THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this Circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular. 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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional advisers. If you have sold or transferred all your shares in Haitong Securities Co., Ltd., you should at once hand this Circular together with the accompanying form of proxy to the purchaser(s) or the transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s). (A joint stock limited company incorporated in the People s Republic of China with limited liability) (Stock Code: 6837) 2015 REPORT OF THE BOARD 2015 REPORT OF THE SUPERVISORY COMMITTEE 2015 ANNUAL REPORT 2015 FINAL ACCOUNTS REPORT 2015 PROFIT DISTRIBUTION PROPOSAL RENEWAL OF ENGAGEMENT OF A SHARE AUDITING FIRM AND H SHARE AUDITING FIRM FOR THE YEAR 2016 INVESTMENT ASSET ALLOCATION OF EQUITY, FIXED INCOME SECURITIES AND DERIVATIVE PRODUCTS OF THE COMPANY AUTHORISATION TO THE BOARD TO DETERMINE PROVISION OF GUARANTEES FOR SUBSIDIARIES DAILY RELATED PARTY TRANSACTIONS OF THE COMPANY FOR THE YEAR 2016 PROPOSED APPOINTMENT OF MR. ZHANG MING AS AN INDEPENDENT NON-EXECUTIVE DIRECTOR PROPOSED APPOINTMENT OF MR. SONG CHUNFENG AS A SUPERVISOR ADJUSTMENTS TO ALLOWANCES OF THE DIRECTORS AND SUPERVISORS PROPOSED APPOINTMENT OF MR. CHU, LAWRENCE SHENG YU AS A NON-EXECUTIVE DIRECTOR PROPOSED APPOINTMENT OF MS. CHAN, WAH MAN CARMAN AS AN INDEPENDENT NON-EXECUTIVE DIRECTOR GENERAL MANDATE TO ISSUE ONSHORE DEBT FINANCING INSTRUMENTS GRANT OF GENERAL MANDATE TO AUTHORIZE, ALLOT OR ISSUE A SHARES AND/OR H SHARES PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION NOTICE OF ANNUAL GENERAL MEETING AND SUPPLEMENTAL NOTICE OF ANNUAL GENERAL MEETING A notice convening the 2015 Annual General Meeting of the Company to be held at Jing Song Hall, 4/F, Pine City Hotel, No. 777 Zhaojiabang Road, Shanghai, the PRC on Thursday, 26 May 2016 at 1:30 p.m. and the supplemental notice are set out on pages 21 to 26 of this Circular. Reply slip for holders of H Share for attending the AGM and the original form of proxy have been distributed on Friday, 8 April 2016 and the supplemental form of proxy has been distributed on Thursday, 5 May They have also been published on the website of the Hong Kong Stock Exchange ( Whether or not you are able to attend the AGM, please complete and return the original and supplemental form of proxy in accordance with the instructions printed thereon as soon as practicable and in any event not less than 24 hours before the time appointed for the holding of the AGM, and deposit it together with the notarised power of attorney or other document of authorization with Computershare Hong Kong Investor Services Limited. Completion and return of the form of proxy will not preclude you from attending and voting at the AGM should you so desire. Shareholders of the Company intending to attend the AGM in person or by their proxies should complete and return the reply slip for attending the AGM to Computershare Hong Kong Investor Services Limited on or before Friday, 6 May * For identification purpose only 5 May 2016

2 TABLE OF CONTENTS Page DEFINITIONS... 1 LETTER FROM THE BOARD... 3 NOTICE OF ANNUAL GENERAL MEETING SUPPLEMENTAL NOTICE OF ANNUAL GENERAL MEETING Annex A 2015 Report of the Board Annex B 2015 Report of the Supervisory Committee Annex C 2015 Final Accounts Report Annex D 2015 Duty Performance Report of Independent Directors Annex E Projected Daily Related Party Transactions for the Year Annex F Biography of Mr. Zhang Ming Annex G Biography of Mr. Song Chunfeng Annex H Biography of Mr. Chu, Lawrence Sheng Yu Annex I Biography of Ms. Chan, Wah Man Carman i

3 DEFINITIONS In this Circular, unless the context otherwise requires, the following expressions have the following meanings: A Share(s) domestic shares of the Company, with a nominal value of RMB1.00 each, which are subscribed for or credited as paid up in Renminbi and are listed for trading on the Shanghai Stock Exchange AGM or Annual General Meeting the annual general meeting for the year 2015 of the Company to be held at Jing Song Hall, 4/F, Pine City Hotel, No. 777 Zhaojiabang Road, Shanghai, the PRC on Thursday, 26 May 2016 at 1:30 p.m. Articles of Association the articles of association of the Company, as amended from time to time Board or Board of Directors the board of directors of the Company Business Day means a day (other than a Saturday or a Sunday) on which the Hong Kong Stock Exchange is opened for the business of dealing in securities Company Haitong Securities Co., Ltd., a joint stock company incorporated in the PRC with limited liability, the H Shares of which are listed on the Hong Kong Stock Exchange under the stock code of 6837 and the A Shares of which are listed on the Shanghai Stock Exchange under the stock code of CSRC the China Securities Regulatory Commission Director(s) the director(s) of the Company Group the Company and its subsidiaries H Share(s) ordinary shares in the share capital of the Company with nominal value of RMB1.00 each, which are listed on the Hong Kong Stock Exchange and traded in Hong Kong dollars Hong Kong the Hong Kong Special Administrative Region of the PRC 1

