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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.
If you have sold or transferred all your shares in Bank of Gansu Co., Ltd.*, you should at once pass this circular, together with the proxy form and reply slip that have been dispatched to you to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.
BANK OF GANSU CO., LTD.* 甘肅銀行股份有限公司 * (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2139)
Annual General Meeting for 2019
The annual general meeting for 2019 (the “AGM”) of Bank of Gansu Co., Ltd.* will be held at 9:00 a.m. on Wednesday, June 3, 2020 at the conference room at 4/F of Bank of Gansu Tower, No.525 Donggang West Road, Chengguan District, Lanzhou, Gansu Province, the PRC. Notice of the AGM is set out on pages 6 to 10 of this circular.
Whether or not you are able to attend the AGM, you are advised to read the notice of the AGM carefully and to complete and return the proxy form that has been dispatched to you in accordance with the instructions printed thereon. H Shareholders shall return the proxy form to the H Share registrar of the Bank, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, while holders of Domestic Shares shall return the proxy form to the registered office and the principal place of business of the Bank in the PRC at Bank of Gansu Tower, No.525 Donggang West Road, Chengguan District, Lanzhou, Gansu Province, the PRC, by hand or by post as soon as possible and in any event no later than 24 hours before the time appointed for holding the AGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the AGM or any adjournment thereof should you so wish.
The reply slip and proxy form for the AGM have been dispatched on Friday, April 17, 2020. If you intend to attend the AGM either in person or by proxy, you are required to complete and return the reply slip for the meeting to the H share registrar of the Bank (for H Shareholders), Computershare Hong Kong Investor Services Limited or the registered office and the principal place of business of the Bank in the PRC (for holders of Domestic Shares) on or before Thursday, May 14, 2020.
April 17, 2020
* Bank of Gansu Co., Ltd. is not an authorized institution within the meaning of the Banking Ordinance (Chapter 155 of the Laws of Hong Kong), not subject to the supervision of the Hong Kong Monetary Authority, and not authorized to carry on banking/deposit-taking business in Hong Kong. CONTENTS
Page
Definitions ...... ii
Letter from the Board ...... 1
Notice of the AGM...... 6
APPENDIX I Matters to be Dealt with at the AGM ...... 11
Annex 1 Work Report of the Board of Directors for 2019 ...... 22
Annex 2 Work Report of Independent Directors for 2019 ...... 29
Annex 3 R emuneration Distribution and Settlement Plan for Directors and Supervisors in 2019 ...... 37
Annex 4 Work Report of the Board of Supervisors for 2019 ...... 40
Annex 5 Report on Related-Party Transactions ...... 46
Annex 6 Es timated Caps of Related Party/Connected Transactions for 2019...... 65
Annex 7 A mendments to the Rules of Procedure for Shareholders’ General Meetings...... 78
Annex 8 A mendments to the Rules of Procedure for the Board of Directors...... 97
Annex 9 A mendments to the Rules of Procedure for the Board of Supervisors...... 107
Annex 10 General Mandate to Issue Shares ...... 123
Annex 11 Amendments to the Articles of Association...... 126
– i – DEFINITIONS
In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:
“AGM” the 2019 annual general meeting of the Bank to be held at 9:00 a.m. on Wednesday, June 3, 2020
“Articles of Association” the Articles of Association of the Bank currently in force, as amended, modified or otherwise supplemented from time to time
“Bank” Bank of Gansu Co., Ltd.*, a joint stock company incorporated in the PRC with limited liability, whose H Shares are listed on the Main Board of the Stock Exchange
“Board” or “Board of Directors” the board of directors of the Bank
“Board of Supervisors” the board of supervisors of the Bank
“CBRC” the former China Banking Regulatory Commission
“CBIRC” China Banking and Insurance Regulatory Commission
“Company Law” the Company Law of the PRC
“Director(s)” the director(s) of the Bank
“Domestic Share(s)” the ordinary shares in the share capital of the Bank, with a nominal value of RMBl.00 each, which are subscribed for or credited as fully paid up in Renminbi
“Group” the Bank and its consolidated subsidiaries
“H Share(s)” the overseas listed foreign shares with a nominal value of RMB1.00 each in the ordinary share capital of the Bank which are listed on the Stock Exchange and traded in Hong Kong in Hong Kong dollars (stock code: 2139)
“H Shareholder(s)” holder(s) of H Shares
– ii – DEFINITIONS
“Hong Kong dollars” or “HK$” Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“IFRS” the International Accounting Standards, International Financial Reporting Standards, amendments and the related interpretations issued by the International Accounting Standards Board
“Independent Director(s)” or the independent non-executive director(s) of the Bank “Independent Non-executive Director(s)”
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange (as amended from time to time)
“PRC” or “China” the People’s Republic of China, for the purpose of this circular only, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan region
“PRC GAAP” the PRC Accounting Standards for Business Enterprises (中國企 業會計準則) promulgated by Ministry of Finance of the PRC on February 15, 2006 and its supplementary regulations, as amended, supplemented or otherwise modified from time to time
“Renminbi” or “RMB” Renminbi, the lawful currency of the PRC
“Share(s)” the shares of the Bank, including Domestic Shares and H Shares
“Shareholder(s)” the shareholder(s) of the Bank
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Supervisor(s)” the supervisor(s) of the Bank
“Rules of Procedure for Shareholders’ the Rules of Procedure for Shareholders’ General Meetings of General Meetings” Bank of Gansu Co., Ltd.
– iii – DEFINITIONS
“Rules of Procedure for the Board of the Rules of Procedure for the Board of Directors of Bank of Directors” Gansu Co., Ltd.
“Rules of Procedure for the Board of the Rules of Procedure for the Board of Supervisors of Bank of Supervisors” Gansu Co., Ltd.
“Securities Law” the Securities Law of the PRC
“Latest Practicable Date” April 14, 2020, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
– iv – LETTER FROM THE BOARD
BANK OF GANSU CO., LTD.* 甘肅銀行股份有限公司 * (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2139)
Executive Directors: Registered office: Mr. LIU Qing (Chairman) No. 122, Gannan Road Mr. WANG Wenyong Chengguan District Lanzhou Non-executive Directors: Gansu Province, the PRC Ms. WU Changhong Ms. ZHANG Hongxia Principal place of business in the PRC: Mr. GUO Jirong Bank of Gansu Tower No. 525 Mr. ZHANG Youda Donggang West Road Mr. LIU Wanxiang** Chengguan District Lanzhou Independent Non-executive Directors: Gansu Province, the PRC Ms. TANG Xiuli Ms. LUO Mei Place of business in Hong Kong: Mr. WONG Sincere 40th Floor Mr. DONG Ximiao Sunlight Tower No. 248 Queen’s Road East Wanchai Hong Kong
2019 ANNUAL GENERAL MEETING
Dear Sir or Madam,
1. INTRODUCTION
On behalf of the Board, I would like to invite you to attend the AGM to be held at 9:00 a.m. on Wednesday, June 3, 2020 at the conference room at 4/F of Bank of Gansu Tower, No. 525 Donggang West Road, Chengguan District, Lanzhou, Gansu Province, the PRC.
– 1 – LETTER FROM THE BOARD
The purpose of this circular is to give you notice of the AGM and provide you with the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolutions to be proposed at the AGM.
2. MATTERS TO BE DEALT WITH AT THE AGM
In order to enable you to have a better understanding of the resolutions to be proposed at the AGM and to make an informed decision thereon, we have provided detailed information to the Shareholders in Appendix I to this circular, which includes the information and explanation on the resolutions proposed to be approved at the AGM.
The resolutions to be considered at the AGM include:
1. To consider and approve the proposal regarding the work report of the Board of Directors for 2019;
2. To consider and approve the proposal regarding the financial audit report for 2019;
3. To consider and approve the proposal regarding the final financial report for 2019;
4. To consider and approve the proposal regarding the profit distribution proposal for 2019;
5. To consider and approve the proposal regarding the annual financial budget for 2020;
6. To consider and approve the proposal regarding the annual report for 2019;
7. To consider and approve the proposal regarding the engagement of external auditing firms for 2020;
8. To consider and approve the proposal regarding the work report of Independent Directors for 2019;
9. To consider and approve the proposal regarding the Board’s evaluation results on the performance of duties by Directors and senior management for 2019;
– 2 – LETTER FROM THE BOARD
10. To consider and approve the proposal regarding the remuneration distribution and settlement plan for Directors and Supervisors in 2019;
11. To consider and approve the proposal regarding the work report of the Board of Supervisors for 2019;
12. To consider and approve the proposal regarding the report on related-party transactions for 2019;
13. To consider and approve the proposal regarding the estimated caps of related-party/connected transactions for 2020;
14. To consider and approve the proposal regarding the plan on authorization by Shareholders’ general meeting to the Board of Directors;
15. To consider and approve the proposal regarding the amendments to the Rules of Procedure for Shareholders’ General Meetings;
16. To consider and approve the proposal regarding the amendments to the Rules of Procedure for the Board of Directors;
17. To consider and approve the proposal regarding the amendments to the Rules of Procedure for Board of Supervisors;
18. To consider and approve the proposal regarding the general mandate to issue Shares;
19. To consider and approve the proposal regarding the amendments to the Articles of Association;
20. To consider and approve the proposal regarding the public issuance of secondary capital bonds;
Details of the proposals are set out on pages 11 to 21 of this circular.
3. THE AGM
The AGM will be held at 9:00 a.m. on Wednesday, June 3, 2020 at the conference room at 4/F of Bank of Gansu Tower, No. 525 Donggang West Road, Chengguan District, Lanzhou, Gansu Province, the PRC. Notice of the AGM is set out on pages 6 to 10 of this circular.
– 3 – LETTER FROM THE BOARD
The reply slip and the proxy form for the AGM have been dispatched on Friday, April 17, 2020 and have been published on the website of the Stock Exchange at www.hkexnews.hk. If you intend to attend the AGM either in person or by proxy, you are required to complete and return the reply slip for the AGM to the H share registrar of the Bank, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (Telephone: (852) 28628555), on or before Thursday, May 14, 2020.
Whether or not you are able to attend the AGM, you are advised to read the notice of the AGM carefully and to complete and return the proxy form that has been dispatched to you in accordance with the instructions printed thereon. H Shareholders shall return the proxy form to the H Share registrar of the Bank, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, while holders of Domestic Shares shall return the proxy form to the registered office and the principal place of business of the Bank in the PRC at Bank of Gansu Tower, No. 525 Donggang West Road, Chengguan District, Lanzhou, Gansu Province, the PRC, by hand or by post as soon as possible and in any event no later than 24 hours before the time appointed for holding the AGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the AGM or any adjournment thereof should you so wish.
However, taking into account of the recent development of the epidemic caused by novel coronavirus pneumonia, in order to facilitate the prevention and control of the epidemic and to safeguard the health and safety of the Shareholders and investors, the Bank encourages the Shareholders to adopt the appropriate way to vote at the AGM, such as appoint the Chairman of the AGM as a proxy to vote on relevant resolution, instead of attending the AGM in person.
4. VOTING BY POLL
Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at the AGM must be taken by poll except where the chairman of the meeting decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Therefore, all resolutions as set out in the notice of the AGM will be voted by poll. The poll results will be published on the HKEXnews website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk and the website of the Bank at www.gsbankchina.com upon the conclusion of the AGM.
To the best knowledge of the Bank, none of the Shareholders or any of their respective associates is deemed to have a material interest in any of the resolutions to be proposed at the AGM, and therefore no Shareholder is required to abstain from voting on any of the resolutions.
– 4 – LETTER FROM THE BOARD
5. RECOMMENDATION
The Directors (including the Independent Non-executive Directors) consider that the resolutions set out in the notice of the AGM are in the interests of the Bank and its Shareholders as a whole. Therefore, the Board recommends you to vote in favor of the proposed resolutions mentioned above.
By Order of the Board Bank of Gansu Co., Ltd.* LIU Qing Chairman
Lanzhou, Gansu Province April 17, 2020
* Bank of Gansu Co., Ltd. is not an authorized institution within the meaning of the Banking Ordinance (Chapter 155 of the Laws of Hong Kong), not subject to the supervision of the Hong Kong Monetary Authority, and not authorized to carry on banking/deposit-taking business in Hong Kong.
** The qualification of Mr. LIU Wanxiang as a Director is subject to the approval of the competent regulatory authority.
– 5 – NOTICE OF THE AGM
BANK OF GANSU CO., LTD.* 甘肅銀行股份有限公司 * (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2139)
NOTICE OF ANNUAL GENERAL MEETING FOR 2019
Notice is hereby given that the annual general meeting (the “AGM”) of Bank of Gansu Co., Ltd. (the “Bank”) for 2019 will be held at the conference room at 4/F of Bank of Gansu Tower, No. 525 Donggang West Road, Chengguan District, Lanzhou, Gansu Province, the PRC at 9:00 a.m. on Wednesday, June 3, 2020, to consider and, if thought fit, pass the following resolutions:
Ordinary Resolutions
1. To consider and approve the proposal regarding the work report of the Board of Directors for 2019;
2. To consider and approve the proposal regarding the financial audit report for 2019;
3. To consider and approve the proposal regarding the final financial report for 2019;
4. To consider and approve the proposal regarding the profit distribution proposal for 2019;
5. To consider and approve the proposal regarding the annual financial budget for 2020;
6. To consider and approve the proposal regarding the annual report for 2019;
7. To consider and approve the proposal regarding the engagement of external auditing firms for 2020;
8. To consider and approve the proposal regarding the work report of Independent Directors for 2019;
9. To consider and approve the proposal regarding the Board’s evaluation results on the performance of duties by Directors and senior management for 2019;
10. To consider and approve the proposal regarding the remuneration distribution and settlement plan for Directors and Supervisors in 2019;
– 6 – NOTICE OF THE AGM
11. To consider and approve the proposal regarding the work report of the Board of Supervisors for 2019;
12. To consider and approve the proposal regarding the report on related-party transactions for 2019;
13. To consider and approve the proposal regarding the estimated caps of related-party/connected transactions for 2020;
14. To consider and approve the proposal regarding the plan on authorization by Shareholders’ general meeting to the Board of Directors;
15. To consider and approve the proposal regarding the amendments to the Rules of Procedure for Shareholders’ General Meetings;
16. To consider and approve the proposal regarding the amendments to the Rules of Procedure for the Board of Directors;
17. To consider and approve the proposal regarding the amendments to the Rules of Procedure for Board of Supervisors.
Special Resolutions
18. To consider and approve the proposal regarding the general mandate to issue Shares;
19. To consider and approve the proposal regarding the amendments to the Articles of Association;
20. To consider and approve the proposal regarding the public issuance of secondary capital bonds.
By order of the Board Bank of Gansu Co., Ltd.* LIU Qing Chairman
Lanzhou, Gansu Province April 17, 2020
– 7 – NOTICE OF THE AGM
Notes:
1. Voting by poll
Pursuant to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “Listing Rules”), all resolutions will be voted on by poll at the AGM (except where the chairman decides to allow a resolution which relates to a procedural or administrative matter to be voted on by a show of hands). An announcement on the voting results will be published on the website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the website of the Bank (www.gsbankchina.com) in accordance with the Listing Rules.
2. Eligibility for attending the AGM and closure of register of holders of H shares
In order to determine the holders of H shares who are eligible to attend the AGM, the register of holders of H shares of the Bank will be closed from Monday, May 4, 2020 to Wednesday, June 3, 2020 (both days inclusive), during which period no transfer of H shares will be registered.
In order to qualify for attending the AGM, share certificates accompanied by instruments of transfer must be lodged with the Bank’s H share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Wednesday, April 29, 2020. Holders of H shares of the Bank whose names appear on the register of members of the Bank on Wednesday, June 3, 2020 are entitled to attend the AGM.
A shareholder or his/her proxy should present proof of identity when attending the AGM. If a shareholder is a legal person, its legal representative or other person authorized by the board of directors or other governing body of such shareholder may attend the AGM by providing a copy of the resolution of the board of directors or other governing body of such shareholder appointing such person to attend the meeting.
3. Reply slip
Holders of H shares who intend to attend and vote (in person or by proxy) at the AGM must complete and lodge the accompanying reply slip and return it to the Bank’s H share registrar on or before Thursday, May 14, 2020. For holders of H shares, the reply slip may be delivered by hand, by post or by fax to the Bank’s H share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
Completion and return of the reply slip would not affect the right of a shareholder to attend and vote at the AGM. However, if shareholders fail to return the reply slip and the number of shares carrying the right to vote represented by the shareholders proposing to attend the AGM by reply slip does not reach more than half of the total number of shares of the Bank carrying the right to vote at the AGM, the Bank shall within five days notify the shareholders again, by way of public announcement, of the matters to be considered and the date and venue of the meeting. The Bank may then proceed to hold the AGM after publishing such announcement.
– 8 – NOTICE OF THE AGM
4. Proxy
(1) Each shareholder who has the right to attend and vote at the AGM convened by the above notice is entitled to appoint one or more proxies in writing to attend and vote on his/her behalf at the AGM. A proxy needs not be a shareholder of the Bank.
(2) The instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorized in writing, or if the appointor is a legal entity, either under seal or signed by a director or a duly authorized attorney. If that instrument is signed by an attorney of the appointor, the power of attorney authorizing that attorney to sign or other document of authorization must be notarized.
Holders of H shares shall lodge the proxy form, together with the notarized power of attorney or other authority, to Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less than 24 hours before the time specified for holding the AGM.
(3) Completion and return of the proxy form will not preclude a shareholder from attending and voting in person at the AGM or any adjournment thereof should he/she so wish.
(4) In the case of joint shareholders and more than one of the shareholders attending the meeting, whether in person or by proxy, 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 stand in the share register of the Bank in respect of the joint shareholding.
5. Miscellaneous
(1) The AGM is expected to last for no more than half a working day. Shareholders and their proxies attending the meeting are responsible for their own traveling and accommodation expenses. However, taking into account of the recent development of the epidemic caused by novel coronavirus pneumonia, in order to facilitate the prevention and control of the epidemic and to safeguard the health and safety of the Shareholders and investors, the Bank encourages the Shareholders to adopt the appropriate way to vote, such as appoint the Chairman of the AGM as a proxy to vote by poll on relevant resolution, instead of attending the AGM in person.
(2) For details of the proposals submitted to the AGM for consideration and approval, please refer to the relevant content in the circular of the AGM to be dispatched by the Bank in due course.
(3) None of the directors, supervisors, presidents and other senior management of the Bank has material interests in matters to be considered.
– 9 – NOTICE OF THE AGM
(4) Address of Computershare Hong Kong Investor Services Limited:
17M Floor, Hopewell Centre 183 Queen’s Road East, Wanchai Hong Kong Telephone: (852) 2862 8628 Facsimile: (852) 2865 0990
(5) Registered Office of the Bank in the PRC:
No. 122, Gannan Road, Chengguan District Lanzhou, Gansu Province The PRC
Principal Place of Business of the Bank in the PRC: Bank of Gansu Tower No. 525 Donggang West Road, Chengguan District Lanzhou, Gansu Province The PRC
Contact department: the Office of the Board Telephone: 86 (931) 877 0491 Facsimile: 86 (931) 877 1877 Contact person: Mr. Zhang Kuixi (張奎喜)
As of the date of this notice, the Board of Directors comprises Mr. LIU Qing and Mr. WANG Wenyong as executive Directors; Ms. WU Changhong, Ms. ZHANG Hongxia, Mr. GUO Jirong, Mr. ZHANG Youda and Mr. LIU Wanxiang** as non-executive Directors; and Ms. TANG Xiuli, Ms. LUO Mei, Mr. WONG Sincere and Mr. DONG Ximiao as independent non-executive Directors.
* Bank of Gansu Co., Ltd. is not an authorized institution within the meaning of the Banking Ordinance (Chapter 155 of the Laws of Hong Kong), not subject to the supervision of the Hong Kong Monetary Authority, and not authorized to carry on banking/deposit-taking business in Hong Kong.
** The qualification of Mr. Liu Wanxiang as a Director is subject to approval of the competent regulatory authority.
– 10 – APPENDIX 1 MATTERS TO BE DEALT WITH AT THE AGM
ORDINARY RESOLUTIONS
1. WORK REPORT OF THE BOARD OF DIRECTORS FOR 2019
According to the Company Law and the Articles of Association, it is the authority and duty of the Shareholders’ general meeting of the Bank to consider and approve the work report of the Board. The Work Report of the Board of Directors of Bank of Gansu Co., Ltd. for 2019 was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
The full text of the work report of the Board of Directors is set out in Annex 1 to this circular.
2. FINANCIAL AUDIT REPORT FOR 2019
According to the Articles of Association, Shinewing Certified Public Accountants LLP (“Shinewing”) was engaged by the Bank to conduct 2019 annual financial audit for the Bank and issued the Financial Audit Report of Bank of Gansu Co., Ltd. for 2019. According to their audit opinion, the financial statements of Bank of Gansu are prepared in accordance with the PRC GAAP in all material respects and give a true and fair view of the financial position of Bank of Gansu as at December 31, 2019 and its operating results and cash flows for 2019. According to the audit results, as at December 31, 2019, total assets, total liabilities, balance of loans and advances, and net profit of Bank of Gansu for the year were RMB335,045 million, RMB310,356 million, RMB170,449 million and RMB511 million, respectively. The aforesaid financial audit report was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
For particulars of financial information of the Group for the year ended December 31, 2019 as audited under IFRS, please refer to the financial statements in the 2019 annual report of the Bank published on April 17, 2020.
– 11 – APPENDIX 1 MATTERS TO BE DEALT WITH AT THE AGM
3. FINAL FINANCIAL REPORT FOR 2019
The Final Financial Report for 2019 of Bank of Gansu Co., Ltd. was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution, details of which are set forth as follows:
The final financial accounts for 2019 were completed by the Bank in accordance with applicable regulations. The financial statements for the year ended December 31, 2019 have been audited in accordance with the IFRS, and the final financial accounts of the Bank for 2019 are set out below:
As at the end of 2019, the total assets of the Bank amounted to RMB335,045 million, and the total assets of parent company amounted to RMB334,215 million; the total liabilities of the Bank amounted to RMB310,356 million, and the total liabilities of parent company amounted to RMB309,583 million; the balance of Shareholders’ equity of the Bank and parent company amounted to RMB24,689 million and RMB24,632 million, respectively. The operating revenue of the Bank and parent company amounted to RMB7,243 million and RMB7,205 million, respectively. Profit before tax of the Bank and parent company amounted to RMB565 million and RMB560 million, respectively. Net profit of the Bank and parent company amounted to RMB511 million and RMB508 million, respectively.
4. PROFIT DISTRIBUTION PROPOSAL FOR 2019
According to the Profit Distribution Proposal for 2019 of Bank of Gansu Co., Ltd. considered and approved by the Board on March 30, 2020, the profit distribution proposal for 2019 is set forth as follows:
Considering the Shareholders’ interests, the Bank’s future development and other factors and in accordance with the requirements of relevant laws and regulations and the Articles of Association, the Board proposed the profit distribution proposal for 2019 as follows:
(1) to appropriate 10% of net profit for the year (being RMB50,782,600) to statutory surplus reserve.
(2) to appropriate 10% of net profit for the year (being RMB50,782,600) to discretionary surplus reserve.
(3) to appropriate 1.5% of the risk-bearing assets (being RMB46,894,200) to the general risk reserve according to the Administrative Measures for the Provisioning for Reserves of Financial Institutions ([2012] No. 20) 《金融企業準備金計提管理辦法》( ([2012]20號)) promulgated by the Ministry of Finance of the People’s Republic of China.
– 12 – APPENDIX 1 MATTERS TO BE DEALT WITH AT THE AGM
(4) the Bank proposes not to distribute any dividends for the year 2019 according to the Bank’s capital budget arrangement for 2020 after taking into account replenishment of capital to support its long-term development.
(5) the remaining retained earnings of the parent company of RMB3,628,341,500 will be carried forward to the next year.
The profit distribution proposal for 2019 was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
5. ANNUAL FINANCIAL BUDGET FOR 2020
According to the Annual Financial Budget for 2020 of Bank of Gansu Co., Ltd. considered and approved by the Board on March 30, 2020, the annual financial budget for 2020 is set forth as follows:
Based on demand of the Bank for strategic development and business expansion, the Bank will control its total operating expenses budget for 2020 within RMB2.6 billion, representing an increase of RMB307 million as compared with the actual operating expenses in 2019. In addition, the Bank will control its cost-to-income ratio for 2020 within 35%. The increase in operating expenses is primarily due to the increase of manpower, additional investment in technology, and increase in assets depreciation and amortization.
In 2020, the Bank intends to arrange capital expenditure of approximately RMB1,050 million, which primarily include:
(1) approximately RMB753.15 million will be used for purchase of office building and the supporting electronic facilities, furnishings and fittings.
(2) approximately RMB166.76 million will be used for software investment.
(3) approximately RMB78.40 million is expected to be used for the “Digital Gansu” project(1).
(4) approximately RMB31.96 million will be used for investment of long-term deferred assets.
(5) approximately RMB22.45 million will be used for the addition of right-of-use assets, mainly concerning the lease of operating outlets with a term of over 1 year.
Note:
1. “Digital Gansu” means to fully share and utilize social information resources on the basis of modern information technology, and make cities more intelligent, education resources more reasonably optimized, medical insurance faster and more efficient, travel safer and more orderly, and scene consumption more convenient and smooth through Internet of Things, Internet and intelligence. Financial services are playing an increasingly important role in digital cities, which also implies huge business space. “Digital Gansu” mainly includes items such as “Digital Hospital”, “Digital School”, “Digital Scenic Spots” and “Digital Scene”.
– 13 – APPENDIX 1 MATTERS TO BE DEALT WITH AT THE AGM
(6) 2,944 pieces of tangible assets involving an amount of RMB15.32 million will be disposed of, all of which have fallen out of use and are expected to be destructed.
The annual financial budget for 2020 was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
6. ANNUAL REPORT FOR 2019
The annual report for 2019 was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution. The annual report for 2019 of the Bank was published on the HKExnews website of Hong Kong Exchanges and Clearing Limited (http://www.hkexnews.hk) and the website of the Bank (http://www.gsbankchina.com) on April 17, 2020, and dispatched to the Shareholders on April 17, 2020.
7. ENGAGEMENT OF EXTERNAL AUDITING FIRMS FOR 2020
In order to maintain the continuity and completeness of audit work of the Bank, the Board proposed to re-appoint (1) Shinewing Certified Public Accountants LLP as the external PRC auditor of the Bank for 2020 to provide auditing services in the PRC in accordance with the PRC GAAP, and (2) SHINEWING (HK) CPA Limited as the external international auditor of the Bank for 2020 to provide auditing and review services overseas in accordance with the IFRS.
The terms of engagement of the above external auditors shall commence from the date of approval of this proposal by the AGM and shall expire at the convening of the AGM for 2020 of the Bank. Audit fees for the 2020 interim financial report and the 2019 annual financial report shall not exceed RMB5.0 million; and other relevant consultation fees for 2020 shall be determined based on the prevailing market rates.
The Proposal Regarding the Engagement of External Auditing Firms for 2020 of Bank of Gansu Co., Ltd. was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
8. WORK REPORT OF INDEPENDENT DIRECTORS FOR 2019
The work report of Independent Directors for 2019 was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
Particulars of the aforesaid work report of Independent Directors for 2019 are set out in Annex 2 to this circular.
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9. THE BOARD’S EVALUATION RESULTS ON THE PERFORMANCE OF DUTIES BY DIRECTORS AND SENIOR MANAGEMENT FOR 2019
In order to strengthen the assessment and management of Directors and senior management by the Board of the Bank and urge Directors and senior management to better perform their duties, the Bank has formulated the Performance Evaluation Plan for Directors and Senior Management by the Board of Directors of Bank of Gansu for 2019 in accordance with the requirements of the Guidelines on Corporate Governance of Commercial Banks, the Articles of Association, the Measures for the Evaluation of Performance of Directors by the Board of Directors of Bank of Gansu Co., Ltd. (Provisional) and the Measures for the Evaluation of Performance of Senior Management by the Board of Directors of Bank of Gansu Co., Ltd. (Provisional), etc., to conduct annual performance evaluation on Directors and senior management who have performed their duties in the Bank for at least six months and have obtained the qualification approval from the banking regulatory authorities. The evaluation was conducted in the following ways: (I) for the non-executive Directors appointed by Shareholders, the self-evaluation by the Directors, comprehensive evaluation by Shareholders and comprehensive evaluation by the Board were adopted; (II) independent Directors and senior management are evaluated in a combination of submission of personal work reports, self-assessment and comprehensive assessment by the Board of the Bank; (III) the Directors and senior management who have performed their duties in the Bank for less than six months will not be evaluated, and the resigned Directors and senior management will be evaluated in a comprehensive manner based on their annual performance of duties; and (IV) the evaluation results are classified into three categories: competent, basically competent and incompetent.
Evaluation results of the Board on the performance of duties of the Directors upon comprehensive assessment are set out as below:
Name Position Evaluation Results
Liu Qing Executive Directors Competent Wang Wenyong Executive Directors Competent Wu Changhong Non-executive Directors Competent Zhang Hongxia Non-executive Directors Competent Guo Jirong Non-executive Directors Competent Zhang Youda Non-executive Directors Competent Tang Xiuli Independent Non-executive Directors Competent Luo Mei Independent Non-executive Directors Competent Wong Sincere Independent Non-executive Directors Competent Dong Ximiao Independent Non-executive Directors Competent
– 15 – APPENDIX 1 MATTERS TO BE DEALT WITH AT THE AGM
Evaluation results of the Board on the performance of duties of the senior management upon comprehensive assessment are set out as below:
Name Position Evaluation Results
Qiu Jinhu Vice President Competent Wang Zhiyuan Vice President Competent Hao Jumei Vice President, Secretary to the Board Competent Wang Chunyun Senior Internal Control and Compliance Executive Competent
Note: Mr. Liu Wanxiang has not yet obtained the qualifications of Directors approved by regulatory authorities, and no evaluation will be made according to regulatory requirements.
The performance evaluation plan for Directors and senior management by the Board for 2019 was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
10. REMUNERATION DISTRIBUTION AND SETTLEMENT PLAN FOR DIRECTORS AND SUPERVISORS IN 2019
The remuneration distribution and settlement plan for Directors and Supervisors in 2019 was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
The aforesaid remuneration distribution and settlement plan for Directors and Supervisors in 2019 is set out in Annex 3 to this circular.
11. WORK REPORT OF THE BOARD OF SUPERVISORS FOR 2019
The work report of the Board of Supervisors for 2019 was considered and approved by the Board of Directors on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
The aforesaid work report of the Board of Supervisors for 2019 is set out in Annex 4 to this circular.
12. REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
The report on related-party transactions for 2019 was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
The aforesaid report on related-party transactions for 2019 is set out in Annex 5 to this circular.
– 16 – APPENDIX 1 MATTERS TO BE DEALT WITH AT THE AGM
13. ESTIMATED CAPS OF RELATED PARTY/CONNECTED TRANSACTIONS FOR 2020
Pursuant to relevant regulations of CBIRC and the Measures on Management of Related Party/ Connected Transactions of Bank of Gansu Co., Ltd., the Bank proposed the estimated cap of ordinary related party transactions for 2020 with four related legal persons including Gansu Province Highway Aviation Tourism Investment Group Co., Ltd. and their controlled subsidiaries, and related natural persons. In order to further improve the scientific nature and flexibility in management of related-party transactions and improve the approval efficiency of related-party transactions, while ensuring the compliance operation of related-party transactions, the Bank proposes that the management be authorized by the Shareholders’ general meeting to make adjustments to the estimated amount for related single (or group) legal person and related natural persons up to the estimated cap of related-party transactions in connection with credit facilities with reference to the best practice in the industry under the premise of compliance with the requirement in relation to the prescribed limit under regulatory rules, and file the same with the related- party transactions and risk management committee. The aforesaid estimated cap of related-party/ connected transactions for 2020 was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
The aforesaid estimated caps of related-party/connected transactions for 2020 are set out in Annex 6 to this circular.
14. AMENDMENTS TO THE PLAN ON AUTHORIZATION OF THE SHAREHOLDERS’ GENERAL MEETING TO THE BOARD
In order to further improve the corporate governance structure of the Bank, the Bank formulated the Plan on Authorization of the Shareholders’ General Meeting to the Board of Directors of Bank of Gansu Co., Ltd.* in 2019 in accordance with the Company Law of the PRC, the Interim Measures for the Administration of Commercial Banks’ Authorization and Credit Granting, Guidelines for the Internal Controls of Commercial Banks, the Interim Measures for the Equity Management of Commercial Banks, the Listing Rules and the Articles of Association etc.. The plan was considered and approved at the general meeting held on June 3, 2019. In order to further clarify the relevant approval authority for related-party transactions and ensure the operability of the authorization matters, the Bank proposes to amend the content of “(I) Approval authority for the related transactions” in the authorization plan, namely the existing content which reads “A transaction with a related party as defined by the CBIRC with a single transaction amount within the limit (inclusive) required by regulatory authorities, or a connected transaction with a connected party as defined under the Hong Kong Listing Rules, shall be subject to the approval by the Board of Directors. In particular, the non-exempt connected transactions under the Hong Kong Listing Rules shall also be submitted to the Bank’s general meeting for approval by the independent shareholders of the Bank. The general related-party transactions and the fully-exempted connected transactions under the Hong Kong Listing Rules may be submitted to the Chairman for approval
– 17 – APPENDIX 1 MATTERS TO BE DEALT WITH AT THE AGM
and filed with the Board of Directors upon being reviewed and approved according to the Bank’s prevailing review and approval process.” is proposed to be amended as follows: “A transaction with a related party as defined by the CBIRC with a single transaction amount within the limit (inclusive) required by regulatory authorities, or a connected transaction with a connected party as defined under the Hong Kong Listing Rules, shall be subject to the approval by the Board of Directors, or approval by the Chairman and filing with the Board of Directors. In particular, the non-exempt connected transactions under the Hong Kong Listing Rules shall be submitted to the Bank’s general meeting for approval by the independent shareholders of the Bank. The related party transactions that are exempt from the independent shareholders’ approval requirement under the Hong Kong Listing Rules shall be submitted to the Board of Directors of the Bank for approval; the related party transactions with the senior management of the head office or branches of the Bank as related legal persons or related natural persons (under the regulatory requirements of domestic banking regulatory authorities) and the connected transactions that are fully exempt from disclosure requirements and independent shareholders’ approval requirements under the Hong Kong Listing Rules may be submitted to the Chairman for approval and filed with the Board of Directors after being reviewed and approved in accordance with the prevailing review and approval process of the Bank”.
The proposal regarding amendments to the Plan on Authorization of the Shareholders’ General Meeting to the Board of Directors was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
15. AMENDMENTS TO RULES OF PROCEDURE FOR SHAREHOLDERS’ GENERAL MEETING
In order to further improve the corporate governance structure of the Bank, standardize the operation of the general meeting and guarantee the scientificness and efficiency of decisions made by the general meeting, the Bank proposed to make amendments to the Rules of Procedure for Shareholders’ General Meeting in accordance with the relevant provisions of laws, regulations and other normative documents. The proposal regarding the amendments to the Rules of Procedure for the Shareholders’ General Meeting was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
Particulars of specific amendments to the aforesaid Rules of Procedure for the Shareholders’ General Meeting are set out in Annex 7 to this circular.
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16. AMENDMENTS TO RULES OF PROCEDURE FOR THE BOARD OF DIRECTORS
In order to further improve the corporate governance structure of the Bank, standardize the operation of the Board and guarantee the scientificness and efficiency of decisions made by the Board, the Bank proposed to make amendments to the Rules of Procedure for the Board of Directors in accordance with the relevant provisions of laws, regulations and other normative documents. The proposal regarding the amendments to the Rules of Procedure for the Board of Directors was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
Particulars of specific amendments to the aforesaid Rules of Procedure for the Board of Directors are set out in Annex 8 to this circular.
17. AMENDMENTS TO RULES OF PROCEDURE FOR THE BOARD OF SUPERVISORS
In order to further improve the corporate governance structure of the Bank, standardize the operation of the Board of Supervisors and guarantee the scientificness and efficiency of decisions made by the Board of Supervisors, the Bank proposed to make amendments to the Rules of Procedure for the Board of Supervisors in accordance with Company Law of the PRC, the Guidelines on Corporate Governance of Commercial Banks, the Working Guidelines on the Board of Supervisors of Commercial Banks, the Listing Rules, the Articles of Association and other relevant provisions. The proposal regarding the amendments to the Rules of Procedure for the Board of Supervisors was considered and approved by the Board of Supervisors on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as an ordinary resolution.
Particulars of specific amendments to the aforesaid Rules of Procedure for the Board of Supervisors are set out in Annex 9 to this circular.
SPECIAL RESOLUTIONS
18. GENERAL MANDATE TO ISSUE SHARES
The Proposal Regarding the General Mandate to Issue Shares of Bank of Gansu Co., Ltd. was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as a special resolution.
The particulars of such proposal are set out in Annex 10 to this circular.
– 19 – APPENDIX 1 MATTERS TO BE DEALT WITH AT THE AGM
19. AMENDMENTS TO THE ARTICLES OF ASSOCIATION
In order to safeguard the legitimate rights and interests of the Bank, its shareholders and creditors, regulate the organization and activities of the Bank, and further improve corporate governance, the Bank proposed to amend certain articles of the existing Articles of Association, taking into account the actual situation of the Bank, and in accordance with the Company Law of the PRC, the Law of the People’s Republic of China on Commercial Banks, the Guidelines on Corporate Governance of Commercial Banks, the Mandatory Provisions for Articles of Association of Companies to be Listed Overseas, the Interim Measures for the Equity Management of Commercial Banks, the Listing Rules, the Working Regulations of the Communist Party of China on the Grassroots Organization of State-owned Enterprises (Trial) and other laws, administrative regulations, departmental rules, normative documents and relevant requirements of the securities regulatory authorities of the place where the Bank’s shares are listed.
The proposal regarding the amendments to the Articles of Association was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval as a special resolution. The amended Articles of Association are subject to the approval of the banking regulatory authorities of the PRC after being considered and approved at the AGM as a special resolution. The Articles of Association currently in force shall remain effective until then.
The reference table on the aforesaid amendments to the Articles of Association is set out in Annex 11 to this circular.
20. PUBLIC ISSUANCE OF SECONDARY CAPITAL BONDS
In order to further enhance the capital strength and support the development of various business of the Bank, the following proposals in relation to the issuance of secondary capital bonds are hereby presented:
(1) To approve the issuance of secondary capital bonds by the Bank on the following terms and conditions, subject to approval by the AGM and relevant regulatory authorities:
a. Total issue amount: not more than RMB5 billion;
b. Bond type: bond capital instruments that meet the requirements of the Measures for Capital Management of Commercial Banks (Provisional);
c. Target market: national inter-bank bond market;
d. Duration: not more than 10 years (inclusive);
– 20 – APPENDIX 1 MATTERS TO BE DEALT WITH AT THE AGM
e. Interest rate: to be determined with reference to the market interest rates;
f. Use of proceeds: to replenish supplementary capital of the Bank; and
g. Validity period of the resolution: within 18 months from the date of approval of the issuance of secondary capital bonds by the AGM.
(2) It is proposed that the authorization to the Board be submitted to the general meeting for consideration and approval, and that subject to the authorization of the general meeting, the Board be authorized to delegate its authorization to the management to determine and attend to other terms and specific matters concerning the issuance of the capital replenishment bonds in accordance with rules promulgated by relevant departments and requirements of relevant regulatory authorities, including but not limited to signing relevant documents, attending to all relevant matters such as submitting application to relevant regulatory authorities, and ensuring the immediate write-down of the secondary capital bonds upon the occurrence of the triggering events as specified. The validity period of the authorization granted by the AGM to the Board shall coincide with that of the resolution regarding the issuance of secondary capital bonds.
The aforesaid proposal was considered and approved by the Board on March 30, 2020, and is hereby submitted to the AGM for consideration and approval as a special resolution.
– 21 – ANNEX 1 WORK REPORT OF THE BOARD OF DIRECTORS FOR 2019(1)
Dear Shareholders:
In 2019, the Board of Directors (the “Board”) of Bank of Gansu Co., Ltd. (“Bank of Gansu” or the “Bank”) fulfilled its duties diligently and stayed scientific in making decisions in earnest adherence to the spirit of the 19th National Congress of the Communist Party of China, the Central Economic Working Conference and the National Financial Work Conference, and in strict compliance with laws, regulations, regulatory stipulations and the Articles of Association of the Bank. In the face of the complex and severe domestic and international economic and financial trends as well as pressure and risks, the Board insisted on the keynote of “seeking progress amidst stability” and closely focused on the three major tasks of “serving the real economy, prevention and control of financial risks, and deepening financial reform”. Under the correct leadership of the Gansu provincial Party Committee and provincial government, the guidance and help of regulatory authorities and with the strong support of all shareholders, the Board continuously improved corporate governance and strengthened risk compliance management. As a result, the overall asset quality was controllable, business portfolio continued to be optimized, and all businesses of the Bank maintained stable development.
