THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to any aspect about this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.
If you have sold or transferred all your shares in GF Securities Co., Ltd., you should at once hand this circular, together with the enclosed proxy form, 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.
GF SECURITIES CO., LTD.
廣發証券股份有限公司
(A joint stock company incorporated in the People's Republic of China with limited liability)
(Stock Code: 1776)
- 2020 DIRECTORS' REPORT
- 2020 SUPERVISORY COMMITTEE'S REPORT
- 2020 FINAL FINANCIAL REPORT
- 2020 ANNUAL REPORT
- 2020 PROFIT DISTRIBUTION PLAN
- RESOLUTION REGARDING ENGAGING AUDITORS IN 2021
- RESOLUTION REGARDING THE AUTHORIZATION OF PROPRIETARY INVESTMENT QUOTA FOR 2021
- RESOLUTION REGARDING THE 2021 EXPECTED DAILY RELATED PARTY/CONNECTED TRANSACTIONS
AND
(9) NOTICE OF AGM
The 2020 AGM of GF Securities Co., Ltd. will be held at 2:00 p.m. on Thursday, May 13, 2021 at Conference Room 4008, 40th Floor, GF Securities Tower, 26 Machang Road, Tianhe District, Guangzhou, Guangdong, the PRC. A notice convening the AGM is set out on pages 7 to 10 of this circular.
Whether or not you are able to attend the AGM, you are advised to read the notice of AGM carefully and to complete the enclosed proxy form in accordance with the instructions printed thereon and return it as soon as possible. H Shareholders are required to return the proxy form to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, while A Shareholders are required to return the proxy form to the Board's office, in person or by post no later than 24 hours before the time appointed for convening the AGM. Completion and return of the proxy form will not preclude you from attending and voting at the AGM in person if you so wish.
April 15, 2021
CONTENTS | ||
Page | ||
Definitions . . . . | . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1 |
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4 | |
Notice of AGM | . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7 |
Appendix I | Businesses of the AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | I-1 |
Annex A | 2020 Directors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | A-1 |
Annex B | 2020 Supervisory Committee's Report . . . . . . . . . . . . . . . . . . . . | B-1 |
Annex C | 2020 Final Financial Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . | C-1 |
Annex D | Resolution Regarding the Authorization of Proprietary | |
Investment Quota for 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . | D-1 | |
Annex E | Resolution Regarding the 2021 Expected Daily Related | |
Party/Connected Transactions . . . . . . . . . . . . . . . . . . . . . . . . | E-1 | |
Appendix II | 2020 Work Report of the Independent Directors . . . . . . . . . . . | II-1 |
Appendix III | 2020 Duty Performance Report of the Independent Directors . | III-1 |
Appendix IV | Special Description of the Performance Assessment and | |
Remuneration of the Directors for the Year of 2020 . . . . . . . | IV-1 | |
Appendix V | Special Description of the Duty Performance Appraisal and | |
Remuneration of the Supervisors for the Year of 2020 . . . . . | V-1 | |
Appendix VI | Special Description of the Duty Performance, Performance | |
Assessment and Remuneration of the Management for | ||
the Year of 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | VI-1 |
- i -
DEFINITIONS
In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:
"AGM" or "2020 AGM" | the 2020 annual general meeting of the Company to be |
held at 2:00 p.m. on Thursday, May 13, 2021 | |
"A Share(s)" | domestic shares with nominal value of RMB1.00 each in |
the ordinary share capital of the Company, which are | |
listed on the SZSE and traded in RMB (stock code: | |
000776) |
"A Shareholder(s)"
"Articles of Association"
"associate"
"Board" or "Board of Directors"
"The Company" or "Company" or "GF Securities" or "parent company"
holder(s) of A Shares
the articles of association of the Company, as amended, modified or otherwise supplemented from time to time