4 DEFINITIONS Hong Kong Listing Rules the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited Hong Kong Stock Exchange The Stock Exchange of Hong Kong Limited Independent Director(s) or Independent Non-executive Director(s) the independent non-executive director(s) of the Company Latest Practicable Date 29 April 2016, being the latest practicable date prior to the printing of this Circular for ascertaining certain information contained herein PBOC the People s Bank of China, the central bank of the PRC PRC or China the People s Republic of China, but for the purposes of this Circular only, excludes Hong Kong, the Macau Special Administrative Region and Taiwan RMB or Renminbi Renminbi, the lawful currency of the PRC Share(s) the ordinary share(s) of RMB1.00 each in the share capital of the Company, including A Shares and H Shares Shareholder(s) the shareholder(s) of the Company, including holder(s) of H Shares and holder(s) of A Shares Supervisor(s) the supervisor(s) of the Company Supervisory Committee the supervisory committee of the Company Unless otherwise indicated, all the financial data in this Circular were presented in Renminbi. 2

5 LETTER FROM THE BOARD (A joint stock limited company incorporated in the People s Republic of China with limited liability) (Stock Code: 6837) Executive Directors: Mr. Wang Kaiguo (Chairman) Mr. Qu Qiuping (General Manager) Non-executive Directors: Ms. Yu Liping Mr. Chen Bin Mr. Xu Chao Mr. Wang Hongxiang Ms. Zhang Xinmei Mr. Shen Tiedong Independent Non-executive Directors: Mr. Liu Chee Ming Mr. Xiao Suining Mr. Li Guangrong Mr. Lyu Changjiang Mr. Feng Lun Registered office: Haitong Securities Building No. 689 Guangdong Road Shanghai PRC Principal place of business in Hong Kong: 21st Floor, Li Po Chun Chambers 189 Des Voeux Road Central Central Hong Kong 5 May 2016 To the Shareholders Dear Sir or Madam, INTRODUCTION The purpose of this Circular is to provide you notice of the AGM and supplemental notice of the AGM (set out on pages 21 to 26 of this Circular) and provide you with information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolutions proposed at the AGM. At the AGM, ordinary resolutions will be proposed to approve, among others, (i) the report of the Board of Directors of the Company for the year 2015 (the 2015 Report of the Board ); (ii) the report of the Supervisory Committee of the Company for the year 2015 (the 2015 Report of the Supervisory Committee ); (iii) the annual report of the Company for the year 2015 (the 2015 Annual Report ); (iv) the final accounts report of the Company for the * For identification purpose only 3

6 LETTER FROM THE BOARD year 2015 (the 2015 Final Accounts Report ); (v) the profit distribution proposal of the Company for the year 2015 (the 2015 Profit Distribution Proposal ); (vi) the renewal of engagement of A Share auditing firm and H Share auditing firm for the year 2016; (vii) investment asset allocation of equity, fixed income securities and derivative products of the Company; (viii) authorisation to the Board to determine provision of guarantees for subsidiaries; (ix) daily related party transactions of the Company for the year 2016; (x) proposed appointment of Mr. Zhang Ming as an independent non-executive Director; (xi) proposed appointment of Mr. Song Chunfeng as a Supervisor; (xii) adjustments to allowances of the Directors and Supervisors; (xiii) proposed appointment of Mr. Chu, Lawrence Sheng Yu as a non-executive Director; and (xiv) proposed appointment of Ms. Chan, Wah Man Carman as an independent non-executive Director. Special resolutions will be proposed to approve (i) general mandate to issue onshore debt financing instruments; (ii) the grant of general mandate to authorize, allot or issue A Shares and/or H Shares; and (iii) the proposed amendments to the Articles of Association. ORDINARY RESOLUTIONS: Report of the Board An ordinary resolution will be proposed at the AGM to approve the 2015 Report of the Board. Details of the aforesaid report of the Board are set out in Annex A of this Circular. The 2015 Report of the Board was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval Report of the Supervisory Committee An ordinary resolution will be proposed at the AGM to approve the 2015 Report of the Supervisory Committee. Details of the aforesaid report of the Supervisory Committee are set out in Annex B of this Circular. The 2015 Report of the Supervisory Committee was considered and approved by the Supervisory Committee on 30 March 2016 and is hereby proposed at the AGM for consideration and approval Annual Report An ordinary resolution will be proposed at the AGM to approve the 2015 Annual Report. The 2015 Annual Report of the Company has been despatched and also published on the website of the Hong Kong Stock Exchange ( and the website of the Company ( on 27 April The 2015 Annual Report was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval. 4