I. PRINCIPAL WORK OF THE BOARD IN 2019
(1) Operation and management progressed steadily thanks to scientific planning and layout
In 2019, the Board, in view of the new requirement of high quality development and the new features of change in events, specified the development direction of returning to its original aspiration and serving the real economy, and insisted on the principle of “addressing problems in the course of development and seeking better development through trouble shooting” and continued to explore the embedded development mode of paying equal attention to “scale, speed, quality and profitability”. The Board, based on the regional development strategy, took on the mission of serving local economy, focused on the provincial key projects, gave impetus to poverty alleviation campaigns and supported private businesses with great efforts. Thanks to its steadfast promotion of the reform and development of the entire Bank, the brand influence rose swiftly and operation and development progressed while maintaining stable. In the list of “Top 1000 World Banks 2019” released by The Banker, a British magazine, the Bank was ranked 313th in terms of Tier-1 capital and 49th among domestic banks. The Bank was honored with the “Best Corporate Governance Award”, “Best Sustainable Development Report Award”, “Most Featured Mobile Banking Function Award”, “Outstanding Contribution Award for Financial Technology Innovation – Contribution Award for Innovation of Operation and Maintenance and Contribution Award for Management Innovation” and other awards; the Bank took the
1Note: The financial data in this report were prepared in accordance with the IFRS.
– 22 – ANNEX 1 WORK REPORT OF THE BOARD OF DIRECTORS FOR 2019
54th place and 90th place among the “2019 Top 100 Financial Service Institutions” and the “2019 Top 100 Financial Innovation Enterprises in China”, respectively, and won the provincial governor financial award for the sixth time.
As at the end of 2019, the Bank had total assets of RMB335,045 million, representing an increase of RMB6,423 million or 1.95% as compared with the end of the previous year; and the balance of various loans amounted to RMB170,449 million, representing an increase of RMB9,564 million or 5.94% as compared with the end of the previous year; the total liabilities reached RMB310,356 million, representing an increase of RMB6,981 million or 2.3% as compared with the end of the previous year; and the balance of general deposits amounted to RMB236,869 million, representing an increase of RMB26,146 million or 12.41% as compared with the end of the previous year. The Bank managed to maintain stable growth momentum while going through extensive adjustment in respect of business portfolio. Impairment loss on assets amounted to RMB4,312 million, representing an increase of RMB2,350 million as compared with the beginning of the year. The profit indicators declined sharply in spite of the effectively improved quality of assets. The Bank recorded net profit of RMB511 million, representing a decrease of RMB2,929 million as compared with the previous year; the rates of return on assets and return on capital reached 0.15% and 2.05%, respectively. The capital adequacy ratio and tier-one capital adequacy ratio were 11.83% and 9.92%, respectively, both of which have met the regulatory requirements.
(II) Corporate governance was improved and the quality and efficiency of governance continued to level up
In 2019, the Board of the Bank strictly complied with the relevant requirements of the Company Law and the Guidelines on Corporate Governance of Commercial Banks, strictly abided by the Corporate Governance Code for listed companies of the Hong Kong Stock Exchange, and continuously improved the corporate governance structure and operation mechanism. As a result, the “shareholders’ general meeting, the Board of Directors, the Board of Supervisors and the senior management” have clear responsibilities and operate independently. They cooperated with each other to achieve effective checks and balances, which guaranteed and promoted the healthy and sustainable development of the Bank. The Board gave full play to the leadership and political core role of the Party Committee in corporate governance, and fully strengthened the decision-making mechanism of the Board, the supervision mechanism of the Board of Supervisors and the implementation mechanism of the senior management in all fronts; the Bank established a consumer rights protection committee to incorporate consumer rights protection into our corporate governance and business development strategies, thereby further enriching and optimizing the functions of the special committees of the Board; in response to the new regulatory rules, the Bank amended and improved the Articles of Association and the rules of procedure of the special committees under the Board in a timely manner, ensuring the scientificity, effectiveness and feasibility of various systems.
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During the year, the Board organized and convened one AGM, at which 24 resolutions were considered and approved; 2 class meetings, at which 4 resolutions were considered and approved; 8 Board meetings, at which 55 resolutions were considered and approved; 14 meetings of the special committees under the Board, at which 43 resolutions were considered and approved. The matters considered covered the Bank’s business development, system revision, bond issuance, internal control and compliance, etc., which gave effective play to independent Directors and special committees in supporting the decision-making process of the Bank’s corporate governance and operation management, and ensured the efficient operation of the Board.
(III) Risk management was enhanced and internal control and compliance mechanism was cemented
1. Preventing and mitigating risks and securing the bottom line of risk prevention and control. The Board has always adhered to the development concept of “prudent compliance and stable operation”, earnestly discharged its duties in respect of comprehensive risk management, and actively improved the comprehensive risk management system in strict accordance with the requirements of laws and regulations and the guidance opinions of regulatory inspection. In 2019, the Bank effectively implemented the transformation of risk management and fully disposed of and recovered non-performing assets. It established the risk-bearing assets mitigation team under the leadership of the Chairman, formulated risk-bearing assets mitigation plans, and provided special assessment measures to replenish the work force of the assets preservation line; the Bank actively adjusted the structure of credit assets, established the credit approval department, strictly controlled new credit risks, and strictly regulated the approval process of related party transactions to secure the risk bottom line. The Bank weathered the ordeal with regard to liquidity management, emergency management and public opinion management and control, and further consolidated its risk resistance capacity against various incidents last year.
2. Strengthening the construction of internal control system and ensuring legal and compliant operation. The Board attached great importance to internal control and compliance, continuously optimized the internal control mechanism and continuously improved the internal control management system. During the year, the Board formulated and revised 117 bylaws, improved emergency plans, and enhanced employees’ compliance awareness through warning education, compliance training and other means; it continued to promote the establishment of the case prevention and control system and anti-money laundering management, and revised the anti-money laundering management measures; the Board strengthened internal audit supervision and formulated the Implementation Rules of Internal Audit Rectification of Bank of Gansu to enhance the pertinence and effectiveness of internal audit, give full play
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to the role of external audit, regularly learn about the information on the Bank’s financial reports, and guarantee the effective supervision and control of the Board; the Bank rendered all kinds of credit information in strict compliance with relevant requirements of the People’s Bank of China, and prevented the leakage of credit information and illegal inquiry resolutely to ensure the security of credit information. In 2019, the Bank had neither any major and critical case or major risk event, nor any major negative public opinion, and enjoyed safe and orderly business operation.
(IV) Obligation of disclosure was fulfilled and sound market image was preserved
The Board earnestly fulfilled the obligation of information disclosure, conducted information disclosure in a standardized and efficient way, continuously improved operation management transparency, and disclosed corporate governance and operation management information in a timely, accurate and comprehensive manner in strict accordance with the requirements of domestic and overseas regulatory requirements. Throughout the year, the Bank made disclosure for a total of 44 times including annual report, interim report, results reports, social responsibility report and various types of announcements and interim announcements. Based on the demands of investors, the Bank continued to standardize management of inside information and the insiders, and has thus effectively ensured the investors’ right to know and safeguarded the legitimate rights and interests of minority shareholders.
In 2019, under the guidance of the Board, the Bank continued to strengthen the investor relations management to proactively maintain the relationship with domestic and foreign investors. It conducted in-depth communication and exchange with investors by way of accepting investors’ research, return visits to institutional investors, accepting interviews with the media, etc. and answered questions related to the Bank’s business strategy, business development, risk management, etc. In the meantime, the Bank paid close attention to the capital market and share price movements, implemented public opinion management effectively, and continued to enhance the Bank’s brand image and sustainable development capacity while creating a good investment environment for investors.
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(V) Equity management was standardized and self-construction was optimized
The Board actively implemented the requirements under the Interim Measures for Equity Management of Commercial Banks and its supporting documents, and made timely amendments to the Measures for Equity Management of Bank of Gansu to ensure that the Bank’s equity management was in compliance with the latest regulatory requirements at the institutional level. The Bank established the working mechanism of reporting shareholding status to the regulatory authorities on a regular basis in active obedience to various regulatory investigations. In 2019, the Bank paid a total dividend of RMB1,029 million to all shareholders with a cash dividend ratio of 30%. The Bank assisted the judicial authorities to complete the equity auction, and strengthened the control and management of equity pledge and equity freeze of the Bank. As a result, right registration percentage of natural person shareholders reached 99%, and the standardization of equity management improved effectively.
II. WORK ARRANGEMENT OF THE BOARD FOR 2020
(I) Emphasize strategic guidance and achieve high quality development
The year of 2020 is destined for plentiful challenges. The outbreak of pandemic is a tremendous test on the development of the national economy. The Board will devote greater efforts to the judgment and analysis over macro economic and financial trends, get down to and determine the business schemes, and initiate the formation and evaluation of medium to long-term strategic plans so as to exert the effect of strategic guidance and follow the path of high quality and steady development unswervingly. We will further focus on the return to the origin of finance, hold fast to the market positioning, proactively serve the private engagements and small and micro enterprises and fully discharge the duties of serving the real economy development as a city commercial bank. In addition, we will integrate our own development into serving the local real economy and allocate more resources to our key fields and weak fields in the provincial economic and social development.
(II) Strengthen corporate governance and improve operation mechanism
In 2020, the Board will continue to consummate and improve the corporate governance of the Bank, and earnestly summarize the Bank’s corporate governance status since its listing in light of the latest regulatory requirements and relevant regulatory rating requirements on corporate governance, so as to identify and rectify deficiencies, optimize the performance of duties by Directors and improve their competency in performance of duties. The Board will give full play to the core leadership role of the Party Committee, the strategic decision-making role of the Board, the legal supervision role of the Board of Supervisors and the operation and management role of the senior management to ensure the scientific and
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stable operation of the governance structure comprising the “shareholders’ general meeting, the Board of Directors, the Board of Supervisors and the senior management”. The Board will make amendments and consummation to the fundamental systems such as the Articles of Association to standardize the operating mechanism of corporate governance, clarify the priorities of the terms of reference of the Board, and reinforce the communication mechanism between the special committees and the operation management. The Board will further strengthen the management of shareholders’ equity, improve other supporting measures for management of equity pledge and related party transactions, and regulate the behaviors of shareholders, thereby ensuring the long-term and healthy development of the Bank.
(III) Enhance risk management and improve internal control
In 2020, the Board will further discharge its duties in risk management by enhancing the foresight and initiative in risk management, strengthening internal control and compliance management, and securing the bottom line of risk. Firstly, it will procure the management to continuously improve the construction of the comprehensive risk management system, regularly evaluate the overall risk management status, and actively implement the transformation of risk management. Secondly, it will build up risk prevention and control in key areas, pay high attention to medium and long-term loans, the industry and customer concentration, and improve liquidity risk management and control. Thirdly, it will enhance the management of internal control, compliance and audit, improve the coverage of systems, exert further supervision and control over employees’ behaviors, and level up the integrity and effectiveness of internal control. Fourthly, it will continue to increase efforts on disposal of non-performing assets, secure the bottom line of asset quality, strengthen the prejudgment and analysis of asset quality, and continuously innovate and expand the methods and channels for disposal of non-performing assets.
(IV) Intensify capital management and make for sustainable development
In 2020, the Board will make for a reasonable capital adequacy ratio of the Bank. Firstly, it will optimize capital structure and reduce capital cost through reasonable utilization of capital tools and scientific formulation of capital management plans. Secondly, the Bank will enhance its sustainable development capability by energetic exploration of multiple capital replenishment methods, continuous study of regulatory policies and timely selection of capital replenishment tools including preference shares, perpetual bonds, secondary capital bonds, etc. Thirdly, the Board will scientifically carry out internal capital adequacy evaluation, get various risks within its reach in all fronts and boost the economic capital-centered value management system, so as to improve its capital management standard and capital strength continuously and provide support for the sustainable development of the Bank’s business.
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In 2020, with the great support of all shareholders of the Bank, and under the strong leadership of the Gansu Provincial Party Committee and Provincial Government, the Board will stick to the philosophy of high-quality and steady development, make scientific analysis of the domestic and overseas economic trends, and follow the regulatory requirements proactively. It will continue to support the real economy, deepen the corporate governance reform, optimize the construction of mechanism and system and accelerate business transformation and upgrade with a view to striving for the high quality development of the Bank and creating more value for customers, shareholders, employees and the society with high sense of mission and responsibility through solid work, pioneering spirit and aggressive initiatives.
The above report is proposed for your consideration.
– 28 – ANNEX 2 WORK REPORT OF INDEPENDENT DIRECTORS FOR 2019
In 2019, the independent Directors of Bank of Gansu Co., Ltd. (the “Bank”) faithfully and diligently performed their duties, duly attended the meetings of the Board of Directors and its special committees, actively fulfilled their responsibilities and made decisions at their own discretion and effectively protected the interests of the Bank and all its shareholders in accordance with the Company Law, the Securities Law, the Guidelines on Corporate Governance of Commercial Banks, the Corporate Governance Code contained in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and other domestic and overseas laws and regulations as well as the articles of association of Bank of Gansu Co., Ltd. (the “Articles of Association”). Relevant information is herein reported as follows:
I. BASIC INFORMATION ON THE INDEPENDENT DIRECTORS
As at the end of 2019, the Bank had four independent Directors in total, accounting for over one third of all Directors, which was in compliance with the relevant laws, regulations and the Articles of Association. The audit committee, the related party transaction and risk management committee, and the nomination and remuneration committee under the Board of Directors of the Bank were all chaired by independent Directors. Except the annual remuneration, independent Directors of the Bank neither had any business or financial interests with the Bank and its subsidiaries nor assumed any management roles in the Bank. The Bank has received the annual confirmation letters of independent Directors on their independence, and acknowledged their independence. Therefore, the independence of the Bank’s independent Directors met the relevant regulatory requirements. Biographical details of independent Directors of the Bank are as follows:
Ms. Tang Xiuli (唐岫立), aged 51, has been an independent non-executive Director of the Bank since August 2017. Ms. Tang currently serves as the general manager of Heng Jiu Yuan Asset Management Co., Ltd. She also concurrently serves as professor of Dongbei University of Finance and Economics, tutor of master-degree students majoring in economics or finance of Fudan University and Zhejiang University as well as distinguished MBA tutor of Chinese Academy of Social Sciences, EDP distinguished professor of Dongbei University of Finance and Economics, researcher of Economics Institute of Beijing Language and Culture University* (北京語言大學經濟 研究院), and chairman of financial branch of China Optimization Society of Capital Construction. Ms. Tang has many years of experience in banking regulation in the PRC. She worked at the Heilongjiang Branch and Shenyang Branch of the PBOC in the 1990s. She also previously worked at the CBIRC. Ms. Tang was a member of the Party committee and vice president of Bank of Wenzhou Co., Ltd. from July 2012 to December 2015, served as senior vice president and chief policy officer of Zillion Financial Network Technology Group Limited from January 2016 to May 2018, and an independent director of Dandong Rural Commercial Bank Company Limited from March 2019 to September 2019. Ms. Tang obtained a bachelor’s degree in economics from Dongbei University of Finance and Economics in Liaoning province, the PRC, in July 1991, majoring in management information system, a master’s degree in economics from Dongbei University of Finance and Economics in April 2006, majoring in finance, and a doctorate’s degree in economics from Dongbei University of Finance and Economics in June 2014, majoring in finance. Ms. Tang was certified as a senior economist by PBOC in November 2003.
– 29 – ANNEX 2 WORK REPORT OF INDEPENDENT DIRECTORS FOR 2019
Ms. Luo Mei (羅玫), aged 44, has been an independent non-executive Director of the Bank since August 2017. Ms. Luo joined Tsinghua University in June 2007 and is currently professor and a PHD tutor of the Department of Accounting at the School of Economics and Management of Tsinghua University, and the director of the Research Center for Digital Financial Assets, School of Economics and Management, Tsinghua University. She worked at Mellon Capital Management, an assets management company in San Francisco, the United States, and was responsible for the strategy of quantitative investment in the stock market. She also taught at the Department of Accounting in University of Illinois at Urbana-Champaign, the United States. Ms. Luo has been an independent director of each of Canaan Inc. (a company listed on the NASDAQ of the USA, stock code: CAN) since December 2019, and Beijing Gehua CATV Network Co., Ltd. (a company listed on the Shanghai Stock Exchange, stock code: 600037) since March 2013. Ms. Luo was an independent director of Beijing Baofeng Technology Co., Ltd. (now known as “Baofeng Group Co., Ltd.”, a company listed on the Shenzhen Stock Exchange, stock code: 300431) from June 2013 to December 2014. Ms. Luo obtained a bachelor’s degree from the School of Economics and Management of Tsinghua University in Beijing, the PRC, in June 1998, majoring in accounting (international accounting), and a doctorate’s degree in business management from the University of California Berkeley in California, the U.S., in December 2004, majoring in accounting and finance.
Mr. Wong Sincere (黃誠思), aged 55, has been an independent non-executive Director of the Bank since August 2017. Mr. Wong became the founder and has been the principal of Sincere Wong & Co. (currently renamed as Wong Heung Sum & Lawyers) since May 2016. He was an in-house counsel for Hutchison Whampoa Group from September 1996 to January 2005 and China Resources Enterprise, Limited (now known as China Resources Beer (Holdings) Company Limited) from February 2005 to November 2006, chief legal officer of Shui On Construction and Materials Limited from November 2006 to June 2010, as well as the head of the legal department and company secretary of Sateri Holdings Limited (a company previously listed on the Hong Kong Stock Exchange, the name of which was later changed to Bracell Limited but has subsequently been privatized) from July 2010 to May 2011. He worked at the Hong Kong Stock Exchange from August 2011 to May 2016, and was a vice president of Listing & Regulatory Affairs Division at the time of his departure from the Hong Kong Stock Exchange, primarily responsible for reviewing listing applications and providing recommendations to the Listing Committee of the Hong Kong Stock Exchange regarding listing applications. Mr. Wong was appointed as an independent non-executive Director of U Banquet Group Holding Limited (a company listed on the Hong Kong Stock Exchange, stock code: 1483) in September 2018, and was appointed as a non-executive director of MOS House Group Limited (a company listed on the Hong Kong Stock Exchange, stock code: 1653) Mr. Wong obtained a bachelor’s degree of social science from the Chinese University of Hong Kong in Hong Kong in December 1986. He passed the Common Professional Examination in Wolverhampton Polytechnic (now known as University of Wolverhampton) in July 1990, and the Solicitors’ Final Examination of the Law Society of England and Wales with first class honors in October 1991. Mr. Wong was admitted as a solicitor of Hong Kong and England and Wales in October 1993 and February 1994, respectively.
– 30 – ANNEX 2 WORK REPORT OF INDEPENDENT DIRECTORS FOR 2019
Mr. Dong Ximiao (董希淼), aged 42, has been an independent non-executive Director of the Bank since December 2018. He is currently the head researcher of Zhongguancun Internet Finance Institute and the deputy director of the Industry Development Research Committee of the China Banking Association. Mr. Dong also serves as a special economic analyst of Xinhua News Agency, a special research fellow of the Banking Research Center of the National Institution for Finance and Development, an adjunct professor of the Lanzhou University, a master’s tutor of the School of Finance of Zhongnan University of Economics and Law, and a visiting professor of the School of Economics of Sichuan Agricultural University. Mr. Dong joined China Construction Bank Corporation in July 2000 and successively served as the office secretary, deputy business manager and business manager of Zhejiang Branch of China Construction Bank Corporation. Since March 2009, he served as the vice president and a senior manager of the private banking department of the sub-branch directly under Zhejiang Branch of China Construction Bank Corporation. Mr. Dong served as the executive dean of its Research Institute of HengFeng Bank from July 2015 to October 2018. In December 2017, he was elected as the deputy director of the Industry Development Research Committee of China Banking Association. He has been an independent director of Bozhou Yaodu Rural Commercial Bank Co., Ltd. since February 2020. Mr. Dong graduated from Lanzhou University in June 2000 with a dual bachelor’s degree in history and laws, and graduated from Zhejiang University of Technology in January 2007 with a master’s degree in business administration. In December 2010, he was certified as a senior economist by China Construction Bank Corporation.
II. OVERVIEW ON PERFORMANCE OF DUTIES DURING THE YEAR
In 2019, independent Directors of the Bank actively attended the shareholders’ general meetings, the meetings of the Board of Directors and its special committees. They reviewed the resolutions of the Board of Directors and its special committees. In 2019, the Bank convened 3 shareholders’ general meetings and 8 Board meetings. The attendance of the independent Directors is as follows:
Shareholders’ general meeting Board meeting Attendance in Attendance in Attendance by Independent Director person person proxy
Ms. Tang Xiuli 3/3 8/8 0/8 Ms. Luo Mei 0/3 6/8 2/8 Mr. Wong Sincere 3/3 7/8 1/8 Mr. Dong Ximiao 3/3 8/8 0/8
– 31 – ANNEX 2 WORK REPORT OF INDEPENDENT DIRECTORS FOR 2019
In 2019, the attendance of independent Directors at the meetings of the special committees of the Board of Directors is as follows:
Related party transaction Strategy and development Remuneration and and risk management committee Audit committee nomination committee committee Independent Attendance Attendance Attendance Attendance Attendance Attendance Attendance Attendance Director in person by proxy in person by proxy in person by proxy in person by proxy
Ms. Tang Xiuli – – 4/4 0/4 3/3 0/3 5/5 0/5 Ms. Luo Mei – – 4/4 0/4 2/3 1/3 5/5 0/5 Mr. Wong Sincere – – 4/4 0/4 – – 5/5 0/5 Mr. Dong Ximiao – – – – 3/3 0/3 5/5 0/5
Notes:
(1) The number of “attendance in person” includes attendance in person, by telephone or video conference.
(2) During the reporting period, the independent Directors of the Bank who were unable to attend the meetings of the Board of Directors and its special committees have entrusted other Directors to attend the meetings and exercise the voting rights on their behalves.
The independent Directors of the Bank came from renowned universities or organizations in the Chinese Mainland and Hong Kong with extensive professional background in the fields of economics, finance, law and accounting. In 2019, the independent Directors of the Bank actively attended the board meetings and relevant special committee meetings, debriefed reports on operation and management; paid attention to the development and the implementation of development strategies of the Bank through timely communication with the management; actively conducted investigation and study, and acquired a knowledge of the operation and management of the Bank through site visits; made forward-looking reflection on the business plan of the Bank; and played an important role in the decision-making of the Board by providing constructive suggestions on development strategies, risk management, capital adequacy, business structure, etc. During the reporting period, the Bank’s independent non-executive Directors did not raise any objection to the relevant matters reviewed by the Board of Directors.
To constantly update their professional knowledge and improve duty performance capabilities, independent Directors kept abreast of the changes in the regulatory policies, paid continuous attention to opinions of the regulators, diligently attended trainings on corporate governance, risk management and internal control and compliance, etc. The work of independent Directors was fully supported and coordinated by the management. The independent Directors actively attended the week-long leadership workshop of “intelligent + banker’s mind” held at Tsinghua University and business training programs on recent amendments to the Hong Kong Listing Rules and compliance cases, which further enhanced their ability to perform their duties.
– 32 – ANNEX 2 WORK REPORT OF INDEPENDENT DIRECTORS FOR 2019
III. MAJOR CONCERNS IN PERFORMANCE OF DUTIES DURING THE YEAR
(I) Related-party transactions
During the reporting period, independent Directors of the Bank paid close attention to the development of domestic and overseas regulations and standards, strengthened the review and supervision of related party transaction management, improved the related-party transaction management system, promoted the level of technology application in related-party transaction management, and procured that the related-party transactions were conducted in compliance with laws, regulations and business principles.
(II) External guarantees and capital occupation
The external guarantee business of the Bank, as approved by the PBOC and China Banking and Insurance Regulatory Commission, is conducted in the ordinary course of business of the Bank. With respect to the risks arising from guarantee business, the Bank has formulated specific management measures, operational processes and approval procedures, and carried out related business accordingly. The guarantee business of the Bank is mainly in the form of letter of guarantee. As at December 31, 2019, the balance of the letters of guarantees issued by the Bank was approximately RMB1,510 million.
(III) Use of proceeds
The Bank’s proceeds from the listing of H Shares in 2018 were used for the purposes as disclosed in the prospectus and other announcements, namely replenishing the capital base of the Bank to support its business development. In 2019, the Bank did not have any equity financing activity.
(IV) Nomination and remuneration of senior management members
In 2019, the Board of Directors of the Bank considered and approved the Proposal on Formulation of Director Nomination Policy, the Proposal on Amendments to the Working Rules of the Nomination and Remuneration Committee of the Board of Directors, the Proposal on the Evaluation Results of Directors and Senior Management by the Board of Directors for 2018, the Proposal on the Remuneration Distribution and Settlement Plan for Directors and Supervisors for 2018, the Proposal on the Remuneration Distribution and Settlement Plan for Senior Management for 2018, the Proposal on Change of Company Secretary, Authorized Person under the Listing Rules, ESS First Authorized Person and Authorized Representative of Bank of Gansu Co., Ltd., the Proposal on Establishment of Consumer Rights Protection Committee of the Board of Directors, the Proposal on Appointment of Members of the Consumer Rights Protection Committee, the Proposal on
– 33 – ANNEX 2 WORK REPORT OF INDEPENDENT DIRECTORS FOR 2019
Appointment of Chen Jinhui and Du Jing as Vice Presidents and the Proposal on Setting up the Position of Business Director. Independent Directors all agreed on the matters about the nomination and remuneration of the senior management members of the Bank.
(V) Results forecast and preliminary results estimate
During the reporting period, there was no results forecast or preliminary results estimate of the Bank to be disclosed.
(VI) Engagement or change of accounting firms
During the reporting period, in accordance with relevant requirements on the annual report work, independent Directors maintained adequate communication with external auditors and conscientiously performed relevant responsibilities and duties. Independent Directors concluded that the auditors engaged by the Bank strictly followed the professional conduct standards of independence, objectiveness and fairness in the audit, and satisfactorily completed all tasks. Therefore, independent Directors agreed on further engagement of Shinewing Certified Public Accountants LLP and SHINEWING (HK) CPA Limited as the Bank’s accounting firms in 2019.
(VII) Cash dividends and other returns to investors
The Bank has sound decision–making procedures and mechanism regarding profit distribution. The Bank attaches great importance to the return to shareholders and distributes cash dividends to shareholders on a continuous basis. During the process of drafting the profit distribution plan, the Board of Directors extensively collected the opinions and requests from shareholders, protected the legitimate rights and interests of minority shareholders, and submitted the profit distribution plan to the general meeting for approval. The independent Directors discharged their duties and played their roles diligently in the decision-making process of the profit distribution plan. In 2019, the Bank distributed 30% of the net profit (being RMB3,431 million) as cash dividends, namely, a total of RMB1,029 million (tax inclusive) were distributed at a cash dividend of RMB0.1022 per share (tax inclusive).
(VIII) Implementation of information disclosure
The Bank duly and fully disclosed regular reports such as the 2018 annual report, 2019 half-year report, as well as interim announcements in accordance with the laws and regulations and the Articles of Association. Independent Directors actively performed their duties in the preparation and disclosure of the annual report and fully communicated and discussed with external auditors on annual audit work of the Bank.
– 34 – ANNEX 2 WORK REPORT OF INDEPENDENT DIRECTORS FOR 2019
(IX) Protection of the legitimate rights and interests of depositors and minority shareholders
The independent Directors of the Bank actively performed their duties by conducting a preliminary review of and in-depth investigation into the resolutions subject to consideration and approval of the Board of Directors. They also exercised their voting rights in connection therewith in an independent, prudent and objective manner. With regard to related party transactions, they conducted a rigorous examination of the transactions between the Bank and its substantial shareholders, so as to effectively protect the legitimate rights and interests of the depositors and minority shareholders of the Bank.
(X) Operation of the Board of Directors and its special committees
The special committees established under the Board comprise the strategy and development committee, audit committee, related party transaction and risk management committee, as well as nomination and remuneration committee.
In 2019, the Board of Directors convened a total of 8 meetings, at which the matters such as major personnel appointment and dismissal, development strategies, business plans, investment plans, annual reports, financial budgets, financial accounts, profit distribution proposals, information disclosure and major related party transactions of the Bank were considered and approved in strict compliance with the requirements of the Company Law, the Listing Rules and the Articles of Association.
In 2019, the strategy and development committee convened a total of 2 meetings, at which the plan for non-public issuance of offshore preference share, the proposal on establishment of consumer rights protection committee of the Board of Directors and other proposals were considered and approved.
In 2019, the audit committee convened a total of 4 meetings, and held 2 separate meetings with external auditors. The committee supervised the preparation of and audited the 2018 annual report, 2019 half-year report and relevant results announcements, paid attention to the implementation of the new financial instrument standards and strengthened the supervision and assessment of the auditing work of external auditors. The auditor committee reviewed the annual financial reports of the Bank in accordance with the rules of procedure for the audit committee under the Board of Directors of the Bank and strengthened communication with external auditors. The audited annual financial report was reviewed and voted on by the auditor committee before it was submitted to the Board of Directors for consideration and approval.
– 35 – ANNEX 2 WORK REPORT OF INDEPENDENT DIRECTORS FOR 2019
In 2019, the related party transaction and risk management committee convened a total of 5 meetings. The committee kept a close eye on the impact of domestic and international economic and financial situations on the Bank, strengthened comprehensive risk management, and gave advice and recommendations regarding comprehensive enhancement of risk management capability. Pursuant to the domestic and overseas regulatory provisions, the committee sorted and reviewed the related party transactions within the definition of rules of the CBRC and the Hong Kong Stock Exchange and actively communicated with the management personnel and provided them with independent audit opinions.
In 2019, the nomination and remuneration committee convened a total of 3 meetings. In terms of nomination, the committee considered and approved the director nomination policy, provided recommendations to the Board of Directors regarding the candidates for members of consumer rights protection committee and candidates for senior executives, and ensured the candidates are eligible for these positions, observe laws, administrative regulations, rules and the Articles of Association and are able to perform their duties in a diligent manner. The nomination and remuneration committee was of the opinion that the composition of the Board of Directors of the Bank during the reporting period was in conformity with the requirements of the board diversity policy of the Bank. In terms of remuneration and performance appraisal, such proposals as the evaluation results of Directors and senior management by the Board of Directors for 2018, the remuneration distribution and settlement plan for Directors and Supervisors for 2018, remuneration distribution and settlement plan for the senior management for 2018, etc. were considered and approved; and advice and recommendations regarding boosting Board diversity, optimizing performance appraisal of the senior management, improving remuneration incentive rules and strengthening talent development and cultivation were provided.
IV. OVERALL EVALUATION AND SUGGESTIONS
In 2019, independent Directors performed their duties in an honest, diligent and independent manner in accordance with relevant provisions of relevant laws and regulations and the Articles of Association. This effectively enhanced the level of scientific decision-making of the Board of Directors and its special committees, improved corporate governance and protected the legitimate rights and interests of the Bank and all of its shareholders. In 2020, independent Directors will continue to improve their duty performance ability, fulfill their duties diligently, and propose suggestions in an independent and objective manner, so as to effectively protect the legitimate rights and interests of shareholders.
Independent Directors:
Tang Xiuli Luo Mei Wong Sincere Dong Ximiao
This proposal is hereby submitted to the AGM for consideration.
– 36 – ANNEX 3 REMUNERATION DISTRIBUTION AND SETTLEMENT PLAN FOR DIRECTORS AND SUPERVISORS IN 2019
I. REMUNERATION DISTRIBUTION AND SETTLEMENT PLAN FOR DIRECTORS IN 2019
Remuneration received from the Bank in 2019 (Unit: RMB’0,000) Social insurance, Whether annuity, receiving any supplementary remuneration medical insurance from corporate and housing shareholder(s) provident funds or other related Remuneration contributed Other monetary Total party(ies) Name paid (1) by the Bank (2) income (3) (4) =(1) + (2) + (3) Allowance
Liu Qing 65.27 15.80 2.27 83.34 – No Wang Wenyong 62.65 15.44 2.27 80.36 – No Wu Changhong – – – – – Yes Zhang Hongxia – – – – 14.29 Yes Guo Jirong – – – – – Yes Liu Wanxiang – – – – – Yes Zhang Youda – – – – – Yes Tang Xiuli – – – – 14.29 No Luo Mei – – – – 14.29 No Wong Sincere – – – – 14.29 No Dong Ximiao – – – – 11.90 No
Notes:
1. In accordance with relevant laws and regulations, independent non-executive Directors receive allowances from the Bank.
2. The remuneration before tax shown in the above table refers to the total amount of remuneration of the Directors of the Bank for the year 2019, including the remuneration paid as disclosed in the Bank’s 2019 annual report.
3. As Ms. Wu Changhong, Mr. Guo Jirong, Mr. Liu Wanxiang and Mr. Zhang Youda were appointed by a corporate shareholder to serve as Directors of the Bank, their remuneration is paid by such corporate shareholder. As Ms. Zhang Hongxia was appointed by a corporate shareholder to serve as a Director of the Bank, she receives remuneration from such corporate shareholder and receives Director’s allowance from the Bank. Besides, some independent non-executive Directors of the Bank serve as directors or senior management officers in other corporate bodies or organizations, and thus such corporate bodies or organizations are deemed as related parties of the Bank. Save as disclosed above, none of the Directors of the Bank received remuneration from any related parties of the Bank during the reporting period.
4. The remuneration for the Bank’s person-in-charge, who is responsible for operation of the state-owned financial company administered by the Gansu Provincial Government, shall be determined in accordance with the relevant requirement as stipulated thereby.
– 37 – ANNEX 3 REMUNERATION DISTRIBUTION AND SETTLEMENT PLAN FOR DIRECTORS AND SUPERVISORS IN 2019
II. REMUNERATION DISTRIBUTION AND SETTLEMENT PLAN FOR SUPERVISORS IN 2019
Remuneration received from the Bank in 2019 (Unit: RMB’0,000) Social insurance, Whether annuity, receiving any supplementary remuneration medical insurance from corporate and housing shareholder(s) provident funds or other related Remuneration contributed by the Other monetary Total party(ies) Name paid (1) Bank (2) income (3) (4) = (1) + (2) + (3) Allowance
Tang Lan 62.65 15.44 2.27 80.36 – No Xu Yongfeng 53.24 15.38 3.33 71.95 – No Luo Zhenxia 41.95 13.21 2.24 57.4 – No Liu Xiaoyu – – – – – Yes Zeng Lehu – – – – – Yes Liu Yongchong – – – – – Yes Li Yongjun – – – – – Yes Yang Zhenjun – – – – – Yes Dong Ying – – – – – Yes Luo Yi – – – – 14.29 No
Notes:
1. In accordance with relevant laws and regulations, external Supervisors who are not appointed by corporate shareholder(s), shall receive allowances from the Bank.
2. The remuneration before tax shown in the above table refers to the total amount of remuneration of the Supervisors of the Bank for the year 2019, including the remuneration paid as disclosed in the Bank’s 2019 annual report.
3. As Mr. Liu Xiaoyu, Mr. Zeng Lehu, Mr. Liu Yongchong and Mr. Li Yongjun were appointed by a corporate shareholder of the Bank to serve as Supervisors of the Bank, their remuneration is paid by such corporate shareholder. As Mr. Yang Zhenjun and Mr. Dongying are external Supervisors nominated by a corporate shareholder, their remuneration is paid by such corporate shareholder and they do not receive Supervisor’s allowance from the Bank. Besides, external Supervisors serve as directors or senior management officers in other corporate bodies or organizations, and thus such corporate bodies or organizations are deemed as related parties of the Bank. Save as disclosed above, none of the Bank’s Supervisors received remuneration from any related parties of the Bank during the reporting period.
– 38 – ANNEX 3 REMUNERATION DISTRIBUTION AND SETTLEMENT PLAN FOR DIRECTORS AND SUPERVISORS IN 2019
4. Changes in Supervisors and the remunerations thereof:
(1) Mr. Liu Xiaoyu ceased to be a shareholder Supervisor of the Bank since June 2019.
(2) Mr. Zeng Lehu has served as a shareholder Supervisor of the Bank since June 2019.
5. The remuneration for the Bank’s person-in-charge, who is responsible for operation of the state-owned financial company administered by the Gansu Provincial Government, shall be determined in accordance with the relevant requirement as stipulated thereby.
The aforesaid Remuneration Distribution and Settlement Plan for Directors and Supervisors in 2019 was considered and approved by the Board on March 30, 2020 and is hereby submitted to the AGM for consideration and approval.
– 39 – ANNEX 4 WORK REPORT OF THE BOARD OF SUPERVISORS FOR 2019
In 2019, in accordance with the Company Law, the Securities Law, various guidelines of regulatory authorities, the Articles of Association of Bank of Gansu Co., Ltd. and requirements of bylaws of the Board of Supervisors, the Board of Supervisors fulfilled its duties with diligence and established a comprehensive supervision system covering supervision over meetings, strategies, performance, patrol inspection, and external audit, which made for more pragmatic supervision work and more effective measures, and in turn gave a positive impetus for promotion of the business development of the Bank.
I. IMPLEMENTATION OF MAJOR WORK
During the reporting period, the Board of Supervisors successfully completed the renewal of session. In accordance with the requirements of corporate governance and the Articles of Association of the Bank, the proposals on the establishment and composition of the second session of the Board of Supervisors were considered and approved at the employee representative meeting, the general meeting and the first meeting of the second session of the Board of the Supervisors. Afterwards, the personnel structure was adjusted and professional capabilities of the Board of Supervisors in the fields of accounting, law and other aspects were enhanced. Upon the re-election, the Board of Supervisors comprised nine Supervisors, including three employee Supervisors, three shareholder Supervisors and three external Supervisors, and each Supervisor had the qualifications in line with the regulatory requirements, which effectively ensured the supervision competency of the Board of Supervisors.
During the reporting period, the Board of Supervisors continued to strengthen system construction. According to the regulatory inspection requirements and work needs, after making reference to the experience of peers and soliciting sufficient opinions from the Supervisors of the Bank, the Board of Supervisors further amended and improved the Rules of Procedure for the Board of Supervisors of Bank of Gansu, the Rules of Procedure for the Nomination Committee under the Board of Supervisors of Bank of Gansu, the Rules of Procedure for the Supervision Committee under the Board of Supervisors of Bank of Gansu, the Measures for the Evaluation of the Performance of Directors by the Board of Supervisors of Bank of Gansu (Provisional), the Measures for the Evaluation of the Performance of the Supervisors by the Board of Supervisors of Bank of Gansu (Provisional) and the Measures for the Evaluation of the Performance of the Senior Management and its Members by the Board of Supervisors of Bank of Gansu (Provisional), which provided the foundation and basis for the Board of Supervisors to perform their duties in accordance with laws and regulations. At present, all of the six amended and improved sets of rules have been considered and approved by the Board of Supervisors, and the Rules of Procedure for the Board of Supervisors of Bank of Gansu have been submitted to the shareholders’ general meeting for consideration.
– 40 – ANNEX 4 WORK REPORT OF THE BOARD OF SUPERVISORS FOR 2019
During the reporting period, the Board of Supervisors held a total of 8 meetings of the Board of Supervisors and 11 meetings of the special committees under the Board of Supervisors, at which 55 proposals were considered and approved. Members of the Board of Supervisors attended the Shareholders’ general meetings in a timely manner, and Supervisors were assigned to be present at the Board meetings, various business meetings of the Bank, meetings on compliance, internal control and case prevention, risk control meetings, etc. Attending and being present at various meetings and activities enabled the Board of Supervisors to obtain various operation and management information in a more timely and comprehensive manner, and provide supervision opinions, suggestions or reminders to the Board of Directors and senior management in a timely manner, which further strengthened the competency in performance of supervision duties.
During the reporting period, the Board of Supervisors carried out patrol inspection, research and supervision. The Board of Supervisors conducted compliance construction patrol inspections on business units including Longnan Branch, Dingxi Branch, Zhangye Branch, Anning Sub-Branch, Qilihe Sub-Branch, Gaoxin Sub-Branch and Chengxian Sub-Branch as well as the corporate business department and legal and compliance department of the headquarters in succession. By reaching out to the frontline for debriefing of reports, communication seminars, research questionnaires, on-site investigation, etc., the Board of Supervisors obtained first-hand materials for operation and management, prepared research reports on risk management, internal control and compliance, and thus put forward 12 pieces of comments and suggestions; it conducted special investigation and research on targeted poverty alleviation work of Dingxi Branch and its Lintao Sub-Branch and Longxi Sub-Branch, and provided 8 pieces of comments and suggestions; it conducted research and supervision on the operation and management as well as internal control of Pingliang Branch, Baiyin Branch, Qingyang Branch, Jiuquan Branch, Tianshui Branch, Zhangye Branch and Linxia Branch, and provided more than 20 pieces of comments and suggestions on the problems identified therefrom.
During the reporting period, the Board of Supervisors delivered various information to the Board of Directors, senior management and Supervisors through meetings, emails and WeChat groups on a regular and ad hoc basis. In addition to maintaining smooth reporting and communication with the regulatory authorities for being timely informed of guidance and support from all parties, the Board of Supervisors also arranged exchanges with the Board of Supervisors of such urban commercial banks as Chang’an Bank, Bank of Jiangsu, Bank of Nanjing, Zhongyuan Bank and Bank of Zhengzhou for reciprocal supplements, which provided strong guarantee for better performance of the supervision duties by the Board of Supervisors.
