H Shareholders entitlement to attend the AGM, from Tuesday, 17 May 2016 to Thursday, 16 June 2016 (both days inclusive), during which period no transfer of H Shares will be registered. In order to attend the AGM, all share transfers, accompanied by the relevant share certificates, must be lodged for registration with the Company s H Share Registrar, Computershare Hong Kong Investor Services Limited, at Rooms , 17th Floor, Hopewell Centre, 183 Queen s Road East, Wan Chai, Hong Kong, no later than 4:30 p.m. on Monday, 16 May H Shareholders whose names appear on the register of members of the Company maintained by Computershare Hong Kong Investor Services Limited on or before the above date will be eligible to attend the AGM. 8. In case of joint shareholdings and the shareholder or the proxy attending the AGM is more than one person, the vote of the senior joint shareholder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint shareholder(s) and for this purpose seniority will be determined by the order in which the names appear in the register of members of the Company in respect of the joint shareholdings. 10

13 NOTICE OF THE ANNUAL GENERAL MEETING 9. Shareholders who intend to attend the AGM in person or by proxy should return the reply slip for the AGM to the Company s H Share Registrar, Computershare Hong Kong Investor Services Limited, by hand, by post or by fax on or before Thursday, 26 May The Company s H Share Registrar, Computershare Hong Kong Investor Services Limited, is located at 17M Floor, Hopewell Centre, 183 Queen s Road East, Wan Chai, Hong Kong (Telephone: (852) ). 10. The AGM is expected to last for about half a day. Shareholders who attend the meeting in person or by proxy shall bear their own travelling and accommodation expenses. Shareholders or their proxies shall produce their identity documents when they attend the AGM. 11

14 ORDINARY RESOLUTION: 1. THE 2015 WORK REPORT OF THE BOARD OF THE COMPANY In accordance with the relevant provisions of the Articles of Association, Rules of Procedure for General Meetings of CRRC Corporation Limited and Rules of Procedure for the Board of Directors of CRRC Corporation Limited, the Board reported the working status of the Board for the year 2015, details of which are set out in Appendix A to this circular. 2. THE 2015 WORK REPORT OF THE SUPERVISORY COMMITTEE OF THE COMPANY In accordance with the provisions of the Articles of Association, the supervisory committee of the Company reported the working status of the supervisory committee for the year 2015, details of which are set out in Annex B to this circular. 3. THE 2015 FINANCIAL ACCOUNTS REPORT OF THE COMPANY The Company has prepared its financial statements and the notes thereto for the year 2015 in accordance with Accounting Standards for Business Enterprises issued by the Ministry of Finance of the PRC, and engaged Deloitte Touche Tohmatsu CPA LLP to audit the consolidated balance sheet, the balance sheet of the Company as at 31 December 2015, the consolidated statements of profit or loss and the statement of profit or loss of the Company for the period from 1 January 2015 to 31 December 2015, the consolidated statements of cash flows and the statement of cash flows of the Company, the consolidated statements of changes in equity and the statement of changes in equity of the Company and the notes thereto. Deloitte Touche Tohmatsu CPA LLP is of the opinion that the financial statements are prepared in accordance with Accounting Standards for Business Enterprises issued by the Ministry of Finance of the PRC in all material aspects, fairly reflect the consolidated financial position and the financial position of the Company as at 31 December 2015, consolidated operating results, the operating results of the Company together with the consolidated cash flow and the cash flow of the Company for the year For details of the above statements, please refer to the financial report of the Company in section 11 of the 2015 annual report of the Company published on the website of the Shanghai Stock Exchange. The abovementioned resolution in relation to the 2015 financial report was considered and approved by the Board on 29 March 2016 and is hereby submitted to the AGM for consideration and approval. 4. THE RESOLUTION IN RELATION TO THE TERMINATION OF CERTAIN PROJECTS FUNDED BY PROCEEDS AND THE USE OF REMAINING PROCEEDS TO SUPPLEMENT THE WORKING CAPITAL ON A PERMANENT BASIS The Company is an A+H share listed company established through the merger of CNR and CSR under the principle of merger of equals, and the Company has assumed all rights and obligations of CSR and CNR. Projects under construction funded by proceeds raised from issue of A Shares of CRRC include: 62 projects funded by the proceed raised from 3 batches of fund raising including the initial public offering of A shares by CNR in 2009, the A share rights issue by CNR in 2012, and the 12