7 LETTER FROM THE BOARD Final Accounts Report An ordinary resolution will be proposed at the AGM to approve the 2015 Final Accounts Report. Details of the aforesaid final accounts report are set out in Annex C of this Circular. The 2015 Final Accounts Report was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval Profit Distribution Proposal An ordinary resolution will be proposed at the AGM to approve the profit distribution proposal of the Company in accordance with the Articles of Association. Based on the audit results of the year 2015, relevant laws and regulations and the Articles of Association, the profit distribution proposal of the Company for the year 2015 is as follows: on the basis of a total share capital of 11,501,700,000 A Shares and H Shares in issue as at 31 December 2015, cash dividend of RMB4.50 per 10 shares (inclusive of tax) will be distributed to all holders of A Shares and H Shares whose names appear on the register of members of the Company on the record date, with total cash dividend amounting to RMB5,175,765, The retained profits of the Company of RMB14,655,043, following the cash dividend distribution will be carried forward to the next year. Pursuant to the Notice of the PRC State Administration of Taxation on Issues Concerning Individual Income Tax Collection and Management after the Repeal of Guo Shui Fa [1993] No. 045 (Guo Shui Han [2011] No. 348), the dividend received by the overseas resident individual shareholders from the stocks issued by domestic non-foreign invested enterprises in Hong Kong is subject to the payment of individual income tax according to the items of interests, dividend and bonus income, which shall be withheld by the withholding agents according to the relevant laws. The overseas resident individual shareholders who hold the stocks issued by domestic non-foreign invested enterprises in Hong Kong are entitled to the relevant preferential tax treatment pursuant to the provisions in the tax agreements signed between the countries where they are residents and China or the tax arrangements between Mainland and Hong Kong (Macau). The tax rate for dividends under the relevant tax agreements and tax arrangements is generally 10%, and for the purpose of simplifying tax administration, domestic non-foreign invested enterprises issuing shares in Hong Kong may, when distributing dividend, generally withhold individual income tax at the rate of 10%, and are not obligated to file an application. If the tax rate for dividend is not equal to 10%, the following provisions shall apply: (1) for citizens from countries under tax agreements to be entitled to tax rates lower than 10%, the withholding agents will file applications on their behalf to seek entitlement of the relevant agreed preferential treatments, and upon approval by the tax authorities, over withheld tax amounts will be refunded; (2) for citizens from countries under tax agreements to be entitled to tax rates higher than 10% but lower than 20%, the withholding agents will withhold the individual income tax at the agreed-upon effective tax rate when distributing dividend (bonus), and are not obligated to file an application; (3) for citizens from countries without tax agreements or are under other situations, the withholding agents will withhold the individual 5

8 LETTER FROM THE BOARD income tax at a tax rate of 20% when distributing dividend. Pursuant to the Notice of the State Administration of Taxation on the Issues Concerning Withholding the Enterprise Income Tax on the Dividends Paid by Chinese Resident Enterprises to Holders of H Shares Which Are Overseas Non-resident Enterprises (Guo Shui Han [2008] No. 897), a PRC resident enterprise, when distributing dividends for 2008 and for the years afterwards to holders of H Shares who are overseas non-resident enterprises, shall be subject to the enterprise income tax withheld at a uniform rate of 10%. Cash dividends are denominated and declared in RMB and will be paid in RMB and Hong Kong dollars to holders of A Shares and to holders of H Shares respectively. The actual amount distributed in Hong Kong dollar will be calculated based on the average exchange rate of RMB against Hong Kong dollar announced by the PBOC of the five working days prior the date of the AGM. The 2015 Profit Distribution Proposal was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval. The Company will conduct the cash dividend distribution within two months from the date of convening the AGM, subject to the approval of the aforesaid profit distribution proposal at the AGM. 6. Renewal of Engagement of A Share Auditing Firm and H Share Auditing Firm for the Year 2016 The Board proposes that BDO China Shu Lun Pan Certified Public Accountants LLP be re-appointed as the external auditor of the Company in 2016 for a period of one year, who will be responsible for provision of relevant domestic audit services in accordance with China Enterprise Accounting Standards. The auditing fees of 2016 including internal control is RMB3.15 million, of which RMB2.75 million is for financial and special regulatory reporting auditing and RMB400,000 is for internal control auditing. The Board proposes that Deloitte Touche Tohmatsu be re-appointed as the external auditor of the Company in 2016 for a period of one year, who will be responsible for provision of relevant audit and review services in accordance with International Financial Reporting Standards. The annual auditing fees and interim review fees of 2016 is RMB3.15 million. It will be proposed at the AGM to authorize the Board to determine the adjustment in the auditing fees if there is any increase to the auditing fees due to the change in the scope of auditing. The aforesaid resolution was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval. 6