– 41 – ANNEX 4 WORK REPORT OF THE BOARD OF SUPERVISORS FOR 2019
During the reporting period, the Board of Supervisors carried out performance evaluation on the Board of Directors, the Board of Supervisors, the senior management and its members in 2019 in accordance with the requirements of the Guidelines on the Work of the Board of Supervisors of Commercial Banks, the Articles of Association, the Measures for the Evaluation of the Performance of Directors by the Board of Supervisors of Bank of Gansu (Provisional), the Measures for the Evaluation of the Performance of Supervisors by the Board of Supervisors of Bank of Gansu (Provisional) and the Measures for the Evaluation of the Performance of Senior Management and its Members by the Board of Supervisors of Bank of Gansu (Provisional). After evaluation, the Board of Supervisors was of the view that the Board of Directors was able to perform its duties faithfully, honestly and diligently in accordance with the Articles of Association of the Bank, actively implement the national and local financial policies and guidelines as well as the resolutions of the general meeting, and accept the supervision of the Board of Supervisors on its own accord; besides, it had an accurate understanding of the national macro situation and the development direction of the Bank, and was capable of making significant decisions and adjustments accordingly in a timely manner. The Board of Directors attached great importance to corporate governance, risk management, capital management, internal control and compliance management and rectification of problems identified during internal and external inspections, and regularly listened to reports on operation, profitability analysis, risk monitoring, asset and liability management analysis, anti-money laundering, case prevention and control, compliance management, etc., so as to make timely adjustments to the development strategies and discharge its decision-making duties. The Directors performed their duties faithfully and diligently, accepted the supervision of the Board of Supervisors voluntarily, regularly reviewed various operation reports, financial reports and risk management reports of the Bank, continuously and proactively learned and analyzed the operation updates of the Bank, and kept abreast of remarks on the Bank by the regulatory authorities, external auditors and the public in all fronts, whereby it was able to make independent, professional and objective judgments on the operation and management of the Bank, and provide business basis and foundation for the decision-making of the Board. The senior management was able to implement the arrangements of the Board of Directors thoroughly, adhere to various regulatory requirements strictly and act out the opinions of the Board of Supervisors earnestly. Under the guidance of reform and development, the senior management followed through the tenet of returning to the original aspiration, serving the local economy and serving the real economy, constantly innovated its product and service models, optimized business structure, strengthened risk prevention and control management, and continued to promote the optimization of comprehensive risk management structure; it established and improved the mechanisms and systems, increased efforts on problem rectification, and continued its emphasis on employee behavior management; it took initiate to carry forward incentive mechanism reform, effectuated the model of assessment under the comprehensive risk management structure, and emphasized the guiding role of the assessment mechanism; it enhanced budget and expense management and strived to reduce cost and increase efficiency, thereby boosting the stable development of the Bank effectively. Members of the senior management were able to implement the resolutions of the Board of Directors and the Board of Supervisors and abided by the requirements of the regulatory authorities conscientiously,
– 42 – ANNEX 4 WORK REPORT OF THE BOARD OF SUPERVISORS FOR 2019
exercise the operation and management rights prudently, and carry out various tasks in a pragmatic and efficient manner according to their respective authorization and division of labor; Being dedicated and diligent, the members organized daily operation and management effectively, did well in business and related affairs in the charge thereof earnestly, and enhanced communication with the Board of Directors and the Board of Supervisors emphatically; members of the senior management were in possession of the knowledge, skills and experience to deal with complex issues, having reflected sound management competency and professional quality in the course of daily operation and management and decision-making process. The Board of Supervisors was capable of discharging its duties diligently and conscientiously in accordance with the various guidelines of the regulatory authorities, the Articles of Association of the Bank and the requirements of the bylaws of the Board of Supervisors. With the view to promoting the compliant and steady development of the Bank, the Board of Supervisors actively implemented the regulatory requirements, continuously improved the supervision contents, innovated supervision methods, consummated the supervision working mechanism and assumed its responsibilities voluntarily, which gave positive impetus in promoting the business development, risk management and corporate governance of the Bank. The Supervisors were able to actively perform their duties of supervision by attending the general meetings, being present at the meetings of the Board of Directors, the senior management and the special committees, and considering various proposals and expressing their opinions and suggestions with regard thereto. They were able to balance the interests between the shareholders and the Bank on their own accord, pay attention to and safeguard the overall interests of the Bank, and put forward targeted supervision opinions and suggestions; they were able to pass on the reasonable demands of employees emphatically, pay attention to the prominent problems in the operation of the Bank, and provide targeted supervision opinions and suggestions in a timely manner; they were able to pay attention to the overall interests of depositors and the Bank, perform its duties independently in accordance with the laws, participate in supervision research activities in accordance with the requirements and arrangements of the Board of Supervisors, and propose supervision opinions and suggestions in an independent, objective and targeted manner. Their hours of services in the Bank were in compliance with relevant regulations. Upon evaluation, it is concluded that all Directors were competent, all Supervisors were competent and all members of the senior management were competent.
II. INDEPENDENT OPINIONS ON RELEVANT MATTERS
(I) Compliance operation
During the reporting period, the operating activities of the Bank were in compliance with the requirements of the Company Law, the Commercial Banking Law and the Articles of Association of the Bank, and the decision-making procedures were legal and valid; none of the Directors and senior management of the Bank was in breach of any laws, regulations and the Articles of Association of the Bank or did harm to the interests of the Bank and its Shareholders when performing their duties.
– 43 – ANNEX 4 WORK REPORT OF THE BOARD OF SUPERVISORS FOR 2019
(II) Authenticity of the financial report
During the reporting period, SHINEWING Certified Public Accountants audited the financial report and issued a standard unqualified audit report thereon. The financial report gave an objective and fair view of the financial activities and operating results of the Bank.
(III) Related party transactions
During the reporting period, the Bank further regulated the management of related party transactions. The Board of Supervisors was not aware of any act that went against the principle of fairness or was detrimental to the interests of the Bank and its Shareholders.
(IV) Internal Control
During the reporting period, the Bank continued to strengthen and improve its internal control. The Board of Supervisors was not aware of any material defect in the Bank’s internal control system and its implementation.
(V) Implementation of Resolutions of General Meetings by the Board
During the reporting period, the Board of Supervisors had no objection to the reports and proposals submitted by the Board of Directors to the general meetings for consideration and approval, and opined that the Board of Directors had duly implemented the relevant resolutions of the general meetings.
(VI) Fulfillment of Social Responsibilities
During the reporting period, the Bank earnestly fulfilled its social responsibilities, and the Board of Supervisors had no objection to the annual Environment, Social Responsibility, Corporate Governance (ESG) Report.
– 44 – ANNEX 4 WORK REPORT OF THE BOARD OF SUPERVISORS FOR 2019
III. WORK PROSPECTS IN 2020
In 2020, the Board of Supervisors will continue to optimize its supervision methods in accordance with the relevant provisions of laws, regulations and the Articles of Association of the Bank, further improve the supervision efficiency of the Board of Supervisors, earnestly perform its duties, and play an active role in promoting the healthy and sustainable development of the Bank.
(1) To strengthen the effective combination of pre-event, on-going and post-event supervision in line with the changes in the national macroeconomic and financial development and new regulatory requirements; it will increase its endeavors in improving the standardization and effect of supervision, perform duties in strict accordance with the required procedures, and improve the effectiveness of supervision through effective utilization of various supervision tools such as inspection, inquiry and reminder.
(2) To make full use of relevant working mechanism for timely access to and understanding of major issues and provision of necessary supervisory opinions; leveraging on its work characteristics and advantages, the Board of Supervisors will strive to serve the Bank through supervision by means of masterminding for the work of the Bank, harmonizing the relationships and rationalizing the emotions.
(3) To pay attention to the “three considerations”, i.e. taking into consideration the inspection opinions of the regulatory authorities, the monitoring results of internal and external auditors, and the work results and resources of parties concerned, so as to catalyze the joint efforts of supervision.
(4) To strengthen effective communication with members of the Board of Supervisors, Shareholders, Directors, regulatory authorities and the management of branches in a bid to win over their understanding of and support for the work of the Board of Supervisors in all aspects, and ensure the normal development of various supervision work.
(5) To continuously improve and innovate working methods through work practices; the Board of Supervisors will continue to strengthen self-construction and improve the performance competency and standard of Supervisors.
– 45 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
According to the Law of the People’s Republic of China on Commercial Banks, the Administrative Measures for the Related Party Transactions between the Commercial Banks and their Insiders or Shareholders(《商業銀行與內部人和股東關聯交易管理辦法》), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Hong Kong Listing Rules”), the Articles of Association of the Bank of Gansu Co., Ltd (the “Articles of Association”), and the Measures on Management of the Related/Connected Transaction of the Bank of Gansu Co., Ltd. 《甘肅銀行股份有( 限公司關聯╱連交易管理辦法》) and other relevant provisions, particulars of the Bank’s related-party/ connected transactions in 2019 are described as follows:
I. PARTICULARS OF RELATED-PARTY TRANSACTIONS
(I) Particulars of related-party transactions under the rules of the CBRC
From January 1 to December 31, 2019 (the “Reporting Period”), the Bank’s balance of exposure to all related parties was RMB5,627,832,800, of which the balance of exposure to related legal persons was RMB5,376,637,000, accounting for 18.61% of the Bank’s net capital; the balance of exposure to related natural persons was RMB251,195,800, accounting for 0.87% of the Bank’s net capital. The balance of deposits was RMB6,225,678,100. Please see the table below for details.
Unit: RMB’0,000
Credit business Deposit business As a percentage Name of related party or its controlled Exposure Bonds Deposit Margin of net No. Name of related party subsidiary balance investment balance deposits capital
1 Gansu Province Highway Gansu Province Highway Aviation Tourism 5,827.20 34,316.00 205,030.61 5,827.20 1.19% Aviation Tourism Investment Investment Group Co., Ltd. Group Co., Ltd. 2 Gansu Yuanda Road Group Co., Ltd. (甘肅省 遠大路業集團有限公司) 1,052.20 0.00 24,383.93 1,052.20 0.00%
3 Gansu Highway Aviation Tourism Properties Co., Ltd. (甘肅公航旅置業有限公司) 0.00 0.00 1,135.62 0.00 0.00%
4 Gansu Financial Capital Management Co., Ltd. (甘肅省金融資本管理有限公司) 0.00 0.00 3,871.47 0.00 0.00%
5 Zhangye Danxia Cultural Tourism Co., Ltd. (張掖丹霞文化旅遊股份有限公司) 0.00 0.00 352.20 0.00 0.00%
6 Highway Aviation Tourism (Lanzhou New Area) International Trade Co., Ltd. (公航旅 （蘭州新區）國際貿易有限公司) 0.00 0.00 42,776.56 0.00 0.00%
– 46 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
Credit business Deposit business As a percentage Name of related party or its controlled Exposure Bonds Deposit Margin of net No. Name of related party subsidiary balance investment balance deposits capital
7 Gansu Yingzhishan Cultural Tourism Co., Ltd.(甘肅焉支山文化旅遊有限責任公司) 0.00 0.00 50.38 0.00 0.00%
8 Gansu Yuanfeng Transportation Engineering Co., Ltd.(甘肅圓峰交通工程有限公司) 0.00 0.00 48.45 0.00 0.00%
9 Gansu Highway Aviation Tourism Finance Lease Co., Ltd. (甘肅公航旅融資租賃有限 公司) 0.00 0.00 3,041.86 0.00 0.00%
10 Gansu Changda Highway Co. Ltd. (甘肅長達 路業有限責任公司) 0.00 0.00 633.60 0.00 0.00%
11 Gansu Financing Guarantee Group Co., Ltd. (甘肅省融資擔保集團股份有限公司) 0.00 0.00 38,844.78 0.00 0.00%
12 Gansu Xinruifeng Investment Co., Ltd. (甘肅 信瑞豐投資有限公司) 0.00 0.00 1,157.18 0.00 0.00%
13 Gansu Provincial Property Exchange Co., Ltd. (甘肅省產權交易所股份有限公司) 0.00 0.00 13,397.24 0.00 0.00%
14 Sub-total 6,879.40 34,316.00 334,723.89 6,879.40 1.19%
15 Jinchuan Group Co., Ltd Baotou Huading Copper Industry 18,200.00 0.00 8,435.96 7,800.00 0.36% Development Co., Ltd. (包頭華鼎銅業發展 有限公司)
16 Jinchang Jinchuan Wanfang Industrial Co., 2,861.39 0.00 0.00 0.00 0.10% Ltd. (金昌金川萬方實業有限責任公司)
17 Jinchang Niedu Mining Industry Co., Ltd. (金 3,170.93 0.00 0.06 0.00 0.11% 昌鎳都礦山實業有限公司)
18 Jinchuan Group Wire & Cable Co., Ltd. (金 4,330.25 0.00 2,282.76 1,930.25 0.08% 川集團電線電纜有限公司)
19 Jinchuan Group Co., Ltd 11,000.00 0.00 55,951.53 0.00 0.38%
20 Jinchuan Group Machinery Manufacturing 1,677.29 0.00 700.85 670.92 0.03% Co., Ltd. (金川集團機械製造有限公司)
21 Jinchuan Group Nickel Alloy Co., Ltd. 1,000.00 0.00 0.00 0.00 0.03% Jinchuan Branch(金川集團鎳合金有限公司 金川分公司)
22 Jinchuan Maike Metal Resources Co., Ltd. 74,600.00 0.00 18,540.94 18,455.00 1.94% (金川邁科金屬資源有限公司)
23 Jinchuan Niedu Industrial Co., Ltd. (金川鎳 0.00 0.00 3,123.36 0.00 0.00% 都實業有限公司)
24 Sub-total 116,839.87 0.00 89,035.45 28,856.17 3.04%
– 47 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
Credit business Deposit business As a percentage Name of related party or its controlled Exposure Bonds Deposit Margin of net No. Name of related party subsidiary balance investment balance deposits capital
25 Jiuquan Iron & Steel (Group) Gansu Dongxing Aluminum Industry Co., 97,000.00 0.00 92.76 0.00 3.36% Co., Ltd. Ltd. (甘肅東興鋁業有限公司)
26 Gansu Jujihui Energy and Chemical Co., Ltd. 87,060.00 0.00 2.88 0.00 3.01% (甘肅巨集匯能源化工有限公司)
27 Gansu Jiugang Group Hongxing Iron and 10,000.00 0.00 10,043.73 3,000.00 0.24% Steel Co., Ltd. (甘肅酒鋼集團宏興鋼鐵股份 有限公司)
28 Gansu Jiuquan Steel Tiancheng Colored 52,000.00 0.00 3,517.68 15,600.00 1.26% Aluminum Co., Ltd. (甘肅酒鋼天成彩鋁有 限責任公司)
29 Jiuquan Steel Group Yuzhong Iron & Steel 22,720.00 0.00 0.00 6,816.00 0.55% Co., Ltd.(酒鋼集團榆中鋼鐵有限責任公司)
30 Jiuquan Iron & Steel (Group) Co., Ltd. 80,000.00 0.00 31.04 0.00 2.77%
31 Pingliang Tianyuan Coal and Electricity Co., 25,000.00 0.00 1,464.42 0.00 0.87% Ltd. (平涼天元煤電化有限公司)
32 Jiayuguan Dayoujia Magnesium Calcium 0.00 0.00 78.36 0.00 0.00% Industry Co., Ltd. (嘉峪關大友嘉鎂鈣業有 限公司)
33 Jiayuguan Dayou Enterprise Company (嘉峪 0.00 0.00 500.82 0.00 0.00% 關大友企業公司)
34 Gansu Jiugang Logistics Co., Ltd. (甘肅酒鋼 0.00 0.00 18.07 0.00 0.00% 物流有限公司)
35 Jiayuguan Dayou Enterprise Company 0.00 0.00 83.70 0.00 0.00% Construction Power Installation Company (嘉 峪關大友企業公司建築動力安裝公司)
36 Sub-total 373,780.00 0.00 15,833.47 25,416.00 12.05%
– 48 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
Credit business Deposit business As a percentage Name of related party or its controlled Exposure Bonds Deposit Margin of net No. Name of related party subsidiary balance investment balance deposits capital
37 Gansu Province Electric Power Gansu Power Investment Changle Power 20,000.00 0.00 12.60 0.00 0.69% Investment Group Co., Ltd. Generation Co., Ltd. (甘肅電投常樂發電有 限責任公司)
38 Gansu Investment Group Yuntian Hotel Co., 47,000.00 0.00 0.00 0.00 1.63% Ltd. (甘肅投資集團雲天酒店有限公司)
39 Dunhuang Wenbo Investment Co., Ltd. (敦煌 0.00 0.00 56.39 0.00 0.00% 文博投資有限公司)
40 Gansu Province Railway Investment and 0.00 0.00 109,500.03 0.00 0.00% Construction Group Co., Ltd. (甘肅省鐵路投 資建設集團有限公司)
41 Sub-total 67,000.00 0.00 109,569.03 0.00 2.32%
42 564,499.27 34,316.00 549,161.83 61,151.57
43 Total (related legal persons) 598,815.27 (balance) 549,161.83 18.61%
44 537,663.70 (net amount) 549,161.83
45 Related natural persons 25,119.58 73,405.98 0.87%
46 Total 562,783.28 622,567.81 19.47%
1. Credit granting
The types of related-party transactions between the Bank and the non-natural person shareholders such as Gansu Province Highway Aviation Tourism Investment Group Co., Ltd., are mainly credit granting business, specifically:
(1) Gansu Province Highway Aviation Tourism Investment Group Co., Ltd. and its controlled subsidiaries
During the Reporting Period, the balance of transactions between the Group and its controlled subsidiaries and the Bank was RMB411,954,000, accounting for 1.19% of the net capital of the Bank after deducting the security deposits of RMB68,794,000. In particular, the non-financing letters of guarantee (with full security deposits) amounted to RMB68,794,000, and the balance of bond investment amounted to RMB343,160,000.
– 49 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
(2) Jinchuan Group Co., Ltd and its controlled subsidiaries
During the Reporting Period, the balance of transactions between the Group and its controlled subsidiaries and the Bank was RMB1,168,398,700. After deducting margin deposits of RMB288,561,700, the balance of exposure was RMB879,837,000, accounting for 3.04% of the Bank’s net capital. In particular, loans amounted to RMB10,000,000, bank acceptance bills(with exposure) amounted to RMB1,026,096,200, domestic non-financing letters of guarantee (with full security deposits) amounted to RMB1,302,500 and import letters of credit amounted to RMB21,000,000.
(3) Jiuquan Iron & Steel (Group) Co., Ltd and its controlled subsidiaries
During the Reporting Period, the balance of transaction between the Group and its controlled subsidiaries and the Bank was RMB3,737,800,000. After deducting the security deposits of RMB254,160,000, the balance of exposure was RMB3,483,640,000, accounting for 12.05% of the net capital of the Bank. In particular, loans amounted to RMB2,890,600,000 and bank acceptance bills(with exposure) amounted to RMB847,200,000.
(4) Gansu Province Electric Power Investment Group Co., Ltd. and its controlled subsidiaries
During the Reporting Period, the business balance between the Group and its controlled subsidiaries and the Bank was RMB670 million, accounting for 2.32% of the net capital of the Bank. The loan balance was RMB670 million.
– 50 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
During the Reporting Period, the related party transactions between the Bank and natural person related parties mainly represented loans of various types, with a balance of RMB251,195,800, accounting for 0.87% of the Bank’s net capital. Due to the position adjustment of the natural person related parties, natural person related parties increased by 5,680 persons as compared to the end of 2019, and the balance of credit granting transactions increased by RMB140,489,800, representing a significant increase as compared to 2018.
2. Asset transfer
During the Reporting Period, the Bank did not have any asset transfer related-party transactions with related/connected legal persons.
3. Provision of services and others
During the Reporting Period, the Bank did not have related-party transactions with related/connected legal persons in respect of provision of services and others.
In summary, related-party transactions between related parties and the Bank are conducted in accordance with commercial principles and on terms no favourable than those offered to non-related parties for similar transactions. At the same time, the ratios of credit balance to net capital of related-party transactions between the Bank and a single related party customer, a single related-party group customer, or all related-party customers are all in compliance with the requirements of the CBRC on proportional control, namely 10%, 15% and 50%.
– 51 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
(II) Particulars of related-party transactions under the Hong Kong Listing Rules
1. The first category: Commercial banking services and products provided in the ordinary and usual course of business
During the Reporting Period, the Bank provided loans and other credit facilities of RMB10,093,152,700 to connected persons and the balance of deposits of connected persons with the Bank amounted to RMB6,104,024,800 (see the table below for details).
Unit: RMB’0,000
Credit business Deposit business
Exposure Deposit Margin No. Related party Related party and its controlled subsidiary balance Others balance deposits
1 Gansu Province Highway Gansu Province Highway Aviation Tourism 5,827.20 3,431.6 210,857.68 5,827.20 Aviation Tourism Investment Investment Group Co., Ltd. (bond Group Co., Ltd. investment)
2 Gansu Yuanda Road Group Co., Ltd. (甘肅省遠大路 1,052.20 0.00 25,437.25 1,052.20 業集團有限公司)
3 Gansu Highway Aviation Tourism Longzhang 60,000.00 0.00 1,506.91 0.00 Expressway Management Co., Ltd. (甘肅公航旅隴漳 高速公路管理有限公司)
4 Gansu Financing Guarantee Group Dingxi Co., Ltd. 0.00 0.00 1,004.81 0.00 (甘肅省融資擔保集團定西有限公司)
5 Gansu Highway Aviation Tourism Properties Co., 0.00 0.00 1,135.62 0.00 Ltd. (甘肅公航旅置業有限公司)
6 Gansu Financial Capital Management Co., Ltd. (甘肅 0.00 0.00 3,871.47 0.00 省金融資本管理有限公司)
7 Zhangye Danxia Cultural Tourism Co., Ltd. (張掖丹 0.00 0.00 352.20 0.00 霞文化旅遊股份有限公司)
8 Gansu Financing Guarantee Group Jinchang Co., 0.00 0.00 300.09 0.00 Ltd. (甘肅省融資擔保集團金昌有限公司)
9 Highway Aviation Tourism (Lanzhou New Area) 0.00 0.00 42,776.56 0.00 International Trade Co., Ltd. (公航旅（蘭州新區）國 際貿易有限公司)
10 Gansu Yingzhishan Cultural Tourism Co., Ltd.(甘肅 0.00 0.00 50.38 0.00 焉支山文化旅遊有限責任公司)
11 Gansu Yuanfeng Transportation Engineering Co., 0.00 0.00 48.45 0.00 Ltd.(甘肅圓峰交通工程有限公司)
12 Gansu Highway Aviation Tourism Finance Lease 0.00 0.00 3,041.86 0.00 Co., Ltd. (甘肅公航旅融資租賃有限公司)
– 52 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
Credit business Deposit business
Exposure Deposit Margin No. Related party Related party and its controlled subsidiary balance Others balance deposits
13 Gansu Changda Highway Co. Ltd. (甘肅長達路業有 0.00 0.00 633.60 0.00 限責任公司)
14 Gansu Financing Guarantee Group Co., Ltd. (甘肅省 0.00 0.00 38,844.78 0.00 融資擔保集團股份有限公司)
15 Gansu Xinruifeng Investment Co., Ltd. (甘肅信瑞豐 0.00 0.00 1,157.18 0.00 投資有限公司)
16 Gansu Property Right Exchange Co., Ltd.(甘肅省產 0.00 0.00 13,397.24 0.00 權交易所股份有限公司)
17 Subtotal 908,119.87 34,316.00 344,416.09 6879.40
18 Total 101,195.40 344,416.09
19 Gansu Jinchuan Jinchuan Group Nickel Alloy Co., Ltd. Jinchuan 1,000.00 0.00 0.00 0.00 Provincial Group Co., Branch (金川集團鎳合金有限公司金川分公司) State-owned Ltd 20 Jinchuan Group Co., Ltd 11,000.00 0.00 55,951.53 0.00 Assets 21 Investment Baotou Huading Copper Industry Development Co., 18,200.00 0.00 8,435.96 7,800.00 Group Co., Ltd. (包頭華鼎銅業發展有限公司) Ltd. 22 Jinchang Jinchuan Wanfang Industrial Co., Ltd. (金 2,861.39 0.00 0.00 0.00 昌金川萬方實業有限責任公司)
23 Jinchang Niedu Mining Industry Co., Ltd. (金昌鎳都 3,170.93 0.00 0.06 0.00 礦山實業有限公司)
24 Jinchuan Group Wire & Cable Co., Ltd.(金川集團電 4,330.25 0.00 2,282.76 1,930.25 綫電纜有限公司)
25 Jinchuan Group Machinery Manufacturing Co., Ltd. 1,677.29 0.00 700.85 670.92 (金川集團機械製造有限公司)
26 Jinchuan Maike Metal Resources Co., Ltd. (金川邁 74,600.00 0.00 18,540.94 18,455.00 科金屬資源有限公司)
27 Jinchuan Niedu Industrial Co., Ltd. (金川鎳都實業 0.00 0.00 3,123.36 0.00 有限公司)
29 Jinchuan Group Finance Co., Ltd. (金川集團財務有 0.00 0.00 1,593.38 0.00 限公司)
30 Subtotal 116,839.87 0.00 90,628.83 28,856.17
– 53 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
Credit business Deposit business
Exposure Deposit Margin No. Related party Related party and its controlled subsidiary balance Others balance deposits
31 Jiuquan Gansu Dongxing Aluminum Industry Co., Ltd. (甘肅 97,000.00 0.00 92.76 0.00 Iron & Steel 東興鋁業有限公司) (Group) Co., 32 Gansu Honghui Energy and Chemical Co., Ltd.(甘肅 87,060.00 0.00 2.88 0.00 Ltd. 宏匯能源化工有限公司)
33 Jiuquan Iron & Steel (Group) Co., Ltd.(酒泉鋼鐵（集 80,000.00 0.00 31.04 0.00 團）有限責任公司)
34 Pingliang Tianyuan Coal, Electricity and Chemical 25,000.00 0.00 1,464.42 0.00 Co., Ltd(平涼天元煤電化有限公司)
35 Gansu Jiugang Group Hongxing Iron and Steel Co., 10,000.00 0.00 13,043.73 3,000.00 Ltd. (甘肅酒鋼集團宏興鋼鐵股份有限公司)
36 Gansu Jiuquan Steel Tiancheng Colored Aluminum 52,000.00 0.00 19,127.65 15,600.00 Co., Ltd. (甘肅酒鋼天成彩鋁有限責任公司)
37 Jiuquan Steel Group Yuzhong Iron & Steel Co., Ltd. 22,720.00 0.00 6,816.00 6,816.00 (酒鋼集團榆中鋼鐵有限責任公司)
38 Jiugang Group Finance Co., Ltd. (酒鋼集團財務有限 0.00 0.00 81.18 0.00 公司)
39 Gansu Huihong Energy Chemical Sales Co., Ltd. (甘 0.00 0.00 184.10 0.00 肅匯宏能源化工銷售有限公司)
40 Jiayuguan Dayoujia Magnesium Calcium Industry 0.00 0.00 78.36 0.00 Co., Ltd. (嘉峪關大友嘉鎂鈣業有限公司)
41 Jiayuguan Dayou Enterprise Company (嘉峪關大友 0.00 0.00 500.82 0.00 企業公司)
42 Jiayuguan Huafeng Construction and Installation 0.00 0.00 146.14 0.00 Engineering Co., Ltd. (嘉峪關華峰建築安裝工程有 限公司)
43 Gansu Jiugang Logistics Co., Ltd. (甘肅酒鋼物流有 0.00 0.00 18.07 0.00 限公司)
44 Jiayuguan Dayou Enterprise Company Construction 0.00 0.00 83.81 0.00 Power Installation Company (嘉峪關大友企業公司 建築動力安裝公司)
45 Subtotal 373,780.00 0.00 41,670.97 25,416.00
– 54 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
Credit business Deposit business
Exposure Deposit Margin No. Related party Related party and its controlled subsidiary balance Others balance deposits
46 Gansu Gansu Power Investment Changle Power Generation 20,000.00 0.00 12.60 0.00 Province Co., Ltd. (甘肅電投常樂發電有限責任公司) Electric Power 47 Gansu Investment Group Yuntian Hotel Co., Ltd. (甘 47,000.00 0.00 0.00 0.00 Investment 肅投資集團雲天酒店有限公司) Group Co., 48 Ltd. Guodian Jingyuan Power Generation Co., Ltd. (國電 19,500.00 0.00 0.84 0.00 靖遠發電有限公司)
49 Huating Coal Industry Group Co., Ltd. (華亭煤業集 70,000.00 0.00 19,819.87 0.00 團有限責任公司)
50 Gansu Huating Coal and Electricity Co., Ltd. (甘肅 156,500.00 0.00 3,548.00 0.00 華亭煤電股份有限公司)
51 Dunhuang Wenbo Investment Co., Ltd. (敦煌文博投 0.00 0.00 56.39 0.00 資有限公司)
52 Gansu Province Railway Investment and 0.00 0.00 109,500.03 0.00 Construction Group Co., Ltd. (甘肅省鐵路投資建設 集團有限公司)
53 Gansu Province Electric Investment Group Finance 0.00 0.00 748.86 0.00 Co., Ltd. (甘肅電投集團財務有限公司)
54 Subtotal 313,000.00 0.00 133,686.59 0.00
55 Gansu State Farms Tianmu Dairy Co., Ltd. (甘肅農墾天牧乳業有限公 2,500.00 0.00 0.00 0.00 司)
56 Gansu Provincial State-owned Assets Investment Group Co., Ltd. (甘肅 50,000.00 30,000 0.00 0.00 省國有資產投資集團有限公司) (medium term note)
57 Gansu Assets Management Co., Ltd.(甘肅資產管理有限公司) 22,000.00 0.00 0.00 0.00
878,119.87 30,000.00 265,986.39 54,272.17 Total 58 908,119.87 265,986.39
59 944,999.27 64,316.00 610,402.48 61,151.57 Total 60 1,009,315.27 610,402.48
– 55 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
(1) Gansu Province Highway Aviation Tourism Investment Group Co., Ltd. and its controlled subsidiaries
During the Reporting Period, the balance of the connected transactions between the group and its subsidiaries and the Bank was RMB1,011,954,000, including infrastructure project loans of RMB668,794,000, bond investment of RMB343,160,000, and the non-financing letters of guarantee (with full security deposits) of RMB68,794,000.
(2) Gansu Provincial State-owned Assets Investment Group Co., Ltd. and its controlled subsidiaries
During the Reporting Period, the balance of the connected transactions between the group and its subsidiaries and the Bank was RMB9,081,198,700.
In particular, the balance of transactions with Jinchuan Group Co., Ltd and its controlled subsidiaries was RMB1,168,398,700, the balance of transactions with Jiuquan Iron & Steel (Group) Co., Ltd. and its controlled subsidiaries was RMB3,737,800,000, the balance of transactions with Gansu Province Electric Power Investment Group Co., Ltd. and its controlled subsidiaries was RMB670,000,000, and the balance of transactions with Gansu Provincial State-owned Assets Investment Group Co., Ltd. and other controlled subsidiaries was RMB745,000,000. The balance for provision of deposits service was RMB2,659,863,900.
The above loans, other credit facilities and deposits provided by the Bank to the connected persons are entered into in the ordinary and usual course of business on normal commercial terms and with reference to prevailing market interest rates. Pursuant to Rule 14A.87(1) and Rule14A.90 of the Hong Kong Listing Rules, these transactions constitute fully exempt continuing connected transactions, and therefore are in compliance with the reporting, annual review, announcement and independent shareholders’ approval requirements under the Chapter 14A of Hong Kong Listing Rules.
– 56 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
2. The Second Category: Property leasing agreement with a related person
The Bank entered into the property leasing agreement with JISCO Zhongtian Property Co., Ltd. (酒鋼集團中天置業有限公司) (an associate of Gansu State-owned Assets Investment, a substantial shareholder of the Bank) (“Zhongtian Property”). Pursuant to the agreement, Zhongtian Property agreed to lease a property located in Jiayuguan, Gansu province to the Bank as the Bank’s business office, with a leasing term from January 1, 2019 to December 31, 2019 and at an annual rental of RMB562,200. The transaction was conducted on normal commercial terms.
The Bank entered into the property leasing agreement with Gansu Province Highway Aviation Tourism Assets Management Co., Ltd. (甘肅公航旅資產管理有限公司) (an associate of Gansu Province Highway Aviation Tourism Investment Group Co., Ltd., a substantial shareholder of the Bank). Pursuant to the agreement, Gansu Province Highway Aviation Tourism Assets Management Co., Ltd. agreed to lease a shop located in Xifeng District, Qingyang City to the Bank as the Bank’s business office, with a leasing term from August 1, 2019 to July 31, 2022 and at an annual rental of RMB627,000. The transaction was conducted on normal commercial terms.
As Zhongtian Property is a subsidiary of Jiuquan Iron & Steel which is held as to 31.58% by Gansu State-owned Assets Investment, a substantial shareholder of the Bank, Zhongtian Property is therefore a connected person of the Bank. Meanwhile, Gansu Province Highway Aviation Tourism Assets Management Co., Ltd. is a subsidiary of Gansu Highway Aviation Tourism which holds 12.49%(1) equity interest in the Bank, Gansu Province Highway Aviation Tourism Assets Management Co., Ltd. is therefore a connected person of the Bank. As the highest applicable percentage ratios of the above transaction calculated for the purpose of Chapter 14A of the Hong Kong Listing Rules was, on an annual basis, less than 0.1%, the continuing connected transaction contemplated under the above property leasing agreement constitutes de minimis transaction, and therefore is exempt from the reporting, annual review, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.76(1) of the Hong Kong Listing Rules.
Note:
1. Gansu Highway Aviation Tourism held 1,157,154,433 shares of the Bank, representing a shareholding of 11.49%; and its subsidiary Gansu Financial Capital Management Co., Ltd. (甘 肅金融資本管理有限公司) held 100,541,667 shares of the Bank, representing a shareholding of 1%. The shareholding percentage of Gansu Highway Aviation Tourism set out here is on an aggregated basis.
– 57 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
3 The third category: Property management agreement with a connected person
The Bank entered into a property management agreement with Lanzhou Changhong Property Management Co., Ltd. (蘭州長虹物業管理有限公司) (an associate of Gansu State-owned Assets Investment, a substantial shareholder of the Bank) (“Changhong Property Management”). Pursuant to the agreement, Changhong Property agreed to provide property management services to Bank of Gansu Tower situated at Chengguang District of Lanzhou, Gansu province, with a term from January 1, 2019 to December 31, 2019. The total annual service fees under the agreement amounted to RMB8,590,700, including property management fee of RMB4,914,400, heating (cooling) expenses of RMB2,981,100, property management fee for training center of RMB335,200, and property management fee for the laundry of RMB360,000. At the same time, it was agreed that Changhong Property would collect the property-related expenses of RMB1,287,800 from the commercial tenants within the Bank of Gansu Tower on behalf of the Bank. During the Reporting Period, the Bank paid RMB7,087,600 to Changhong Property for various services it provided, and received RMB128,780,000 of property–related expenses which Changhong Property collected from the tenants on behalf of the Bank. The transaction was conducted on normal commercial terms.
Gansu State-owned Assets Investment, a substantial shareholder of the Bank, holds 31.58% equity interest in Jiuquan Iron & Steel, which holds 100% equity interest in Lanzhou Judong Real Estate Development Co., Ltd. Lanzhou Judong Real Estate Development Co., Ltd. holds 100% equity interest in Changhong Property Management. Therefore, Changhong Property Management is a connected person of the Bank. As the highest applicable percentage ratios of the above transaction calculated for the purpose of Chapter 14A of the Listing Rules are expected to be, on an annual basis, less than 0.1%, the continuing connected transaction contemplated under the above property management services agreement constitutes de minimis transaction, and therefore is exempt from all the reporting, annual review, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.76(1) of the Listing Rules.
– 58 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
4. The fourth category: Trust arrangement with a connected person
In the ordinary and usual course of business, the Bank and Everbright Xinglong Trust Co., Ltd. (光大興隴信託有限責任公司) (“Everbright Xinglong Trust”) entered into a number of fund trust agreements (“Everbright Xinglong Trust Agreements”). As the settlor of the trust schemes, the Bank used its own funds as the trust property, while Everbright Xinglong Trust, serving as the trustee of the trust schemes, set up specific service management trust schemes. Both parties agreed in the Everbright Xinglong Trust Agreements on the expected annualized rate of investment return or the method of determination of the investment return during the term of trusts. These returns are derived from the interest on trust loans or returns paid by the end-users of the trust property to Everbright Xinglong Trust under the Relevant Agreements. As the trustee of the trust schemes, Everbright Xinglong Trust is entitled to receive trust fees from trust property which is a fixed amount agreed upon between Everbright Xinglong Trust and the Bank or calculated with reference to the principal balance of the trust property multiplied by the fixed annualized trust fee rate. Under the trust scheme agreements signed between the Bank and Everbright Xinglong Trust, the annualized trust fee rate charged by Everbright Xinglong Trust ranged from 0.15% to 0.79%.
Pursuant to the Trust Business Cooperation Framework Agreement, the total trust management fees received by Everbright Xinglong Trust for the period from January 1, 2019 to December 31, 2019 amounted to RMB9,312,300 (the transaction cap for the corresponding period was RMB21,000,000).
As Gansu State-owned Assets Investment, a substantial shareholder of the Bank, holds 43.98% equity interest in Everbright Xinglong Trust, Everbright Xinglong Trust is an associate of Gansu State-owned Assets Investment and therefore a connected person of the Bank. As the highest applicable percentage ratios of the above transaction calculated for the purpose of Chapter 14A of the Listing Rules are expected to be, on an annual basis, less than 0.1%, the continuing connected transaction contemplated under the Everbright Xinglong Trust Agreements constitutes de minimis transaction, and therefore is exempt from all the reporting, annual review, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.76(1) of the Listing Rules.
– 59 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
5. The fifth category: Purchase of Guotou Medium-term Notes
During the period from September 23, 2019 to September 24, 2019, Gansu State-owned Assets Investment had completed the issuance of the Guotou Medium-term Notes in a total nominal value of RMB2 billion, which are listed on the Shanghai Clearing House. The Guotou Medium-term Notes have been listed for trading since September 26, 2019. On October 15, 2019, the Bank, through a securities broker, purchased the Guotou Medium-term Notes in a total nominal value of RMB300 million at market price by way of on-exchange trading from the secondary market. The total consideration was approximately RMB300.75 million. With a term of five years, the medium-term notes will be paid on the payment date (being September 25, 2024) at nominal value. Total issuance amount of the Guotou Medium-term Notes is RMB2 billion, at a fixed interest rate of 4% per annum. Dated date is September 25, 2019 and interests are payable on September 25 in each year during the effective term.
The Bank is expected to receive an interest of RMB12 million per annum during the term it holds the Guotou Medium-term Notes. During the Reporting Period, the Bank had not received any interest.
As Gansu State-owned Assets Investment is a substantial shareholder of the Bank and directly and indirectly holds 21.61% equity interests in the Bank, Gansu State-owned Assets Investment is thus a connected person of the Bank. Although the Bank purchased the Guotou Medium-term Notes through on-exchange trading, holding of the Guotou Medium-term Notes constitutes a financial assistance of the Bank to Gansu State-owned Assets Investment, and thus a connected transaction of the Bank under Chapter 14A of the Listing Rules. As one or more applicable percentage ratios of the purchase and holding of the Guotou Medium-term Notes exceed 0.1% but all percentage ratios are less than 5%, the above continuing connected transaction constitutes de minimis transaction, and therefore is exempt from all the reporting, annual review, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.76(1) of the Listing Rules..
– 60 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
II. PARTICULARS OF THE IMPLEMENTATION OF RELATED-PARTY TRANSACTION MANAGEMENT
(I) Management of the list of related/connected parties in 2019
The Bank identified the related parties in accordance with the relevant provisions of the Administrative Measures for the Related Party Transactions between the Commercial Banks and their Insiders or Shareholders《 (商業銀行與內部人和股東關聯交易管理辦法》), Hong Kong Listing Rules, the Accounting Standards for Business Enterprises and the IFRS.
1. Related/connected legal person
During the Reporting Period, the Bank has 375 related parties under the rules of the CBRC, mainly including Gansu Province Highway Aviation Tourism Investment Group Co., Ltd. (directly holding 11.49% equity interest in the Bank and holding 1% equity interest through controlled corporation), Jiuquan Iron & Steel (Group) Co., Ltd. (holding 6.309% equity interest in the Bank), Gansu Province Electric Power Investment Group Co., Ltd.(holding 6.309% equity interest in the Bank), Jinchuan Group Co., Ltd (holding 6.309% equity interest in the Bank) and their controlled subsidiaries. As compared with the end of 2018, there have been 4 additional related parties, mainly including Gansu Highway Aviation Tourism International Trade Co., Ltd.(甘肅公航旅國際貿易有限公司) and Jinchuan Group Chemical and New Materials Co.,Ltd.(金川集團化工新材料有限責任公司); the Bank has 686 connected parties under the Hong Kong Listing Rules, mainly including Gansu Province State-owned Assets Investment Group Co., Ltd. (directly holding 3.57% equity interest in the Bank and holding 12.59% equity interest through controlled corporations), Gansu Province Highway Aviation Tourism Investment Group Co., Ltd. (directly holding 11.49% equity interest in the Bank and holding 1% equity interest through controlled corporation) and their controlled corporations or related parties. As compared with the end of 2018, there have been 13 additional connected parties, mainly including Gansu Technology Investment Group Co.,Ltd.(甘肅省科技投資集團 有限公司) and its subsidiaries.