has the meaning ascribed to it under the Hong Kong Listing Rules
the board of Directors of the Company
GF Securities Co., Ltd. (廣發証券股份有限公司), a joint stock company incorporated in the PRC with limited liability and whose H Shares and A Shares are listed on the main board of the Hong Kong Stock Exchange and the main board of the SZSE, respectively
"Company Law" | Company Law of the PRC (《中華人民共和國公司法》), |
as amended from time to time | |
"connected person(s)" | has the meaning ascribed to it under the Hong Kong |
Listing Rules | |
"CSRC" | China Securities Regulatory Commission |
"Director(s)" | the director(s) of the Company |
"E Fund" | E Fund Management Co., Ltd. (易方達基金管理有限公 |
司) | |
"GF Asset Management" | GF Securities Asset Management (Guangdong) Co., Ltd. |
(廣發証券資產管理 (廣東)有限公司) | |
"GF Fund" | GF Fund Management Co., Ltd. (廣發基金管理有限公司) |
"GF Futures" | GF Futures Co., Ltd. (廣發期貨有限公司) |
- 1 -
DEFINITIONS | |
"GF Qianhe" | GF Qianhe Investment Co., Ltd. (廣發乾和投資有限公 |
司) | |
"GF Xinde" | GF Xinde Investment Management Co., Ltd. (廣發信德投 |
資管理有限公司) | |
"GFHK" | GF Holdings (Hong Kong) Corporation Limited (廣發控 |
股 (香港)有限公司) | |
"GFFL" | Guangfa Financial Leasing (Guangdong) Co., Ltd. (廣發 |
融資租賃(廣東)有限公司) | |
"GF Hexin" | GF Hexin Industry Investment Management Co., Ltd. (廣 |
發合信產業投資管理有限公司) | |
"The Group" or "Group" | the Company and its subsidiaries |
"H Share(s)" | the overseas listed foreign share(s) with nominal value of |
RMB1.00 each in the ordinary share capital of the | |
Company, which are listed on the Hong Kong Stock | |
Exchange and traded in Hong Kong in HK$ (stock code: | |
1776) | |
"H Shareholder(s)" | holder(s) of H Shares |
"HK$" | Hong Kong dollars, the lawful currency of Hong Kong |
"Hong Kong" | the Hong Kong Special Administrative Region of the |
PRC | |
"Hong Kong Listing Rules" | the Rules Governing the Listing of Securities on the |
Hong Kong Stock Exchange (as amended from time to | |
time) | |
"Hong Kong Stock Exchange" | The Stock Exchange of Hong Kong Limited |
"Independent Director(s)" or | the independent non-executive director(s) of the |
"Independent Non-executive | Company |
Director(s)" | |
"substantial shareholder(s)" | has the meaning ascribed to it under the Hong Kong |
Listing Rules |
- 2 -
DEFINITIONS | |
"Jilin Aodong" | Jilin Aodong Pharmaceutical Group Co., Ltd. (吉林敖東 |
藥業集團股份有限公司), a substantial shareholder of the | |
Company, the shares of which are listed on the SZSE | |
(stock code: 000623) | |
"Liaoning Cheng Da" | Liaoning Cheng Da Co., Ltd. (遼寧成大股份有限公司), a |
substantial shareholder of the Company, the shares of | |
which are listed on the SSE (stock code: 600739) | |
"Zhongshan Public Utilities" | Zhongshan Public Utilities Group Co., Ltd. (中山公用事 |
業集團股份有限公司), a substantial shareholder of the | |
Company, the shares of which are listed on the SZSE | |
(stock code: 000685) | |
"Latest Practicable Date" | April 11, 2021, being the latest practicable date prior to |
the publication of this circular for the purpose of | |
ascertaining certain information contained herein | |
"PRC" | the People's Republic of China, which for the purpose of |
this circular only, excludes Hong Kong, the Macau | |
Special Administrative Region of the PRC and Taiwan | |
"Reporting Period" | the year of 2020 (January 1, 2020 to December 31, 2020) |
"RMB" | Renminbi, the lawful currency of the PRC |
"Securities Law" | The Securities Law of the PRC (《中華人民共和國證券 |
法》), as amended and adopted at the 15th Meeting of the | |
Standing Committee of the 13th National People's | |
Congress and came into force on March 1, 2020 | |
"Share(s)" | ordinary share(s) of the Company with a nominal value of |
RMB1.00 each, including A Share(s) and H Share(s) | |
"Shareholder(s)" | shareholder(s) of the Company, including A |
Shareholder(s) and H Shareholder(s) | |
"SSE" | Shanghai Stock Exchange |
"Supervisor(s)" | the supervisor(s) of the Company |
"Supervisory Committee" | the supervisory committee of the Company |
"SZSE" | Shenzhen Stock Exchange |
Note: Unless otherwise specified, the monetary amount presented in this circular are denominated in RMB.