9 LETTER FROM THE BOARD 7. Investment Asset Allocation of Equity, Fixed Income Securities and Derivative Products of the Company An ordinary resolution will be proposed at the AGM to consider and approve the investment asset allocation of equity, fixed income securities and derivative products of the Company. Details are as follows: With strict control of actual risk exposure, the maximum amount of investment (based on initial investment costs) in proprietary equity securities and securities derivatives (including stock repurchase business) and proprietary fixed income securities shall not exceed 90% and 200% of net capital of the Company (estimation based on the latest assets allocation), respectively. The maximum risk exposure position of the investment in proprietary equity securities shall not exceed RMB34.0 billion, representing 40% of net capital of the Company (estimation based on the latest assets allocation). The aforementioned investments must be conducted in line with various regulatory requirements. The management of the Company will be authorised to flexibly allocate fund scale and adjust investment direction within the limit of the maximum amount of the proprietary investment according to market opportunities and the actual conditions of the Company, subject to various regulatory requirements. The validity period of the aforementioned investment plan and authorisation shall commence on the date of the resolution being approved at the Shareholders general meeting and shall end on the date of the resolution being revoked or revised by the Shareholders at any Shareholders general meeting. The aforesaid resolution was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval. 8. Authorisation to the Board to Determine Provision of Guarantees for Subsidiaries An ordinary resolution will be proposed at the AGM to consider and approve: 1. To provide joint and several guarantees by the Company for its wholly-owned subsidiaries (including those with a gearing ratio of more than 70%) and controlling subsidiaries in respect of their issuance of onshore or offshore debt financing instruments (including but not limited to bonds, subordinated bonds, ultra short-term financing bills, short-term financing bills, medium-term notes, notes and establishment of note programmes) on a one-off or multiple issuance or multitranche issuance basis through public offerings or private placements, as well as domestic or overseas bank loans (including but not limited to bank credit, bank loans and syndicated loans). The aggregate amount of the guarantees and the individual amount of any guarantee provided by the Company shall not exceed 50% and 10% of the Company s audited net assets as at the end of the latest accounting period, respectively. 7

10 LETTER FROM THE BOARD 2. To authorise the Board and its authorised representatives to, in their sole discretion, execute all documents in connection with the aforesaid guarantees, obtain approvals from and handle filing formalities with relevant regulatory authorities and all other relevant matters, and to fulfil the obligation of information disclosure in a timely manner in accordance with the relevant laws and regulations upon the provision of letters of guarantee or issuance of guarantee documents for the Company s wholly-owned or controlling subsidiaries. The revocation and revision of this authorisation shall also be considered and approved at the Shareholders general meeting. The aforesaid resolution was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval. 9. Daily Related Party Transactions of the Company for the Year 2016 Reference is made to the announcement of the Company dated 30 March 2016 in relation to projected related party transactions in Ordinary resolutions will be proposed at the AGM to consider and approve the projected daily related party transactions of the Company for the year 2016, details of which are set out in Annex E of this Circular. The aforesaid resolutions were considered and approved by the Board on 30 March 2016 and are hereby proposed at the AGM for consideration and approval. 10. Proposed Appointment of Mr. Zhang Ming as an Independent Non-Executive Director References are made to the announcements of the Company dated 11 December 2015 and 30 March 2016 in relation to resignation and appointment of independent non-executive Director. An ordinary resolution will be proposed at the AGM to consider and approve the appointment of Mr. Zhang Ming ( Mr. Zhang ) as an independent non-executive Director of the Company. Details of Mr. Zhang s biography and other information regarding to his appointment are set out in Annex F of this Circular. In accordance with the Articles of Association and the provisions of the relevant PRC laws and regulations, the appointment of Mr. Zhang as an independent non-executive Director is subject to approval of the Shareholders at the AGM and the regulatory authorities approval on his qualification for appointment. The aforesaid resolution was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval. 11. Proposed Appointment of Mr. Song Chunfeng as a Supervisor Reference is made to the announcement of the Company dated 30 March 2016 in relation to appointment of Supervisor. An ordinary resolution will be proposed at the AGM to consider and approve the appointment of Mr. Song Chunfeng ( Mr. Song ) as a Supervisor of the Company. Details of Mr. Song s biography and other information regarding to his appointment are set out in Annex G of this Circular. 8