The Bank had 686 related parties under the Accounting Standards for Business Enterprises and the IFRS, mainly including Gansu Province State-owned Assets Investment Group Co., Ltd. (directly holding 3.57% equity interest in the Bank and holding 12.59% equity interest through controlled corporation), Gansu Province Highway Aviation Tourism Investment Group Co., Ltd. (directly holding 11.49% equity interest in the Bank and holding 1% equity interest through controlled corporation) and their subsidiaries (controlled corporations or related parties), representing an increase of 13 related parties as compared with the end of 2018.
– 61 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
2. Related/connected natural persons
During the Reporting Period, the Bank had 8,983 related natural persons and their close relatives under the rules of the CBIRC, representing an increase of 5,680 persons as compared with the end of 2018; and had 223 related persons under the Hong Kong Listing Rules, representing a decrease of 6 persons (mainly being former Directors and Supervisors) as compared with the end of 2018.
(II) The approval of related-party/connected transactions
In order to further enhance the scientific and flexible management of related-party/ connected transactions, the Bank implemented the estimated cap management for related party transactions in 2019 in accordance with the relevant requirements on related-party/ connected transactions and with reference to the relevant practice in the industry subject to the regulatory rules such as Administrative Measures for the Related Party Transactions between the Commercial Banks and their Insiders or Shareholders and Listing Rules of Hong Kong Stock Exchange. Meanwhile, the Bank strictly implemented relevant requirements in respect of the occurrence and existence of related party/connected transactions with related/ connected parties to the extent considered and approved at the 2019 general meeting.
(III) The pricing of related-party/connected transactions
The pricing of the transactions between the Bank and its related/connected parties shall be complied with the principles governing the prevailing market price and the pricing standards shall be determined according to the type of the particular related/connected transaction. It shall be specified in the agreement in respect of such related-party/connected transaction. The pricing of the credit extension related-party/connected transaction shall be determined by the Bank pursuant to the pricing administrative measures on credit extension as well as the credit rating of the customers of related/connected party and the actual risk situation. For the pricing of service provision related-party/connected transactions shall be determined by the Bank by reference to market price of similar services.
During the Reporting Period, the related-party/connected transactions between the Bank and its related/connected parties strictly followed the above-mentioned transaction pricing principles, and were conducted on terms no favourable than those offered to non-related/ non-connected parties for similar transactions and in accordance with general commercial terms and normal business procedures. Such transactions are legitimate and fair and there is no case that causes damage to the legitimate interests of other shareholders.
– 62 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
(IV) The improvement of the related party/connected transaction management mechanism
1. Continually maintaining the list of related/connected parties. In accordance with the relevant provisions of the Administrative Measures for the Related Party Transactions between the Commercial Banks and their Insiders or Shareholders, Hong Kong Listing Rules, the Accounting Standards for Business Enterprises, the IFRS and the Interim Measures for the Equity Management of Commercial Banks, the Bank has timely supplemented and maintained the list of related/connected parties, and implemented dynamic management to all lists of related/connected parties.
2. Strictly implementing the approval and filing system for related party/connected transactions. In order to improve the scientific nature and flexibility in management of related-party/connected transactions, the Bank submitted the proposal in relation to the estimated cap management for related party/connected transactions for 2019 to the Board of Directors and the general meeting at the beginning of 2019, in accordance with the relevant requirements on related-party/connected transactions and with reference to the relevant practice in the industry subject to the regulatory rules such as Administrative Measures for the Related Party Transactions between the Commercial Banks and their Insiders or Shareholders and Listing Rules of Hong Kong Stock Exchange. Meanwhile, the Bank regulated the management in strict compliance with the relevant requirements and implemented the filling system.
3. Rectifying relevant issues earnestly. In response to the effectiveness inspection on risk and internal control of the CBIRC in 2019, the Bank identified the issue on “credit loans granted to related persons”. The Bank carefully analyzed the causes of the issue, identified management loopholes and strengthened various measures for timely rectification. First, the Bank issued the notice of regulating loans to natural person related parties in a timely manner to strengthen the management of credit extension to natural person related parties; secondly, the Bank carefully streamlined the loan process, optimized the regulation and system process of personal loan products secured by credit, and realized system control for such loans; thirdly, for natural person related parties that did not meet the management requirements, the Bank urged the relevant related natural persons to repay the loan; fourthly, the Bank took measures to enhance the guarantee method to rectify the issue in a continuous manner.
– 63 – ANNEX 5 REPORT ON RELATED-PARTY TRANSACTIONS FOR 2019
4. Issuing risk warnings in a timely manner. In respect of the risk points for related party management and related party transactions identified by the Bank in its actual management, the Bank timely issued compliance risk alerts to the relevant branches or the relevant business line management departments of the head office, and proposed clear rectification requirements and deadlines.
This proposal is subject to consideration at the AGM.
– 64 – ANNEX 6 ESTIMATED CAPS OF RELATED PARTY/CONNECTED TRANSACTIONS FOR 2020
Pursuant to relevant regulations of the CBIRC and the Measures on Management of Related-party/ Connected Transactions of Bank of Gansu Co., Ltd., the Bank has proposed the estimated annual caps of ordinary related party transactions for 2020 with four related legal persons (including Gansu Province Highway Aviation Tourism Investment Group Co., Ltd.) and their controlled subsidiaries, and related natural persons. In order to further enhance the scientific and flexible management of related party transactions, improve the efficiency of examination and approval of related party transactions and draw on best practices in the industry, subject to compliance with regulatory rules and relevant cap requirements, it is proposed that the management be authorized by the Shareholders’ general meeting to make adjustment to the estimated caps of related party transactions regarding credit facilities with related legal persons (on an individual or group basis) and related natural persons in the list within the estimated total cap of the transactions, and file the same with the related-party transactions and risk management committee.
I. GANSU PROVINCE HIGHWAY AVIATION TOURISM INVESTMENT GROUP CO., LTD.
(i) Overview of Related Parties
Gansu Province Highway Aviation Tourism Investment Group Co., Ltd. (“Highway Aviation Tourism Group”) had a registered capital of RMB100 billion. Highway Aviation Tourism is responsible for the development of high-grade highways, civil aviation airports and major tourism resources of Gansu Province, investment and financing of major tourism projects, financial insurance, trade and their development, construction and operational management; construction and operation of transportation ancillary facilities.
As of the end of September 2019, Highway Aviation Tourism Group had total assets of RMB486,458 million and total liabilities of RMB318,697 million, of which, short-term loans amounted to RMB4,276 million, long-term loans amounted to RMB207,919 million, owner’s equity amounted to RMB167,761 million, gear ratio was 65.51%, total operating income was RMB94,428 million, net profit was RMB153 million and net asset was RMB167,761 million. With strong comprehensive strength, Highway Aviation Tourism Group has obtained credit lines of nearly RMB358,500 million from 20 banks in and outside the Gansu province, and has been listed as a key customer at the head office level by many banks.
(ii) Transactions with the Bank for 2019
In 2019, the Bank approved unified credit limit of RMB2,000 million for Highway Aviation Tourism Group and its subsidiaries, including RMB150 million of low risk credit limit and RMB1,850 million of total credit lines. The credit period is 1 year. It is mainly used for, among others, working capital loans, fixed asset project loans, bond investment and bank acceptance bills. As at the end of 2019, the balance of transactions between the Bank and Highway Aviation Tourism Group and its subsidiaries amounted to RMB411,954,000, including letters of guarantee of RMB68,794,000 and bonds investment of RMB343,160,000.
– 65 – ANNEX 6 ESTIMATED CAPS OF RELATED PARTY/CONNECTED TRANSACTIONS FOR 2020
(iii) Proposed estimated annual caps and demand analysis for 2020
The proposed estimated annual caps for 2020 will be total credit lines of RMB3,400 million, which will be mainly used for, among others, working capital loans, fixed assets project loans, letters of guarantee, bank acceptance bills and bonds investment, Particulars are set out in Table 1.
Table 1: Proposed estimated annual caps of Highway Aviation Tourism Group for 2020
Unit: RMB0’000
Proposed estimated annual Type of No. Name of related party caps for 2020 Proposed transactions for 2020 transaction
1 Gansu Province Gansu Province 98,120.6 Working capital loans, bank Major related Highway Highway acceptance bills(with exposure), party transaction Aviation Tourism Aviation Tourism discounted commercial bills, Investment Group Investment Group letters of guarantee, factoring, Co., Ltd. Co., Ltd. domestic letters of credit, import letters of credit and other comprehensive credit extension business
2 Gansu Province 35,000 Dollar bonds Major related Highway party transaction Aviation Tourism Investment Group Co., Ltd.
3 Gansu Province 100,000 Working capital loans Major related Financial Capital party transaction Management Co., Ltd.(甘肅省金融 資本管理公司)
4 Gansu Highway 30,000 Bank acceptance bills(with Major related Aviation Tourism exposure) party transaction International Trade Co., Ltd. (甘肅公航旅國際 貿易有限公司)
– 66 – ANNEX 6 ESTIMATED CAPS OF RELATED PARTY/CONNECTED TRANSACTIONS FOR 2020
5 Gansu Highway 20,000 Discounting, Bank acceptance Major related Aviation Tourism bills(with full security deposits) party transaction International Trade Co., Ltd. (甘肅公航旅國際 貿易有限公司)
6 Gansu Highway 50,000 Fixed assets project loans Major related Aviation party transaction Tourism Tianma Investment Co.,Ltd.(甘肅公 航旅天馬投資有 限公司)
7 Gansu Yuanda Road 1,052.2 Letters of guarantee Major related Group Co., Ltd. party transaction (甘肅省遠大路業 集團有限公司)
8 Gansu Province 2,827.2 Letters of guarantee Major related Highway party transaction Aviation Tourism Investment Group Co., Ltd
9 Gansu Province 3,000 Letters of guarantee Major related Highway party transaction Aviation Tourism Investment Group Co., Ltd
10 Total 340,000
– 67 – ANNEX 6 ESTIMATED CAPS OF RELATED PARTY/CONNECTED TRANSACTIONS FOR 2020
(iv) Fairness Analysis of the Transaction
In 2020, the related party transactions between the Bank and Highway Aviation Tourism Group and its controlled subsidiaries (or associates) will fall within the annual caps of the related party transactions, and will be conducted based on general commercial principles and on the terms available to related parties being no more favorable than those available to non-related parties for similar transactions.
II. JINCHUAN GROUP CO., LTD.
(i) Overview
Jinchuan Group Co., Ltd. (“Jinchuan Group”) is principally engaged in the production and sales of precious metals such as nickel, copper, cobalt and platinum group and chemical products such as sulfuric acid. The company has an annual combined production capacity of 200,000 tons of nickel, 1 million tons of copper, 10,000 tons of cobalt, 3,500 kg of platinum group metals, 30 tons of gold, 600 tons of silver, 200 tons of selenium and 5,600,000 tons of chemical products. It ranked third in nickel production and fourth in cobalt production in the world, ranked first in platinum group metals in Asia and third in copper production in China. The company has the world’s fifth and Asia’s first nickel flash smelting furnace, the world’s first copper synthesis smelting furnace, the world’s first oxygen-rich top-blown nickel smelting furnace, and the world’s leading international equipment and technology such as the mechanized downward filling mining method with the largest continuous recovery area in the world.
As of the end of September 2019, Jinchuan Group’s paid-in capital was RMB22,946 million. It had consolidated total assets of RMB121,097 million and owners’ equity of RMB44,119 million. It recorded operating income of RMB161,522 million, total profit of RMB2,945 million and net profit of RMB2,307 million. In 2019, Jinchuan Group ranked 369th among the top 500 enterprises in the world, 96th among the top 500 enterprises in China and 32nd among the top 500 manufacturing enterprises in China. It has been granted a series of national awards including the Special Award of National Science and Technology Progress, the National Quality Award, the National May 1st Labor Medal and the China Industrial Award. In recent years, it experienced relatively rapid growth with increasing operating results and sound financial condition.
– 68 – ANNEX 6 ESTIMATED CAPS OF RELATED PARTY/CONNECTED TRANSACTIONS FOR 2020
(ii) Transactions with the Bank for 2019
In 2019, the credit lines granted to Jinchuan Group and its controlled subsidiaries by the Bank was RMB3,000 million with a credit period of one year, which was mainly used for, among others, working capital loans and bank acceptance bills. As of the end of 2019, the balance of transaction of the group and its controlled subsidiaries with the Bank amounted to RMB1,168,398,700. Excluding the margin deposits of RMB288,561,700, the balance of exposure was RMB879,837,000, including loans of RMB10,000,000, bank acceptance bills(with exposure) of RMB1,026,096,200, domestic non-financing letters of guarantee(with full security deposits) of RMB1,302,500 and import letters of credit of RMB21,000,000.
(iii) Proposed estimated annual caps and demand analysis for 2020
The proposed estimated annual caps for 2020 will be total credit lines of RMB3,000 million, which will be mainly used for, among others, working capital loans, bank acceptance bills, discounted commercial bills, import letters of credit and letters of guarantee. Particulars are set out in Table 2.
Table 2: Proposed estimated annual caps of Jinchuan Group for 2020
Unit: RMB0’000
Proposed estimated annual Type of No. Name of related party caps for 2020 Proposed transactions for 2020 transaction
1 Jinchuan Group Co., Jinchuan Group Co., 52,400 Working capital loans, bank Major related Ltd. Ltd. acceptance bills(with exposure), party transaction discounted commercial bills, letters of guarantee, factoring, domestic letters of credit, import letters of credit and other comprehensive credit extension business
2 Jinchuan Group 70,000 Working capital loans, bank Major related Wire and Cable acceptance bills(with exposure), party transaction Co., Ltd.(金川集 discounted commercial bills, 團電線電纜有限 letters of guarantee, factoring, 公司) domestic letters of credit, import letters of credit and other comprehensive credit extension business
– 69 – ANNEX 6 ESTIMATED CAPS OF RELATED PARTY/CONNECTED TRANSACTIONS FOR 2020
Proposed estimated annual Type of No. Name of related party caps for 2020 Proposed transactions for 2020 transaction
3 Gansu Jinchuan 600 Working capital loans, bank Major related Aike Mineral and acceptance bills(with exposure), party transaction Insulated Cable discounted commercial bills, Co., Ltd.(甘肅金 letters of guarantee, factoring, 川艾克礦物絕緣 domestic letters of credit, 電纜有限公司) import letters of credit and other comprehensive credit extension business
4 Jinchun Maike Metal 70,000 Working capital loans, bank Major related Resources Co., acceptance bills(with exposure), party transaction Ltd. (金川邁科金 discounted commercial bills, 屬資源有限公司) letters of guarantee, factoring, domestic letters of credit, import letters of credit and other comprehensive credit extension business
5 Jinchang Niedu 10,000 Working capital loans, bank Major related Mining Industry acceptance bills(with exposure), party transaction Co., Ltd.(金昌鎳 discounted commercial bills, 都礦山實業有限 letters of guarantee, factoring, 公司) domestic letters of credit, import letters of credit and other comprehensive credit extension business
6 Jinchang Jinchuan 5,000 Working capital loans, bank Major related Wanfang acceptance bills(with exposure), party transaction Industrial Co., discounted commercial bills, Ltd.(金昌金川萬 letters of guarantee, factoring, 方實業有限責任 domestic letters of credit, 公司) import letters of credit and other comprehensive credit extension business
7 Gansu Jinchuan 10,000 Working capital loans, bank Major related Chemical acceptance bills(with exposure), party transaction Materials Co.,Ltd. discounted commercial bills, (甘肅金川化工材 letters of guarantee, factoring, 料有限公司) domestic letters of credit, import letters of credit and other comprehensive credit extension business
– 70 – ANNEX 6 ESTIMATED CAPS OF RELATED PARTY/CONNECTED TRANSACTIONS FOR 2020
Proposed estimated annual Type of No. Name of related party caps for 2020 Proposed transactions for 2020 transaction
8 Jinchuan Group 5,000 Working capital loans, bank Major related Machinery acceptance bills(with exposure), party transaction Manufacturing discounted commercial bills, Co., Ltd.(金川集 letters of guarantee, factoring, 團機械製造有限 domestic letters of credit, 公司) import letters of credit and other comprehensive credit extension business
9 Jinchuan Group 2,000 Working capital loans, bank Major related Nickel Alloy Co., acceptance bills(with exposure), party transaction Ltd. Jinchuan discounted commercial bills, Branch(金川集團 letters of guarantee, factoring, 鎳合金有限公司 domestic letters of credit, 金川分公司) import letters of credit and other comprehensive credit extension business
10 Baotou Huading 25,000 Working capital loans, bank Major related Copper acceptance bills(with exposure), party transaction Development Co., discounted commercial bills, Ltd.(包頭華鼎銅 letters of guarantee, factoring, 業發展有限公司) domestic letters of credit, import letters of credit and other comprehensive credit extension business
11 Jinchuan Group 20,000 Working capital loans, bank Major related Copper Industry acceptance bills(with exposure), party transaction Co., Ltd.(金川集 discounted commercial bills, 團銅業有限公司 letters of guarantee, factoring, domestic letters of credit, import letters of credit and other comprehensive credit extension business
12 Jinchuan Group 30,000 Major related Finance Co., Ltd. party transaction (金川集團財務有 限公司)
13 Total 300,000
– 71 – ANNEX 6 ESTIMATED CAPS OF RELATED PARTY/CONNECTED TRANSACTIONS FOR 2020
(iv) Fairness Analysis of the Transaction
In 2020, the related party transactions between the Bank and Jinchuan Group and its controlled subsidiaries (or associates) will fall within the annual caps of the related party transactions, and will be conducted based on general commercial principles and on the terms available to related parties being no more favorable than those available to non-related parties for similar transactions.
III. JIUQUAN IRON & STEEL (GROUP) CO., LTD.
(I) Overview
Jiuquan Iron & Steel (Group) Co., Ltd. (“Jiuquan Iron & Steel Group”) had a registered capital of RMB14,395,058,800. Its business scope includes: manufacturing, mining, agriculture, forestry, animal husbandry, fishery, production and supply of electricity, gas and water, construction, transportation, warehousing, information transmission, computer services and software, wholesale and retail, accommodation and catering, real estate, leasing and business services, scientific research, technical services and geological exploration, water conservancy, environmental and public facilities management, residential services and other services, education, healthcare, culture, sports and entertainment (the above businesses that are under the monopoly of the state are subject to the qualification certificate or license). Since 1985, it has been listed among the 500 largest industrial enterprises in China for many years. At present, it has formed a new pattern of diversified businesses with trans-regional, multi-industry and multi-ownership operations and established a relatively well-established modern enterprise system. It has been granted more than 50 awards, including the National Civilized Entity, the National Excellent Enterprise for Ideological and Political Work, the National Advanced Grassroots Party Organization, the National Model Entity of National Unity and Progress, the National Advanced Entity for Spiritual Civilization Construction, the National May 1st Labor Medal, the National Advanced Enterprise for Quality Management and the National Enterprise with Outstanding Performance in Contract Compliance and Credit Establishment, and is the largest and diversified modern enterprise group of both ferrous and nonferrous metals in the northwest region of China.
As of the end of September 2019, Jiuquan Iron & Steel Group had paid-in capital of RMB14,395 million and consolidated total assets of RMB113,800 million, of which monetary funds were RMB8,285 million and fixed assets were RMB43,964 million; total current liabilities were RMB65,874 million, of which short-term loans were RMB35,194 million; owner’s equity was RMB31,829 million, operating income was RMB77,803 million, total profit was RMB218 million and net operating cash flow was RMB4,993 million.
– 72 – ANNEX 6 ESTIMATED CAPS OF RELATED PARTY/CONNECTED TRANSACTIONS FOR 2020
(ii) Transactions with the Bank for 2019
In 2019, the credit lines granted to the group and its controlled subsidiaries by the Bank were RMB3,952.30 million with a credit period of one year, which was mainly used for, among others, working capital loans and bank acceptance bills. As of the end of 2019, the balance of transactions between the Group and its controlled subsidiaries and the Bank was RMB3,737.80 million. Excluding security deposits of RMB254.16 million, the balance of exposure was RMB3,483.64 million, including loans of RMB2,890.60 million and bank acceptance bills (with exposure) of RMB847.20 million.
(iii) Proposed estimated annual caps and demand analysis for 2020
The proposed estimated annual caps for 2020 will be total credit lines of RMB3,949.20 million, which will be mainly used for, among others, working capital loans, fixed asset project loans and bank acceptance bills. Particulars are set out in Table 3.
Table 3: Proposed estimated annual caps of Jiuquan Iron & Steel Group for 2020
Unit: RMB0’000
Proposed estimated annual Type of No. Name of related party caps for 2020 Proposed transactions for 2020 transaction
1 Jiuquan Iron & Steel Jiuquan Iron & Steel 100,000 Working capital loans, fixed asset Major related (Group) Co., Ltd. (Group) Co., Ltd. project loans and bank acceptance party transaction bills
2 Jiugang Group 7,000 Bank acceptance bills(with Major related Hongxing Iron exposure) party transaction and Steel Co., Ltd. (酒鋼集團宏 興鋼鐵股份有限 公司)
3 Gansu Dongxing 97,000 Working capital loans Major related Aluminum Co., party transaction Ltd.(甘肅東興鋁 業有限公司)
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4 Gansu Jiuquan 39,970 Bank acceptance bills(with Major related Steel Tiancheng exposure) party transaction Colored Aluminum Co., Ltd. (甘肅酒鋼天 成彩鋁有限責任 公司)
5 Jiuquan Steel Group 19,950 Bank acceptance bills(with Major related Yuzhong Iron & exposure) party transaction Steel Co., Ltd.(酒 鋼集團榆中鋼鐵 有限責任公司)
6 Gansu Jiuquan Steel 14,000 Working capital loans, fixed asset Major related Group Western project loans and bank acceptance party transaction Heavy Industry bills Co., Ltd. (甘肅酒 鋼集團西部重工 股份有限公司)
7 Pingliang Tianyuan 30,000 Working capital loans Major related Coal and party transaction Electricity Co., Ltd. (平涼天元煤 電化有限公司)
8 Gansu Huihong 87,000 Infrastructure project loan Major related Energy Chemical party transaction Sales Co., Ltd. (甘肅匯宏能源化 工銷售有限公司)
9 Total 394,920 Major related party transaction
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(IV) Fairness Analysis of the Transaction
In 2020, the related party transactions between the Bank and Jiuquan Iron & Steel Group and its controlled subsidiaries (or associates) will/be limited to the extent of the annual caps of the related party transactions, and will be conducted based on general commercial principles and on the terms available to related parties being no more favorable than those available to non-related parties for similar transactions.
IV. GANSU PROVINCE ELECTRIC POWER INVESTMENT GROUP CO.,LTD.
(i) Overview
Gansu Province Electric Power Investment Group Co., Ltd. (“Electric Power Investment Group”) had a registered capital of RMB3.6 billion. Its business scope includes, among others, provision of services to energy industry development and railway infrastructure construction and the coal industry in Gansu Province.
As of the end of September 2019, the Group had total assets of RMB79,124 million and total liabilities of RMB43,769 million, of which, long-term loans were RMB27,832 million, owner’s equity was RMB35,355 million, gear ratio was 55.32%, total operating income was RMB4,496 million, net profit was RMB-643,000 and net assets were RMB35,355 million. With strong comprehensive strength, Electric Power Investment Group has obtained credit lines of nearly RMB63,573 million from 18 banks in and outside the Gansu province, and has been listed as a key customer at the head office level by many banks.
(ii) Transactions with the Bank for 2019
In 2019, the Bank approved total credit lines of RMB1,470 million granted to Electric Power Investment Group and its subsidiaries with a credit period of one year, which was mainly used for, among others, fixed assets project loan and operation property loan. As of the end of 2019, the balance of transactions of the group and its controlled subsidiaries with the Bank amounted to RMB670 million.
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(iii) Proposed estimated annual caps and demand analysis for 2020
The proposed estimated annual caps for 2020 will be RMB2,500 million, which will be mainly used for, among others, working capital loans, fixed asset project loans and bond investment. Particulars are set out in Table 4.
Table 4: Proposed estimated annual caps of Electric Power Investment Group for 2020
Unit: RMB0’000
Proposed estimated annual Type of No. Name of related party caps for 2020 Proposed transactions for 2020 transaction
1 Gansu Province Gansu Province 100,000 Working capital loans, bank Major related Electric Power Electric Power acceptance bills(with exposure), party transaction Investment Group Investment Group discounted commercial bills, letters Co., Ltd. Co., Ltd. of guarantee, factoring, domestic letters of credit, import letters of credit and other comprehensive credit extension business
2 Gansu Electric 100,000 Fixed asset project loans Major related Power Investment party transaction Changle Power Generation Company Limited(甘肅電投常 樂發電有限責任公 司)
3 Gansu Investment 50,000 Operation property loans Major related Group Yuntian Hotel party transaction Co., Ltd. (甘肅投資 集團雲天酒店有限 公司)
4 Total 250,000
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(iv) Fairness Analysis of the Transaction
In 2020, the related party transactions between the Bank and Electric Power Investment Group and its controlled subsidiaries (or associates) will fall within the annual caps of the related party transactions, and will be conducted based on general commercial principles and on the terms available to related parties being no more favorable than those available to non-related parties for similar transactions.
V. RELATED NATURAL PERSONS
The grant of credit to individual customers is one of the core credit products of the Bank. The credit facilities granted to individual customers by the Bank include personal mortgage loan, consumer loan, business loan and other credit products. Individual customers of the Bank may apply to the Bank for one or more of the above credit products according to their actual funding needs. At the end of 2019, the balance1 of outstanding loans granted to related natural persons by the Bank was RMB251,195,800. Based on the principle of risk control and operation efficiency, and the actual conditions of the Bank and taking into overall consideration of economic development and consumer price, subject to the terms available to related parties being no more favorable than those available to non-related parties for similar transactions, the proposed estimated annual caps of total credit lines granted to the related natural persons by the Bank for related party transactions regarding credit facilities were RMB300 million in 2020, increased by nearly RMB50 million as compared with last year, which was mainly used for personal loan, etc.
This proposal is subject to the consideration at the general meeting.
1 The Bank expanded the definition of related natural persons in 2019, which resulted in an increase of 5,680 persons as compared with the end of June 2018. As the newly added related natural persons had outstanding loans with a balance of RMB179,160,500, the balance with related natural persons increased significantly as compared with the end of last year.
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 1 To regulate the organization and Article 1 To regulate the organization and The term “(H activities of the shareholders’ general meetings of activities of the shareholders’ general meetings of Shares)” in the Bank of Gansu Co., Ltd. (the “Bank”), ensuring Bank of Gansu Co., Ltd. (the “Bank”), ensuring “Articles of shareholders’ general meetings to operate general meetings to operate according to law Association of Bank according to law in a standardized and efficient in a standardized and efficient manner and the of Gansu Co., Ltd. manner and the shareholders to effectively exercise shareholders to effectively exercise their powers, (H Share)” and their powers, and to safeguard the legitimate rights and to safeguard the legitimate rights and interests the “Articles of and interests of the shareholders of the Bank of the shareholders of the Bank (“Shareholders”), Association (H (“Shareholders”), these Rules of Procedure have these Rules of Procedure have been formulated Shares)” is deleted been formulated with reference to the actuality with reference to the actuality of the Bank and in throughout the text. of the Bank and in accordance with the Company accordance with the Company Law of the People’s The same deletion Law of the People’s Republic of China (the Republic of China(the “PRC”) (the “Company hereinafter will not “PRC”) (the “Company Law”), the Law of the Law”), the Law of the PRC on Commercial be separately marked PRC on Commercial Banks (the “Commercial Banks (the “Commercial Banking Law”), the or explained. Banking Law”), the Securities Law of the PRC Securities Law of the PRC (the “Securities Law”), (the “Securities Law”), the Special Provisions the Special Provisions of the State Council of the State Council Concerning the Floatation Concerning the Floatation and Listing Abroad and Listing Abroad of Stocks by Limited Stock of Stocks by Limited Stock Companies (the Companies (the “Special Provisions”), the “Special Provisions”), the Mandatory Provisions Mandatory Provisions for Articles of Association for Articles of Association of Companies to be of Companies to be Listed Overseas (the Listed Overseas (the “Mandatory Provisions”), “Mandatory Provisions”), the Guidelines on the Guidelines on Corporate Governance of Corporate Governance of Commercial Banks, the Commercial Banks, the Reply on Opinions Reply on Opinions Concerning the Supplement Concerning the Supplement and Amendment to and Amendment to Articles of Association by Articles of Association by Companies to be Listed Companies to be Listed in Hong Kong (“Zheng in Hong Kong (“Zheng Jian Hai Han”), the Rules Jian Hai Han”), the Rules Governing the Listing Governing the Listing of Securities on The Stock of Securities on The Stock Exchange of Hong Exchange of Hong Kong Limited (the “Hong Kong Kong Limited (the “Hong Kong Listing Rules”), Listing Rules”), other laws, regulations, normative other laws, regulations, normative documents and documents and relevant requirements of the relevant requirements of the securities regulatory securities regulatory authorities in the place where authorities in the place where the Bank’s shares the Bank’s shares are listed and the Articles of are listed and the Articles of Association of Bank Association of Bank of Gansu Co., Ltd. (H Shares) of Gansu Co., Ltd. (H Shares) (the “Articles of (the “Articles of Association (H Shares)”), and Association (H Shares)”), and with reference to with reference to the actual situation of the Bank. the actual situation of the Bank.
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 5 General meetings shall be the organ Article 5 General meetings shall be the organ Amended according of authority of the Bank and shall exercise the of authority of the Bank and shall exercise the to Article 2 (2) of the following duties and powers in accordance with following duties and powers in accordance with Guiding Opinions laws: laws: of the CBRC on Commercial Banks’ ⋯⋯ ⋯⋯ Innovation on Capital Instruments (9) to adopt resolutions on the issuance of (9) to adopt resolutions on the issuance of and Rule 14 of the bonds by the Bank or the listing thereof; corporate bonds or other securities by Rules Governing the Bank or and the listing thereof; Shareholders’ ⋯⋯ General Meetings of ⋯⋯ Listed Companies, and for deleting the (15) to consider ad hoc proposals made by (15) to consider ad hoc proposals made by duplicate provisions, Shareholders representing more than 3% Shareholders representing more than 3% as well as adjusting of the total voting shares of the Bank; of the total shares with voting rights of the numbering of the Bank; cross-referenced ⋯⋯ articles ⋯⋯
(19) to consider and approve matters relating (19) to consider and approve matters relating to guarantees stipulated in Article 74 of to guarantees stipulated in Article 743 of the Articles of Association (H Shares); the Articles of Association (H Shares);
⋯⋯ ⋯⋯
(23) to consider proposals made by (23) to consider proposals made by shareholders with more than 3% of the shareholders with more than 3% of the shares with voting rights of the Bank; and shares with voting rights of the Bank; and
(24) to consider other matters required to (243) to consider other matters required to be determined by general meeting in be determined by general meeting in accordance with the laws, administrative accordance with the laws, administrative regulations, Hong Kong Listing Rules and regulations, Hong Kong Listing Rules and the Articles of Association (H Shares). the Articles of Association (H Shares).
⋯⋯ ⋯⋯
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 6 General meetings consist of annual Article 6 General meetings consist of annual For unifying the general meetings and extraordinary general general meetings and extraordinary general references to banking meetings. Annual general meetings shall be meetings. Annual general meetings shall be regulatory authorities convened once a year and shall be held within six convened once a year and shall be held within six as “banking months after the end of the previous financial year. months after the end of the previous financial year. regulatory authorities Extraordinary general meetings shall be convened Extraordinary general meetings shall be convened under the State irregularly. In the event that an extraordinary irregularly. In the event that an extraordinary Council” general meeting is required to be convened general meeting is required to be convened pursuant to Article 100 of the Company Law, the pursuant to Article 100 of the Company Law, the extraordinary general meeting shall be convened extraordinary general meeting shall be convened within two months. within two months.
In the event that the Bank is unable to convene a In the event that the Bank is unable to convene a general meeting within the aforesaid period for general meeting within the aforesaid period for any reason, the Board shall report to the banking any reason, the Board shall report to the banking regulatory authorities and explain the reasons for regulatory authorities under the State Council the postponement. and explain the reasons for the postponement.
Article 9 An extraordinary general meeting may Article 9 An extraordinary general meeting For improving be held upon proposal by more than half of the may be held upon proposal by more than half of accuracy of independent Directors to the Board. the independent Directors (in the event that the expression Bank has less than three independent Directors, ⋯⋯ then upon the unanimous proposal by the two independent Directors) to the Board.
⋯⋯
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 11 The Proposal Shareholders shall act Article 11 The Proposal Shareholders shall act In view of “Proposal in compliance with the following procedures when in compliance with the following procedures when Shareholders” they make a request to convene an extraordinary they make a request to convene an extraordinary has been defined general meeting or a class meeting: general meeting or a class meeting: in a previous Article, Amended (1) Two or more shareholders holding in (1) Two or more shareholders holding in for improving aggregate 10% or more of the voting aggregate 10% or more of the voting the accuracy of shares at the meeting sought to be held shares at the meeting sought to be held expression of this shall sign one or more counterpart The Proposal Shareholders shall sign Article, and in requisitions in writing requiring the Board one or more counterpart requisitions in accordance with of Directors to convene an extraordinary writing requiring the Board of Directors Rule 9 of the general meeting or a class meeting and to convene an extraordinary general Rules Governing stating the objectives of the meeting. The meeting or a class meeting and stating Shareholders’ Board of Directors shall, in accordance the objectives of the meeting. The Board General Meetings of with the laws, administrative regulations of Directors shall, in accordance with the Listed Companies and the Articles of Association (H Shares), laws, administrative regulations and the make a written response as to whether or Articles of Association (H Shares), make not it agrees to convene an extraordinary a written response as to whether or not it general meeting within ten days after agrees to convene an extraordinary general receiving the proposal. The above meeting within ten days after receiving the mentioned number of shares held shall be proposal. The above mentioned number calculated as of the date of requisitions in of shares held shall be calculated as of the writing made by the Shareholders. date of requisitions in writing made by the shareholders. ⋯⋯ ⋯⋯
(2) Where the Board of Directors does (2) Where the Board of Directors does not agree to convene the extraordinary not agree to convene the extraordinary general meeting, or fails to give its general meeting, or fails to give its response within ten days after receiving response within ten days after receiving the proposal, the Shareholders who the proposal, the shareholders who individually or jointly hold more than individually or jointly hold more than 10% of the shares in the Bank shall 10% of the shares in the Bank Proposal have the right to propose to the Board of Shareholders shall have the right to Supervisors to convene an extraordinary propose to the Board of Supervisors to general meeting and this proposal shall convene an extraordinary general meeting be made to the Board of Supervisors in and this proposal shall be made to the writing. Board of Supervisors in writing.
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Where the Board of Supervisors agrees to convene Where the Board of Supervisors agrees to convene an extraordinary general meeting, it shall issue an extraordinary general meeting, it shall issue a a notice for convening such meeting within five notice for convening such meetings within five days after receiving the proposal. In the event of days after receiving the proposal. In the event of any change to the original proposal in the notice, any change to the original proposal in the notice, the consent of the related Shareholders shall be the consent of the related shareholders shall be obtained. obtained.
Where the Board of Supervisors fails to issue the Where the Board of Supervisors fails to issue the notice of extraordinary general meeting within a notice of extraordinary general meeting within prescribed period, the Board of Supervisors shall a prescribed period, the Board of Supervisors be deemed as refusing to convene and preside over shall be deemed as refusing to convene and such meeting. Shareholders who individually or preside over such meeting. Shareholders who jointly hold more than 10% of the shares in the individually or jointly hold more than 10% of the Bank for more than ninety successive days (the total shares with voting rights in the Bank for “Convening Shareholders”) may convene and more than ninety successive days (the “Convening preside over such meeting on their own initiative. Shareholders”) may convene and preside over such meeting on their own initiative. ⋯⋯ ⋯⋯
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 12 If either the Board of Supervisors Article 12 If either the Board of Supervisors or For unifying the or Shareholders propose to convene a general Shareholders propose to convene a general meeting references to banking meeting on their own initiatives, the Board of on their own initiatives, the Board of Directors regulatory authorities Directors shall be informed in writing and the shall be informed in writing and the relevant as “banking relevant documents shall be filed with the local documents shall be filed with the local banking regulatory authorities banking regulatory authorities in the place where regulatory authorities under the State Council in under the State the Bank is situated. A notice for convening an the place where the Bank is situated. A notice for Council”, and for extraordinary general meeting shall be issued convening an extraordinary general meeting shall improving accuracy and its content shall comply with the following be issued and its content shall comply with the of expression requirements: following requirements:
⋯⋯ ⋯⋯
(2) the venue for the meeting shall be the (2) the venue for the meeting shall be the domicile of the Bank. domicile of the Bank.
For the general meeting convened For the general meeting convened and presided over by Shareholders on and presided over by Shareholders on their own initiatives, the shareholding their own initiatives, the shareholding proportion of the Convening Shareholders proportion of the Convening Shareholders before the announcement of the before the announcement of the resolutions passed at the general meeting resolutions passed at the general meeting shall not be less than 10%. shall not be less than 10% of the total shares with voting rights.
The Board of Supervisors or convening The Board of Supervisors or convening Shareholders shall submit the relevant Shareholders shall submit the relevant evidentiary materials to the local banking evidentiary materials to the local banking regulatory authorities in the place where regulatory authorities under the State the Bank is situated upon the issuance of Council in the place where the Bank is the notice of a general meeting and the situated upon the issuance of the notice of announcement of the resolutions of the a general meeting and the announcement general meeting. of the resolutions of the general meeting.
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 13 Article 13 For improving accuracy of ...... expression
If the Board of Directors fails to provide the If the Board of Directors fails to provide the register of members, the Convening Shareholders register of members, the Convening Shareholders may request a copy from the securities registration convener may request a copy from the securities and clearing institution by presenting the relevant registration and clearing institution by presenting announcement of the notice of convening the the relevant announcement of the notice of general meeting. The register of member obtained convening the general meeting. The register of by the Convening Shareholders shall not be used member obtained by the Convening Shareholders for any purpose other than holding the general convener shall not be used for any purpose other meeting. than holding the general meeting.
Article 16 If the election of Directors or Article 16 If the election of Directors or For unifying the Supervisors is proposed to be discussed at a Supervisors is proposed to be discussed at a references to general meeting, the notice of such meeting shall general meeting, the notice of such meeting shall banking regulatory adequately disclose the detailed information of the adequately disclose the detailed information of the authorities as candidates for Directors or Supervisors, in which candidates for Directors or Supervisors, in which “banking regulatory the information shall at least include: the information shall at least include: authorities under the State Council”, ⋯⋯ ⋯⋯ and unifying the references (4) whether they have been punished by the (4) whether they have been punished by the to “securities banking regulatory authorities or securities banking regulatory authorities under the regulators” as regulators. State Council or securities regulators “securities regulators under the State Council. under the State ⋯⋯ Council” ⋯⋯
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 17 When convening a general meeting, Article 17 When convening a shareholders’ Amended in the Bank shall give written notice to all general meeting, the Bank the convener accordance with Shareholders whose names appear on the register shall inform the Shareholders by way of the Reply of the of members forty-five days prior to the convening announcement give written notice to all State Council on of the meeting to inform them of the matters Shareholders whose names appear on the register the Adjustment to proposed to be considered and the date and venue of members forty-five twenty days prior to the the Notice Period of the meeting. Shareholders who intend to attend convening of the an annual general meeting and for Shareholders’ the meeting shall serve written reply on the Bank fifteen days prior to an extraordinary general General Meetings twenty days prior to the convening of the meeting. meetingto inform them of the matters proposed Applicable to to be considered and the date and venue of the Overseas Listed When calculating the starting date, the date of the meeting. Shareholders who intend to attend the Companies meeting shall be excluded. meeting shall serve written reply on the Bank twenty days prior to the convening of the meeting.
When calculating the starting date, the date of the meeting shall be excluded.
Article 18 Based on the written replies received Article 18 Based on the written replies received Amended in 20 days before a general meeting, the Bank shall 20 days before a general meeting, the Bank shall accordance with calculate the number of the shares with voting calculate the number of the shares with voting the Reply of the rights represented by the Shareholders intending rights represented by the Shareholders intending State Council on to attend the meeting. Where the number of the to attend the meeting. Where the number of the the Adjustment to shares with voting rights represented by the shares with voting rights represented by the the Notice Period Shareholders intending to attend the meeting is Shareholders intending to attend the meeting is for Shareholders’ more than one half of the total number of the more than one half of the total number of the General Meetings shares with voting rights of the Bank, the Bank shares with voting rights of the Bank, the Bank Applicable to shall convene such general meeting; otherwise, shall convene such general meeting; otherwise, Overseas Listed the Bank shall, within five days, inform the the Bank shall, within five days, inform the Companies Shareholders again of the matters to be considered Shareholders again of the matters to be considered at the meeting and the date and venue of the at the meeting and the date and venue of the meeting by means of a public announcement. meeting by means of a public announcement. After making such announcement, the Bank may After making such announcement, the Bank may convene the general meeting. convene the general meeting.