- 3 -
LETTER FROM THE BOARD
GF SECURITIES CO., LTD.
廣發証券股份有限公司
(A joint stock company incorporated in the People's Republic of China with limited liability)
(Stock Code: 1776)
Executive Directors: | Registered address: |
Mr. Sun Shuming (Chairman) | Room 618 |
Mr. Lin Chuanhui (General Manager) | 2 Tengfei 1st Road |
Ms. Sun Xiaoyan | Sino-Singapore Guangzhou Knowledge City |
Mr. Qin Li | Huangpu District, Guangzhou |
Guangdong | |
Non-executive Directors: | the PRC |
Mr. Li Xiulin | |
Mr. Shang Shuzhi | Principal place of |
Mr. Guo Jingyi | business in the PRC: |
GF Securities Tower | |
Independent Non-executive Directors: | 26 Machang Road |
Mr. Fan Lifu | Tianhe District |
Mr. Hu Bin | Guangzhou |
Ms. Leung Shek Ling Olivia | Guangdong, the PRC |
Mr. Li Wenjing | |
Place of business in Hong Kong: | |
29-30/F, Li Po Chun Chambers | |
189 Des Voeux Road Central | |
Hong Kong | |
April 15, 2021 | |
Dear H Shareholders, |
- 2020 DIRECTORS' REPORT
- 2020 SUPERVISORY COMMITTEE'S REPORT
- 2020 FINAL FINANCIAL REPORT
- 2020 ANNUAL REPORT
- 2020 PROFIT DISTRIBUTION PLAN
- RESOLUTION REGARDING ENGAGING AUDITORS IN 2021
- RESOLUTION REGARDING THE AUTHORIZATION OF PROPRIETARY INVESTMENT QUOTA FOR 2021
- RESOLUTION REGARDING THE 2021 EXPECTED DAILY RELATED PARTY/CONNECTED TRANSACTIONS
AND
(9) NOTICE OF AGM
1. INTRODUCTION
On behalf of the Board, I would like to invite you to attend the 2020 AGM to be held at 2:00 p.m. on Thursday, May 13, 2021 at Conference Room 4008, 40th Floor, GF Securities Tower, 26 Machang Road, Tianhe District, Guangzhou, Guangdong, the PRC.
- 4 -
LETTER FROM THE BOARD
The purpose of this circular is to give you notice of the AGM and to 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. BUSINESSES TO BE CONSIDERED AT THE AGM
Details of the businesses to be considered at the AGM are set forth on pages I-1 to I-3 of this circular.
Resolutions to be proposed at the AGM include the resolutions to be approved by way of ordinary resolutions: (1) the 2020 Directors' Report; (2) the 2020 Supervisory Committee's Report; (3) the 2020 Final Financial Report; (4) the 2020 Annual Report; (5) the 2020 Profit Distribution Plan; (6) the resolution regarding engaging auditors in 2021; (7) the resolution regarding the authorization of proprietary investment quota for 2021; and (8) the resolution regarding the 2021 expected daily related party/connected transactions.
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 thereof, we have provided detailed information to the Shareholders in Appendix I to this circular, which includes the information and explanation about the resolutions proposed to be passed at the AGM.