11 LETTER FROM THE BOARD In accordance with the Articles of Association and the provisions of the relevant PRC laws and regulations, the appointment of Mr. Song as a Supervisor is subject to approval of the Shareholders at the AGM and the regulatory authorities approval on his qualification for appointment. The aforesaid resolution was considered and approved by the Supervisory Committee on 30 March 2016 and is hereby proposed at the AGM for consideration and approval. 12. Adjustments to Allowances of the Directors and Supervisors An ordinary resolution will be proposed at the AGM to consider and approve the adjustments to the allowances of the Directors and Supervisors (the Proposed Adjustments ), so as to bring their remuneration packages in line with their efforts and contribution to the development of the Company. An annual allowance of RMB200,000 (tax inclusive) is proposed to be paid to each independent non-executive Director, and an annual allowance of RMB50,000 (tax inclusive) is proposed to be paid to each non-executive Director and non-employee representative Supervisor. It is also proposed that duty allowance in the amount of RMB10,000 should be paid to every independent non-executive Director, non-executive Director and non-employee representative Supervisor for their attendance in person at each general meeting and each on-site meeting of the Board, the Supervisory Committee and the special committees under the Board (excluding attendance through dialing in telephone conference). Subject to consideration and approval by the Shareholders at the AGM, the aforementioned allowances of Directors and Supervisors shall accrue from 1 January The aforesaid allowances of Directors and Supervisors will be provided on a monthly basis and paid in two installments in a year (i.e. at mid-year and year end) after deducting individual income tax as withheld by the Company. Transportation and accommodation costs incurred by the aforementioned persons for attending meetings shall be borne by the Company. The Company will disclose the allowances paid to aforementioned persons in its annual reports in accordance with relevant regulatory requirements. The aforesaid resolution was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval. 13. Proposed Appointment of Mr. Chu, Lawrence Sheng Yu as a Non-Executive Director Insight Phoenix Fund and AA Global Ventures Limited (together, being the Shareholders holding approximately 3.4% of the Shares) have submitted an ordinary resolution to the Company which will be proposed at the AGM to consider and approve the appointment of Mr. Chu, Lawrence Sheng Yu ( Mr. Chu ) as a non-executive Director of the Company. This ordinary resolution is inter-conditional with the special resolution no. 3 below. Details of Mr. Chu s biography and other information regarding to his appointment are set out in Annex H of this Circular. 9

12 LETTER FROM THE BOARD In accordance with the Articles of Association and the provisions of the relevant PRC laws and regulations, the appointment of Mr. Chu as a non-executive Director is subject to approval of the Shareholders at the AGM and the regulatory authorities approval on his qualification for appointment. The aforesaid resolution is hereby proposed at the AGM for consideration and approval. 14. Proposed Appointment of Ms. Chan, Wah Man Carman as an Independent Non-Executive Director Insight Phoenix Fund and AA Global Ventures Limited (together, being the Shareholders holding approximately 3.4% of the Shares) have submitted an ordinary resolution to the Company which will be proposed at the AGM to consider and approve the appointment of Ms. Chan, Wah Man Carman ( Ms. Chan ) as an independent non-executive Director of the Company. This ordinary resolution is inter-conditional with the special resolution no. 3 below. Details of Ms. Chan s biography and other information regarding to her appointment are set out in Annex I of this Circular. In accordance with the Articles of Association and the provisions of the relevant PRC laws and regulations, the appointment of Ms. Chan as an independent non-executive Director is subject to approval of the Shareholders at the AGM and the regulatory authorities approval on her qualification for appointment. The aforesaid resolution is hereby proposed at the AGM for consideration and approval. SPECIAL RESOLUTIONS: 1. General Mandate to Issue Onshore Debt Financing Instruments The Board has approved the Company to issue onshore debt financing instruments (the onshore debt financing instruments ), through public or non-public offering, on a one-off or multiple issuances or multi-tranche issuances basis, including without limitation the short-term financing bills of securities companies, corporate bonds, short-term corporate bonds, asset-backed securities (notes), income receipts, subordinated bonds, subordinated debts and onshore debt financing instruments which may be issued by the Company as approved by or filed with CSRC, Securities Association of China and other relevant authorities in accordance with the relevant rules (excluding the placements with banks and other financial institutions and the repurchase transactions for daily liquidity operations). Special resolutions will be proposed at the AGM to approve the general mandate to issue the onshore debt financing instruments of the Company. Details are as follows: (1) Type A resolution will be proposed at the general meeting to authorise the Board, and agree the Board of the Company in turn to authorise the Chairman and general manager of the Company ( authorised representatives ) to jointly or individually determine the 10

13 LETTER FROM THE BOARD type of the onshore debt financing instruments and details of priorities for repayment of creditors in accordance with laws, regulations and the relevant rules stipulated by securities regulatory authorities, as well as the resolutions of the shareholders general meeting of the Company, the Company s conditions and then prevailing market conditions at the time of issuance. The onshore debt financing instruments of the Company proposed for issuance in this resolution do not contain any provision for conversion into shares. (2) Term The term of the fixed-term onshore debt financing instruments of the Company shall be no longer than 15 years (inclusive). It may have single or multiple maturities; the non-fixed-term onshore debt financing instruments of the Company are not subject to the aforementioned requirement on the term. A resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to authorise its authorised representatives to determine the details including the term and size of each type of the onshore debt financing instruments in accordance with the relevant rules and then prevailing market conditions at the time of issuance. (3) Interest Rate A resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to authorise its authorised representatives to determine the interest rate for the issuance of the onshore debt financing instruments of the Company as well as the method of calculation and payment thereof in accordance with the then prevailing market conditions at the time of issuance of the same and relevant rules. (4) Issuer, Issue Size and Issue Method The Company or its onshore wholly owned subsidiaries will act as the issuer of the onshore debt financing instruments. The onshore debt financing instruments shall be issued on a one-off or multiple issuances or multi-tranche issuances basis through public offering or private placement to qualified investors, upon approval by or filing with CSRC, Securities Association of China and other relevant authorities in accordance with relevant rules. The aggregate issue size of the onshore debt financing instruments of the Company shall be no more than 400% of the net asset value of the Company by the end of the preceding period (based on the balance outstanding on the instruments issued and, in the case of an instrument denominated in foreign currency, based on the median exchange rate published by the People s Bank of China on the date of issuance), and shall be in compliance with the requirements prescribed in the relevant laws and regulations on the maximum amount of the specific debt financing instruments to be issued. A resolution will be proposed by the Board of the Company at the general meeting to authorise the Board, and agree the Board in turn to authorise its authorised representatives to jointly or individually determine, at its/their sole discretion, the details 11