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 19 The notice of a general meeting Article 19 The notice of a general meeting For improving shall specify the time and venue of the meeting shall specify the time and venue of the meeting accuracy of and the Record Date. The interval between the and the Record Date. The interval between the expression Record Date and the date of the meeting shall not Record Date and the date of the meeting shall be more than 7 workdays. The Record Date, once not be more than 7 seven workdays. Where the confirmed, shall not be changed. laws, administrative regulations, departmental rules, normative documents and the securities regulatory authorities of the place where the shares of the Bank are listed have any other provisions on the period of closure of register of members before a general meeting, such provisions shall prevail. The Record Date, once confirmed, shall not be changed.
Article 21 Article 21 Amended in accordance with ⋯⋯ ⋯⋯ the Reply of the State Council on The announcement mentioned in the preceding The announcement mentioned in the preceding the Adjustment to paragraph shall be published in one or more paragraph shall be published in one or more the Notice Period newspapers designated by the securities regulator newspapers designated by the securities regulator for Shareholders’ under the State Council between 45 days to 50 under the State Council between 45 days to 50 General Meetings days prior to the meeting. Once the announcement days prior to the meeting. Once the announcement Applicable to has made, all Shareholders of domestic shares has made, all Shareholders of domestic shares Overseas Listed shall be deemed to have received the notice of the shall be deemed to have received the notice of the Companies general meeting. general meeting.
⋯⋯ ⋯⋯
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 25 All Shareholders whose names appear Article 25 All Shareholders whose names appear For improving on the register of shareholders on the Record on the register of shareholders on the Record accuracy of Date or their proxies shall be entitled to attend the Date or their proxies shall be entitled to attend the expression general meeting, and shall have the right to know, general meeting, and shall have the right to know, the right to speak, the right to question and the the right to speak, the right to question and the right to vote and other rights of shareholders in right to vote and other rights of shareholders in accordance with the relevant laws, administrative accordance with the relevant laws, administrative regulations, departmental rules, the Hong Kong regulations, departmental rules, the Hong Kong Listing Rules, the Articles of Association (H Listing Rules, the Articles of Association (H Shares) and these Rules. Shares) and these Rules.
Any Shareholder entitled to attend the general Any Shareholder entitled to attend the general meeting and vote thereat is entitled to appoint one meeting and vote thereat is entitled to may or more persons (who need not be a Shareholder) as either attend the general meeting in person his proxy(ies) to attend and vote on his behalf. The or appoint one or more persons (who need not instrument appointing proxy(ies) must be made be a Shareholder) as his proxy(ies) to attend and in writing and must be signed by the appointer, vote on his behalf. The instrument appointing or his attorney duly authorised in writing, or if proxy(ies) must be made in writing and must such appointer is a legal person, either under its be signed by the appointer, or his attorney duly common seal or under the hand of its director or authorised in writing, or if such appointer is a legal attorney duly authorized on that behalf. person, either under its common seal or under the hand of its director or attorney duly authorized on ⋯⋯ that behalf.
⋯⋯
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 28 A proxy form shall contain the Article 28 A proxy form shall contain the For improving following information: following information: accuracy of expression ⋯⋯ ⋯⋯
The proxy form must be deposited at the Bank’s The proxy form must be deposited at the Bank’s domicile or at such other place as specified in the domicile or at such other place as specified in the notice of meeting at least twenty-four (24) hours notice of meeting at least twenty-four (24) hours before the time fixed for the meeting at which the before the time fixed for the meeting at which the proxy is authorized to vote or twenty-four (24) proxy is authorized to vote or twenty-four (24) hours before the time fixed for voting. hours before the time fixed for voting.
⋯⋯ ⋯⋯
Article 30 The convener and the lawyers Article 30 The convener and the lawyers Amended in engaged by the Bank shall verify the legitimacy engaged by the Bank shall verify the legitimacy accordance with of Shareholders’ eligibility based on the Bank’s of Shareholders’ eligibility based on the Bank’s Article 65 of the register of members, and shall record the names of register of members provided by a securities Guidance for Articles Shareholders and the number of shares with voting registration and clearing institution, and shall of Association of rights held by them. The registration process record the names of Shareholders and the number Listed Companies for the meeting shall be terminated before the of shares with voting rights held by them. The chairman of the meeting announces the number of registration process for the meeting shall be Shareholders and proxies attending the meeting terminated before the chairman of the meeting and the total number of voting shares held or announces the number of Shareholders and proxies represented by them. attending the meeting and the total number of voting shares held or represented by them.
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REASONS ORIGINAL ARTICLES AMENDED ARTICLES FOR OR BASIS OF AMENDMENT
Article 33 A sign-in book for meeting attendance Article 33 A sign-in book for meeting attendance For improving shall be prepared by the secretariat of the general shall be prepared by the secretariat of the general accuracy of meeting. The sign-in book shall set forth the meeting. The sign-in book shall set forth the names expression names of attendees (or legal persons represented), of attendees (or legal persons represented), their their identity card numbers (if applicable), identity card numbers (if applicable), residential residential addresses, number of shares held or addresses, number of shares held or represented, represented, share certificate numbers, and names share shareholding certificate numbers, and of the appointers (including legal persons), etc. names of the appointers (including legal persons), etc.
Article 36 The convener shall ensure that the Article 36 The convener shall ensure that the For unifying the general meeting is held continuously till final general meeting is held continuously till final references to banking resolutions have been reached. If the general resolutions have been reached. If the general regulatory authorities meeting is adjourned or fails to reach any meeting is adjourned or fails to reach any as “banking resolution due to force majeure or for other special resolution due to force majeure or for other special regulatory authorities reasons, the convener shall take necessary action reasons, the convener shall take necessary action under the State to resume the general meeting as soon as possible to resume the general meeting as soon as possible Council” or directly terminate the general meeting and or directly terminate the general meeting and make an announcement in time. Meanwhile, the make an announcement in time. Meanwhile, the convener shall report to the banking regulatory convener shall report to the banking regulatory authorities of the place where the Bank is authorities under the State Council of the place operating. where the Bank is operating.
Article 38 Directors, Supervisors and secretary Article 38 Directors, Supervisors and secretary For improving to the Board of Directors shall attend general to the Board of Directors shall attend general accuracy of meetings, and the president and other senior meetings, and the president and other senior expression management officers of the Bank shall be present management officers of the Bank shall be present at general meetings without voting rights. Except at general meetings without voting rights. Except for the persons mentioned above, the Bank is for the persons mentioned above and Shareholders entitled to refuse other persons to enter the venue (or their proxies), appointed lawyers and of the meeting. persons invited by the Board of Directors, the Bank is entitled to refuse other persons to enter the venue of the meeting.
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Article 41 When the Bank convenes general Article 41 When the Bank convenes general For improving meetings, the Board of Directors, the Board of meetings, the Board of Directors, the Board of accuracy of Supervisors and Shareholders who individually Supervisors and Shareholders who individually or expression or jointly hold a total of more than 3% of the jointly hold a total of more than 3% of the shares shares of the Bank shall be entitled to submit with voting rights of the Bank shall be entitled to their proposals in writing to the Bank. The Bank submit their proposals in writing to the Bank. The shall include in the meeting agenda matters in Bank shall include in the meeting agenda matters the proposals which are within the scope of in the proposals which are within the scope of responsibilities of the general meeting responsibilities of the general meeting.
Shareholders who individually or jointly hold a Shareholders who individually or jointly hold a total of more than 3% of the shares of the Bank total of more than 3% of the shares with voting may submit provisional proposals to the convener rights of the Bank may submit provisional in writing ten days prior to the date of the general proposals to the convener in writing ten days prior meeting or the deadline for the issuance of the to the date of the general meeting or the deadline supplementary notice of the general meeting for the issuance of the supplementary notice of as required by the Hong Kong Listing Rules, the general meeting as required by the Hong Kong whichever is earlier. The convener shall issue a Listing Rules, whichever is earlier. The convener supplemental notice setting out the content of the shall issue a supplemental notice setting out the ad hoc proposals within two days upon receipt of content of the ad hoc proposals within two days the proposals pursuant to the requirements of the upon receipt of the proposals pursuant to the Hong Kong Listing Rules. requirements of the Hong Kong Listing Rules.
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Article 45 Matters which fall within the scope Article 45 Matters which fall within the scope of For unifying the of government regulation over the industry and are government regulation over the banking industry references to banking required to be submitted to the banking regulatory and are required to be submitted to the banking regulatory authorities authorities for approval shall be proposed in a regulatory authorities under the State Council as “banking case-specific proposal. for approval shall be proposed in a case-specific regulatory authorities proposal. under the State Council”
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Article 47 When convening a general meeting, Article 47 When convening a general meeting, Amended pursuant chairman of the meeting shall firstly announce chairman of the meeting shall firstly announce to Rule 30 of the the attendances of Shareholders and proxies the attendances of Shareholders and proxies Rules Governing at the meeting, the shares with voting rights at the meeting, the shares with voting rights Shareholders’ represented by such Shareholders and proxies, and represented by such Shareholders and proxies, and General Meetings of the compliance with the Articles of Association the compliance with the Articles of Association Listed Companies (H Shares), and then announce the agenda set out (H Shares), and then announce the agenda set in the notice of the meeting and read out, either out in the notice of the meeting and read out, by himself or other person on his behalf, the either by himself or other person on his behalf, proposals. the proposals. The number of Shareholders and proxies attended the meeting in person and the number of shares with voting rights held by them shall be subject to the register of the meeting.
Article 51 Every resolution of a general meeting Article 51 Every resolution of a general meeting For improving is either an ordinary resolution or a special is either an ordinary resolution or a special accuracy of resolution. resolution. expression
(1) Any ordinary resolutions adopted at a (1) Any ordinary resolution adopted at a general meeting shall be passed by votes general meeting shall be passed by votes representing more than one second of representing more than one second half the voting rights held by the attending of the voting rights held by the attending Shareholders (including proxies thereof) Shareholders (including proxies thereof)
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Article 54 The following shall be approved by Article 54 The following shall be approved by Amended in ordinary resolutions at a general meeting: ordinary resolutions at a general meeting: accordance with Article 76 of the ⋯⋯ ⋯⋯ Guidance for Articles of Association of (5) appointment or dismissal of an accounting (5) appointment or dismissal of an accounting Listed Companies firm; and firm; and
(6) matters other than those required by (6) annual reports of the Bank; and the laws, administrative regulations, departmental rules, the Hong Kong Listing (6)(7) matters other than those required by Rules and the Articles of Association (H the laws, administrative regulations, Shares) to be passed by special resolutions. departmental rules, the Hong Kong Listing Rules and the Articles of Association (H Shares) to be passed by special resolutions.
Article 58 Save under the cumulative voting Article 58 Save under the cumulative voting For improving system, proposals included in the agenda shall system, proposals included in the agenda shall accuracy of be voted on one by one at general meeting; in be voted on one by one at general meeting; in expression the event that there are several proposals for the the event that there are several proposals for the same matter, such proposals shall be voted on in same matter tabled at the general meeting, such chronological order of submission. Unless the proposals shall be voted on in chronological order general meeting is adjourned or no resolution can of submission. Unless the general meeting is be adopted due to force majeure or other special adjourned or no resolution can be adopted due to reasons, no proposal shall be set aside or rejected force majeure or other special reasons, no proposal for voting. shall be set aside or rejected for voting.
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Article 69 Where a proposal on election of Article 69 Where a proposal on election of Amended in Director has been passed at a general meeting, Director or Supervisor has been passed at a accordance with the qualifications of the new Director shall be general meeting, qualifications of the new Director Article 93 of the submitted to the banking regulatory authorities or Supervisor shall be submitted to the banking Guidance for Articles for review and he/she shall take office on the regulatory authorities for review and he/she shall of Association of date when the resolution is passed at the general take office on the date when he/she is elected Listed Companies meeting. the resolution is passed at the general meeting. and for improving Where the qualifications of the new Director or the accuracy of Supervisor shall be submitted to the regulatory expression authorities for review, he/she shall take office on the date of approval by the regulatory authorities.
Article 71 A resolution adopted at general Article 71 If a A resolution adopted at general For improving meeting is in violation of any law or administrative meeting is in violation of any law or administrative accuracy of regulation or the Hong Kong Listing Rules shall regulation or the Hong Kong Listing Rules shall be expression be invalidated. invalidated, Shareholders have the right to file a petition to a people’s court to invalidate the ⋯⋯ resolution (the provisions for dispute settlement stipulated in the Articles of Association shall apply if holders of foreign-invested shares are involved).
⋯⋯
Article 72 The nomination of candidates for Article 72 The nomination of candidates for For improving Directors or Supervisors shall be submitted by way Directors or Supervisors shall be submitted by way accuracy of of proposal to general meetings for voting. of proposal to general meetings for voting. expression
When voting on election of Directors and When voting on election of Directors and Supervisors at a general meeting, each candidate Supervisors at a general meeting, each candidate for Directors or Supervisors shall be voted on for Directors or Supervisors shall be voted on separately, or the cumulative voting system may be separately, or and the cumulative voting system adopted pursuant to the Articles of Association (H may be adopted pursuant to the Articles of Shares) or the resolution of the general meeting. Association (H Shares) or the resolution of the general meeting. ⋯⋯ ⋯⋯ ⋯⋯
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Article 77 The convener shall ensure that the Article 77 The convener shall ensure that the The amendment is meeting minutes are true, accurate and complete. meeting minutes are true, accurate and complete. made in accordance The attending Directors, Supervisors, secretary The attending Directors, Supervisors, secretary with Article 73 of the to the Board, convener or representative thereof, to the Board, convener or representative thereof, Guidance for Articles and the chairman of the meeting shall sign on the and the chairman of the meeting shall sign on the of Association of meeting minutes. The meeting minutes, together meeting minutes, and warrant that the meeting Listed Companies with the attendance register of Shareholders, proxy minutes are true, accurate and complete. The forms, and the valid information relating to the meeting minutes, together with the attendance voting results, shall be kept by the secretary to the register of Shareholders, proxy forms, and the Board at the domicile of the Bank for at least ten valid information relating to the voting results, years. shall be kept by the secretary to the Board at the domicile of the Bank for at least ten years.
Article 81 The Bank’s proposal to vary or Article 81 The Bank’s proposal to vary or For adjusting the abrogate the rights conferred any class of abrogate the rights conferred any class of numbering of cross- Shareholders shall be subject to approval by way Shareholders shall be subject to approval by way referenced Articles as of a special resolution at a general meeting and of a special resolution at a general meeting and per the amendments approval by the Shareholders of that class at a approval by the Shareholders of that class at a to the Articles of separate class meeting convened in accordance separate class meeting convened in accordance Association with the requirements of Article 138 to Article 142 with the requirements of Article 1387 to Article of the Articles of Association (H Shares). 1421 of the Articles of Association (H Shares)
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Article 82 The following circumstances shall Article 82 The following circumstances shall For improving be deemed to be a variation or abrogation of the be deemed to be a variation or abrogation of the accuracy of rights of Shareholder of a certain class: rights of Shareholder of a certain class: expression
(1) to increase or reduce the number of shares (1) to increase or reduce the number of shares of such class, or to increase or reduce the of such class, or to increase or reduce the number of shares of a class having equal number of shares of a class having equal or additional voting rights, distribution or additional voting rights, distribution rights or other privileges; rights or other privileges;
⋯⋯ ⋯⋯
(12) the variation or abrogation of the (12) the variation or abrogation of the provisions of this Chapter. provisions of this Chapter section.
Article 83 Article 83 For adjusting the numbering of cross- ⋯⋯ ⋯⋯ referenced Articles as per the amendments (1) in the case of a repurchase by the (1) in the case of a repurchase by the to the Articles of Bank of shares by pro rata offers to all Bank of shares by pro rata offers to all Association Shareholders or through public dealing on Shareholders or through public dealing the stock exchange according to Article 33 on the stock exchange according to of the Articles of Association (H Shares), Article 332 of the Articles of Association the term “interested Shareholder(s)” shall (H Shares), the term “interested mean Controlling Shareholder(s) within Shareholder(s)” shall mean Controlling the meaning of Article 354 of the Articles Shareholder(s) within the meaning of of Association; Article 3545 of the Articles of Association (H Shares);
(2) in the case of repurchasing shares through (2) in the case of repurchasing shares through an off-market agreement outside of an off-market agreement outside of the stock exchange by the Bank under the stock exchange by the Bank under Article 33 of the Articles of Association Article 332 of the Articles of Association (H Shares), the term “interested (H Shares), the term “interested Shareholder(s)” shall mean Shareholder(s) Shareholder(s)” shall mean Shareholder(s) to whom the agreement relates; to whom the agreement relates;
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Article 85 When convening a class meeting, the Article 85 When convening a class meeting, the Amended in Bank shall give written notice to all Shareholders Bank shall give written notice to all shareholders accordance with whose names appear on the register of members of whose names appear on the register of members of the Reply of the such class forty-five days prior to the convening such class and who are entitled to attending the State Council on of the meeting to inform them of the matters meeting forty-five days prior to the convening of the Adjustment to proposed to be considered and the date and venue the meeting in accordance with the requirements the Notice Period of the meeting. Shareholders who intend to attend of Article 17 of these Rules, to inform them of the for Shareholders’ the meeting shall serve written reply on the Bank matters proposed to be considered and the date and General Meetings twenty days prior to the convening of the meeting. venue of the meeting. Shareholders who intend to Applicable to attend the meeting shall serve written reply on the Overseas Listed ⋯⋯ Bank twenty days prior to the convening of the Companies meeting.
⋯⋯
Article 89 These Rules shall, upon approval by Article 89 These Rules shall, take effect upon For improving Shareholders by way of a resolution at general approval by Shareholders by way of a resolution accuracy of meeting, take effect from the effective date of the at general meeting, take effect from the effective expression Articles of Association (H Shares). date of the Articles of Association (H Shares).
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Article 1 In order to regulate the methods and Article 1 In order to regulate the methods and For improving procedures for discussions and deliberation of procedures for discussions and deliberation of accuracy of the board of directors (the “Board”) of Bank of the board of directors (the “Board”) of Bank of expression Gansu Co., Ltd. (the “Bank”), boost the efficiency Gansu Co., Ltd. (the “Bank”), boost the efficiency of operation of the Board and ensure scientific of operation of the Board and ensure scientific decision-making of the Board, these Rules of decision-making of the Board, these Rules of Procedure are formulated with reference to the Procedure are formulated with reference to the actuality of the Bank and in accordance with the actuality of the Bank and in accordance with the Company Law of the People’s Republic of China Company Law of the People’s Republic of China (the “Company Law”), the Law of the People’s (the “Company Law”), the Law of the People’s Republic of China on Commercial Banks (the Republic of China on Commercial Banks (the “Commercial Banking Law”), the Securities Law “Commercial Banking Law”), the Securities Law of the People’s Republic of China (the “Securities of the People’s Republic of China (the “Securities Law”) and other relevant laws, regulations and Law”) and other relevant laws, regulations and normative documents, as well as the Articles normative documents, as well as the Articles of Association of Bank of Gansu Co., Ltd. (the of Association of Bank of Gansu Co., Ltd. (the “Articles of Association”) and based on the actual “Articles of Association”) and based on the actual conditions of the Bank. conditions of the Bank.
Article 4 The Board shall set up a Strategy and Article 4 The Board shall set up a Strategy and Amended in Development Committee, an Audit Committee, a Development Committee, an Audit Committee, accordance Articles Nomination and Remuneration Committee, and a a Nomination and Remuneration Committee, 6 17 of the Measures Related Party Transaction and Risk Management and a Related Party Transaction and Risk of the People’s Committee, and Consumer Rights. The Strategy Management Committee, and Consumer Rights Bank of China for and Development Committee may engage and Interests Protection Committee. The the Protection of experts to form an advisory panel for studying Strategy and Development Committee may engage Financial Consumer and developing the Bank’s key development experts to form an advisory panel for studying Rights and Interests strategies. These special committees shall exercise and developing the Bank’s key development their functions and powers within the scope of strategies. These special committees shall exercise authorization of the Board and have their specific their functions and powers within the scope of rules of procedures to ensure efficient operation authorization of the Board and have their specific and scientific decision-making. rules of procedures to ensure efficient operation and scientific decision-making.
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Article 5 The terms of reference of the Board Article 5 The terms of reference of the Board Amended in are as follows: are as follows: accordance with Article 29 of ⋯⋯ ⋯⋯ the Guidelines on Corporate (5) to prepare the Bank’s annual financial (5) to prepare the Bank’s annual financial Governance of budgets, final accounts, venture capital budgets, final accounts, and venture Commercial Bank distribution plan, profit distribution plan capital distribution plan, profit distribution and plan for making up losses; plan and plan for making up losses;
(6) to assess and evaluate the performance (6) to prepare profit distribution plan and of the Directors’ duties and report to the plan for making up losses; Shareholders’ general meeting;
(7) to develop plans for increase or reduction (6)(7) to assess and evaluate the performance of the Bank’s registered capital, and of the Directors’ duties and report to the issuance of bonds or other securities and Shareholders’ general meeting; the listing thereof;
⋯⋯ ⋯⋯
(12) to appoint or dismiss the president of (12)(13) to appoint or dismiss the president of the the Bank and secretary to the Board; Bank and secretary to the Board as per and to appoint or dismiss other senior the nomination of the chairman of the management officers such as vice Board; and to appoint or dismiss vice presidents of the Bank as per the presidents, chief financial officer and nomination of the president of the Bank; other senior management officers as per the nomination of the president of the Bank;
(13) to determine the Bank’s risk management (13)(14) to determine the Bank’s risk management and internal control policies and to and internal control policies and to develop the Bank’s key management develop the Bank’s key management system; system;
(14) to regularly assess and improve the Bank’s (14)(15) to regularly assess and improve the Bank’s corporate governance; corporate governance;
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(15) to formulate proposals for amendments to (16) to formulate the basic management the Articles of Association; system of the Bank;
⋯⋯ (15)(17) to formulate proposals for amendments to the Articles of Association, to the rules of procedure for Shareholders’ general meetings and to the rules of procedure for the Board;
⋯⋯
(29) other duties and powers conferred by the laws, administrative regulations, department rules, the Articles of Association and the Shareholders’ general meeting or required by the supervisory authority for the Board to exercise.
The Board may resolve on such matters by approval of more than half of all Directors save for major matters described in items (6), (8), (10), (13) and (17) or otherwise stipulated under laws, administrative regulations, department rules and the Articles of Association, for which approval of more than two-thirds of all Directors is required.
The Board shall seek advice from the Bank’s party committee before making decisions on the Bank’s major matters.
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Article 6 Board meetings comprise routine Article 6 Board meetings comprise For improving meetings and interim meetings. Routine Board routineregular meetings and interim meetings. accuracy of meetings shall be held at least four times every RoutineRegular Board meetings shall be held at expression and year and shall be convened and presided over least once a quarter and at least four times every deleting duplicate by the chairman of the Board. If the chairman of year and shall be convened and presided over provisions the Board is unable to perform his/her duties, a by the chairman of the Board. If the chairman of Director elected by more than half of all Directors the Board is unable to perform his/her duties, a shall perform such duties. Meeting notice and Director elected by more than half of all Directors relevant meeting documents shall be given to all shall perform such duties. Meeting notice and Directors ten days before the meeting. relevant meeting documents shall be given to all Directors ten days before the meeting.
Article 7 Before giving the notice of a routine Article 7 Before giving the notice of a routine For improving Board meeting, the office of the Board shall regular Board meeting, the office of the Board accuracy of adequately consult with the Directors, and shall shall adequately consult with the Directors, expression accordingly formulate a preliminary proposal for and shall accordingly formulate a preliminary the meeting and submit the same to the chairman proposal for the meeting and submit the same of the Board for consideration. Before deciding a to the chairman of the Board for consideration. proposal, the chairman of the Board shall, where Before deciding a proposal, the chairman of the necessary, seek opinions of the president of the Board shall, where necessary, seek opinions of the Bank and other senior executives. president of the Bank and other senior executives.
Article 8 Under any of the following Under any of the following circumstances, Amended in circumstances, the chairman of the Board shall the chairman of the Board shall convene and accordance with convene an interim Board meeting within ten preside over an interim Board meeting within ten Article 110 of the workdays upon receipt of the proposal: workdays upon receipt of the proposal: Company Law
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Article 9 A proposal for convening an interim Article 9 A proposal for convening an interim Deleting duplicate Board meeting as specified in the preceding Board meeting as specified in the preceding provisions Article shall be made in written form and affixed Article shall be made in written form and affixed with the signature (seal) of the proposer, and shall with the signature (seal) of the proposer, and shall be submitted to the chairman of the Bank directly be submitted to the chairman of the Bank directly or via the office of the Board. The written proposal or via the office of the Board. The written proposal shall specify: shall specify:
⋯⋯ ⋯⋯
The chairman of the Board shall convene and The chairman of the Board shall convene and preside over an interim Board meeting within ten preside over an interim Board meeting within ten days upon receipt of the proposal. Meeting notice days upon receipt of the proposal. Meeting notice and relevant meeting documents shall be given to and relevant meeting documents shall be given to all Directors five days before the meeting. all Directors five days before the meeting.
Article 10 Both routine and interim Board Article 10 Both routine regular and interim For improving meetings should generally be held onsite. When Board meetings should generally be held onsite. accuracy of necessary, with the consent of the convener When necessary, with the consent of the convener expression (presider) and the proposer, a meeting may (presider) and the proposer, a meeting may be held by way of written resolution, or via be held by way of written resolution, or via teleconference, videoconference, facsimile or teleconference, videoconference, facsimile or other means of communication that allow effective other means of communication that allow effective communication among the Directors, provided communication among the Directors, provided that the attendees can fully express their opinions. that the attendees can fully express their opinions. Board meetings may also be held onsite and offsite Board meetings may also be held onsite and offsite simultaneously. simultaneously.
⋯⋯ ⋯⋯
Article 11 No Board meeting may be held Article 11 No Board meeting may be held unless For improving unless more than half of the Directors attend the more than half of the Directors attend the meeting. accuracy of meeting. Where there are Director(s) who have Where there are Director(s) who have material expression material interest in a matter to be resolved at a interest in a matter to be resolved at a Board Board meeting, such Board meeting shall be held meeting, such Board meeting shall be held only if only if more than 1/2 of the Directors who have no more than 1/2 half of the Directors who have no material interest in the matter are present. material interest in the matter are present.
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Article 18 Notices of Board meetings shall be Article 18 Notices of Board meetings shall be To be consistent made in writing. Notice of a routine Board meeting made in writing. Notice of a routine regular Board with Article 175 and relevant meeting materials shall be delivered meeting and relevant meeting materials shall be of the Articles of to all attendees by hand, by fax, by email or via delivered to all attendees by hand, by fax, by email Association, and for other means ten days before the meeting. Notice or via other means at least fourteen days before improving accuracy of an interim Board meeting and relevant meeting the meeting. Notice of an interim Board meeting of expression materials shall be delivered to all attendees by and relevant meeting materials shall be delivered hand, by fax, by e-mail or via other means five to all attendees by hand, by fax, by e-mail or via days before the meeting. Notices that are not other means five days before the meeting. Notices served by hand shall be confirmed by telephone that are not served by hand shall be confirmed by and record should be made accordingly. telephone and record should be made accordingly.
In case of emergency where an interim Board In case of emergency where an interim Board meeting needs to be convened as soon as possible, meeting needs to be convened as soon as possible, the notice of meeting may be given by telephone the notice period specified in the preceding or by other verbal means at any time, but the paragraph may not apply, and the notice of convener shall provide an explanation at the meeting may be given by telephone or by other meeting. verbal means at any time, but the convener shall provide an explanation at the meeting.
Article 23 The following persons or bodies of Article 23 The following persons or bodies of For improving the Bank shall have the right to make proposals: the Bank shall have the right to make proposals: accuracy of expression (1) the chairman of the Board, Directors or (1) the chairman of the Board, Directors or independent Directors; independent Directors;
(2) special committees under the Board; (2) special committees under the Board;
(3) the president of the Bank; (3) the president of the Bank;
(4) the Board of Supervisors; and (4) the Board of Supervisors; and
(5) Shareholders who individually or jointly (5) Shareholders who individually or jointly hold more than 3% of the shares of the hold more than 3% of the total voting Bank. shares of the Bank.
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Article 24 Matters to be considered at routine Article 24 Matters to be considered at For improving Board meetings or at any interim Board meeting routineregular Board meetings or at any interim accuracy of convened as proposed by the chairman of the Board meeting convened as proposed by the expression Board, shall be decided by the chairman of the chairman of the Board, shall be decided by the Board; matters to be considered at interim Board chairman of the Board; matters to be considered meetings convened as proposed by Shareholder(s) at interim Board meetings convened as proposed individually or jointly holding more than 10% of by Shareholder(s) individually or jointly holding the total voting shares of the Bank, or by more more than 10% of the total voting shares of the than one-third of the Directors, more than one-half Bank, or by more than one-third of the Directors, of the independent Directors or the president of more than one-half of the independent Directors or the Bank, shall be put forward by the proposer(s) the president of the Bank, shall be put forward by and decided by the chairman of the Board. the proposer(s) and decided by the chairman of the Board.
Article 26 The office of the Board shall go over Article 26 The office of the Board shall go over For improving proposals sent by the proposer(s), and submit proposals sent by proposer(s), and submit those accuracy of those that meet relevant requirements to relevant that meet relevant requirements to relevant special expression special committee under the Board for preliminary committee under the Board for preliminary review. review. After the special committee issues its After the special committee issues its preliminary preliminary review opinions, the chairman of review opinions, the chairman of the Board shall the Board shall decide whether to present the decide whether to present the proposals to the proposals to the routine or interim Board meeting routine regular or interim Board meeting for for consideration. consideration.
Article 28 After each proposal has been fully Article 28 After each proposal has been fully For improving discussed, the presider of the meeting shall have discussed, the presider of the meeting shall have accuracy of the proposal voted on by the attending Directors in the proposal voted on by the attending Directors in expression due time. due time.
Voting at Board meetings shall be taken by a show Voting at Board meetings shall be taken by a show of hands or by open ballot. Each Director shall of hands or by open ballot. Each Director shall have one vote, by open ballot or in writing. have one vote, by open ballot or in writing.
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Article 30 Votes cast by Directors on matters Article 30 Votes cast by Directors on matters Amended in considered at Board meetings shall clearly considered at Board meetings shall clearly accordance with indicate their affirmative or negative opinions or indicate their affirmative or negative opinions or Article 29 of abstentions. Any resolution of the Board shall be abstentions. Any resolution of the Board shall be the Guidelines passed by more than half of all Directors. In case passed by more than half of all Directors. In case on Corporate of equality of votes, the chairman of the Board of equality of votes, the chairman of the Board Governance of shall have an additional decisive vote. Resolutions shall have an additional decisive vote. Resolutions Commercial Banks concerning material matters such as profit concerning material matters such as profit distribution, material investment, plan for material distribution, increase or reduction of registered disposal of assets, and appointment or dismissal capital, issuance of bonds, merger, division, of the president of the Bank or other senior dissolution or change of corporate form of management officers, shall be passed by more than the Bank, material investment, plan for material two-thirds of all Directors. disposal of assets, appointment or dismissal of the president of the Bank or other senior management officers, amendments to the Articles of Association, amendments to the Rules of Procedure for Shareholders’ General Meetings and amendments to the Rules of Procedure for the Board of Directors, shall be passed by more than two-thirds of all Directors.
Article 33 Voting by means of communications Article 33 Voting by means of communications Amended in is allowed at Board meetings, provided that is allowed at Board meetings, provided that accordance with Directors can fully express their opinions. Directors can fully express their opinions. Article 29 of However, voting by communications is not allowed However, voting by communications is not allowed the Guidelines for material matters such as profit distribution for material matters such as profit distribution on Corporate plan, material external investment, plan for plan, material external investment, plan for Governance of material disposal of assets, and appointment or material disposal of assets, and appointment Commercial Banks dismissal of the president of the Bank or other or dismissal of the President or other senior senior management officers. management officers, capital replenishment plan, material changes in interest equity and ⋯⋯ financial restructuring.
⋯⋯
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 41 Minutes shall be kept for Board Article 41 Minutes shall be kept for Board Amended in meetings, which shall contain: meetings, which shall contain: accordance with Article 123 of (1) session, time and venue of the meeting (1) sessionthe date, time and venue of the the Guidance for and form of convening; meeting and form of conveningnames of the Articles of the convener and presider; Association of Listed (2) dispatch of meeting notice; Companies, and for (2) dispatch of meeting notice; improving accuracy (3) convener and presider of the meeting; of expression (3) convener and presider of the meeting; (4) attendance of Directors in person or by proxy; (4) attendance of Directors in person or by proxy; (5) proposals for consideration at the meeting, main points and opinions of each Director (5) proposals for consideration at the meeting, on relevant matters and their intents of main points and opinions of each Director voting on proposals; on relevant matters and their intents of voting on proposals; (6) the main points of Directors’ speeches; (2) names and titles of Directors and (7) the voting method for and voting result of proxies attending the meeting; each resolution (the voting result shall set out the respective numbers of pros, cons (3) names and titles of people attending the and abstentions); and meeting as nonvoting participants;
(8) other matters that the attending Directors (4) meeting agenda; believed should be explained and recorded in the minutes. (6)(5) the main points of Directors’ speeches; and
(7)(6) the voting method for and voting result of each resolution (the voting result shall set out the respective numbers of pros, cons and abstentions).; and
(8) other matters that the attending Directors believed should be explained and recorded in the minutes.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 45 Directors shall be responsible for Article 45 Directors shall be responsible for Amended in the resolutions passed at Board meetings. If any the resolutions passed at Board meetings. If any accordance with resolution of the Board runs counter to the laws resolution of the Board runs counter to the laws Article 3 of the and regulations, the Articles of Association or and regulations, the Articles of Association or Opinions on resolutions of the shareholders’ general meeting, resolutions of the shareholders’ general meeting, Further Promoting thereby incurring material losses to the Bank, thereby incurring material losses to the Bank, the Standardized the Directors adopting the said resolution shall the Directors adopting the said resolution shall Operations and In- be liable for compensating the Bank. However, be liable for compensating the Bank. However, depth Reform of where a Director is proved as having expressed where a Director is proved as having expressed Overseas Listed dissenting opinions on the resolution when it was dissenting opinions on the resolution when it was Companies 《關於進( put to the vote and such opinions are recorded in put to the vote and such opinions are recorded in 一步促進境外上市公 the minutes of the meeting, such Director may be the minutes of the meeting, such Director may 司規範運作和深化改 exempt from liability. be exempt from liability. Any Director who has 革的意見》) abstained from voting or who has not attended the meeting in person or by proxy shall not be exempted from liability; and any Director who has explicitly expressed dissenting opinions in the course of discussion but failed to vote against the resolution shall not be exempted from liability.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 1 In order to regulate the operation Article 1 In order to regulate the operation For improving procedures of the Board of Supervisors of Bank procedures of the Board of Supervisors of Bank accuracy of of Gansu Co., Ltd. (the “Bank”), ensure the of Gansu Co., Ltd. (the “Bank”), ensure the expression independent excise of supervisory rights by the independent excise of supervisory rights by the Board of Supervisors according to the laws, these Board of Supervisors according to the laws, these Rules of Procedure are formulated with reference Rules of Procedure are formulated with reference to the actuality of the Bank and in accordance to the actuality of the Bank and in accordance with the Company Law of the People’s Republic with the Company Law of the People’s Republic of China (the “Company Law”), the Law of of China (the “Company Law”), the Law of the People’s Republic of China on Commercial the People’s Republic of China on Commercial Banks (the “Commercial Banking Law”), the Banks (the “Commercial Banking Law”), the Securities Law of the People’s Republic of China Securities Law of the People’s Republic of China (the “Securities Law”), the Special Provisions (the “Securities Law”), the Special Provisions of the State Council Concerning the Floatation of the State Council Concerning the Floatation and Listing Abroad of Stocks by Limited Stock and Listing Abroad of Stocks by Limited Stock Companies (the “Special Provisions”), the Companies (the “Special Provisions”), the Mandatory Provisions for Articles of Association Mandatory Provisions for Articles of Association of Companies to be Listed Overseas (the of Companies to be Listed Overseas (the “Mandatory Provisions”), the Guidelines on “Mandatory Provisions”), the Guidelines on Corporate Governance of Commercial Banks, the Corporate Governance of Commercial Banks, Reply on Opinions Concerning the Supplement the Working Guidelines on the Board of and Amendment to Articles of Association by Supervisors of Commercial Banks, the Reply Companies to be Listed in Hong Kong (“Zheng on Opinions Concerning the Supplement and Jian Hai Han”), the Rules Governing the Listing Amendment to Articles of Association by of Securities on The Stock Exchange of Hong Companies to be Listed in Hong Kong (“Zheng Kong Limited (the “Hong Kong Listing Rules”), Jian Hai Han”), the Rules Governing the Listing other laws, regulations, normative documents and of Securities on The Stock Exchange of Hong the Articles of Association of Bank of Gansu Co., Kong Limited (the “Hong Kong Listing Rules”), Ltd. (the “Articles of Association”). other laws, regulations, normative documents and the Articles of Association of Bank of Gansu Co., Ltd. (the “Articles of Association”).
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 2 The Board of Supervisors is a standing Article 2 The Board of Supervisors is a standing Amended in supervisory body of the Bank and is accountable supervisory body of the Bank and is accountable accordance with the to the general meeting. It supervises the legality to the general meeting. It supervises the legality Article 28 of the and compliance of the financial activities of and compliance of the financial activities Working Guidelines the Bank and the performance of the directors, management, related-party transactions on the Board of president and other senior management officers and other material matters of the Bank and Supervisors of based on its duties as stipulated under the laws, the performance of the directors, president and Commercial Banks regulations and the Articles of Association, to other senior management officers based on its safeguard the legitimate rights and interests of the duties as stipulated under the laws, regulations Bank and its shareholders. and the Articles of Association, to safeguard the legitimate rights and interests of the Bank and its shareholders.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 3 The Board of Supervisors shall be Article 3 The Board of Supervisors shall be Amended in accountable to the general meeting and exercise accountable to the general meeting and exercise accordance with the following functions and powers according to the following functions and powers according to the Article 32 of the laws: the laws: the Guidelines on Corporate (1) to review the regular reports of the Bank (1) to review the regular reports of the Bank Governance of prepared by the Board of Directors and prepared by the Board of Directors and Commercial Banks, express its written opinions; express its written opinions; and for improving accuracy of (2) to examine and supervise the financial (2) to examine and supervise the financial expression activities of the Bank; activities of the Bank;
(3) to monitor the performance of duties by (3) to be present at meetings of the Board the directors and senior management of Directors without voting rights; officers and to propose the dismissal of directors, president and other senior (3)(4) to monitor the performance of duties by management member who have violated the directors and senior management laws, administrative regulations, the officers and to propose the dismissal Articles of Association or resolutions of of directors, president and other senior the general meeting; management member who have violated ...... laws, administrative regulations, the Articles of Association or resolutions of (8) to assess and evaluate the performance the general meeting; of duties of supervisors and report to the ...... general meeting;
(9) to report to the general meeting; (8)(9) to assess and comprehensively evaluate the performance of duties of directors, supervisors and senior management officers, report the performance evaluation of directors and supervisors to the regulatory authorities and report the evaluation results to the general meeting;
(10) to supervise the business decisions, risk (9)(10) to report to the general meeting; management and internal control of the Bank and urge the rectification of problems;
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
(10) to supervise the business decisions, risk management and internal control of the Bank and urge the rectification of problems;
(11) to conduct audit on resigning directors (11) to conduct audit on resigning directors and senior management officers when and senior management officers when necessary; necessary;
(12) to negotiate with directors or file a lawsuit (12) to negotiate with directors or file a lawsuit against directors and senior management against directors and senior management on behalf of the Bank in accordance with on behalf of the Bank in accordance the Company Law; with the Company Law of the People’s Republic of China;
(13) to investigate any abnormality found in (13) to investigate any abnormality found in the operation of the Bank; if necessary, to the operation of the Bank; if necessary, to engage accounting firms, law firms and engage accounting firms, law firms and other professional institutions to assist its other professional institutions to assist its work at the expense of the Bank; work at the expense of the Bank;
(14) to propose remuneration (or allowance) (14) to propose remuneration (or allowance) arrangements for supervisors; arrangements for supervisors;
(15) to supervise the directors and senior (15) to supervise the directors and senior management officers in performance management officers in performance of their anti-money laundering duties of their anti-money laundering duties according to the laws, evaluate the according to the laws, evaluate the performance of directors and senior performance of directors and senior management officers in money laundering management officers in money laundering risk management, and report the same to risk management, and report the same to the general meeting; the general meeting;
(16) to exercise other functions and powers (16)(15) to exercise other functions and powers conferred by the laws, administrative conferred by the laws, administrative regulations and the Articles of Association regulations and the Articles of Association or by the general meeting. or by the general meeting.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Supervisors may be present meetings of the Board Supervisors may be present at meetings of the of Directors without voting rights. Board of Directors without voting rights..