15 non-public issuance of A shares by CSR in According to the fund usage plan stated in the prospectuses and other offering documents, a total of RMB billion in proceeds shall be used in such projects. As at 31 December 2015, the actual proceeds used in projects funded by proceeds was RMB billion, the balance of the proceeds of the projects amounted to RMB0.721 billion, representing 3.51% of the total proceeds to fund such projects. The Company intends to terminate certain projects funded by the proceeds and use all the remaining proceeds to supplement the working capital on a permanent basis based on actual conditions of the projects. I. Basic status of the proceeds (I) Status of the proceeds raised from the initial public offering of A Shares by CNR in 2009 With the approval of China Securities Regulatory Commission (Zheng Jian Xu Ke [2009] No.1270), CNR completed its initial public offering of 2,500,000,000 A Shares (nominal value per share: RMB1) at the issue price of RMB5.56 per Share. The total proceeds raised were RMB13,900,000,000. After deducting the offering expenses, the net proceeds amounted to RMB13,542,924,626.23, which was verified by the Capital Verification Report of China CNR Corporation Limited issued by KPMG Huazhen LLP (KPMG-A(2009)CR NO.0022). The proceeds are deposited in specific accounts of the Company. (II) Status of the proceeds raised from the A Shares rights issue by CNR in 2012 With the approval of China Securities Regulatory Commission (Zheng Jian Xu Ke [2012] No.184), CNR issued 2,020,056,303 RMB-denominated ordinary Shares (A Shares). After deducting the offering expenses, the net proceeds amounted to RMB6,873,641,122.63, which was verified by the Capital Verification Report of China CNR Corporation Limited issued by KPMG Huazhen LLP (KPMG-A(2012)CR NO.0008). The proceeds are deposited in specific accounts of the Company. (III) Status of the proceeds from the non-public issuance of A Shares of CSR in 2012 With the approval of China Securities Regulatory Commission (Zheng Jian Xu Ke [2012] No.210), CSR issued 1,963,000,000 RMB-denominated ordinary Shares (A Shares) by way of non-public issuance at the issue price of RMB4.46 per Share on the Shanghai Stock Exchange. The total proceeds raised were RMB8,754,980, After deducting the offering expenses, the net proceeds amounted to RMB8,699,405,280.22, which was verified by the Capital Verification Report on Proceeds from the Non-public Issue of RMB-denominated Ordinary Shares (A Shares) of CSR Corporation Limited issued by Da Hua Certified Public Accountants Co., Ltd ( ) (da hua yan zi [2012] No.119). The proceeds are deposited in specific accounts of the Company. 13

16 II. Proposed change to projects funded by proceeds raised (I) Proposed termination of projects funded by proceeds raised No. Implementation entity Project name Planned investment amount of the proceeds (RMB0 000) Amounts invested as at 31 December 2015 The amounts of proceeds proposed to change its usage as at 31 December 2015 (RMB0 000) (RMB0 000) Percentage of the amount of proceeds proposed to change its usage to the total proceeds I. Non-public issuance of A Shares by CSR in CRRC Guangdong Railway Transportation Vehicles Co.,Ltd. ( ) Construction project (phase I) of the Guangdong CSR transit vehicles maintenance and manufacturing base 110,000 70,600 39, % 2. CRRC Luoyang Co., Ltd. ( ) Construction project of the repair and service base for Hexie electric locomotives 28,000 15,000 13, % II. Initial public offering of A Shares by CNR in CRRC Corporation Limited The overall informationization construction projects 16,000 15, Note 0.028% (II) Status of projects funded by proceeds with remaining proceeds (inclusive of interest income) Note: As at 31 December 2015, the actual unused proceeds amounted to RMB6,424,300, of which, an amount of RMB3,783,800 (exclusive of interest income) of the proceeds for the Datong subsidiary project proposes to change its usage. 14

17 No. Implementation entity Project name I. Initial public offering of A Shares by CNR in CRRC Changchun Railway Vehicles Co., Ltd. ( ) CRRC Tangshan Co., Ltd. ( ) CRRC Datong Co., Ltd. ( ) Construction project of the manufacturing platform for the MUs at a speed of 350km/h Projects for the introduction, digestion and absorption of technology and the domestic transformation of MUs at a speed of 200km/h Construction project of the national engineering laboratory on system integration of high-speed trains Projects for the introduction, digestion and absorption of technology and the domestic transformation of bogies of MUs at a speed of 300km/h Production technology transformation project of rail vehicles for export Projects for the introduction, digestion and absorption of technology and the domestic transformation of MUs at a speed of 300km/h Construction project of warehousing system for the MUs at a speed of 300km/h Project for the introduction, digestion and absorption of technology and the domestic transformation of six-axle high power AC drive electric locomotives Planned investment amount of the proceeds (RMB 0,000) 131,200 46,000 11,400 9,800 36,000 68,000 9,000 Proceeds to be used to permanently supplement working capital (including interest income) (RMB 0,000) Remarks , All represent the interest in the accounts All represent the interest in the accounts The remaining proceeds amounted to RMB2,084,600 and the interest in the account amounted to RMB7,116,100 15