14 LETTER FROM THE BOARD including the issuer, issue size, timing of issue, number of tranches, currency and issue method in accordance with relevant laws and regulations as well as the advice and recommendations of regulatory authorities, the Company s actual needs for funding and the then prevailing market conditions at the time of issuance, in order to maximize the interest of the Company, and to monitor the issuance and payment of onshore debt financing instruments of the Company. (5) Issue Price A resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to authorise its authorised representatives to jointly or individually determine the issue price of the onshore debt financing instruments of the Company in accordance with the then prevailing market conditions at the time of issuance and relevant laws and regulations. (6) Security and Other Credit Enhancement Arrangements A resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to authorise its authorised representatives to jointly or individually determine the security and other credit enhancement agreements based on the features of the onshore debt financing instruments of the Company and the issuance needs in accordance with the laws. (7) Use of Proceeds The proceeds raised from the issuance of onshore debt financing instruments of the Company shall be used to fund business operation needs of the Company, improve the debt structure of the Company, supplement working capital of the Company and/or make project investment. A resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to authorise its authorised representatives to jointly or individually determine the details including the use of proceeds in accordance with the funding needs of the Company. (8) Issue Target and Arrangements on Placement to Shareholders of the Company The issue target of the onshore debt financing instruments of the Company shall be the onshore investors which meet the conditions for subscription. A resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to authorise its authorised representatives to jointly or individually determine the details including the issue target in accordance with relevant laws and regulations, the prevailing market conditions and other matters in connection with the issuance. The onshore debt financing instruments of the Company may be placed to the shareholders of the Company. A resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to authorise its authorised representatives to jointly or individually determine the details of the placement arrangements (including whether to make such placement and the proportion of placement, etc.) in accordance with the then prevailing market conditions and other matters in connection with the issuance and the laws. 12

15 LETTER FROM THE BOARD (9) Guarantee Measures for Repayment A resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to authorise its authorised representatives to jointly or individually implement, as a minimum, the following measures in the event they expect that the Company is unable to repay the principal and interests of the onshore debt financing instruments as scheduled, or the Company fails to repay the principal and interests of the onshore debt financing instruments when they become due: (i) (ii) no dividend shall be distributed to the shareholders; suspend the implementation of projects that incur capital expenditure such as material external investments, acquisitions and mergers; (iii) payment of salary and bonus of the Directors and senior management shall be adjusted, reduced or ceased; (iv) key personnel accountable for such event shall not be allowed for redesignation. (10) Listing of Debt Financing Instruments A resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to authorise its authorised representatives to jointly or individually apply for listing of the onshore debt financing instruments of the Company in accordance with the actual conditions of the Company and the prevailing market conditions. (11) Validity Period of Resolution The shareholder s resolutions regarding the issuance of onshore debt financing instruments of the Company shall be valid for a period of 36 months from the date of passing of the resolutions at the general meeting. Where the Board and/or its authorised representatives have, during the term of the authorisation, decided the issuance or partial issuance of onshore debt financing instruments of the Company, and provided that the Company has also, during the term of the authorisation, obtained the approval or license from or completed filing or registration (if applicable) with regulatory authorities on the issuance, the Company may, during the validity period of such approval, licence, filing or registration, complete the issuance or relevant partial issuance of onshore debt financing instruments of the Company. (12) Authorisation for Issuance of Onshore Debt Financing Instruments of the Company To ensure effective coordination of the issuance of onshore debt financing instruments and other matters in connection with the issuance, a resolution will be proposed at the general meeting to authorise the Board, and agree the Board in turn to 13