Article 108 of the Mandatory Provisions Article 108 of the Mandatory Provisions
In addition to the above duties, the Board of Supervisors shall also focus on the matters relating to the Bank’s strategic planning, business decision, risk management, internal control, procedures for selection and appointment of directors and their remuneration management, related party transactions, anti-money laundering and consumer rights and interests protection, and supervise the Bank’s implementation of the aforesaid works.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 4 The chairman of the Board of Article 4 The chairman of the Board of Amended in Supervisors presides over the work of the Board Supervisors presides over the work of the Board accordance with the of Supervisors. The chairman of the Board of of Supervisors. The chairman of the Board of Article 22 of the Supervisors exercises the following functions and Supervisors shall exercises the following functions Working Guidelines powers: and powers: on the Board of Supervisors of (1) to convene and preside over the work of (1) to convene and preside over the work Commercial Banks, the Board of Supervisors; meetings of the Board of Supervisors; and for improving accuracy of (2) to supervise and inspect the (2) to supervise and inspect the expression implementation of resolutions of the implementation of resolutions of the Board of Supervisors; Board of Supervisors;
(2) to organise the fulfillment of duties of the Board of Supervisors;
(3) to review and execute reports and other (3) to review and execute reports and other important documents of the Board of important documents of the Board of Supervisors; Supervisors;
(4) to supervise and inspect the implementation of resolutions of the Board of Supervisors; (4) (5) to report to the general meeting or (4) to report to the general meeting or shareholders’ meeting on behalf of the Board of shareholders’ meeting on behalf of the Supervisors; Board of Supervisors; (5) to organise the fulfillment of duties of the (5) to organise the fulfillment of duties of the Board of Supervisors; Board of Supervisors; (6) other functions and powers as provided by (6) other functions and powers as provided by the laws, administrative regulations and the laws, administrative regulations and the Articles of Association. the Articles of Association.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 5 The Board of Supervisors shall Article 5 The Board of Supervisors shall The Board of establish a supervision committee, a nomination establish a supervision committee, and a Supervisors canceled committee and an audit committee, the chairmen nomination committee and an audit committee, the the audit committee of which shall be an external supervisor. Each chairmen of which shall be an external supervisor. thereunder, and for committee shall carry out its work as authorized by Each committee shall carry out its work as improving accuracy the Board of Supervisors and shall be accountable authorized by the Board of Supervisors and shall of expression to the Board of Supervisors. The responsibilities be accountable to the Board of Supervisors. The of each committee are prescribed separately. responsibilities of each committee are prescribed separately in their working rules. The Board of Supervisors may engage professional institutions such as law firms and accounting firms The Board of Supervisors may engage professional during its performance of duties, and the expenses institutions such as law firms and accounting firms incurred therefrom shall be borne by the Bank. during its performance of duties, and the expenses incurred therefrom shall be borne by the Bank.
Article 7 The Board of Supervisors shall Amended in report to the Party Committee of the Bank in accordance with advance when deliberating major supervision Certain Opinions matters and identifying major issues, so on Upholding the as to obtain support and receive necessary Party’s Leadership supervision from the Party Committee. and Strengthening the Party’s Construction during Deepening Reform of State-owned Enterprises
Article 7 Meetings of the Board of Supervisors Article 78 The rules of procedure for Meetings For improving include regular meetings and interim meetings. of the Board of Supervisors include daily accuracy of Regular meetings of the Board of Supervisors supervision, supervision through regular expression shall be held at least four times a year and at least meetings and supervision through interim once every six months. meetings. Regular meetings of the Board of Supervisors shall be held at least four times a year and at least once every six months.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 8 In any of the following circumstances, Article 89 In any of the following circumstances, For improving the chairman of the Board of Supervisors shall the chairman of the Board of Supervisors shall accuracy of convene an interim meeting of the Board of convene an interim meeting of the Board of expression Supervisors within ten working days: Supervisors within ten working days:
(1) deemed necessary by the chairman of the (1) deemed necessary by the chairman of the Board of Supervisors; Board of Supervisors;
(2) proposed by more than one third of the (2) proposed in written by more than one third supervisors; of the supervisors;
(3) the general meeting or the meeting of (3) the general meeting or the meeting of the Board of Directors have passed the Board of Directors have passed any resolution which violates laws, any resolution which violates laws, regulations, rules, provisions and regulations, rules, provisions and requirements of the regulatory authorities, requirements of the regulatory authorities, the Articles of Association, resolutions the Articles of Association, resolutions of the general meeting and other relevant of the general meeting and other relevant provisions; provisions;
(4) improper acts of directors and senior (4)(3) improper acts of directors and senior management officers may possibly give management officers may possibly give rise to material damages to the Bank or rise to material damages to the Bank or bad impacts on the market; bad impacts on the market;
(5) the shareholders bring a lawsuit against (5)(4) the shareholders bring a lawsuit against the Bank, directors, supervisors or senior the Bank, directors, supervisors or senior management officers; management officers;
(6) the regulatory authorities require holding (6)(5) the regulatory authorities require holding such a meeting. such a meeting.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 9 If a supervisor proposes to convene Article 9 If a supervisor proposes to convene For improving an interim meeting of the Board of Supervisors, an interim meeting of the Board of Supervisors, accuracy of a written proposal signed by the proposing a written proposal signed by the proposing expression supervisor shall be submitted to the office of the supervisor shall be submitted to the office of the Board of Supervisors or directly to the chairman Board of Supervisors or directly to the chairman of the Board of Supervisors. The written proposal of the Board of Supervisors. The written proposal shall state the following matters: shall state the following matters:
(1) the name of the proposing supervisor; (1) the name of the proposing supervisor;
(2) the reasons or objective causes on which (2) the reasons or objective causes on which the proposal is based; the proposal is based;
(3) the time or timeframe, venue and form of (3) the time or timeframe, venue and form of the proposed meeting; the proposed meeting;
(4) the explicit and specific proposals; (4) the explicit and specific proposals;
(5) the contact information of the proposing (5) the contact information of the proposing supervisor and the date of proposal, etc. supervisor and the date of proposal, etc.
Within three days upon the receipt of written Within three days upon the receipt of written proposal of supervisors by the office of the Board proposal of supervisors by the office of the Board of Supervisors or the chairman of the Board of of Supervisors or the chairman of the Board of Supervisors, the office of the Board of Supervisors Supervisors, the office of the Board of Supervisors shall issue the notice of convening the interim shall issue the notice of convening the interim meeting of the Board of Supervisors. meeting of the Board of Supervisors.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 10 Meetings of the Board of Supervisors Article 10 Meetings of the Board of Supervisors Amended in shall be held onsite. shall be held by means of onsite meeting, accordance with the communication meeting or written proposal. A Article 55 of the Under emergency circumstances, voting may communication meeting refers to a meeting held Working Guidelines be executed by way of communication for a by utilizing telephone, video or communication on the Board of meetings of Board of Supervisors, however, equipment that enable all attending supervisors Supervisors of the convener(chairperson) of the meeting shall to hear clearly and communicate with each Commercial Banks elaborate specific emergency to the supervisors other in real time, provided that the supervisors present at the meeting. When voting by way can fully express their opinions. of communications, supervisors shall, after confirming their votes by signing a written Under emergency circumstances, voting may opinion on the matter considered and his/her be executed by way of communication for a voting intention, fax the same to the office of the meetings of Board of Supervisors, however, Board of Supervisors. Supervisors shall not merely the convener(chairperson) of the meeting shall specify their voting opinions without expressing elaborate specific emergency to the supervisors their written opinions or reasons for voting. present at the meeting. When voting by way of communications, supervisors shall, after confirming their votes by signing a written opinion on the matter considered and his/her voting intention, fax the same to the office of the Board of Supervisors. Supervisors shall not merely specify their voting opinions without expressing their written opinions or reasons for voting.
Article 13 Notices and documents of the Article 13 Notices and documents of the For improving meetings shall be given in writing to all meetings shall be given in writing to all accuracy of supervisors ten days prior to the regular meeting supervisors ten days prior to the regular meeting expression and three working days prior to the interim and three working days prior to the interim meeting by the Board of Supervisors. If the notice meeting by the office of the Board of Supervisors. is not delivered directly, it shall be confirmed by If the notice is not delivered directly, it shall telephone and be recorded accordingly. be confirmed by telephone and be recorded ...... accordingly. ⋯⋯
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 14 A notice of a meeting of the Board of Article 14 A notice of a meeting of the Board of Amended in Supervisors shall include the following contents: Supervisors shall include the following contents: accordance with the Article 148 (1) the date and venue of the meeting; (1) the date and venue of the meeting; of the Guidelines on Articles of (2) duration of the meeting; (2) duration of the meeting; Association of Listed Companies (3) reasons and topics proposed for (3) reasons and topics proposed for consideration at the meeting; consideration at the meeting;
(4) convener and presider of the meeting, (4) convener and presider of the meeting, proposer of and written proposal for an proposer of and written proposal for an interim meeting; interim meeting;
(5) members attending or present at the (5) members attending or present at the meeting whether or not with voting rights; meeting whether or not with voting rights;
(6) the meeting materials need for voting by (6)(4) the meeting materials need for voting by supervisors; supervisors;
(7) the requirement that the supervisors shall (7) the requirement that the supervisors shall attend the meeting in person; attend the meeting in person;
(8) the name and contact information of the (8) the name and contact information of the contact person of the meeting; contact person of the meeting;
(9) date of the notice. (9)(5) date of the notice.
The oral notice of a meeting shall at least include The oral notice of a meeting shall at least include the contents set out in provisions (1) and (2) above the contents set out in provisions (1) and (2) above and an explanation why an interim meeting should and an explanation why an interim meeting should be convened as soon as possible in any emergency. be convened as soon as possible in any emergency.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 16 Supervisors shall be present in Article 16 Supervisors shall be present in Amended in person at meetings of the Board of Supervisors. person at meetings of the Board of Supervisors. accordance with the If a supervisor is unable to attend a meeting in If a supervisor is unable to attend a meeting in Article 21 of the person for any reason, he/she may appoint another person for any reason, he/she may appoint another Working Guidelines supervisor in writing to attend the meeting on his/ supervisor in writing to attend the meeting on on the Board of her behalf. An external supervisor may appoint his/her behalf. However, a supervisor shall Supervisors of another external supervisor to attend the meeting not accept the appointment of more than Commercial Banks on his/her behalf. two supervisors at a meeting of the Board of Supervisors. An external supervisor may appoint another external supervisor to attend the meeting on his/her behalf.
The power of attorney shall set out the name of the The power of attorney shall set out the name of the proxy supervisor, the matters represented, scope proxy supervisor, the matters represented, scope of authorization and validity period, and shall be of authorization and validity period, and shall be signed or sealed by the appointing supervisor. signed or sealed by the appointing supervisor.
The proxy supervisor attending the meeting shall The proxy supervisor attending the meeting shall exercise rights within the scope of authorization. If exercise rights within the scope of authorization. If a supervisor fails to attend a meeting of the Board a supervisor fails to attend a meeting of the Board of Supervisors in person or by proxy, he/she shall of Supervisors in person or by proxy, he/she shall be deemed to have waived his/her voting rights at be deemed to have waived his/her voting rights at the meeting. the meeting.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 17 A supervisor who fails to attend two Article 17 A supervisor who fails to attend two For improving consecutive meetings of the Board of Supervisors consecutive meetings of the Board of Supervisors accuracy of in person or by proxy shall be deemed to be in person or by proxy, or an external supervisor expression unable to perform his/her duties. The Board of fails to attend two consecutive meetings, shall Supervisors shall propose to the general meeting, be deemed to be unable to perform his/her duties. the shareholders’ meeting or the employee The Board of Supervisors shall propose to the representative meeting to remove such supervisor. general meeting, the shareholders’ meeting or the employee representative meeting to remove such supervisor.
Where the number of meetings of the Board of Where the number of meetings of the Board of Supervisors attended by an external supervisor in Supervisors attended by an external supervisor in person is less than two-thirds of the total number person is less than two-thirds of the total number of the meetings of the Board of Supervisors held of the meetings of the Board of Supervisors held within one year, or where an external supervisor within one year, or where an external supervisor fails to attend the meetings in person or by fails to attend the meetings in person or by proxy for two consecutive times, the Board of proxy for two consecutive times, the Board of Supervisors shall propose to the general meeting Supervisors shall propose to the general meeting to remove such external supervisor. to remove such external supervisor.
Article 19 The topics of a meeting of the Article 19 The topics of a meeting of the Amended in Board of Supervisors shall be determined by the Board of Supervisors shall be determined by the accordance with the chairman of the Board of Supervisors. When chairman of the Board of Supervisors. When more Article 19 of the more than one third of the supervisors propose to than one third of the supervisors and all external Working Guidelines convene a meeting of the Board of Supervisors, supervisors propose to convene a meeting of on the Board of the topics shall be put forward by the proposer, the Board of Supervisors, the topics shall be put Supervisors of and the chairman of the Board of Supervisors may forward by the proposer, and the chairman of the Commercial Banks determine the topics of the meeting according to Board of Supervisors may determine the topics the requests of the proposer. of the meeting according to the requests of the proposer.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 21 Matters subject to consideration by Article 21 Matters subject to consideration by The Board of the Board of Supervisors include: the Board of Supervisors include, but not limited Supervisors canceled to the followings: the audit committee thereunder, and for (1) to consider the Bank’s annual, interim (1) to consider the Bank’s annual, interim improving accuracy and quarterly financial and operational and quarterly financial and operational of expression reports, and to provide advice and reports, and to provide advice and recommendations; recommendations;
(2) to analyze and evaluate the Bank’s (2) to analyze and evaluate the Bank’s budget implementation, asset operation, budget implementation, asset operation, asset quality, internal control and asset quality, internal control and implementation of major investment implementation of major investment decisions; decisions;
(3) to discuss the work report, work plan (3) to consider the work report, work plan and work summary of the Board of and work summary of the Board of Supervisors; Supervisors;
(4) to discuss the audit report of the Audit (4) to discuss the audit report of the Audit Committee; Committee consider the supervision and inspection report of the special committees under the Board of Supervisors;
(5) to discuss the supervision opinions on (5) to discuss consider the supervision the performance of duties by directors, opinions on the performance of duties president and other senior management by directors, president and other senior officers; and management officers; and
(6) other reports and opinions required to be (6) other reports and opinions required to be issued by the Board of Supervisors. issued by the Board of Supervisors.
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REASONS FOR ORIGINAL ARTICLES AMENDED ARTICLES OR BASIS OF AMENDMENT
Article 23 When voting at a meeting of the Article 23 When voting at a meeting of the For improving Board of Supervisors, each supervisor shall have Board of Supervisors, each supervisor shall have accuracy of one vote for each proposal, which shall be made one vote for each proposal, which shall be made expression in registered form and in writing. in registered form and in writing.
Article 27 When a proposal is related to a Article 27 When the relevant proposal is For improving supervisor, the supervisor shall withdraw from the related to a supervisor, the supervisor shall accuracy of meeting and abstain from voting. voluntarily withdraw from the meeting and expression abstain from voting .
Article 30 Before the resolutions of the Board Article 30 Before the resolutions of the Board For improving of Supervisors are disclosed through channels, of Supervisors are disclosed through official accuracy of all persons attending the meeting shall not channels, all persons attending the meeting shall expression disclose any confidential information in any way, not disclose any confidential information in any otherwise the persons concerned shall bear all way, otherwise the persons concerned shall bear consequences and be taken legal actions according all consequences and be taken corresponding to the circumstances. legal actions according to the circumstances.
Article 34 Meeting documents of the Board of Article 34 Meeting documents of the Board of Amended in Supervisors, including meeting notices, meeting Supervisors, including meeting notices, meeting accordance with materials, attendance book, recording materials, materials, attendance book, recording materials, the Article 147 voting ballots, meeting minutes signed and voting ballots, meeting minutes signed and of the Guidelines confirmed by the attending supervisors, shall be confirmed by the attending supervisors, shall on Articles of kept by persons designated by the chairman of the be kept permanently by persons designated by Association of Listed Board of Supervisors. the chairman of the Board of Supervisors as Companies archives of the Bank.
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Article 35 The meeting materials of the Board Article 35 The meeting materials of the Board For deleting the of Supervisors shall be kept for at least 10 years. of Supervisors shall be kept for at least 10 years. duplicate provisions
Article 39 These rules and any amendments Article 398 These rules and any amendments For improving thereto are formulated by the Board of thereto are formulated by the Board of Supervisors accuracy of Supervisors and, upon approval by way of a of Bank of Gansu Co., Ltd. and, upon approval expression resolution at general meeting, shall be effective by way of a resolution at general meeting, shall and adopted from the effective date of the Articles be effective and adopted from the effective date of Association of the Bank. of the Articles of Association of the Bank.
Article 40 These rules shall be interpreted by Article 4039 These rules shall be interpreted by For improving the Board of Supervisors. the Board of Supervisors of Bank of Gansu Co., accuracy of Ltd.. expression
Note: Due to the addition or deletion of some articles in the amendments to the Rules of Procedure for the Board of Supervisors, the numbering of all articles shall be adjusted accordingly, which will not be separately explained.
– 122 – ANNEX 10 GENERAL MANDATE TO ISSUE SHARES
In order to keep the capital adequacy ratio constantly remaining at the required level, meet the capital requirement of the Bank for its continuous business development, utilize financing platforms flexibly and effectively and take advantage of opportunities in the capital market in a timely manner, it is proposed that the Board approve and propose the general meeting to approve the proposal for granting the Board a general mandate to issue shares and matters including authority delegation by the Board, according to the requirements of applicable laws and regulations of the PRC, the Hong Kong Listing Rules and the Articles of Association.
I. PARTICULARS OF THE GENERAL MANDATE TO ISSUE SHARES
(1) Subject to the conditions set out in (2) below, the Board shall be authorized to separately or concurrently ratify, allot, issue, grant and/or otherwise deal with Shares (overseas listed foreign Shares and/or Domestic Shares (including A Shares)), securities convertible into Shares, share options and warrants of securities that are entitled to subscribe for any Shares or are convertible into Shares, or other securities that carry rights to subscribe for or are convertible into Shares during the Relevant Period (as defined below).
Notwithstanding the fulfillment of the conditions set out in (2) below, the Board of the Bank shall obtain a separate mandate by way of a special resolution prior to making the allotment of Shares with voting rights if such allotment will result in an actual change of the control rights of the Bank.
(2) The number of Shares (overseas listed foreign Shares and/or Domestic Shares (including A Shares)), securities convertible into Shares, share options and warrants of securities that are entitled to subscribe for any Shares or are convertible into Shares, or other securities that carry rights to subscribe for or are convertible into Shares (among which, the above securities shall be calculated on the basis of the number of overseas listed foreign Shares/Domestic Shares which such securities can be converted into/be allotted) proposed to be ratified, allotted, issued, granted and/or otherwise dealt with by the Board shall not respectively exceed 20% of the total number of each category of the overseas listed foreign Shares and Domestic Shares of the Bank in issue as at the date on which this resolution is passed at the AGM.
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(3) For the purposes of this resolution, “Relevant Period” means the period from the date on which this special resolution is passed at the general meeting until the earliest of:
1. the conclusion of the next AGM of the Bank following the date on which this resolution is passed;
2. the expiration of twelve months following the date on which this resolution is passed at the general meeting;
3. the date on which the authority granted to the Board under this resolution is revoked or varied by a special resolution at a general meeting.
(4) The Board shall be authorized to determine the details of the issuance plan, including but not limited to:
1. the class and number of Shares proposed to be issued;
2. the pricing methods and/or the issue price (including the price range);
3. the commencement and closing dates of the issuance;
4. the specific use of proceeds;
5. the making or granting of recommendations, agreements and options which might require the exercise of such powers;
6. other contents that should be included in the detailed issuance plan as required under relevant laws and regulations and other normative documents, and as requested by relevant regulatory authorities and the stock exchange of the listing place.
– 124 – ANNEX 10 GENERAL MANDATE TO ISSUE SHARES
(5) The Board shall be authorized to implement the issuance plan and deal with the matters related to an increase in the registered capital of the Bank, so as to reflect the Shares authorized to be issued by the Bank under this resolution, and to make such amendments as it deems appropriate and necessary to the clauses related to the issuance of Shares and registered capital in the Articles of Association, and to adopt and complete any other actions and procedures which are necessary for the implementation of the issuance plan and the completion of the increase in the registered capital of the Bank.
II. RELEVANT AUTHORIZATION
In order to improve the efficiency of decision-making, reduce internal approval procedures and grasp market opportunities, it is proposed that the Board approve and the Board in turn propose the general meeting to authorize the Board and the persons authorized by the Board to deal with the matters in connection with the issuance of Shares under the general mandate. The above specific details of the authorization given to the authorized persons by the Board will be separately determined upon the exercise of the general mandate by the Board under this resolution.
This proposal is subject to consideration at the general meeting.
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The Bank proposes the following amendments to the Articles of Association:
REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 1 To safeguard the legitimate rights and interests of Article 1 To safeguard the legitimate rights and interests of The amendment is made Bank of Gansu Co., Ltd. (the “Bank”), its shareholders and Bank of Gansu Co., Ltd. (the “Bank”), its shareholders and in accordance with creditors, and to regulate the organization and activities of the creditors, and to regulate the organization and activities of the Working Regulations of Bank, the Articles of Association (the “Articles of Association”) Bank, the Articles of Association (the “Articles of Association”) the Communist Party of have been formulated in accordance with the Company Law of have been formulated in accordance with the Company Law of China on the Grassroots the People’s Republic of China (the “Company Law”), the Law of the People’s Republic of China (the “Company Law”), the Law of Organization of State-owned the People’s Bank of China of the PRC, the Banking Supervision the People’s Bank of China of the PRC, the Banking Supervision Enterprises (Trial) and Regulatory Law of the PRC, the Commercial Banking Law and Regulatory Law of the PRC, the Commercial Banking Law of the PRC (the “Commercial Banking Law”), the Securities Law of the PRC (the “Commercial Banking Law”), the Securities Law of the PRC (the “Securities Law”), the Special Provisions of the of the PRC (the “Securities Law”), the Special Provisions of the State Council Concerning the Floatation and Listing Abroad of State Council Concerning the Floatation and Listing Abroad of Stocks by Limited Stock Companies (the “Special Provisions”), the Stocks by Limited Stock Companies (the “Special Provisions”), the Mandatory Provisions for Articles of Association of Companies to Mandatory Provisions for Articles of Association of Companies to be Listed Overseas (the “Mandatory Provisions”), the Guidelines be Listed Overseas (the “Mandatory Provisions”), the Guidelines on Corporate Governance of Commercial Banks, the Reply on on Corporate Governance of Commercial Banks, the Reply on Opinions Concerning the Supplement and Amendment to Articles Opinions Concerning the Supplement and Amendment to Articles of Association by Companies to be Listed in Hong Kong (“Zheng of Association by Companies to be Listed in Hong Kong (“Zheng Jian Hai Han”), the Rules Governing the Listing of Securities Jian Hai Han”), the Rules Governing the Listing of Securities on on The Stock Exchange of Hong Kong Limited (the “Hong The Stock Exchange of Hong Kong Limited (the “Hong Kong Kong Listing Rules”) and other laws, administrative regulations, Listing Rules”), Working Regulations of the Communist Party departmental rules, normative documents and relevant requirements of China on the Grassroots Organization of State-owned of the securities regulatory authorities in the place where the Enterprises (Trial), and other laws, administrative regulations, Bank’s shares are listed. departmental rules, normative documents and relevant requirements of the securities regulatory authorities in the place where the Bank’s shares are listed.
Article 9 The Articles of Association have been adopted at the Article 9 The Articles of Association have been adopted at the To improve the accuracy general meeting of the Bank as a special resolution and approved general meeting of the Bank as a special resolution and become of expression according to by the competent authorities, and shall become effective from the effective from the date of approved by the competent authorities, the actual conditions of the date of listing and trading of the overseas listed foreign shares (H approval by the banking regulatory authorities under the State Bank Shares) issued under the public offering of the Bank on The Stock Council and shall become effective from the date of listing and Exchange of Hong Kong Limited (“Hong Kong Stock Exchange”). trading of the overseas listed foreign shares (H Shares) issued under the public offering of the Bank on The Stock Exchange of Hong ⋯⋯ Kong Limited (“Hong Kong Stock Exchange”).
⋯⋯
– 126 – ANNEX 11 AMENDMENTS TO THE ARTICLES OF ASSOCIATION
REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 14 The organization of the Communist Party of China of Article 14 The organization of the Communist Party of China The amendment is made the Bank shall carry out the activities of the Communist Party of of the Bank shall carry out the activities of the Communist Party in accordance with China in accordance with the regulations of the Constitution of the of China in accordance with the regulations of the Constitution of Working Regulations of Communist Party of China. the Communist Party of China and Working Regulations of the the Communist Party of Communist Party of China on the Grassroots Organization of China on the Grassroots State-owned Enterprises (Trial). Organization of State-owned Enterprises (Trial)
Article 18 As registered with the registration authorities and Article 18 As registered with the registration authorities and as For unifying the names as approved by the China Banking Regulatory Commission and approved by the China Banking Regulatory Commission banking of banking regulatory the People’s Bank of China, the business scope of the Bank shall regulatory authorities under the State Council and the People’s authorities in the Articles of include: Bank of China, the business scope of the Bank shall include: Association, and updating business scope in accordance ⋯⋯ ⋯⋯ with the changed business license (13) providing safe deposit box service; (13) providing safe deposit box service;
(14) providing settlement and sales of foreign exchange services; (14) providing settlement and sales of foreign exchange services; and and
(15) engaging in other businesses approved by the banking (15) providing RMB and foreign currency exchange business; regulatory authorities under the State Council. (156) engaging in other businesses approved by the banking regulatory authorities under the State Council.
– 127 – ANNEX 11 AMENDMENTS TO THE ARTICLES OF ASSOCIATION
REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 23 The Bank shall issue shares in a fair and just manner, Article 23 The Bank shall issue shares in a fair, and just and The amendment is made in and shares of the same class shall rank pari passu with each other. open manner, and shares of the same class shall rank pari passu accordance with Article 15 with each other. of the Guidance for Articles of Association of Listed Companies
Article 25 Upon approval by the approval authorities authorized Article 25 Upon approval by the approval authorities authorized For improving the accuracy by the State Council, the Bank may issue a total number of by the State Council, the Bank may issued a total number of of expression 10,069,791,330 ordinary shares. 10,069,791,330 ordinary shares.
The capital structure of the Bank is 10,069,791,330 ordinary shares, The capital structure of the Bank is 10,069,791,330 ordinary shares, including 7,525,991,330 domestic shares, accounting for 74.7383% including 7,525,991,330 domestic shares, accounting for 74.7383% of the total ordinary shares issued by the Bank; and 2,543,800,000 of the total ordinary shares issued by the Bank; and 2,543,800,000 H shares, accounting for 25.2617% of the total ordinary shares H shares, accounting for 25.2617% of the total ordinary shares issued by the Bank. issued by the Bank.
Article 28 The registered capital of the Bank is Article 28 The registered capital of the Bank is As the content of Article 28 RMB10069791330. RMB10069791330. is included in Article 5, this article shall be deleted
Article 31 Article 310 The amendment is made for unifying the names ⋯⋯ ⋯⋯ of banking regulatory authorities in the Articles of The registered share capital of the Bank following the reduction of The registered share capital of the Bank following the reduction of Association capital shall not fall below the minimum threshold as required in capital shall not fall below the minimum threshold as required in Company Law, Commercial Banking Law and banking regulatory Company Law, Commercial Banking Law and banking regulatory authority. authorityies under the State Council.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 32 As adopted through the procedures stated in the Article 321 As adopted through the procedures stated in the The amendment is made Articles of Association of the Bank and approved by the banking Articles of Association of the Bank and approved by the banking for unifying the names regulatory authority, the Bank may repurchase its shares in the regulatory authorityies under the State Council, the Bank may of banking regulatory following circumstances: repurchase its shares in the following circumstances: authorities in the Articles of Association, and adding ⋯⋯ ⋯⋯ the relevant explanation on repurchase of shares Except for the purpose as set above, the Bank shall not be engaged Except for the purpose as set above, the Bank shall not be engaged in accordance the specific in any activities of buying and selling its own shares. in any activities of buying and selling its own shares. The Bank requirements therefor under shall comply with the laws, administrative regulations, rules, the the Listing Rules rules governing the listing of securities on the stock exchange where its shares are listed and the Articles of Association in repurchasing the shares in issue.
Article 34 Purchase of the shares of the Bank for the sake of Article 343 Purchase of the shares of the Bank for the sake of The amendment is made for the reasons provided in Article 32 (1) to (3) of the Articles of the reasons provided i n Article 321(1) to (3) of the Articles of supplemental purpose to Association shall be permitted by resolutions at the shareholders’ Association shall be permitted by resolutions at the shareholders’ avoid any inconsistency with general meeting. Shares repurchased by the Bank in accordance general meeting. Shares repurchased by the Bank in accordance Rule 10.06 of the Listing with the provision in Article 32 (1) shall be cancelled within 10 with the provision in Article 321 (1) shall be cancelled within 10 Rules, and for adjusting days from the date of repurchase, and shares repurchased by the days from the date of repurchase, and shares repurchased by the the numbering of cross- Bank in accordance with the provision in Article 32 (2) and (4) Bank in accordance with the provision in Article 321 (2) and (4) referenced articles shall be transferred or cancelled within six months. shall be transferred or cancelled within six months.; provided, however, that where the administrative regulations, department The number of shares in the Bank to be purchased under the rules and the rules governing the listing of securities on the circumstance set out in Article 32 (3) shall not exceed 5% of the stock exchange in relation to cancellation of the shares provide total issued shares of the Bank. The purchase of such shares shall otherwise, such provisions shall prevail. be funded using after-tax profits of the Bank and the shares so purchased shall be transferred to the employees within one year. The number of shares in the Bank to be purchased under the circumstance set out in Article 321 (3) shall not exceed 5% of the total issued shares of the Bank. The purchase of such shares shall be funded using after-tax profits of the Bank and the shares so purchased shall be transferred to the employees within one year.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 43 Article 432 For adjusting the numbering of cross-referenced articles ⋯⋯ ⋯⋯
This Article shall not be applicable to the circumstances described This Article shall not be applicable to the circumstances described in Article 45 in the Articles of Association. in Article 454 in the Articles of Association.
Article 45 Without violation to laws and administrative Article 454 Without violation to laws and administrative For adjusting the numbering regulations, the acts listed below are not prohibited by Article 43 in regulations, the acts listed below are not prohibited by Article 432 of cross-referenced articles the Articles of Association: in the Articles of Association:
⋯⋯ ⋯⋯
Article 48 For matters specified in the two articles preceding Article 487 For matters specified in the two articles preceding The accuracy of expression this Article of the Articles of Association, in the circumstance of this Article of the Articles of Association, iIn the circumstance of has been improved via paperless trading of the shares of the Bank, provisions provided by paperless trading of the shares of the Bank, provisions provided by amendments according the securities regulatory authorities in the place where the Bank’s the securities regulatory authorities in the place where the Bank’s to relevant applicable shares are listed shall apply. shares are listed shall apply. provisions for listing in Hong Kong
Article 53 No changes shall be made to the register of Article 532 Where the laws, administrative regulations, The amendment is made in shareholders as a result of a transfer of shares either within thirty department rules and the securities regulators of the place accordance with the Reply days prior to the date of a general meeting, or within five days where the shares of the Bank are listed provide for the closure of the State Council on the before the benchmark date set by the Bank for the purpose of period of register of members No changes shall be made to the Adjustment to the Notice distribution of dividends. register of shareholders as a result of a transfer of shares either Period for Shareholders’ within thirty days prior to the date of a general meeting, or within General Meetings Applicable If the securities regulators of the place where the shares of the Bank five days before the benchmark date set by the Bank for the purpose to Overseas Listed are listed provide otherwise, such provisions shall prevail. of distribution of dividends, such provisions shall prevailapply. Companies
If the securities regulators of the place where the shares of the Bank are listed provide otherwise, such provisions shall prevail.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 60 Holders of the ordinary shares of the Bank shall enjoy Article 6059 Holders of the ordinary shares of the Bank shall The amendment is made the following rights: enjoy the following rights: in accordance with Article 32 of the Guidance for (1) to receive dividends and other kinds of distributions as (1) to receive dividends and other kinds of distributions as Articles of Association of determined by the number of shares held by them; determined by the number of shares held by them; Listed Companies, and for improving the accuracy of (2) to attend general meetings in person or by proxy and exercise (2) to request, convene, preside over and attend general meetings expression corresponding voting rights based on the number of the shares held in person or by proxy according to law and exercise corresponding by him/her; voting rights based on the number of the shares held by him/her;
⋯⋯ ⋯⋯
(5) to obtain relevant information in accordance with the laws, (5) to obtain relevant information in accordance with the laws, administrative regulations and regulations of the securities administrative regulations and regulations of the securities regulators of the place where the shares of the Bank are listed and regulators of the place where the shares of the Bank are listed and the provisions of the Articles of Association, including: the provisions of the Articles of Association, including:
⋯⋯ ⋯⋯
(2) the personal information of Directors, Supervisors, President (2) the personal information of Directors, Supervisors, President and other senior management officers of the Bank, including: and other senior management officers of the Bank; including:
⋯⋯ ⋯⋯ (8) the copy of the latest annual report submitted to the State (8) the copy of the latest annual report submitted to the State Administration for Industry & Commerce of China industrial Administration for Industry & Commerce of China or other and commercial administration authorities or other competent competent authorities for files; authorities for files;
In accordance with the requirements of the Hong Kong Listing In accordance with the requirements of the Hong Kong Listing Rules, the Bank shall make the above documents (excluding item Rules, the Bank shall make the above documents (excluding item (2)) available for free inspection by the public and shareholders of (2)) available for free inspection by the public and shareholders of H Shares at the domicile of the Bank in Hong Kong, of which the H Shares at the domicile of the Bank in Hong Kong, of which the documents referred to in item (5) shall be available for inspection documents referred to in item (5) shall be available for inspection by shareholders only. by shareholders only.
⋯⋯
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
The resolutions of the Board meetings, resolutions of the meetings of the Board of Supervisors and counterfoils of corporate bonds shall be available for the inspection of the shareholders of the Bank.
⋯⋯
Article 66 The shareholders holding the ordinary shares of the Article 665 The shareholders holding the ordinary shares of the The amendment is made in Bank shall have the following obligations: Bank shall have the following obligations: accordance with Article 28 of the Interim Measures for (1) to abide by laws, administrative regulations and the Articles of (1) to abide by laws, administrative regulations, regulatory the Equity Management of Association; requirements, and the Articles of Association; Commercial Banks
⋯⋯ ⋯⋯
(5) for shareholders, especially substantial shareholders, to (5) for shareholders, especially substantial shareholders, to support the Board of the Bank in developing a rational capital support the Board of the Bank in developing a rational capital plan to ensure that the capital of the Bank continuously meets the plan to ensure that the capital of the Bank continuously meets the regulatory requirements. When the capital of the Bank fails to meet regulatory requirements. When the capital of the Bank fails to meet the regulatory requirements, a plan of capital replenishment shall be the regulatory requirements, a plan of capital replenishment shall be developed to cause its capital adequacy ratio to meet the regulatory developed to cause its capital adequacy ratio to meet the regulatory requirements during a certain period of time, and its capital may requirements during a certain period of time, and its capital may be supplemented by means such as increasing its core capital. be supplemented by means such as increasing its core capital. Major shareholders shall not impede additional capital contributed Major shareholders shall not impede additional capital contributed to the Bank by other shareholders or introduction of eligible new to the Bank by other shareholders or introduction of eligible new shareholders into the Bank. shareholders into the Bank. The substantial shareholders shall replenish the Bank with capital when necessary. ⋯⋯ ⋯⋯ (9) other obligations as required by laws, administrative regulations and the Articles of Association. (9) No such rights of a shareholder as requesting to convene a general meeting, voting, nominating, proposing resolutions, Shareholders holding more than 5% of shares of the Bank shall or disposing may be exercised unless and until approved by make long-term commitments on contribution of additional capital regulatory authorities (where such approval is required) or to the Bank as a part of the capital plan of the Bank. reporting to regulatory authorities;
⋯⋯
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
(9)(10) other obligations as required by laws, administrative regulations and the Articles of Association.
For shareholders who have made false statements, abused shareholders’ rights or had other acts that jeopardize the interests of the Bank, the banking regulatory authorities under the State Council or its local offices may restrict or prohibit such shareholders from conducting related party transactions with the Bank, restrict their shareholding percentage in the Bank and the proportion of equity pledge, etc., and may restrict their rights to request to convene a shareholders’ general meeting, to vote, to nominate, to propose resolutions, to dispose, etc.
Shareholders holding more than 5% of shares of the Bank shall make long-term commitments on contribution of additional capital to the Bank as a part of the capital plan of the Bank.
⋯⋯
Article 69 Where a shareholder holding more than 5% of voting Article 698 Where a shareholder holding more than 5% of voting For correcting a clerical shares of the Bank pledges any of his/her shares, he/she shall report shares of the Bank pledges any of his/her shares, he/she shall report error the same to the Bank in writing on the day on which he/she pledges the same to the Bank in writing on the day on which he/she pledges his/her shares. his/her shares.
⋯⋯ ⋯⋯
If a shareholder pledges 50% or more of his/her equity interests in If a shareholder pledges 50% or more of his/her equity interests the Bank, the voting rights exercisable by the said shareholder at in the Bank, the voting rights exercisable by the said shareholder the general meeting shall be the number of his/her remaining shares at the general meeting shall be the number of his/her remaining unpledged; if the said shareholder nominates a shareholder for the shares unpledged; if the said shareholder nominates a shareholder Board of the Bank, the voting rights of the Director at the Board Director for the Board of the Bank, the voting rights of the meeting shall be subject to restriction. Director at the Board meeting shall be subject to restriction.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 73 The general meeting, as the organ of authority of the Article 732 The general meeting, as the organ of authority of the The amendment is made Bank, shall have the following duties and powers in accordance Bank, shall have the following duties and powers in accordance in accordance with Article with laws: with laws: 97 of the Guidelines on Corporate Governance of ⋯⋯ ⋯⋯ Commercial Banks
(13) to consider the report of evaluation by the Board on the (13) to consider the report of evaluation by the Board on the Directors and by the independent Directors on each other; Directors and by the independent Directors on each other;
(14) to consider the report of evaluation by the Board of (14) to consider the report of evaluation by the Board of Supervisors on the Supervisors and by the external Supervisors on Supervisors on the Supervisors and by the external Supervisors on each other; each other;
Article 73 The general meeting, as the organ of authority of the Article 732 The general meeting, as the organ of authority of the The amendment is made Bank, shall have the following duties and powers in accordance Bank, shall have the following duties and powers in accordance for improving the accuracy with laws: with laws: of expression, deleting duplicate provisions, and ⋯⋯ ⋯⋯ adjusting the numbering of cross-referenced articles (9) to pass resolutions on the issuance of the bonds or listing of the (9) to pass resolutions on the issuance of the corporate bonds or Bank; other securities and listing of the Bank;
⋯⋯ ⋯⋯
(15) to consider the temporary proposals of shareholders (15) to consider the temporary proposals of shareholders representing more than 3% of the total voting shares of the Bank; representing more than 3% of the total voting shares with voting rights of the Bank; ⋯⋯ (19) to consider and approve matters relating to the guarantees ⋯⋯ stipulated in Article 74 of the Articles of Association; (19) to consider and approve matters relating to the guarantees ⋯⋯ stipulated in Article 743 of the Articles of Association;
⋯⋯
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
(23) to consider proposals for shareholders with more than 3% (23) to consider proposals for shareholders with more than 3% (inclusive) of the shares with voting rights of the Bank; and (inclusive) of the shares with voting rights of the Bank; and
(24) to consider other matters as determined by the general meeting (243) to consider other matters as determined by the general in accordance with the laws, administrative regulations and the meeting in accordance with the laws, administrative regulations and Articles of Association. the Articles of Association.
⋯⋯ ⋯⋯
Article 75 General meetings consist of annual general meetings Article 754 General meetings consist of annual general meetings For unifying the names and extraordinary general meetings. Annual general meetings shall and extraordinary general meetings. Annual general meetings shall of banking regulatory be convened once a year and shall be held within six months of the be convened once a year and shall be held within six months of the authorities in the Articles of date of the previous financial year. date of the previous financial year. Association
In the event that the Bank is unable to convene a general meeting In the event that the Bank is unable to convene a general meeting within the aforesaid period for any reason, the Board shall report to within the aforesaid period for any reason, the Board shall report the banking regulatory authorities and explain the reasons for the to the banking regulatory authorities under the State Council and postponement. explain the reasons for the postponement.