18 No Implementation entity CRRC Dalian Co., Ltd. ( ) CRRC Beijing Erqi Locomotive Co., Ltd. ( ) CRRC Dalian Institude Co.,Ltd. ( ) Project name Technical transformation project of 9600KW high power AC drive electric locomotives Project for the introduction, digestion and absorption of technology and the domestic transformation of high power AC drive diesel locomotives Project for the introduction, digestion and absorption of technology and the domestic transformation of major road maintenance and construction machineries Technology transformation project for the production of six-axle high power AC drive electric locomotives Project for the introduction, digestion and absorption of technology and the domestic transformation of the microcomputer network control systems of high power AC locomotives and the key components of diesel locomotive engines Planned investment amount of the proceeds (RMB 0,000) 45,100 47,800 20,000 34,500 Proceeds to be used to permanently supplement working capital (including interest income) (RMB 0,000) Remarks 1, , The remaining proceeds amount to RMB415,300 in respect of technical transformation project of 9600KW high power AC drive electric locomotives; an outstanding amount of RMB6,500,000 shall be paid in respect of project for the introduction, digestion and absorption of technology and the domestic transformation of high power AC drive diesel locomotives, the remaining proceeds of which is expected to be RMB9,058,100; and the interest in the accounts amounted to RMB4,614,900 An outstanding amount of RMB2,380,000 shall be paid in respect of such projects, the remaining proceeds of which is expected to be RMB2,860,600; and the interest in the accounts amounted to RMB3,392,100 All represent the interest in the accounts 16

19 No Implementation entity CRRC Sifang Institude Co.,Ltd. ( ) CRRC Qiqihar Railway Rolling Stock Co.,Ltd. ( ) CRRC Xi an Co.,Ltd. ( ) CRRC Taiyuan Co.,Ltd. ( ) Project name Project for the introduction, digestion and absorption of technology and the domestic transformation of the auxiliary train network systems, braking systems and coupler and draft gears of the MUs at a speed of 200km/h Technical transformation project of electrical products and air spring products on the train Improvement of railway wagons and specialized production technology transformation project of the key components and parts Establishment of a research and development center for railway wagons and construction project of assembly base Construction and renovation projects of research and development and manufacturing bases for high-speed and heavy-load railway wagons Adaption with the technology development of 25-ton-axle heavy load freight and technology transformation project for enhancing the manufacturing process of new model 70-ton railway tank wagons Repair of new model electric locomotives and technology transformation project for enhancing the manufacturing process of construction vehicles Planned investment amount of the proceeds (RMB 0,000) 11,000 37,000 32,000 22,000 23,400 Proceeds to be used to permanently supplement working capital (including interest income) (RMB 0,000) Remarks , ,000 1, All represent the interest in the accounts All represent the interest in the accounts There will be no remaining proceeds after payment of the outstanding amount of RMB12,093,200; the interest in the account amounted to RMB3,088,200 There will be no remaining proceeds after payment of the outstanding amount of RMB33,540,900; the interest in the account amounted to RMB11,296,400 17

20 No Implementation entity CRRC Yongji Motor Co.,Ltd. ( ) CRRC Jinan Co.,Ltd. ( ) Project name Wind power generation and research and development center project Technology transformation project of large steel structure industrial base and intelligentized installation of equipment II. Rights Issue of A Shares by CNR in CRRC Tangshan Co.,Ltd. ( ) Construction project of research and development and experiment platform for high-speed inspection trains and high-speed MUs at a speed of 400km/h and above New technology transformation project of the MUs at a speed of 350km/h and above (4-6 vehicles) Construction project of repair and service base for high-speed MUs Planned investment amount of the proceeds (RMB 0,000) Proceeds to be used to permanently supplement working capital (including interest income) (RMB 0,000) Remarks 82,000 1, , ,000 8,000 65,000 1, There will be no remaining proceeds after payment of the outstanding amount of RMB6,257,700; the interest in the account amounted to RMB10,888,900 The remaining proceeds amounted to RMB2,310,400; the interest in the account amounted to RMB1,591,900 There will be no remaining proceeds after payment of the outstanding amount of RMB59,275,900 in respect of construction project of research and development and experiment platform for high-speed inspection trains and high-speed MUs at a speed of 400km/h and above; there will be no remaining proceeds after the payment of the outstanding amount of RMB14,788,400 in respect of construction project of repair and service base for high-speed MUs; the interest in the account amounted to RMB10,060,900 18