16 LETTER FROM THE BOARD further authorise its authorised representatives to deal with, at its/their sole discretion, all matters in connection with the issuance of onshore debt financing instruments in accordance with the relevant laws and regulations as well as the advice and recommendations from regulatory authorities, within the framework and under the principles approved at the general meeting, in order to maximise the interest of the Company, including but not limited to: (i) formulation and adjustment of the details of the proposal for issuance of onshore debt financing instruments in accordance with the applicable laws, regulations and relevant provisions from regulatory authorities as well as resolutions passed at the general meeting of the Company, and based on the actual conditions of the Company and the specific conditions of the relevant debt market, including without limitation, the determination of the suitable issuer(s), timing of issue, details of issue size and method, terms of issue, issue targets, maturity, whether to issue on a one-off, multiple issuances, multitranche issuances or multiple-category issuances basis and, if on multiple issuances, multi-tranche issuances or multiple-category issuances basis, the issue size and term of each issuance, tranche and category, the methods in which the nominal value and interest rate are determined, currency (including offshore RMB), pricing method, issuance arrangements, credit enhancement arrangements including letter of guarantee or letter of support, rating arrangement, details of subscription method, whether to incorporate terms of repurchase or redemption, details of placement arrangements, use of proceeds, registration, listing of onshore debt financing instruments of the Company and place of listing, measures to mitigate repayment risks, measures to ensure debt repayment (if applicable), etc. and all matters in connection with the issuance of onshore debt financing instruments of the Company; (ii) determining and engaging intermediary agency, signing, implementing, amending and completing all agreements and documents relating to the issuance of onshore debt financing instruments, including without limitation, the sponsor agreement, underwriting agreement, credit enhancement agreements such as guarantee agreement or letter of support, bond indenture, engagement letter with intermediary agency, trust agreement, settlement management agreement, registration and custody agreement, listing agreement and other legal documents, etc., and disclosing the relevant information in accordance with the relevant laws, regulations and the listing rules of the stock exchanges on which the Company s securities are listed (including without limitation, the preliminary and final offering memoranda of the debt financing instruments, and all announcements and circulars, etc. in relation to the issuance of onshore debt financing instruments of the Company); (iii) selecting and engaging trustee manager(s) and settlement manager(s) for the issuance of onshore debt financing instruments of the Company, signing the trustee agreement(s) and settlement management agreement(s) and (if applicable), formulating rules for meetings of the holders of the debt financing instruments; 14

17 LETTER FROM THE BOARD (iv) undertaking all applications and filings as well as listing matters (if applicable) in connection with the issuance of onshore debt financing instruments of the Company, including without limitation, preparing, revising and submitting relevant application and filing materials relating to the issuance and listing of the onshore debt financing instruments of the Company and application and filing materials in respect of credit enhancement agreements such as guarantee or letter of support to be provided by the Company, the issuer(s) and/or third party(ies), and signing the relevant application and filing documents and other legal documents; (v) (vi) making relevant adjustments to matters relating to the issuance of onshore debt financing instruments of the Company according to the advice of and changes in the policies of regulatory authorities or the changes in market conditions, or determining whether to continue with all or part of the work in respect of the issuance of onshore debt financing instruments of the Company in accordance with the actual conditions, unless re-approval by the shareholders at general meeting is otherwise required pursuant to the relevant laws, regulations and the Articles of Association; dealing with other relevant matters in connection with the issuance of onshore debt financing instruments of the Company; (vii) subject to approval of the above authorisation at the general meeting, a resolution will be proposed to agree the Board in turn to authorise the Chairman and general manager of the Company to act as authorised representatives for the issuance of onshore debt financing instruments of the Company to jointly or individually deal with all matters in connection with the issuance of onshore debt financing instruments of the Company on behalf of the Company pursuant to the resolutions passed at the general meeting and the authorisation granted by the Board. The above authorisations shall remain valid and effective on and from the date when the Shareholders at the general meeting have approved and passed the resolutions until the earlier of the expiry of 36 months or the date when matters authorised above have been completed (depending on whether the issuance of all onshore debt financing instruments of the Company has been completed). However, where the Board and/or its authorised representatives have, during the term of the authorisation, decided the issuance or partial issuance of onshore debt financing instruments of the Company, and provided that the Company has also, during the term of the authorisation, obtained the approval or license from or completed filing or registration (if applicable) with regulatory authorities on the issuance, the Company may, during the validity period of such approval, licence, filing or registration, complete the issuance or relevant partial issuance of onshore debt financing instruments of the Company. With respect to the matters of issuance or partial issuance, the above authorisation shall remain valid until the date of completion of such issuance or partial issuance. This proposal will come into effect after being considered and approved at the AGM. 15