Article 79 An extraordinary general meeting may be held upon Article 798 An extraordinary general meeting may be held upon For improving the accuracy proposal by more than half of the independent Directors to the proposal by more than half of the independent Directors (in the of expression Board. Regarding the proposal by the independent Directors to event that the Bank has less than three independent Directors, convene an extraordinary general meeting, the Board shall, in then upon the unanimous proposal by the two independent accordance with the laws, administrative regulations and the Directors) to the Board. Regarding the proposal by the independent Articles of Association, give a written reply on whether or not it Directors to convene an extraordinary general meeting, the Board agrees to convene such an extraordinary general meeting within shall, in accordance with the laws, administrative regulations and ten days after receiving the proposal. Where the Board agrees to the Articles of Association, give a written reply on whether or not convene an extraordinary general meeting, it shall issue a notice of it agrees to convene such an extraordinary general meeting within such meeting within five days after it has so resolved. Where the ten days after receiving the proposal. Where the Board agrees to Board does not agree to convene the extraordinary general meeting, convene an extraordinary general meeting, it shall issue a notice of it shall give the reasons and publish an announcement. such meeting within five days after it has so resolved. Where the Board does not agree to convene the extraordinary general meeting, it shall give the reasons and publish an announcement.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 80 Article 8079 The amendment is made in accordance with Article 47 ⋯⋯ ⋯⋯ of the Guidance for Articles of Association of Listed Where the Board does not agree to convene the extraordinary Where the Board does not agree to convene the extraordinary Companies general meeting or fails to give a written reply within five days general meeting or fails to give a written reply within five ten days after receiving the proposal, the Board shall be deemed as unable after receiving the proposal, the Board shall be deemed as unable to or failing to perform the duty of convening the extraordinary to or failing to perform the duty of convening the extraordinary general meeting, and the Board of Supervisors may convene and general meeting, and the Board of Supervisors may convene and preside over the meeting by itself. preside over the meeting by itself.
Article 81 The Proposal Shareholders shall act in compliance Article 810 The Proposal Shareholders shall act in compliance In view of “Proposal with the following procedures when they make a request to convene with the following procedures when they make a request to convene Shareholders” has been an extraordinary general meeting or a class meeting: an extraordinary general meeting or a class meeting: defined in a previous article of the Articles (1) Two or more shareholders holding in aggregate 10% or more (1) Two or more shareholders holding in aggregate 10% or of Association, the of the voting shares at the meeting sought to be held shall sign one more of the voting shares at the meeting sought to be held The amendment is made for or more counterpart requisitions in writing requiring the Board of Proposal Shareholders shall sign one or more counterpart improving the accuracy Directors to convene an extraordinary general meeting or a class requisitions in writing requiring the Board of Directors to convene of expression of this meeting and stating the objectives of the meeting. The Board an extraordinary general meeting or a class meeting and stating article, and in accordance of Directors shall, in accordance with the laws, administrative the objectives of the meeting. The Board of Directors shall, in with Rule 9 of the Rules regulations and the Articles of Association, make a written response accordance with the laws, administrative regulations and the Governing Shareholders’ as to whether or not it agrees to convene an extraordinary general Articles of Association, make a written response as to whether or General Meetings of Listed meeting within ten days after receiving the proposal. The above not it agrees to convene an extraordinary general meeting within Companies mentioned number of shares held shall be calculated as of the date ten days after receiving the proposal. The above mentioned number of requisitions in writing made by the shareholders. of shares held shall be calculated as of the date of requisitions in writing made by the shareholders. Where the Board of Directors agrees to convene the extraordinary general meeting, it shall issue a notice for convening such a meeting Where the Board of Directors agrees to convene the extraordinary within five days after the resolution of the Board of Directors is general meeting, it shall issue a notice for convening such a meeting passed. In the event of any change to the original proposal in the within five days after the resolution of the Board of Directors is notice, the consent of the related shareholders shall be obtained. passed. In the event of any change to the original proposal in the notice, the consent of the related shareholders shall be obtained.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
(2) Where the Board of Directors does not agree to convene (2) Where the Board of Directors does not agree to convene the extraordinary general meeting, or fails to give its response the extraordinary general meeting, or fails to give its response within ten days after receiving the proposal, the shareholders who within ten days after receiving the proposal, the shareholders who individually or jointly hold more than 10% of the shares in the individually or jointly hold more than 10% of the shares in the Bank shall have the right to propose to the Board of Supervisors to Bank Proposal Shareholders shall have the right to propose to the convene an extraordinary general meeting and this proposal shall Board of Supervisors to convene an extraordinary general meeting be made to the Board of Supervisors in writing. and this proposal shall be made to the Board of Supervisors in writing. Where the Board of Supervisors agrees to convene an extraordinary general meeting, it shall issue a notice for convening such meetings Where the Board of Supervisors agrees to convene an extraordinary within five days after receiving the proposal. In the event of any general meeting, it shall issue a notice for convening such meetings change to the original proposal in the notice, the resent of the within five days after receiving the proposal. In the event of any related shareholders shall be obtained. change to the original proposal in the notice, the resent of the related shareholders shall be obtained. Where the Board of Supervisors fails to issue the notice of extraordinary general meeting within a prescribed period, the Board Where the Board of Supervisors fails to issue the notice of of Supervisors shall be deemed as refusing to convene and preside extraordinary general meeting within a prescribed period, the over such meeting. Shareholders who individually or jointly hold Board of Supervisors shall be deemed as refusing to convene more than 10% of the shares in the Bank for more than ninety and preside over such meeting. Shareholders who individually or successive days (the “Convening Shareholders”) may convene and jointly hold more than 10% of the total shares with voting rights preside over such meeting on their own initiative. in the Bank for more than ninety successive days (the “Convening Shareholders”) may convene and preside over such meeting on their Where the Board fails to respond to the request of the shareholder own initiative. to hold a meeting, any reasonable expenses incurred by the shareholder to convene and preside over such meeting shall be Where the Board fails to respond to the request of the shareholder borne by the Bank and deducted from any sums owing by the Bank to hold a meeting, any reasonable expenses incurred by the to the Directors who have defaulted on their duties. shareholder to convene and preside over such meeting shall be borne by the Bank and deducted from any sums owing by the Bank to the Directors who have defaulted on their duties.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 82 If either the Board of Supervisors or shareholders Article 821 If either the Board of Supervisors or shareholders For unifying the names propose to convene a general meeting on their own initiatives, the propose to convene a general meeting on their own initiatives, the of banking regulatory Board of Directors shall be informed in writing and the relevant Board of Directors shall be informed in writing and the relevant authorities in the Articles documents shall be filed with the local banking regulatory documents shall be filed with the local banking regulatory of Association, and for authorities in the place where the Bank is situated. A notice for authorities under the State Council in the place where the Bank is improving the accuracy of convening an extraordinary general meeting shall be issued and its situated. A notice for convening an extraordinary general meeting expression content shall comply with the following requirements: shall be issued and its content shall comply with the following requirements: (1) No new contents shall be added to the proposal otherwise, the Proposal Shareholders shall make request to the Board of Directors (1) No new contents shall be added to the proposal otherwise, the for convention of such a meeting in accordance with the above Proposal Shareholders shall make request to the Board of Directors procedures; and for convention of such a meeting in accordance with the above procedures; and (2) the venue for the meeting shall be the domicile of the Bank. (2) the venue for the meeting shall be the domicile of the Bank. For the general meeting convened and presided over by shareholders on their own initiatives, the shareholding proportion For the general meeting convened and presided over by of the Convening Shareholders before the announcement of the shareholders on their own initiatives, the shareholding proportion resolutions passed at the general meeting shall not be less than of the Convening Shareholders before the announcement of the 10%. resolutions passed at the general meeting shall not be less than 10% of the total shares with voting rights. The Board of Supervisors or convening shareholders shall submit the relevant evidentiary materials to the local banking regulatory The Board of Supervisors or convening shareholders shall submit authorities in the jurisdiction in which the Bank is situated upon the the relevant evidentiary materials to the local banking regulatory issuance of the notice of a general meeting or the announcement of authorities under the State Council in the jurisdiction in which the resolution of a general meeting. the Bank is situated upon the issuance of the notice of a general meeting or the announcement of the resolution of a general meeting.
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Article 86 When the Bank convenes shareholders’ general Article 865 When the Bank convenes shareholders’ general The amendment is made in meetings, the Board of Directors, the Board of Supervisors and meetings, the Board of Directors, the Board of Supervisors and accordance with Rule 13.73 the shareholders who individually or jointly hold a total of more the shareholders who individually or jointly hold a total of more of Hong Kong Listing Rules, than 3% of the shares of the Bank shall be entitled to submit their than 3% of the shares with voting rights of the Bank shall be for improving the accuracy proposals in writing to the Bank. The Bank shall include matters in entitled to submit their proposals in writing to the Bank. The Bank of expression and adjusting the proposals which are within the scope of responsibilities of the shall include matters in the proposals which are within the scope the numbering of cross- shareholders’ general meeting into the agenda. of responsibilities of the shareholders’ general meeting into the referenced articles agenda. Shareholders who individually or jointly hold a total of more than 3% of the shares of the Bank may submit provisional Shareholders who individually or jointly hold a total of more proposals to the conveners in writing ten days prior to the date than 3% of the shares with voting rights of the Bank may submit of the shareholders’ general meeting. The conveners shall issue provisional proposals to the conveners in writing ten days prior to a supplemental notice setting out the content of the provisional the date of the shareholders’ general meeting or the deadline for proposals within two days of receiving the proposals. the issuance of the supplementary notice and/or supplementary circular of the shareholders’ general meeting as required by the ⋯⋯ Hong Kong Listing Rules, whichever is earlier. The conveners shall issue a supplemental notice setting out the content of the The Board of the Bank shall consider the proposals submitted to a provisional proposals within two days of receiving the proposals. shareholders’ general meeting in the best interests of the Bank and shareholders in accordance with the provisions of Article 85 of the ⋯⋯ Articles. The Board shall give an explanation at the shareholders’ general meeting in respect of the proposals submitted to the The Board of the Bank shall consider the proposals submitted to a shareholders’ general meeting that it has decided not to include in shareholders’ general meeting in the best interests of the Bank and the meeting agenda. shareholders in accordance with the provisions of Article 854 of the Articles. The Board shall give an explanation at the shareholders’ Proposals which have not been set out in the notice of a general meeting in respect of the proposals submitted to the shareholders’ general meeting or which are not in compliance with shareholders’ general meeting that it has decided not to include in Article 85 of the Articles shall not be voted on and resolved at a the meeting agenda. shareholders’ general meeting. Proposals which have not been set out in the notice of a shareholders’ general meeting or which are not in compliance with Article 854 of the Articles shall not be voted on and resolved at a shareholders’ general meeting.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 87 When convening a shareholders’ general meeting, the Article 876 When convening a shareholders’ general meeting, The amendment is made in Bank shall give written notice to all shareholders whose names the Bank the convener shall inform the shareholders by way of accordance with the Reply appear in the register of shareholders forty-five days prior to the announcement give written notice to all shareholders whose names of the State Council on the convening of the meeting to inform them of the matters proposed to appear in the register of shareholders forty-five 20 days prior to Adjustment to the Notice be considered and the date and venue of the meeting. Shareholders the convening of the an annual general meeting and 15 days Period for Shareholders’ who intend to attend the meeting shall serve written reply on the prior to an extraordinary general meeting. to inform them of the General Meetings Bank twenty days prior to the convening of the meeting. matters proposed to be considered and the date and venue of the Applicable to Overseas meeting. Shareholders who intend to attend the meeting shall serve Listed Companies ⋯⋯ written reply on the Bank twenty days prior to the convening of the meeting.
⋯⋯
Article 88 Based on the written replies received 20 days Article 88 Based on the written replies received 20 days The amendment is made in before a general meeting, the Bank shall calculate the number before a general meeting, the Bank shall calculate the number accordance with the Reply of the shares with voting rights represented by the shareholders of the shares with voting rights represented by the shareholders of the State Council on the intending to attend the meeting. Where the number of the shares intending to attend the meeting. Where the number of the shares Adjustment to the Notice with voting rights represented by the shareholders intending to with voting rights represented by the shareholders intending to Period for Shareholders’ attend the meeting is more than one half of the total number of attend the meeting is more than one half of the total number of General Meetings the shares with voting rights of the Bank, the Bank shall convene the shares with voting rights of the Bank, the Bank shall convene Applicable to Overseas such general meeting; otherwise, the Bank shall, within five days, such general meeting; otherwise, the Bank shall, within five days, Listed Companies inform the shareholders again of the matters to be considered at the inform the shareholders again of the matters to be considered at the meeting, the date and venue of the meeting by means of a public meeting, the date and venue of the meeting by means of a public announcement. After making such announcement, the Bank may announcement. After making such announcement, the Bank may convene the general meeting. convene the general meeting.
Article 91 If the election of Directors or Supervisors is proposed Article 9189 If the election of Directors or Supervisors is For unifying the names to be discussed at a general meeting, the notice of such meeting proposed to be discussed at a general meeting, the notice of such of banking regulatory shall adequately disclose the detailed information of the candidates meeting shall adequately disclose the detailed information of the authorities in the Articles of for Directors or Supervisors, in which the information shall at least candidates for Directors or Supervisors, in which the information Association include: shall at least include:
⋯⋯ ⋯⋯
(4) whether they have been punished by the banking regulatory (4) whether they have been punished by the banking regulatory authorities or securities regulators. authorities under the State Council or securities regulators under the State Council.
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Article 92 Article 920 The amendment is made in accordance with the Reply ⋯⋯ ⋯⋯ of the State Council on the Adjustment to the Notice The announcement mentioned in the preceding paragraph shall be The announcement mentioned in the preceding paragraph shall be Period for Shareholders’ published in one or more newspapers designated by the securities published in one or more newspapers designated by the securities General Meetings regulator under the State Council between 45 days to 50 days prior regulator under the State Council between 45 days to 50 days prior Applicable to Overseas to the meeting. Once the announcement has made, all Shareholders to the meeting. Once the announcement has made, all Shareholders Listed Companies of domestic Shares shall be deemed to have received the notice of of domestic Shares shall be deemed to have received the notice of the shareholders’ general meeting. the shareholders’ general meeting.
⋯⋯ ⋯⋯
Article 96 Article 964 For improving the accuracy of expression ⋯⋯ ⋯⋯
Shareholders entitled to attend and vote at a shareholders’ general Shareholders entitled to attend and vote at a shareholders’ general meeting shall be entitled to appoint one or more persons (who need meeting shall be entitled to may attend the meeting in person or not to be a shareholder or shareholders) as their proxy or proxies appoint one or more persons (who need not to be a shareholder or to attend and vote on their behalf. Shareholders shall appoint their shareholders) as their proxy or proxies to attend and vote on their proxies in writing. The principals or their proxies duly authorized behalf. Shareholders shall appoint their proxies in writing. The in writing shall sign the power of attorney. Where the principal principals or their proxies duly authorized in writing shall sign the is a legal person, the power of attorney shall bear its seal or be power of attorney. Where the principal is a legal person, the power signed by its Director or a proxy or others duly appointed. A proxy of attorney shall bear its seal or be signed by its Director or a proxy so appointed shall exercise the following rights pursuant to the or others duly appointed. A proxy so appointed shall exercise the authorization by such shareholder: following rights pursuant to the authorization by such shareholder: ⋯⋯ ⋯⋯
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Article 98 Article 986 For improving the accuracy of expression ⋯⋯ ⋯⋯
The power of attorney shall be deposited at the domicile of the The power of attorney shall be deposited at the domicile of the Bank or such other place as specified in the notice of the meeting at Bank or such other place as specified in the notice of the meeting at least twenty-four (24) hours prior to the meeting at which the proxy least twenty-four (24) hours prior to the meeting at which the proxy is authorized to vote or twenty-four (24) hours before the scheduled is authorized to vote or twenty-four (24) hours before the scheduled voting time. voting time.
⋯⋯ ⋯⋯
Article 101 The convener and the lawyers engaged by the Bank Article 10199 The convener and the lawyers engaged by the The amendment is made in shall verify the legitimacy of shareholders’ qualifications based Bank shall verify the legitimacy of shareholders’ qualifications accordance with Article 65 on the Bank’s register of members, and shall record the names of based on the Bank’s register of members provided by a securities of the Guidance for Articles shareholders and the number of voting shares held by them. The registration and clearing institution, and shall record the names of Association of Listed registration process for the meeting shall be terminated before the of shareholders and the number of voting shares held by them. The Companies chairman of the meeting announces the number of shareholders and registration process for the meeting shall be terminated before the proxies attending the meeting and the total number of voting shares chairman of the meeting announces the number of shareholders and held or represented by them. proxies attending the meeting and the total number of voting shares held or represented by them.
Article 110 The convener shall ensure that the meeting Article 1108 The convener shall ensure that the meeting The amendment is made in minutes are true, accurate and complete. The attending Directors, minutes are true, accurate and complete. The attending Directors, accordance with Article 73 Supervisors, secretary to the Board, convener or representative Supervisors, secretary to the Board, convener or representative of the Guidance for Articles thereof, and the chairman of the meeting shall sign on the meeting thereof, and the chairman of the meeting shall sign on the of Association of Listed minutes. The meeting minutes, the signed attendance book of those meeting minutes, and warrant that the meeting minutes are Companies shareholders on the spot and the powers of attorney for attendance true, accurate and complete. The meeting minutes, the signed by proxy, and the valid information relating to the voting shall be attendance book of those shareholders on the spot and the powers kept by the secretary to the Board at the domicile of the Bank for at of attorney for attendance by proxy, and the valid information least ten years. relating to the voting shall be kept by the secretary to the Board at the domicile of the Bank for at least ten years.
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Article 111 The convener shall ensure that the general meeting Article 11109 The convener shall ensure that the general meeting For unifying the names is held continuously till final resolutions have been reached. If the is held continuously till final resolutions have been reached. If the of banking regulatory general meeting is adjourned or fails to reach any resolution due general meeting is adjourned or fails to reach any resolution due authorities in the Articles of to force majeure or for other special reasons, the convener shall to force majeure or for other special reasons, the convener shall Association take necessary action to resume the general meeting as soon as take necessary action to resume the general meeting as soon as possible or directly terminate the general meeting and make an possible or directly terminate the general meeting and make an announcement in time. Meanwhile, the convener shall report to announcement in time. Meanwhile, the convener shall report to the banking regulatory authorities of the place where the Bank is the banking regulatory authorities under the State Council of the operating. place where the Bank is operating.
Article 117 The following shall be approved by ordinary Article 1175 The following shall be approved by ordinary The amendment is made in resolutions at a general meeting: resolutions at a general meeting: accordance with Article 76 ⋯⋯ ⋯⋯ of the Guidance for Articles (6) matters other than those required by the laws, administrative (6) the annual report of the Bank; of Association of Listed regulations and the Articles of Association to be passed by special Companies resolutions. (6)(7) matters other than those required by the laws, administrative regulations and the Articles of Association to be passed by special resolutions.
Article 118 The following shall be approved by special Article 1186 The following shall be approved by special For improving the accuracy resolutions at a general meeting: resolutions at a general meeting: of expression ⋯⋯ ⋯⋯ (5) the Bank’s purchase or sale of material assets or provision of (5) the Bank’s purchase or sale of material assets or provision of guarantee within one year with the transaction amount exceeding guarantee within one year with the transaction amount exceeding 30% of the latest audited total assets of the Bank; 30% of the latest audited total assets of the Bank;
⋯⋯ ⋯⋯
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Article 122 The list of candidates for Directors or Supervisors Article 1220 The list of candidates for Directors or Supervisors For improving the accuracy shall be submitted by way of proposal to the general meetings for shall be submitted by way of proposal to the general meetings for of expression voting. voting.
When voting on election of Directors and Supervisors at a general When voting on election of Directors and Supervisors at a general meeting, each candidate for Directors or Supervisors shall be voted meeting, each candidate for Directors or Supervisors shall be voted on separately, or the cumulative voting system may be adopted on separately, or and the cumulative voting system may be adopted pursuant to the Articles of Association or the resolution of the pursuant to the Articles of Association or the resolution of the general meeting. general meeting.
⋯⋯ ⋯⋯
Article 133 Where a proposal on election of Directors has been Article 1331 Where a proposal on election of Directors or The amendment is made passed at a general meeting, qualifications of the new Directors Supervisors has been passed at a general meeting, qualifications in accordance with Article shall be submitted to the banking regulatory authorities for review of the new Directors or Supervisors shall be submitted to the 93 of the Guidance for and they shall take office on the date when the resolution is passed banking regulatory authorities for review and they shall take office Articles of Association of at the general meeting. on the date when they are elected the resolution is passed at the Listed Companies and for general meeting. Where the qualifications of the new Directors improving the accuracy of or Supervisors shall be submitted to the regulatory authorities expression for review, they shall take office on the date of approval by the regulatory authorities.
Article 136 The Bank’s proposal to amend or abrogate the Article 1364 The Bank’s proposal to amend or abrogate the For adjusting the numbering rights of class shareholders shall be subject to approval by way rights of class shareholders shall be subject to approval by way of cross-referenced articles of a special resolution at a general meeting and approval by the of a special resolution at a general meeting and approval by the shareholders of the class so affected at a class meeting convened in shareholders of the class so affected at a class meeting convened in accordance with the requirements of Article 138 to Article 142. accordance with the requirements of Article 1386 to Article 1420.
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Article 137 The following circumstances shall be deemed to Article 1375 The following circumstances shall be deemed to For improving the accuracy be an amendment or abrogation of the rights of a certain class be an amendment or abrogation of the rights of a certain class of expression shareholder: shareholder:
⋯⋯ ⋯⋯
(12) the variation or abrogation of the provisions of this Chapter. (12) the variation or abrogation of the provisions of this Chapter section.
Article 138 Shareholders of the affected class, whether or not Article 1386 Shareholders of the affected class, whether or not For adjusting the numbering otherwise entitled to vote at general meetings originally, shall otherwise entitled to vote at general meetings originally, shall of cross-referenced articles nevertheless be entitled to vote at class meetings in respect of nevertheless be entitled to vote at class meetings in respect of matters concerning paragraphs (2) to (8), (11) to (12) of Article matters concerning paragraphs (2) to (8), (11) to (12) of Article 137, but interested shareholder(s) shall not be entitled to vote at 137, but interested shareholder(s) shall not be entitled to vote at class meetings. class meetings.
The meaning of “interested shareholder(s)” as mentioned in the The meaning of “interested shareholder(s)” as mentioned in the preceding paragraph is as follows: preceding paragraph is as follows:
(1) in the case of a repurchase by the Bank of shares by pro rata (1) in the case of a repurchase by the Bank of shares by pro offers to all shareholders or public dealing on the stock exchange rata offers to all shareholders or public dealing on the stock according to Article 33 of the Articles of Association, a Controlling exchange according to Article 332 of the Articles of Association, a Shareholder within the meaning of Article 354 of the Articles of Controlling Shareholder within the meaning of Article 3545 of the Association; Articles of Association;
(2) in the case of repurchasing shares through an off-market (2) in the case of repurchasing shares through an off-market agreement outside of the stock exchange by the Bank under Article agreement outside of the stock exchange by the Bank under Article 33 of the Articles of Association, a shareholder to whom the 332 of the Articles of Association, a shareholder to whom the agreement relates; agreement relates;
⋯⋯ ⋯⋯⋯⋯
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Article 140 When convening a class meeting, the Bank shall Article 14038 When convening a class meeting, the Bank shall The amendment is made in give written notice to all shareholders whose names appear in the give written notice to all shareholders whose names appear in the accordance with the Reply register of shareholders of such class forty-five days prior to the register of shareholders of such class and who are entitled to of the State Council on the convening of the meeting to inform them of the matters proposed to attending the meeting forty-five days prior to the convening of the Adjustment to the Notice be considered and the date and venue of the meeting. Shareholders meeting in accordance with the requirements of Article 86 of the Period for Shareholders’ who intend to attend the meeting shall serve written reply on the Articles of Association, to inform them of the matters proposed to General Meetings Bank twenty days prior to the convening of the meeting. be considered and the date and venue of the meeting. Shareholders Applicable to Overseas who intend to attend the meeting shall serve written reply on the Listed Companies, and for ⋯⋯ Bank twenty days prior to the convening of the meeting. improving the accuracy of expression ⋯⋯
Article 144 Directors shall be elected or replaced at general Article 1442 Directors shall be elected or replaced at general For unifying the names meetings. The term of office of the Directors shall be three (3) meetings. The term of office of the Directors shall be three (3) of banking regulatory years. Upon expiry of the current term of office, a Director shall years. Upon expiry of the current term of office, a Director shall authorities in the Articles of be eligible for re-election and reappointment. The qualifications be eligible for re-election and reappointment. The qualifications Association to act as a Director shall be approved by the banking regulatory to act as a Director shall be approved by the banking regulatory authorities. Prior to the expiry of the office term of a Director, a authorities under the State Council. Prior to the expiry of the general meeting shall not remove such Director from office for no office term of a Director, a general meeting shall not remove such cause. Director from office for no cause.
⋯⋯ ⋯⋯
A written notice about the intention to nominate candidates for A written notice about the intention to nominate candidates for Directors and the candidates’ willingness to accept such nomination Directors and the candidates’ willingness to accept such nomination shall be given to the Bank not earlier than the day after the notice shall be given to the Bank not earlier than the day after the notice of general meeting is sent out and seven days before the meeting. of general meeting is sent out and seven days before the meeting.
⋯⋯ ⋯⋯
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Article 152 The Bank has four independent Directors. An Article 1520 The Bank has four independent Directors. An For supplementing the independent Director shall mean a Director who does not hold independent Director shall mean a Director who does not hold relevant information in positions in the Bank other than directorship, person in charge of positions in the Bank other than directorship, person in charge of accordance with Rule any special committee under the Board or its member and does any special committee under the Board or its member and does 19A.18 of the Hong not maintain with the Bank and its substantial shareholders a not maintain with the Bank and its substantial shareholders a Kong Listing Rules, and relationship which may possibly hamper his/her independent and relationship which may possibly hamper his/her independent and for unifying the names objective judgments. In all cases, independent Directors of the Bank objective judgments. In all cases, independent Directors of the Bank of banking regulatory shall include at least one with appropriate qualifications as provided shall include at least one with appropriate qualifications as provided authorities in the Articles of for in the Hong Kong Listing Rules, the appropriate accounting or for in the Hong Kong Listing Rules, the appropriate accounting or Association relevant financial expertise, and the independent Directors shall relevant financial expertise, and the independent Directors shall not be less than 1/3 of all Directors in number and the total number not be less than 1/3 of all Directors in number and the total number shall not be less than three. An independent Director shall: shall not be less than three, and at least one independent Director shall ordinarily reside in Hong Kong. An independent Director ⋯⋯ shall:
(6) meet other criteria required by the banking regulators. ⋯⋯
(6) meet other criteria required by the banking regulators regulatory authorities under the State Council.
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Article 153 The following persons shall not serve as independent Article 1531 The following persons shall not serve as independent The amendment is made Directors: Directors: in accordance with Article 11 of the Management (1) shareholders directly or indirectly holding more than 1% of (1) shareholders directly or indirectly holding more than 1% of Measures on Qualifications the shares of the Bank or persons holding positions in the top ten the shares of the Bank or persons holding positions in the top ten of Directors (Council shareholders’ entities or immediate family members thereof; shareholders’ entities or immediate family members thereof any Member) and Senior person, together with any of his/her immediate family members, Management of Banking (2) persons holding positions the Bank or its branches and sub- jointly holding more than 1% of the shares of the Bank; Financial Institutions branches and their immediate family members and major social connections (immediate family members shall include spouse, (2) any person and any of his/her immediate family members parents, children, grandparents and siblings, and major social holding a position in an enterprise which holds more than 1% connections shall include parents-in-law, sons/daughters-in-law, of the shares of the Bank; spouses of siblings and siblings of spouse); (2)(3) persons holding positions the Bank or its branches and sub- (3) persons who belonged to persons as prescribed in items (1) and branches and their immediate family members and major social (2) in the preceding year; connections (immediate family members shall include spouse, parents, children, grandparents, and siblings, and grandchildren, (4) persons who have held a position in the Bank in the preceding and major social connections shall include parents-in-law, sons/ three years (inclusive); daughters-in-law, spouses of siblings and siblings of spouse);
(5) persons who provide legal, finance, audit, management (3)(4) persons who belonged to persons as prescribed in items (1), consulting services for or have other business relations with the and (2) or (3) in the preceding year; Bank or branches thereof; (4)(5) persons who have held a position in the Bank or in the (6) persons who may be controlled or significantly influenced by enterprises whose shares are held by the Bank or effectively the Bank; or controlled by the Bank in the preceding three years (inclusive) immediately before assuming their office; (7) other persons disqualified by laws, administrative regulations, relevant supervisory authorities and the Articles of Association. (6) any person or any of his/her close relatives holding a position in the entities which unable to repay loans to the Bank when falling due;
(5) persons who provide legal, finance, audit, management consulting services for or have other business relations with the Bank or branches thereof;
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(7) any person or any of his/her close relatives who holds a position in any entity which has a business relationship with the Bank in such aspects as legal, accounting, auditing, management consultancy and guarantee cooperation, or has any interest of liabilities or debts in connection with the Bank, in each case impeding his/her independence in the performance of duties;
(6) persons who may be controlled or significantly influenced by the Bank; (8) any person or any of his/her close relatives upon whom the substantial shareholders and senior management of the Bank may control or exercise significant influence, thus impeding his/her independence in the performance of duties; or
(7)(9) other persons disqualified by laws, administrative regulations, relevant supervisory authorities and the Articles of Association.
Article 154 An independent Director shall be deemed as having Article 1542 An independent Director shall be deemed as having For unifying the names gross neglect of his/her duties if he/she: gross neglect of his/her duties if he/she: of banking regulatory ⋯⋯ ⋯⋯ authorities in the Articles of (5) commits other acts defined as serious dereliction of duties by (5) commits other acts defined as serious dereliction of duties by Association banking regulatory authorities and securities regulatory authorities banking regulatory authorities and securities regulatory authorities in the place where the Bank’s shares are listed. under the State Council in the place where the Bank’s shares are listed.
Article 159 The Board has the right to propose to the general Article 1597 The Board has the right to propose to the general For adjusting the numbering meeting to replace or dismiss an independent Director if he/she: meeting to replace or dismiss an independent Director if he/she: of cross-referenced articles
⋯⋯ ⋯⋯
(4) has gross neglect of his/her duties as described in Article 154 (4) has gross neglect of his/her duties as described in Article 1542 of the Articles of Association; of the Articles of Association;
⋯⋯ ⋯⋯
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Article 167 The Board shall exercise the following duties and Article 1675 The Board shall exercise the following duties and The amendments are made powers according to law: powers according to law: in accordance with Article 29 of the Guidelines on (1) to determine the Bank’s business development strategies, (1) to determine the Bank’s business development strategies, Corporate Governance of business plans and investment plans; business plans and investment plans; Commercial Banks and the Several Opinions on (2) to consider the Bank’s annual report and manage the Bank’s (2) to consider the Bank’s annual report and manage the Bank’s Upholding the Leadership of external information disclosure; external information disclosure; the Party and Strengthening the Construction of the (3) to convene Shareholders’ general meetings and report its work (3) to convene Shareholders’ general meetings and report its work Party when Deepening the to the Shareholders’ general meetings; to the Shareholders’ general meetings; Reform of the State-owned Enterprises (4) to implement the resolutions of the Shareholders’ general (4) to implement the resolutions of the Shareholders’ general meeting; meeting;
(5) to prepare the Bank’s annual financial budgets, final accounts, (5) to prepare the Bank’s annual financial budgets, final accounts, venture capital distribution plan, profit distribution plan and plan and venture capital distribution plan, profit distribution plan and for making up the losses; plan for making up the losses;
(6) to assess and evaluate the performance of the Directors’ duties (6) to prepare profit distribution plan and plan for making up the and report to the Shareholders’ general meeting; losses;
⋯⋯ (6)(7) to assess and evaluate the performance of the Directors’ duties and report to the Shareholders’ general meeting; Unless otherwise specified in the Articles of Association, the Board may resolve on issues as referred to in previous clause by approval ⋯⋯ of more than half of all Directors save for items (7), (9) and (16), for which approval of more than two-thirds of all Directors is Unless otherwise specified in the Articles of Association, tThe required. Board may resolve on issues as referred to in previous clause such matters by approval of more than half of all Directors save for major matters described in items (7), (9) and (16) (6), (8), (10), (13) and (17) or otherwise stipulated under laws, administrative regulations, department rules and the Articles of Association of the Bank, for which approval of more than two-thirds of all Directors is required.
The Board shall seek advice from the Bank’s party committee before making decisions on the Bank’s major matters.
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Article 176 The Board meetings include regular meetings and Article 1764 The Board meetings include regular meetings and To be consistent with Article interim meetings. interim meetings. 187 and Article 212 of the Articles of Association; and Regular Board meetings shall be held at least once a quarter and Regular Board meetings shall be held at least once a quarter and for improving the accuracy at least four times every year, and shall be convened and presided at least four times every year, and shall be convened and presided of expression over by the chairman, with the written notice to be given to all over by the chairman, with the written notice to be given to all Directors at least fourteen days before such meetings. The agenda Directors at least fourteen days before such meetings. The agenda and relevant meeting documents of a regular Board meeting shall and relevant meeting documents of a regular Board meeting shall be sent to all Directors in full and in a timely manner, and shall be be sent to all Directors in full and in a timely manner, and shall be sent out at least three days prior to the scheduled date of convening sent out at least three days prior to the scheduled date of convening the Board meeting or the meeting of committees thereunder (or the Board meeting or the meeting of committees thereunder (or such other period as agreed). The aforesaid arrangements shall also such other period as agreed). The aforesaid arrangements shall also apply to all other meetings of the Board where practicable. apply to all other meetings of the Board where practicable.
Interim Board meetings may be convened upon proposal by Interim Board meetings may be convened upon proposal by shareholders representing at least one tenth of the total voting shareholders representing at least one tenth of the total voting rights, by at least one third of the Directors, by at least a half rights, by at least one third of the Directors, by at least a half of of independent Directors, or by the Board of Supervisors. The independent Directors, or by the Board of Supervisors, or by the Chairman shall convene and preside over a Board meeting within Chairman when deemed necessary, or by the President of the 10 days after receipt of the proposal. Bank under exceptional circumstances. The Chairman shall convene and preside over a Board meeting within 10 days after The Board shall send a written notice of meeting by hand, fax, receipt of the proposal. email or other means five days before an interim Board meeting is convened. Where an interim Board meeting needs to be convened The Board shall send a written notice of meeting by hand, fax, in emergency, the notice of meeting may be sent by telephone or email or other means five days before an interim Board meeting is by other verbal means at any time, but the convener shall make convened. Where an interim Board meeting needs to be convened explanations at the meeting. in emergency, the notice of meeting may be not subject to the limitation on notice periods specified in the preceding paragraphs, and be sent by telephone or by other verbal means at any time, but the convener shall make explanations at the meeting.
Article 178 No Board meeting may be held unless more than 1/2 Article 1786 No Board meeting may be held unless more than 1/2 For improving the accuracy of the Directors attend the meeting. half of the Directors attend the meeting. of expression
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Article 179 Article 1797 For improving the accuracy of expression ⋯⋯ ⋯⋯
Resolutions made by the Board shall be approved by more than half Resolutions made by the Board shall be approved by more than half of all the Directors. The significantly important matters as specified of all the Directors. The significantly important matters as specified in Paragraph 2 of Article 167 of the Articles of Association shall be in Paragraph 2 of Article 1675 of the Articles of Association shall approved by more than two thirds of all the Directors. be approved by more than two thirds of all the Directors.
Article 182 Article 1820 The amendment is made in accordance with Article ⋯⋯ ⋯⋯ 29 of the Guidelines on Corporate Governance of However, voting by communications is not allowed for material However, voting by communications is not allowed for material Commercial Banks issues like profit distribution plan, material external investment, issues like profit distribution plan, material external investment, plan for material disposal of assets, and appointment or dismissal of plan for material disposal of assets, and appointment or dismissal the President and other senior management officers. of the President and other senior management officers, capital replenishment plan, material changes in interest equity and financial restructuring.
Article 187 The chairman of the Bank shall be elected and Article 1875 The chairman of the Bank shall be elected and For unifying the names removed by more than half of all the Directors of the Board, removed by more than half of all the Directors of the Board, of banking regulatory and shall be subject to resign audit by the audit department. The and shall be subject to resign audit by the audit department. The authorities in the Articles of qualification of the chairman shall be reported to the banking qualification of the chairman shall be reported to the banking Association regulatory authorities for approval. regulatory authorities under the State Council for approval.
Article 189 The Board has set up a Strategy and Development Article 1897 The Board has set up a Strategy and Development The amendment is made Committee, an Audit Committee, a Nomination and Remuneration Committee, an Audit Committee, a Nomination and Remuneration in accordance with Article Committee and a Related Party Transaction and Risk Management Committee and a Related Party Transaction and Risk Management 107 of the Guidance for Committee, and may set up other special committees as needed. Committee, Consumer Rights and Interests Protection Articles of Association Committee, and may set up other special committees as needed. of Listed Companies, and Article 6 and Article 17 of the Measures of the People’s Bank of China for the Protection of Financial Consumer Rights and Interests
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Article 193 The primary duties of the Consumer Rights and The amendment is made Interests Protection Committee include: in accordance with Article 107 of the Guidance for (1) to formulate the Bank’s strategies, policies and objectives Articles of Association of consumer rights and interests protection, guide the senior of Listed Companies, and management to strengthen the construction of corporate culture Article 6 and Article 17 of consumer rights and interests protection from the overall of the Measures of the planning, and incorporate the relevant contents of consumer People’s Bank of China for rights and interests protection into the Bank’s corporate the Protection of Financial governance and business development strategies; Consumer Rights and Interests (2) to supervise and urge the senior management to effectively implement the work related to consumer rights and interests protection, regularly listen to the senior management’s special reports on the Bank’s consumer rights and interests protection work, consider and approve relevant special reports, submit relevant special reports to the Board of Directors, and regard relevant work as an important part of information disclosure;
(3) to be responsible for supervising and evaluating the comprehensiveness, timeliness and effectiveness of the Bank’s consumer rights and interests protection work and the duty performance of the senior management;
(4) to consider the resolutions on consumer rights and interests protection to be submitted to the Board for consideration, and advise the Board in this respect according to the overall strategies of the Bank;
(5) other matters required by the relevant banking regulatory provisions on consumer rights and interests protection or authorized by the Board.
Article 201 The Bank shall have a secretary to the Board, who Article 2010 The Bank shall have a secretary to the Board, who For unifying the names is nominated by the chairman and appointed or dismissed by the is nominated by the chairman and appointed or dismissed by the of banking regulatory Board, and whose qualifications shall be reported to the banking Board, and whose qualifications shall be reported to the banking authorities in the Articles of regulatory authorities for approval. The secretary to the Board shall regulatory authorities under the State Council for approval. The Association be a senior management officer of the Bank. secretary to the Board shall be a senior management officer of the Bank.
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Article 204 Directors or other senior management officers may Article 2043 Directors or other senior management officers may For deleting a duplicate concurrently serve as secretary to the Board, but the Supervisors of concurrently serve as secretary to the Board, but the Supervisors of provision the Bank shall not concurrently serve as secretary to the Board. The the Bank shall not concurrently serve as secretary to the Board. The President, Supervisors, the person in charge of finance of the Bank President, Supervisors, the person in charge of finance of the Bank and accountants of accounting firms engaged by the Bank shall not and accountants of accounting firms engaged by the Bank shall not concurrently serve as secretary to the Board of the Bank. concurrently serve as secretary to the Board of the Bank.
In the event a Director or senior management officer concurrently In the event a Director or senior management officer concurrently serves as secretary to the Board, where any act requires to be made serves as secretary to the Board, where any act requires to be made by the Director, senior management officer and the secretary to the by the Director, senior management officer and the secretary to the Board separately, such Director or senior management officer shall Board separately, such Director or senior management officer shall not make such actions in both capacities. not make such actions in both capacities.
Article 207 The President of the Bank shall be nominated by the Article 2076 The President of the Bank shall be nominated by the For unifying the names Chairman of the Board and appointed or dismissed by the Board. Chairman of the Board and appointed or dismissed by the Board. of banking regulatory authorities in the Articles of The Bank has one President and several Vice Presidents. The Bank has one President and several Vice Presidents. Association
The Vice Presidents and other senior management officers are The Vice Presidents and other senior management officers are nominated by the President and appointed or dismissed by the nominated by the President and appointed or dismissed by the Board. Board.
The qualifications of the President and other senior management The qualifications of the President and other senior management officers shall be reported to the banking regulatory authorities for officers shall be reported to the banking regulatory authorities approval. under the State Council for approval.
Article 212 The President has the following powers and duties: Article 2121 The President has the following powers and duties: For unifying the names ⋯⋯ ⋯⋯ of banking regulatory (11) to take urgent measures in the event of a major incident (11) to take urgent measures in the event of a major incident in authorities in the Articles of in the Bank and to report immediately to the Board, the Board the Bank and to report immediately to the Board, the Board of Association of Supervisors, the banking regulatory authorities and the local Supervisors, the banking regulatory authorities under the State branches of the People’s Bank of China; Council and the local branches of the People’s Bank of China;
⋯⋯ ⋯⋯
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Article 225 The Board of Supervisors of the Bank consists of Article 2254 The Board of Supervisors of the Bank consists of For improving the accuracy employee representative Supervisors, external Supervisors elected employee representative Supervisors, shareholder Supervisors of expression by the general meeting and other Supervisors. The number of and external Supervisors elected by the general meeting and other employee representative Supervisors and external Supervisors Supervisors. The number of employee representative Supervisors shall not be less than one third of the total number of Supervisors. and external Supervisors shall not be less than one third of the total The employee representatives of the Board of Supervisors shall number of Supervisors. The employee representatives of the Board be elected democratically by the staff of the Bank at employee of Supervisors shall be elected democratically by the staff of the representatives’ meetings, general staff meetings or otherwise. Bank at employee representatives’ meetings, general staff meetings or otherwise.