21 No Implementation entity CRRC Beijing Nankou Co.,Ltd. ( ) CRRC Sifang Institude Co.,Ltd. ( ) Tianjin JL Railway Transportation Equipment Co., Ltd. ( ) Project name Specialized gearbox production technical transformation project of the supporting high power locomotives and the MUs at a speed of 200km/h and above Technical transformation project for the enhancement of industrialization capability of gearing and air source system of the AC drive locomotives and high-speed MUs Research and development and industrialization technology transformation project of braking system in the railway vehicles Technical transformation project of spring manufacturing and rolling tool production for high-speed trains Planned investment amount of the proceeds (RMB 0,000) 21,000 27,300 Proceeds to be used to permanently supplement working capital (including interest income) (RMB 0,000) Remarks 3, , , The specialized gearbox production technical transformation project of the supporting high power locomotives and the MUs at a speed of 200km/h and above failed to be completed on schedule due to the preliminary replacement of self-financing funds and the interest of bank loans, with the remaining proceeds of RMB36,346,900; there will be no remaining proceeds after payment of the outstanding amount of RM365,600 in respect of technical transformation project for the enhancement of industrialization capability of gearing and air source system of the AC drive locomotives and high-speed MUs; the interest in the account amounted to RMB3,262,100 All represent the interest in the account All represent the interest in the account 19

22 No Implementation entity CRRC Qiqihar Railway Rolling Stock Co., Ltd. ( ) CRRC Dalian Co., Ltd. ( ) CRRC Lanzhou Co., Ltd. ( ) CRRC Dalian Daqi Co., Ltd. ( ) CRRC Datong Co., Ltd. ( ) CRRC Taiyuan Co., Ltd. ( ) CRRC Harbin Co., Ltd. ( ) Project name Construction project of technical research and development platform for heavy-hauling and rapid freight wagons Construction project of experiment platform for fatigue and vibration of railway wagons Technical transformation project for enhancing the manufacturing process of heavy-hauling and rapid freight railway wagons Construction project of Phase I Lvshun Base of CRRC Dalian Construction project of Phase II Lvshun Base of CRRC Dalian Technology transformation project for locomotive inspection and repair and capacity expansion of mining locomotives Construction project of special container industrial base in the Economic Development Zone of Lvshun, Dalian City Construction project of coal mining equipment manufacturing (Phase I hydraulic supports) Construction project of Phase I coal mining equipment (trackless rubber-tyre vehicles) Construction and technology transformation project of steel logistics base of CRRC Harbin Planned investment amount of the proceeds (RMB 0,000) 10,000 6,400 45,000 45, ,000 Proceeds to be used to permanently supplement working capital (including interest income) (RMB 0,000) Remarks , , , , , All represent the interest in the accounts All represent the interest in the accounts All represent the interest in the accounts All represent the interest in the accounts The remaining proceeds amount to RMB2,486,100 and the interest in the account amounted to RMB520,900 All represent the interest in the accounts There will be no remaining proceeds after payment of the outstanding amount of RMB18,000; the interest in the account amount to RMB152,600 20

23 No Implementation entity Mudanjiang CRRC Jinyuan Casting Industry Co., Ltd. ( ) Jianjin CRRC Tangche Railway Co., Ltd. ( ) Project name Technical transformation project for enhancing the manufacturing process of heavy-hauling and rapid freight railway wagons for export Construction project of inter-city train stainless steel coachwork Planned investment amount of the proceeds (RMB 0,000) Proceeds to be used to permanently supplement working capital (including interest income) (RMB 0,000) Remarks 18, , All represent the interest in the accounts All represent the interest in the accounts (III) After deducting the handling fee from the proceeds raised from the initial public offering of A Shares by CNR in the account of the Company, the interest in the account amounted to RMB15,333,000. In addition to the remaining funds of RMB6,924,600, the remaining proceeds amounted to RMB22,257,600 in total. (IV) After deducting the handling fee from the proceeds raised from the rights issue of A Shares by CNR in 2012 in the account of the Company, the interest in the account amounted to RMB1,673,300 and the remaining proceeds amounted to RMB1,673,300. (V) III. The investment amount of all the proceeds raised from the non-public issurance of A Shares by CSR in 2012 was uniformly magaged under the account of the Company. After deducting the handling fee, the interest in the account amounted to RMB18,060,000. Changed use of proceeds The remaining proceeds of the aforesaid investment projects funded by such proceeds, which are proposed to be terminated, together with the remaining proceeds of investment projects funded by other proceeds (inclusive of interest income), will be used to permanently supplement the working capital of the implementation entity of each project in order to support the development of the principal businesses. From 1 January 2016 to the date on which the account of the implementation entity of each project is cancelled, the interest balance arising from each account will be used to permanently supplement the working capital of the implementation entity of each project in order to support the development of the principal businesses. 21