18 LETTER FROM THE BOARD The aforesaid resolutions were considered and approved by the Board on 30 March 2016 and are hereby proposed at the AGM for consideration and approval. 2. Grant of General Mandate to Authorize, Allot or Issue A Shares and/or H Shares The Board has approved the grant of the general mandate to authorize, allot or issue A Shares of the Company and/or H Shares of the Company and proposed it to be considered at the Shareholders general meeting. Details of this general mandate are as follows: In compliance with the regulations stipulated in the Company Law of the PRC (the PRC Company Law ), the Securities Law of the PRC (the PRC Securities Law ) and the Hong Kong Listing Rules and the Articles of Association, and subject to the terms and conditions set out in the following provisions (1), (2) and (3), it is proposed that the Shareholders general meeting grant an unconditional general mandate to the Board to authorize, allot or issue A Shares and/or H Shares (including warrants, convertible bonds and other securities which carry rights to subscribe for or are convertible into Shares) separately or concurrently, and to sign the necessary documents, complete the necessary formalities and take other necessary steps to complete the aforesaid matters: (1) the authorization is valid for the period from the date of passing of this resolution at the Shareholders general meeting to approve the grant of such authorization until whichever is the earliest of: (a) (b) (c) the conclusion of the next annual Shareholders general meeting of the Company following the passing of this resolution at the Shareholders general meeting; or the expiration of the 12-month period following the passing of this resolution at the Shareholders general meeting; or the date on which the authorization set out in this resolution is revoked or varied by a resolution of the Shareholders of the Company at any Shareholders general meeting. Should the Board, during the validity period of the authorization, sign the necessary documents, complete the necessary formalities or take relevant steps which might require to be performed or carried out upon or after the end of the validity period or continued until the end of the validity period, the validity period of the authorization will be extended accordingly; (2) the respective number of the A Shares and/or H Shares which the Board proposes to authorize, allot or issue, or conditionally or unconditionally agrees to authorize, allot or issue (including warrants, convertible bonds, other securities which carry rights to subscribe for or are convertible into Shares, which will be calculated based on the aggregate number of Shares potentially convertible by them) shall not exceed 20% of the respective number of the A Shares and/or H Shares of the Company in issue as at the date of passing of this resolution at the Shareholders general meeting; 16

19 LETTER FROM THE BOARD (3) the Board shall exercise the authorization pursuant to the PRC Company Law, the PRC Securities Law, the Hong Kong Listing Rules or all applicable laws, regulations and requirements of any other government or regulatory authorities and with the approval by CSRC and/or other relevant governmental authorities in the PRC. With respect to an issue of Shares pursuant to the general mandate set out in this resolution, a proposal is made to the Shareholders general meeting to authorize the Board to increase the Company s registered capital corresponding to the number of shares issued under the general mandate, to make amendments to the Articles of Association of the Company where applicable and necessary in response to the increase of the Company s registered capital, and to take any other necessary actions and complete any other necessary procedures. After the Board has obtained the aforesaid general mandate, a proposal is made to the Shareholders general meeting to approve the Board to in turn authorize the chairman and the general manager of the Company to jointly or separately sign, execute, amend, complete and submit all agreements, contracts and documents relating to the recognition, allotment or issuance of Shares under the general mandate, unless otherwise provided by laws and regulations. The above-mentioned resolution was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval. 3. Proposed Amendments to the Articles of Association Insight Phoenix Fund and AA Global Ventures Limited (together, being the Shareholders holding approximately 3.4% of the Shares) have submitted a special resolution to the Company which will be proposed at the AGM to consider and approve the amendments to article 151 of the Articles of Association in relation to the maximum number of the Directors and Independent Directors of the Board corresponding to the approval of the aforementioned ordinary resolutions no. 13 and 14. This special resolution is inter-conditional with the ordinary resolutions no. 13 and/or 14 above. Original article: Article 151 The Board consists of 13 Directors, including five Independent Directors and at least one with a senior title of accounting profession or qualified as a certified public accountant. The Board shall comprise one Chairman, and may comprise a Vice Chairman. The aforesaid resolution is hereby proposed at the AGM for consideration and approval. 17

20 LETTER FROM THE BOARD READING MATERIALS 2015 DUTY PERFORMANCE REPORT OF INDEPENDENT DIRECTORS Pursuant to the requirements of the Rules of General Meeting of Listed Companies issued by CSRC, Independent Directors shall present a duty performance report at the AGM. Such report will be presented at the general meeting, but no Shareholder s approval is required. The duty performance report of the Independent Directors of the Company is made available to the Shareholders in Annex D of this Circular ANNUAL GENERAL MEETING The AGM of the Company will be held at Jing Song Hall, 4/F, Pine City Hotel, No. 777 Zhaojiabang Road, Shanghai, the PRC on Thursday, 26 May 2016 at 1:30 p.m. The notice and the supplemental notice of the Annual General Meeting are set out on pages 21 to 26 of this Circular. The register of members of H Shares of the Company has been closed from Tuesday, 26 April 2016 to Thursday, 26 May 2016 (both days inclusive), during which time no share transfers of H Shares will be effected. Holders of H Shares whose names appear on the register of members of the H Shares on Thursday, 26 May 2016 are entitled to attend the meeting. Reply slip for holders of H Share for attending the Annual General Meeting and the original proxy form have been distributed on Friday, 8 April 2016 and the supplemental form of proxy has been distributed on Thursday, 5 May They have also been published on the website of Hong Kong Stock Exchange ( Shareholders of the Company intending to attend the AGM in person or by their proxies should complete and return the reply slip for attending the AGM to Computershare Hong Kong Investor Services Limited (for holders of H Shares) on or before Friday, 6 May To be valid, for holders of H Shares, the original and supplemental form of proxy and notarised power of attorney or other document of authorisation must be delivered to Computershare Hong Kong Investor Services Limited not less than 24 hours before the time appointed for the AGM (i.e., on or before Wednesday, 25 May 2016 at 1:30 p.m.). Completion and return of the proxy form will not preclude you from attending and voting at the AGM in person if you so wish. 18