Article 227 The term of office of Supervisors shall be three years Article 2276 The term of office of Supervisors shall be three For deleting a duplicate and a Supervisor shall be eligible for re-election and reappointment; years and a Supervisor shall be eligible for re-election and provision however, an external Supervisor shall not hold office for a period reappointment; however, an external Supervisor shall not hold over 6 years. The appointment or removal of the chairman of the office for a period over 6 years. The appointment or removal of the Board of Supervisors shall be adopted by more than two thirds of chairman of the Board of Supervisors shall be adopted by more than the members of the Board of Supervisors by voting. two thirds of the members of the Board of Supervisors by voting.
Article 237 Where an external Supervisor attends less than two Article 237 Where an external Supervisor attends less than two This article is deleted to thirds of the meetings of the Board of Supervisors in person in a thirds of the meetings of the Board of Supervisors in person in a unify the requirements year or fails to attend such meetings in person or appoint another year or fails to attend such meetings in person or appoint another for Supervisors to attend external Supervisor to attend on his/her behalf for two consecutive external Supervisor to attend on his/her behalf for two consecutive meetings of the Board of times, the Board of Supervisors shall propose to the general times, the Board of Supervisors shall propose to the general Supervisors (please refer meeting to remove the said Supervisor. meeting to remove the said Supervisor. to the Article 231 of the Articles of Association for details)
Article 238 External Supervisors shall be nominated by the Board Article 2386 External Supervisors shall be nominated by the For improving the accuracy of Supervisors, or shareholder(s) severally or jointly holding more Board of Supervisors, or shareholder(s) severally or jointly holding of expression than 1% of the total voting shares of the Bank. more than 1% of the total voting shares of the Bank.
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Article 246 The Board of Supervisors shall have one chairman Article 2464 The Board of Supervisors shall have one chairman For improving the accuracy of the Board of Supervisors who shall be elected by more than of the Board of Supervisors who shall be elected by more than half of expression and deleting a half of all Supervisors at the meeting of Board of Supervisors. The of all Supervisors at the meeting of Board of Supervisors, whose duplicate provision chairman of the Board of Supervisors shall convene and preside appointment and dismissal shall be subject to the approval of over meetings of the Board of Supervisors; if the chairman of the more than two thirds of its members by voting. The chairman of Board of Supervisors cannot fulfill the duties thereof, more than the Board of Supervisors shall convene and preside over meetings half of the Supervisors may elect a Supervisor to convene and of the Board of Supervisors; if the chairman of the Board of preside over the meetings of the Board of Supervisors. Supervisors cannot fulfill the duties thereof, more than half of the Supervisors may elect a Supervisor to convene and preside over the The chairman of the Board of Supervisors shall be appointed or meetings of the Board of Supervisors. removed by the votes of more than two thirds of the Supervisors. The chairman of the Board of Supervisors shall be appointed or removed by the votes of more than two thirds of the Supervisors.
Article 247 The Board of Supervisors shall be accountable to the Article 2475 The Board of Supervisors shall be accountable to the The amendment is made general meeting and exercise the following functions and powers in general meeting and exercise the following functions and powers in in accordance with Article accordance with laws: accordance with laws: 32 of the Guidelines on Corporate Governance of (1) to review the periodic reports of the Bank prepared by the (1) to review the periodic reports of the Bank prepared by the Commercial Banks, and for Board and express its written opinions; Board and express its written opinions; improving the accuracy of expression (2) to check and supervise the financial activities of the Bank; (2) to check and supervise the financial activities of the Bank;
(3) to monitor the performance of duties by Directors and senior (3) to be present at Board meetings without voting rights; management officers and propose dismissal of Directors, President and other senior management officers who have violated laws, (3)(4) to monitor the performance of duties by Directors and administrative regulations, the Articles of Association or the senior management officers and propose dismissal of Directors, resolutions of general meetings; President and other senior management officers who have violated laws, administrative regulations, the Articles of Association or the ⋯⋯ resolutions of general meetings;
⋯⋯
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(8) to assess and evaluate the Supervisors for performance of their (8)(9) to assess and comprehensively evaluate the duty performance duties and report to the general meeting; of Directors, Supervisors and senior management members, for performance of their duties and report the performance evaluation (9) to report to the general meeting; of Directors and Supervisors to the regulatory authorities, and report the evaluation results to the general meeting; (10) to supervise and require for rectification regarding the Bank’s business decision-making, risk management and internal control; (9)(10) to report to the general meeting;
(11) to supervise the Bank’s internal audit; (10) to supervise and require for rectification regarding the Bank’s business decision-making, risk management and internal control; (12) to undertake the resign audit of Directors and senior management officers as required; (11) to supervise the Bank’s internal audit;
(13) to negotiate with the Directors or file a lawsuit against the (12)(11) to undertake the resign audit of Directors and senior Directors and senior management officers on behalf of the Bank in management officers as required; accordance with the Company Law; (13)(12) to negotiate with the Directors or file a lawsuit against the (14) to investigate any abnormality found in operations of the Bank, Directors and senior management officers on behalf of the Bank in and when necessary, to engage such professionals as accounting accordance with the Company Law; firms or law firms to assist in the work, at the expenses of the Bank; (14)(13) to investigate any abnormality found in operations of (15) to propose any remuneration (or allowance) arrangement of a the Bank, and when necessary, to engage such professionals as Supervisor; and accounting firms or law firms to assist in the work, at the expenses of the Bank; (16) to supervise the Directors and senior management officers in the performance of the anti-money laundering duties according (15)(14) to propose any remuneration (or allowance) arrangement to law and to evaluate the performance of the Directors and senior of a Supervisor; and management officers in the risk management of money laundering, and report to the general meeting; (16) to supervise the Directors and senior management officers in the performance of the anti-money laundering duties according to law and to evaluate the performance of the Directors and senior management officers in the risk management of money laundering, and report to the general meeting;
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(17) Other duties and powers as provided in the laws, (17)(15) Other duties and powers as provided in the laws, administrative regulations, and the Articles of Association or administrative regulations, and the Articles of Association or conferred by the general meeting. conferred by the general meeting.
Supervisors may be present at Board meetings without voting Supervisors may be present at Board meetings without voting rights. rights.
In addition to performing the above duties, the Board of Supervisors shall also focus on matters relating to the Bank’s strategic planning, business decision-making, risk management, internal control, procedures for selection and appointment of Directors and remuneration management, related party transactions, anti-money laundering and consumer rights and interests protection, and supervise the Bank’s implementation of the foregoing.
Article 248 The chairman of the Board of Supervisors shall Article 2486 The chairman of the Board of Supervisors shall The amendment is made exercise the following functions and powers: exercise the following functions and powers: in accordance with Article 22 of the Guidelines on the (1) to convene and preside over the work of the Board of (1) to convene and preside over the work meetings of the Board of Board of Supervisors of Supervisors; Supervisors; Commercial Banks
(2) to supervise and inspect the implementation of resolutions of (2) to organize fulfillment of the duties of the Board of Board of Supervisors; Supervisors;
(3) to review and execute the report and other important documents (3) to review and execute the report and other important of the Board of Supervisors; documents of the Board of Supervisors;
(4) to report, on behalf of the Board of Supervisors, to the general (2)(4) to supervise and inspect the implementation of resolutions meeting; of Board of Supervisors;
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(5) to organize fulfillment of the duties of the Board of (4)(5) to report, on behalf of the Board of Supervisors, to the Supervisors; and general meeting;
(6) to exercise other duties or powers as provided by the laws, (5) to organize fulfillment of the duties of the Board of administrative regulations and the Articles of Association or Supervisors; and granted by a shareholders’ general meeting. (6) to exercise other duties or powers as provided by the laws, administrative regulations and the Articles of Association or granted by a shareholders’ general meeting.
Article 249 Meetings of the Board of Supervisors shall be held at Article 2497 Meetings of the Board of Supervisors shall be held For improving the accuracy least four times every year and at least once every six months. The at least four times every year and at least once every six months. of expression notice of meeting shall be served to all the Supervisors 10 days in The notice of meeting shall be served to all the Supervisors 10 days advance. In any of the following circumstances, the chairman of the in advance. In any of the following circumstances, the chairman Board of Supervisors shall convene an interim meeting of the Board of the Board of Supervisors shall convene an interim meeting of of Supervisors within 10 workdays and the notice and documents of the Board of Supervisors within 10 workdays and the notice and the said meeting shall be served to the Supervisors three workdays documents of the said meeting shall be served to the Supervisors in advance. three workdays in advance.
(1) deemed necessary by the chairman of the Board of Supervisors; (1) deemed necessary by the chairman of the Board of Supervisors;
(2) jointly proposed by more than one third of the Supervisors; (2) jointly proposed in writing by more than one third of the Supervisors; (3) the general meeting or Board meeting has passed any resolution which violates relevant laws, regulations, rules, provisions and (3) the general meeting or Board meeting has passed any resolution requirements of the regulatory authority, the Articles of Association, which violates relevant laws, regulations, rules, provisions and resolutions of the general meeting or any other relevant provisions; requirements of the regulatory authority, the Articles of Association, resolutions of the general meeting or any other relevant provisions; (4) improper acts of the Directors and senior management officers may possibly give rise to material damages to the Bank or bad (4)(3) improper acts of the Directors and senior management impacts on the markets; officers may possibly give rise to material damages to the Bank or bad impacts on the markets; (5) the shareholders bring a lawsuit against the Bank, Directors, Supervisors or senior management officers; and (5)(4) the shareholders bring a lawsuit against the Bank, Directors, Supervisors or senior management officers; and (6) the regulatory authority requires holding such a meeting. (6)(5) the regulatory authority requires holding such a meeting.
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Article 250 A notice to a meeting of the Board of Supervisors Article 25048 A notice to a meeting of the Board of Supervisors The amendment is made in shall include the following contents: shall include the following contents: accordance with Article 148 of the Guidance for Articles (1) the date, time and venue of the meeting; (1) the date, time and venue of the meeting; of Association of Listed Companies (2) duration of the meeting; (2) duration of the meeting;
(3) reasons and topics for discussion proposed for consideration at the (3) reasons and topics for discussion proposed for consideration at the meeting; meeting;
(4) convener and presider of the meeting, proposer of and written (4) convener and presider of the meeting, proposer of and written proposal for an interim meeting; proposal for an interim meeting;
(5) members attending or present at the meeting whether or not (5) members attending or present at the meeting whether or not with voting rights; with voting rights;
(6) meeting materials needed for voting by Supervisors; (6)(4) meeting materials needed for voting by Supervisors; and
(7) name and contact information of the contact person of the (7) name and contact information of the contact person of the meeting; and meeting;
(8) date of the notice. (8)(5) date of the notice.
Article 251 Supervisors shall be present in person at meetings of Article 249251 Supervisors shall be present in person at meetings The amendment is made the Board of Supervisors. If any Supervisor cannot attend a meeting of the Board of Supervisors. If any Supervisor cannot attend a in accordance with Article in person for any reason, he/she may appoint another Supervisor meeting in person for any reason, he/she may appoint another 21 of the Guidelines on the in writing to attend the meeting on his/her behalf. The power of Supervisor in writing to attend the meeting on his/her behalf. Board of Supervisors of attorney shall set out the name of the proxy Supervisor, the matters One supervisor shall not act as the proxy of more than two Commercial Banks represented, scope of authorization and validity period, and shall supervisors at one meeting of the Board of Supervisors. The be signed or sealed by the appointing Supervisor. The proxy power of attorney shall set out the name of the proxy Supervisor, Supervisor attending the meeting shall exercise rights within the the matters represented, scope of authorization and validity period, scope of authorization. If a Supervisor does not attend a meeting and shall be signed or sealed by the appointing Supervisor. The of the Board of Supervisors in person or by proxy, he/she shall be proxy Supervisor attending the meeting shall exercise rights within deemed to have waived the voting rights at the meeting. the scope of authorization. If a Supervisor does not attend a meeting of the Board of Supervisors in person or by proxy, he/she shall be deemed to have waived the voting rights at the meeting.
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Article 256 Minutes shall be recorded for meetings of the Board Article 2546 Minutes shall be recorded for meetings of the Board For deleting duplicate of Supervisors and shall be signed by the attending Supervisors and of Supervisors and shall be signed by the attending Supervisors and provisions the recorder. The minutes of meetings of the Board of Supervisors the recorder. The minutes of meetings of the Board of Supervisors shall be kept as archives of the Bank for ever. shall be kept as archives of the Bank for ever.
Any Supervisor shall be entitled to have an explanatory note made Any Supervisor shall be entitled to have an explanatory note made in the minutes regarding his/her speech at the meeting. The minutes in the minutes regarding his/her speech at the meeting. The minutes of meetings of the Board of Supervisors shall be kept as archives of of meetings of the Board of Supervisors shall be kept as archives of the Bank for at least 10 years. the Bank for at least 10 years.
Article 261 The Board of Supervisors is composed of the Article 25961 The Board of Supervisors is composed of the Abolishing the audit supervisory committee, nomination committee and audit committee. supervisory committee, and nomination committee and audit committee under the Board of committee. Supervisors and repartitioning The special committees shall be composed of Supervisors. Each its functions to the special committee shall have at least 3 members, including one The special committees shall be composed of Supervisors. Each supervisory committee under convener, who shall be an external Supervisor and be responsible special committee shall have at least 3 members, including one the Board of Supervisors for convening the activities of each special committee. convener, who shall be an external Supervisor and be responsible for convening the activities of each special committee.
Article 263 Main duties of the nomination committee include: Article 2613 Main duties of the nomination committee include: For improving the accuracy of expression ⋯ ⋯ ⋯ ⋯
(4) supervising the objectivity and reasonableness of the (4) supervising the objectivity and reasonableness of the remuneration management systems and policies of the whole Bank remuneration management systems and policies of the whole Bank as well as the remuneration plans for senior management officers. as well as the remuneration plans for senior management officers.
(5) other matters stipulated under relevant laws, administrative regulations and requirements of the securities regulatory authorities where the Bank’s shares are listed; as well as those as authorized by the Board of Supervisors.
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Article 264 Main duties of the audit committee include: Article 264 Main duties of the audit committee include: Abolishing the audit supervising and inspecting the Bank’s financial position; reviewing supervising and inspecting the Bank’s financial position; reviewing committee under the the Bank’s annual, semi-annual and quarterly financial and the Bank’s annual, semi-annual and quarterly financial and Board of Supervisory and operation reports; and analyzing and evaluating the Bank’s budget operation reports; and analyzing and evaluating the Bank’s budget repartitioning its functions implementation, asset operation and quality, internal controls and implementation, asset operation and quality, internal controls and to the supervisory committee the implementation of major investment decisions. the implementation of major investment decisions. under the Board of Supervisors
Article 265 The working rules of the supervisory committee, Article 2625 The working rules of the supervisory committee, Abolishing the audit nomination committee and audit committee shall be formulated by and nomination committee and audit committee shall be formulated committee under the the Board of Supervisors. by the Board of Supervisors. Board of Supervisory and repartitioning its functions to the supervisory committee under the Board of Supervisors
Article 273 Except as provided in the Article 70 of the Articles Article 2703 Except as provided in the Article 6970 of the For adjusting the numbering of Association, a Director, Supervisor, President and any other Articles of Association, a Director, Supervisor, President and any of cross-referenced articles senior management officer of the Bank may be relieved of liability other senior management officer of the Bank may be relieved for specific breaches of his/her duty by the informed consent of of liability for specific breaches of his/her duty by the informed shareholders given at the general meeting. consent of shareholders given at the general meeting.
Article 282 Article 27982 For adjusting the numbering of cross-referenced articles ⋯⋯ ⋯⋯
(2) a take-over offer made by any person to become a “controlling (2) a take-over offer made by any person to become a “controlling shareholder”. The definition of a controlling shareholder is the shareholder”. The definition of a controlling shareholder is the same as that in Article 350 of the Articles of Association. same as that in Article 3550 of the Articles of Association.
Article 283 The Bank shall formulate the financial accounting Article 2803 The Bank shall formulate the financial accounting For unifying the names system and internal audit system according to laws, administrative system and internal audit system according to laws, administrative of banking regulatory regulations and relevant provisions of financial department under regulations and relevant provisions of financial department under authorities in the Articles of the State Council, banking regulatory authorities and People’s Bank the State Council, banking regulatory authorities under the State Association. of China. Council and People’s Bank of China.
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Article 294 The Bank shall distribute profits after income tax in Article 2914 The Bank shall distribute profits after income tax in The amendment is made the following order: the following order: according to Rule 44 of Financial Rules for Financial (1) to recover losses; (1) to recover losses; Enterprises
(2) to withdraw statutory reserve fund. The percentage of (2) to withdraw statutory reserve fund. The percentage of withdrawal is 10% of after-tax profit; withdrawal is 10% of after-tax profit;
(3) to withdraw general provision; (3) to withdraw general provision;
(4) to withdraw discretionary reserve fund; and (4) to withdraw discretionary reserve fund; and
(5) to pay dividends to shareholders. (5) to pay dividends to shareholders.
Such withdrawal may be stopped when the statutory reserve fund of Such withdrawal may be stopped when the statutory reserve fund of the Bank has accumulated to at least 50% of the registered capital the Bank has accumulated to at least 50% of the registered capital of the Bank. If the aggregate balance of the Bank’s statutory reserve of the Bank. If the aggregate balance of the Bank’s statutory reserve fund is not enough to recover the losses of the Bank of the previous fund is not enough to recover the losses of the Bank of the previous year, the current year’s profits shall first be used for making up the year, the current year’s profits shall first be used for making up the losses before the statutory reserve fund is drawn. losses before the statutory reserve fund is drawn.
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Where a general meeting decides to distribute profits to After the Bank has withdrawn statutory reserve fund and shareholders in violation of the provisions of the preceding general reserve fund, the Bank, subject to the approval of paragraph before the Bank has made up for its losses and set aside the shareholders’ general meeting, may make allocation to its statutory reserve fund, shareholders shall return to the Bank the the discretionary reserve fund from the after-tax profits. The profits distributed in violation of such provisions. balance of the after-tax profits of the Bank, after making up for losses and withdrawing statutory reserve fund, general reserve The shares of the Bank held by the Bank shall not be entitled to any and discretionary reserve fund, may be distributed to the profit distribution. shareholders in pro rata to their shareholding.
The specific percentage of withdrawal of general provision and In general, no dividend shall be paid to shareholders for any discretionary reserves fund shall be proposed by the Board and year in which the Bank’s capital adequacy ratio is lower than decided by the general meeting according to the annual operations the minimum standard required by the regulatory authorities of the Bank. of the PRC. On the premises of ensuring that the capital adequacy ratio meets the regulatory requirements, the Bank may distribute profits if its profits realized in each year, after making up for losses and withdrawing statutory reserve fund and general reserve according to law, remain positive and distributable.
Where a general meeting decides to distribute profits to shareholders in violation of the provisions of the preceding paragraph before the Bank has made up for its losses and set aside its statutory reserve fund, shareholders shall return to the Bank the profits distributed in violation of such provisions.
The shares of the Bank held by the Bank shall not be entitled to any profit distribution.
The specific percentage of withdrawal of general provision and discretionary reserves fund shall be proposed by the Board and decided by the general meeting according to the annual operations of the Bank.
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Article 295 The capital reserve fund of the Bank shall be used Article 2925 The capital reserve fund of the Bank shall be used For unifying the names to make up for losses of the Bank, expand the operating scale or to make up for losses of the Bank, expand the operating scale or of banking regulatory increase the Bank’s capital. However, the capital reserve fund shall increase the Bank’s capital. However, the capital reserve fund shall authorities in the Articles of not be used to make up for the losses of the Bank. not be used to make up for the losses of the Bank. Association.
If the reserve fund is converted into share capital by a resolution of If the reserve fund is converted into share capital by a resolution of the general meeting, the Bank shall distribute new shares as per the the general meeting, the Bank shall distribute new shares as per the existing equity structure upon the approval by banking regulatory existing equity structure upon the approval by banking regulatory authorities. authorities under the State Council.
When the statutory reserve fund is changed to share capital, the When the statutory reserve fund is changed to share capital, the remainder of the reserve fund shall not be less than 25% of the remainder of the reserve fund shall not be less than 25% of the registered capital prior to the increase. registered capital prior to the increase.
Article 297 The Bank may distribute dividends in cash or by Article 2947 The Bank may distribute dividends in cash or by For unifying the names shares. Dividends distributed by shares shall be subject to the shares. Dividends distributed by shares shall be subject to the of banking regulatory resolutions of the general meeting and be submitted to the banking resolutions of the general meeting and be submitted to the banking authorities in the Articles of regulatory authorities for approval. regulatory authorities under the State Council for approval. Association.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 327 In a manner which is conducive to strengthening Section 1 Organization Setup The amendment is made party building and ideological and political work, reform and in accordance with development and in the principle of high quality and efficiency, the Article 3227 In a manner which is conducive to strengthening Working Regulations of Bank establishes party organizations and provides necessary staff party building and ideological and political work, reform and the Communist Party of and activity funds for them to ensure that the party building works development and The Bank has established the Party Committee China on the Grassroots are carried out effectively. in accordance with the provisions of the Constitution of the Organization of State-owned Communist Party of China and the Working Regulations of Enterprises (Trial) the Communist Party of China on the Grassroots Organization of State-owned Enterprises (Trial). The Bank has set positions of the secretary of the Party Committee, deputy secretary and members thereof in the number as approved by higher- level Party organizations, and such positions shall be elected or appointed in accordance with relevant provisions. In in the principle of high quality, efficiency and coordination, Party Committee of the Bank establishes Party affairs departments such as the Office, the Organization Department and the Publicity Department party organizations and provides necessary staff and activity funds for them to ensure that the party building works are carried out effectively. Relevant organizations may work together with the management departments of the Bank with similar functions.
Members of the Party Committee and members of the Board of Directors are applicable to “two-way entry and cross- appointment”. Eligible members of the Party Committee may join the Board of Directors, the Board of Supervisors and the senior management through legal procedures. Eligible members of the Board of Directors, the Board of Supervisors and the senior management may join the Party Committee in accordance with relevant provisions and procedures.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 325 The Bank shall give full play to the political core Section 2 Terms of Reference The amendment is made in function of the party committee, and earnestly bear and implement accordance with Working the main responsibility of managing and governing the party Article 3235 The Bank shall give full play to the political Regulations of the Communist strictly, so as to ensure that the party’s leadership and party core function of the party committee, and earnestly bear and Party of China on the building are fully reflected and really strengthened in the reform implement the main responsibility of managing and governing the Grassroots Organization of and development of the Bank. party strictly, so as to ensure that the party’s leadership and party State-owned Enterprises building are fully reflected and really strengthened in the reform (Trial) and development of the Bank.The Party organization of the Bank shall abide by the following basic principles:
(1) to consolidate the enhancement of leadership of the Party and improvement of the corporate governance, and integrate the leadership of the Party into each aspect of the corporate governance;
(2) to adhere to the deep integration of Party work and production and operation, and examine the effectiveness of the Party organization’s endeavors with the Bank’s reform and development achievements;
(3) to insist on the Party’s management of cadres and talents, and cultivate a high-quality and professional corporate leader team and talent team;
(4) to lay a solid foundation at the grassroots level, highlight the construction of the Party branch, and enhance the vitality of the grassroots Party organizations;
(5) to rely on the working class wholeheartedly, to highlight the master role of the Bank’s mass employees and to consolidate the Party’s class foundation for governing.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 326 The main duties of the party committee include: Article 3246 The Party Committee shall play a leading role The amendment is made guaranteeing and supervising the implementation of the party’s in guiding the direction, managing the overall situation and in accordance with and the state’s guidelines and policies in the Bank; supporting ensuring the implementation, and discuss and decide on major Working Regulations of the general meeting, the Board, Board of Supervisors and the issues of the Bank in accordance with regulations. The Its main the Communist Party of operational management to exercise their powers according to duties of the party committee include: China on the Grassroots law; implementing the principle of placing cadres and talents Organization of State-owned under party supervision, giving full play to the party committee’s (1) to strengthen the political construction of the Party of Enterprises (Trial) gatekeeper role in the enterprises’ selection and utilization the Bank, adhere to and implement the fundamental systems, of talents; wholeheartedly replying on the masses of workers basic systems and important systems of socialism with Chinese and support the work of employee representatives’ meeting; characteristics, and educate and guide all Party members to participating in the decision-making on major issues of the Bank; always maintain a high degree of consistency in political stance, strengthening the party building in the Bank, and supervising and political direction, political principle and political path with the urging the party organizations of the Bank to strictly implement Central Committee of the CPC with Xi Jinping as the core; the “three sessions and one lesson”, democratic appraisal and other principles governing party organizations; leading the ideological (2) thoroughly study and implement Xi Jinping Thought on and political work of the Bank, spiritual civilization and trade Socialism with Chinese Characteristics in the New Era, study unions, the Communist Youth League and other mass organizations; and promote theories of the Party, implement the Party’s implementing the main responsibility of the party committee in the route, guidelines and policies, supervise and ensure the building of party style and honest administration. implementation of major decisions and arrangements of the Central Committee of the CPC and resolutions of higher Party organizations in the Bank;
(3) to study and discuss major operational and management issues of the Bank, and support the shareholders’ (general) meeting, the Board, Board of Supervisors and the operational senior management to exercise their powers according to law; implementing the principle of placing cadres and talents under party supervision, giving full play to
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(4) to strengthen the Party Committee’s gatekeeper role in the Bank’s enterprises’ selection and utilization of talents; wholeheartedly replying on the masses of workers and support the work of employee representatives’ meeting; participating in the decision-making on major issues of the Bank; strengthening the party building in the Bank, and supervising and urging the party organizations of the Bank to strictly implement the “three sessions and one lesson”, democratic appraisal and other principles governing party organizations; leading the ideological and political work of the Bank, spiritual civilization and trade unions, the Communist Youth League and other mass organizations; and to focus on the construction of leadership team, cadre team and talent team of the Bank;
(5) to perform implementing the main responsibility of the party committee in the building of party style and honest administration., lead and support the internal discipline inspection committee to perform the duties of supervision, discipline and accountability, strictly specify political discipline and political rules, and promote the comprehensive extension of strict Party governance to the grassroots level;
(6) to strengthen the construction of grassroots Party organizations and the team building of Party members, and to unite and lead the mass employees to actively participate in the reform and development of the Bank;
(7) to lead the Bank’s ideological and political work, the construction of spiritual civilization, the unified frontline work, and lead the trade union, the Communist Youth League, the women’s organizations and other mass organizations of the Bank.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 328 The Bank ensures party committee’s participation in Article 3258 The Bank ensures party committee’s participation The amendment is made in decision-making of major issues according to the requirements of in decision-making of m Major operational and management accordance with Working central and provincial party committees. The party committee shall issues of the Bank shall be presented to the according to the Regulations of the Communist put forward opinions and suggestions on major issues related to the requirements of central and provincial Party Committees for study Party of China on the reform, development and stability of the Bank; support the general and discussion before being submitted to the Board or the Grassroots Organization of meeting, the Board, Board of Supervisors and the operational senior management for decision making. The party committee State-owned Enterprises management to exercise their powers according to laws so as to shall put forward opinions and suggestions on major issues related (Trial) realize the preservation and appreciation of state-owned assets; to the reform, development and stability of the Bank; support safeguard the legitimate rights and interests of the state, enterprises, the general meeting, the Board, Board of Supervisors and the shareholders and employees. operational management to exercise their powers according to laws so as to realize the preservation and appreciation of state-owned assets; safeguard the legitimate rights and interests of the state, enterprises, shareholders and employees. Matters subject to study and discussion mainly include:
(1) following through the decisions and arrangements of the Central Committee of CPC, the State Council and the provincial Party Committee and government, and implementation of major moves under the national and provincial development strategies;
(2) the Bank’s development strategies, medium and long-term development plans and significant reform plans;
(3) the fundamental and directional issues in the Bank’s asset restructuring, property transfer, capital operation and large investment;
(4) the establishment and adjustment of the Bank’s organizational structure, and the formulation and modification of important rules and regulations;
(5) major issues concerning the Bank’s production safety, maintenance of stability, employee rights and interests, social responsibility, etc.;
(6) other significant matters which shall be studied and discussed by the Party.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 329 The Bank sets up a disciplinary inspection institution, Article 329 The Bank sets up a disciplinary inspection institution, Deleting due to overlap which is mainly responsible for maintaining the party’s constitution which is mainly responsible for maintaining the party’s constitution with Article 324 and and other intra-party regulations, reviewing the implementation of and other intra-party regulations, reviewing the implementation of in accordance with the the party’s lines, principles, policies and resolutions, and helping the party’s lines, principles, policies and resolutions, and helping Working Regulations of the party committee strengthen the party style building and organize the party committee strengthen the party style building and organize the Communist Party of and coordinate anti-corruption work. and coordinate anti-corruption work. China on the Grassroots Organization of State-owned Enterprises (Trial)
Section 3 Working Mechanism The amendment is made in accordance with Article 326 Study and discussion by the Party Committee Working Regulations of is a pre-requisite procedure for the Board of Directors and the Communist Party of senior management to make decisions on major issues. Major China on the Grassroots operational and management matters must be studied and Organization of State-owned discussed by the Party Committee before being decided Enterprises (Trial) by the Board of Directors or senior management to ensure the statutory role of the Party Committee in the corporate governance structure.
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Article 327 Major procedures for the Party Committee to The amendment is made participate in the decision-making process: in accordance with Working Regulations of (1) prior consideration by the Party Committee. Party the Communist Party of organizations shall convene Party Committee meetings to China on the Grassroots deliberate on material matters proposed to the Board of Organization of State-owned Directors and the senior management for decisions, and provide Enterprises (Trial) opinions and advice. If the Party organization finds that the matters to be decided by the Board and senior management are not in compliance with the Party’s route, policies and national laws and regulations, or may harm the interests of the State and the public, as well as the legitimate rights and interests of enterprises and employees, it has the right to provide opinions. If the Party organization considers that there are other material matters that need to be decided by the Board of Directors and the senior management of the Bank, it may propose such matters to the Board of Directors and the senior management of the Bank;
(2) communication before the meeting. Members of the Party Committee who serve as members of the Board of Directors and the senior management of the Bank, in particular the chairman of the Board of Directors or the president of the Bank, shall communicate with other members of the Board of Directors and senior management of the Bank on the relevant opinions and suggestions of the Party Committee before the proposals are formally submitted to the Board of Directors or presented at the president office meeting;
(3) expression during the meeting. Members of the Party Committee who serve as members of the Board of Directors and the senior management of the Bank shall fully express the opinions and suggestions studied by the Party Committee in the decision-making process of the Board of Directors and senior management of the Bank;
(4) report after the meeting. Members of the Party Committee who serve as members of the Board of Directors and the senior management of the Bank shall report to the Party Committee in a timely manner on the decisions made by the Board of Directors and senior management of the Bank.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 328 Organize the implementation of the Bank’s major The amendment is made decisions and arrangements. The Party organizations and takes in accordance with the lead in complying with various rules and regulations of the Working Regulations of Bank, do well in the promotion, motivation and explanation the Communist Party of during the implementation of major decisions of the Bank, and China on the Grassroots solidify and lead all Party members and employees to align their Organization of State-owned thoughts and actions to the development strategic objectives Enterprises (Trial) and major decisions and arrangements of the Bank, so as to promote the reform and development of the Bank.
Article 329 The Party Committee shall establish a supervision The amendment is made system for the implementation of major decisions of the Bank, in accordance with carry out supervision and inspection on a regular basis, and Working Regulations of put forward rectification suggestions in a timely manner on the Communist Party of acts of the Bank that fall short of the Party’s route, guidelines China on the Grassroots and policy, the state laws and regulations, as well as the Organization of State-owned requirements of the Party Committee of the CPC and the Enterprises (Trial) provincial Party Committee and report those going uncorrected to the Party organization at a higher level in a timely manner.
Section 4 Basic Guarantee The amendment is made in accordance with Article 330 The Bank shall allocate a certain proportion of Working Regulations of full-time and part-time employees based on the number of the Communist Party of employees and actual needs. The Bank regards the positions China on the Grassroots involving Party affairs as an important platform to cultivate Organization of State-owned the Bank’s compound talents. The Bank strictly implements Enterprises (Trial) the policy of same treatment for the same rank, and promotes the two-way communication between Party staff and other management personnel.
The Bank shall guarantee the working funds of the Party organizations of the Bank by inclusion of such funds into administrative expenses and retention of Party expenses, and give priority to those used for the frontline of production and operation. The portion included in the administrative expenses is generally appropriated at a ratio of 1% of the payroll of the Bank in the previous year, and will be included in the annual budget of the Bank.
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REASONS FOR OR ORIGINAL ARTICLES AMENDED ARTICLES BASIS OF AMENDMENT
Article 339 With regard to the occurrence of the situation Article 34039 With regard to the occurrence of the situation For improving the accuracy described in item (1) of Article 338 in the Articles of Association, described in item (1) of Article 3398 in the Articles of Association, of expression; For adjusting the Bank may continue to exist by amending the Articles of the Bank may continue to exist by amending the Articles of the numbering of cross- Association. Association. referenced articles
Amendments to the Articles of Association pursuant to the Amendments to the Articles of Association pursuant to the preceding Article shall be approved by votes representing two- preceding Article shall be approved by votes representing two- thirds or more of the voting rights held by shareholders present at thirds or more of the voting rights held by shareholders present at the general meetings. the general meetings.
Article 340 Where the Bank is dissolved pursuant to items (1) and Article 3410 Where the Bank is dissolved pursuant to items For adjusting the numbering (2) of Article 338 hereof, a liquidation group shall be established (1) and (2) of Article 3398 hereof, a liquidation group shall be of cross-referenced articles within fifteen days upon occurrence of causes of such dissolution, established within fifteen days upon occurrence of causes of such and relevant members shall be determined by an ordinary resolution dissolution, and relevant members shall be determined by an passed at a general meeting. ordinary resolution passed at a general meeting.
Where the Bank is dissolved pursuant to item (4) of Article 338 Where the Bank is dissolved pursuant to item (4) of Article 3398 hereof, a people’s court shall organize shareholders, relevant hereof, a people’s court shall organize shareholders, relevant authorities and professionals to set up a liquidation group in authorities and professionals to set up a liquidation group in accordance with relevant laws for liquidation. accordance with relevant laws for liquidation.
Where the Bank is dissolved pursuant to item (5) of Article Where the Bank is dissolved pursuant to item (5) of Article 338 hereof, the relevant competent authorities shall organize 3398 hereof, the relevant competent authorities shall organize shareholders, relevant authorities and professionals to set up a shareholders, relevant authorities and professionals to set up a liquidation group for liquidation. liquidation group for liquidation.
If a liquidation group is not duly set up, the creditors may plead the If a liquidation group is not duly set up, the creditors may plead the people’s court to designate related persons to form a liquidation people’s court to designate related persons to form a liquidation committee to carry out the liquidation. committee to carry out the liquidation.
Article 347 After the liquidation committee has liquidated the Article 3487 After the liquidation committee has liquidated the For unifying the names Bank’s properties and prepared a balance sheet and an inventory of Bank’s properties and prepared a balance sheet and an inventory of of banking regulatory properties, if it believes that the Bank’s properties are insufficient properties, if it believes that the Bank’s properties are insufficient authorities in the Articles of to repay its debts, it shall, upon approval of the banking regulatory to repay its debts, it shall, upon approval of the banking regulatory Association. authorities, apply to the people’s court for declaration of the authorities under the State Council, apply to the people’s court for bankruptcy of the Bank. declaration of the bankruptcy of the Bank.
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Article 348 Upon completion of liquidation, the liquidation Article 3498 Upon completion of liquidation, the liquidation For unifying the names committee shall prepare a liquidation report and a statement of committee shall prepare a liquidation report and a statement of of banking regulatory the income and expenses and the account books in respect of the the income and expenses and the account books in respect of authorities in the Articles of liquidation period, and after verification by PRC certified public the liquidation period, and after verification by PRC certified Association. accountants, shall submit the same to the general meeting, a public accountants, shall submit the same to the general meeting, people’s court, banking regulatory authorities or local branch of the a people’s court, banking regulatory authorities under the People’s Bank of China for confirmation. State Council or local branch of the People’s Bank of China for confirmation. The liquidation committee shall, within 30 days after obtaining confirmations from the general meeting, a people’s court, banking The liquidation committee shall, within 30 days after obtaining regulatory authorities or local branch of the People’s Bank of China confirmations from the general meeting, a people’s court, banking on the liquidation report, cancel registration of the Bank with the regulatory authorities under the State Council or local branch company registration authority, and announce the termination of of the People’s Bank of China on the liquidation report, cancel the Bank. registration of the Bank with the company registration authority, and announce the termination of the Bank.
Article 354 Definitions: Article 3554 Definitions: For improving the accuracy of expression (1) the “controlling shareholders” shall refer to persons who possess (1) the “controlling shareholders” shall refer to persons who possess one of the following conditions: one of the following conditions:
⋯⋯ ⋯⋯
3. when acting alone or acting in concert with other persons, such 3. when acting alone or acting in concert with other persons, such a person holds more than 30% (inclusive) of the outstanding shares a person holds more than 30% (inclusive) of the outstanding shares of the Bank; with voting rights of the Bank;
⋯⋯ ⋯⋯
(4) Substantial shareholders herein refer to the shareholders who (4) Substantial shareholders herein refer to the shareholders who can can directly, indirectly, or jointly hold or control more than 5% of directly, indirectly, or jointly hold or control more than 5% of the the shares or voting rights of the Bank and have a significant impact shares or voting rights of the Bank and have a significant impact upon upon the decision-making of the Bank. the decision-making of the Bank.
⋯⋯ ⋯⋯
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Article 356 The amendments to the Articles of Association Article 3576 The amendments to the Articles of Association For unifying the names adopted by the general meeting shall constitute part of the Articles adopted by the general meeting shall constitute part of the Articles of banking regulatory of Association upon approval by the banking regulatory authorities. of Association upon approval by the banking regulatory authorities authorities in the Articles of under the State Council. Association.
Article 358 The term “or above”, “within”, “under”, as stated in Article 3598 The term “or above”, “within”, “under”, as stated in For improving the accuracy the Articles of Association shall all include the number or amount the Articles of Association shall all include the number or amount of expression itself; the term “less than”, “not exceeding”, “except”, “over”, itself; the term “less than”, “not exceeding”, “except”, “over”, “exceeding”, “less”, “more” shall all exclude the number or amount “exceeding”, “less”, “more” shall all exclude the number or amount itself; the term “day” refers specifically to the workday. itself; the term “day” refers specifically to the workday.
Article 362 After consideration and approval by the general Article 362 After consideration and approval by the general Deleting due to overlap with meeting of the Bank and approval by the banking regulatory meeting of the Bank and approval by the banking regulatory Article 9 authorities, the Articles of Association shall become effective from authorities, the Articles of Association shall become effective from the date of public offering of the H shares of the Bank on the Hong the date of public offering of the H shares of the Bank on the Hong Kong Stock Exchange. Kong Stock Exchange.
Note: The above proposed amendments to the Articles of Association shall be submitted to the CBIRC Gansu Office for approval upon being approved at the general meeting, and shall take effect from the date of approval by the CBIRC Gansu Office
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Regarding the amendments to the Articles of Association, the Bank confirms:
(1) The Bank confirms that although the provisions on Party building have been added in the amendments to the Articles of Association, the Board and the management of the Bank will decide on whether to adopt the opinions and suggestions of the Party committee on the daily management and decision-making of the Bank based on the actual conditions of the Bank. The responsibilities and powers of the Board and the management stipulated in the Articles of Association remain unchanged.
(2) Although Articles 32 to 34 of the Articles of Association provide that we may repurchase our Shares under specific circumstances. However, pursuant to Rules 10.06 (5) and 19A.24 of the Listing Rules, the listing of all the H Shares repurchased by the Bank shall be automatically cancelled upon repurchase and any further issue of H Shares shall be subject to normal application for listing. The Bank shall ensure that the documents of title of the repurchased H Shares are cancelled and destroyed as soon as possible after settlement of the repurchase of H Shares. Further, pursuant to Rule 19A.25 (1) of the Listing Rules, any future H Shares repurchases by the Bank will be subject to (i) the approval by the Shareholders at a general meeting by way of special resolution, (ii) the approval of the H Shareholders at a class meeting for H Shareholders by way of a special resolution. The Bank is required to despatch an explanatory statement containing all information required by Rule10.06 (1) (b) of the Listing Rules to the Shareholders when publishing meeting notices and circular. The Bank will also abide by the reporting obligations required by Rule 10.06 (4) of the Listing Rules and the public float requirement under Rules 8.08 and 13.32 of the Listing Rules for any H Shares repurchase in the future.
(3) Although the Bank intends to amend the provisions of Article 87 of the Articles of Association (which will be changed into Article 86 after the amendment) in accordance with the Reply of the State Council on the Adjustment to the Notice Period for Shareholders’ General Meetings Applicable to Overseas Listed Companies, the Bank does not intend to deviate from, and confirms that it will continue to comply with Provision E.1.3 of the Corporate Governance Code contained in Appendix 14 to the Listing Rules in the future , i.e. the Bank shall give notices to Shareholders at least 20 clear business days before the AGM and at least 10 clear business days before the EGM.
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