24 IV. Reasons for changing the investment projects funded by proceeds (1) The Company intends to terminate the Guangdong CSR transit vehicles maintenance and manufacturing base construction project (phase I) due to the delay in progress in the construction of the project resulted from the reorganization of CSR and CNR. After the reorganization of CSR and CNR and the establishment of CRRC, the Company decided to terminate the construction of such projects in order to avoid duplicate investment. (2) The Company intends to terminate the construction project of the repair and service base for Hexie electric locomotives due to the delay in progress in the construction of the project resulted from the adjustment of repair and service procedures for Hexie locomotives and market fluctuations. The time to re-commence the construction of the project has yet to be determined. As it is required to reintegrate the locomotive repair and service resources after the reorganization of CSR and CNR and the establishment of CRRC, the Company decided to terminate the construction of such project in order to avoid duplicate investment. (3) The Company intends to terminate the informatization sub-project of CRRC Datong Co., Ltd. under the overall informatization construction project of CNR due to the failure to implement certain construction instructions in such sub-project as originally planned as a result of technology upgrades and budget shortfalls. (4) After permanently supplementing the working capital by using the remaining proceeds of the projects to be terminated and the surplus proceeds of the completed projects, the Company s subsidiaries will utilize their own funds to carry out the construction project when necessary, depending on the practical needs of the original investment project. (5) It will raise the utilization rate of the Company s capital and help smoothly promote the development of its principal businesses and strategic plans to permanently supplement the working capital by using the remaining proceeds of the projects to be terminated and the surplus proceeds of the completed projects. The abovementioned resolution in relation to the termination of certain projects funded by proceeds and the use of remaining proceeds to supplement the working capital on a permanent basis was considered and approved on 29 March 2016 and is hereby submitted to the AGM for consideration and approval. 5. THE RESOLUTION IN RELATION TO THE ARRANGEMENT OF GUARANTEES BY THE COMPANY FOR 2016 Based on the daily production and operation needs of its subsidiaries, the Company and its direct wholly-owned subsidiaries propose to provide guarantees for certain subsidiaries of the Company in respect of their financing and credit business such as bank credit facilities, letters of guarantee from 22

25 insurance companies for 2016 and provided parent guarantees to certain subsidiaries of the Company in respect of their businesses such as overseas bidding and contract performance, with a total guarantee amount of RMB billion. The specific arrangement is as follows: (1) Guarantee amount (i) The Company provided guarantee of RMB77.43 billion to certain subsidiaries of the Company in respect of their financing and credit businesses and undertakes joint liability for debts arising from the various businesses of the guaranteed parties involving the use of credit. The details of the guarantees are as follows: Name of guaranteed party Guarantee amount (RMB 0,000) CRRC Qiqihaer Co., Ltd.( ) 255,000 CRRC Changchun Railway Vehicle Co., Ltd 1,000,000 ( ) CNR Shenyang Locomotive & Rolling Stock Co., Ltd. 100,000 ( ) CRRC Dalian Co., Ltd ( ) 340,000 CRRC Tangshan Co., Ltd ( ) 600,000 CRRC Beijing Erqi Locomotive Co., Ltd. 60,000 ( ) CRRC Beijing Erqi Vehicle Co., Ltd. ( ) 57,000 CRRC Beijing Nankou Co., Ltd. ( ) 10,000 CRRC Shijiazhuang Co., Ltd. ( ) 90,000 CRRC Datong Co., Ltd. ( ) 130,000 CRRC Taiyuan Co., Ltd. ( ) 50,000 CRRC Yongji Motor Co., Ltd. ( ) 160,000 CRRC Jinan Co., Ltd. ( ) 160,000 CRRC Qingdao Sifang Co., Ltd. ( ) 1,000,000 CRRC Sifang Co., Ltd. ( ) 150,000 CRRC Luoyang Co., Ltd. ( ) 60,000 CRRC Xi an Co., Ltd. ( ) 40,000 CRRC Lanzhou Co., Ltd. ( ) 28,000 CRRC Nanjing Puzhen Co., Ltd. ( ) 250,000 CRRC Qishuyan Co., Ltd. ( ) 81,000 CRRC Yangtze Co., Ltd. ( ) 127,000 CRRC Ziyang Co., Ltd. ( ) 160,000 CRRC Meishan Co., Ltd. ( ) 36,000 CRRC Zhuzhou Locomotive Co., Ltd. ( ) 200,000 CRRC Zhuzhou Motor Co., Ltd. ( ) 55,500 CRRC Guiyang Co., Ltd. ( ) 30,000 23

26 Name of guaranteed party Guarantee amount (RMB 0,000) CRRC Dalian Institute Co., Ltd. ( ) 20,000 CRRC Dalian R&D Co., Ltd. 13,000 ( ) CRRC Sifang Institute Co., Ltd. 50,000 ( ) CRRC Qishuyan Institute Co., Ltd. 156,000 ( ) CRRC Zhuzhou Institute Co., Ltd. 720,000 ( ) CRRC International Co., Ltd. ( ) 100,000 CRRC Logistics Co., Ltd. ( ) 300,000 CRRC Investment & Leasing Co., Ltd. ( ) 300,000 CNR Finance Co., Ltd. ( ) 280,000 CRRC CONSTRUTION ENGRG.CO., LTD. 150,000 ( ) CRRC Shenzhen Capital Management Co., Ltd. 20,000 ( ) CRRC Hong Kong Capital Management Co., Ltd 100,000 ( ) CRRC Hong Kong Co., Ltd. ( ( ) ) 250,000 Beijing CNR CR Railway Transportation Equipment Co., Ltd. 7,500 ( ) CRRC Information Technology Co., Ltd. ( ) 2,000 CRRC Shanghai Co., Ltd. ( ) 5,000 CRRC USA Corporation ( ( ) ) 20,000 CNR Rolling Stock South Africa Proprietary Limited 20,000 ( ( ) ) Total 7,743,000 24

27 (ii) The direct wholly-owned subsidiaries of the Company provided guarantee of RMB billion to certain subsidiaries of the Company in respect of their financing and credit businesses and undertakes joint liability for debts arising from the various businesses of the guaranteed parties involving the use of credit. The details of the guarantees are as follows: Name of guaranteed party Guarantee amount (RMB 0,000) CRRC Zhuzhou Locomotive Co., Ltd. ( ) 150, CRRC Qishuyan Co., Ltd. ( ) 78, CRRC Ziyang Co., Ltd. ( ) 20, CRRC Qingdao Sifang Co., Ltd. 200, ( ) CRRC Nanjing Puzhen Co., Ltd. ( ) 50, CRRC Sifang Co., Ltd. ( ) 50, CRRC Shijiazhuang Co., Ltd. ( ) 20, CRRC Meishan Co., Ltd. ( ) 6, CRRC Beijing Erqi Vehicle Co., Ltd. ( ) 7, CRRC Zhuzhou Institute Co., Ltd. 100, ( ) Zhuzhou CRRC Times Electric Co., Ltd. 250, ( ) Zhuzhou Times New Material Technology Co., Ltd. 70, ( ) CRRC Yongji Motor Co., Ltd. ( ) 4, CRRC Zhuzhou Motor Co., Ltd. ( ) 35, CRRC Zhuzhou Institute Co., Ltd. 100, ( ) (iii) The Company provided parent guarantee of RMB41.0 billion to certain subsidiaries of the Company in respect of their businesses such as overseas bidding and contract performance and undertakes to assume the guarantee liability within the scope agreed under the guarantee contract. In accordance with the equity level of the entity of the Company entering into the guarantee contract, certain part of the parent guarantee may be provided by the direct wholly-owned subsidiaries of the Company; (iv) The validity period of the abovementioned credit guarantee is from the date of the approval at the 2015 AGM to the date on which the 2016 annual general meeting is convened; (v) The guarantee amount is based on the estimate of the current business. Based on the possible changes, if the guarantor under the different guarantees is the same, the guarantor may adjust the guarantee provided to the guaranteed party within the total guarantee amount as prescribed in the abovementioned guarantee plan; 25