The following reports/special descriptions will be presented at the AGM for hearing, but no Shareholders' approval is required: (1) the 2020 Work Report of the Independent Directors;
- the 2020 Duty Performance Report of the Independent Directors; (3) the Special Description of the Performance Assessment and Remuneration of the Directors for the Year of 2020; (4) the Special Description of the Duty Performance Appraisal and Remuneration of the Supervisors for the Year of 2020; and (5) the Special Description of the Duty Performance, Performance Assessment and Remuneration of the Management for the Year of 2020. In order to provide detailed information to Shareholders, these reports/special descriptions are set out in Appendix II to Appendix VI to this circular for Shareholders' review, respectively.
3. THE AGM
The AGM will be held at 2:00 p.m. on Thursday, May 13, 2021 at Conference Room 4008, 40th Floor, GF Securities Tower, 26 Machang Road, Tianhe District, Guangzhou, Guangdong, the PRC. The notice of AGM is set out on pages 7 to 10 of this circular.
Enclosed are the proxy form of the AGM. Whether or not you are able to attend the AGM, you are advised to read the notice of AGM carefully and to complete the enclosed proxy form in accordance with the instructions printed thereon and return it as soon as possible. H Shareholders are required to return the proxy form to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, while A Shareholders are required to return the proxy form to the Board's office, in person or by post no later than 24 hours before the time appointed for convening the AGM. Completion and return of the proxy form will not preclude you from attending and voting at the AGM in person if you so wish.
- 5 -
LETTER FROM THE BOARD
The address of the Company's Board office is 51st Floor, GF Securities Tower, 26 Machang Road, Tianhe District, Guangzhou, Guangdong, the PRC, postcode: 510627, (phone:
- 20 8755 0265, (86) 20 8755 0565; fax: (86) 20 8755 4163). Computershare Hong Kong Investor Services Limited, the Company's H Share registrar, is located at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong (phone: (852) 2862 8555).
4. VOTING BY POLL
- Pursuant to the requirements of the Hong Kong Listing Rules, all votes of shareholders at a general meeting must be taken by poll. Therefore, all resolutions to be proposed at the AGM will be voted by poll. Results of the poll voting will be posted on the website of the Company at www.gf.com.cn and on the HKExnews website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk upon the conclusion of the AGM.
- Jilin Aodong, Liaoning Cheng Da, Zhongshan Public Utilities and their respective associates will abstain from voting on the resolution regarding the 2021 expected daily related party/connected transactions and shall not accept appointment from other Shareholders as proxies in voting.
5. RECOMMENDATION
The Directors (including the Independent Non-executive Directors) are of the view that the matters set out in this circular are in the interests of the Company and the Shareholders as a whole. As such, the Directors (including the Independent Non-executive Directors) recommend all the Shareholders to vote in favour of the resolutions to be proposed at the AGM.
6. RESPONSIBILITY STATEMENT
This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Hong Kong Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects, and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.
By order of the Board
GF Securities Co., Ltd.
Sun Shuming
Chairman
- 6 -
NOTICE OF AGM
GF SECURITIES CO., LTD.
廣發証券股份有限公司
(A joint stock company incorporated in the People's Republic of China with limited liability)
(Stock Code: 1776)
NOTICE OF AGM
NOTICE IS HEREBY GIVEN that the 2020 annual general meeting (the "AGM") of GF Securities Co., Ltd. (the "Company") will be held at 2:00 p.m. on Thursday, May 13, 2021 at Conference Room 4008, 40th Floor, GF Securities Tower, 26 Machang Road, Tianhe District, Guangzhou, Guangdong, the PRC to consider and, if thought fit, approve the following resolutions.
ORDINARY RESOLUTIONS
- To consider and approve the 2020 Directors' Report.
- To consider and approve the 2020 Supervisory Committee's Report.
- To consider and approve the 2020 Final Financial Report.
- To consider and approve the 2020 Annual Report.
- To consider and approve the 2020 Profit Distribution Plan.
- To consider and approve the resolution regarding engaging auditors in 2021.
- To consider and approve the resolution regarding the authorization of proprietary investment quota for 2021.
- To consider and approve the resolution regarding the 2021 expected daily related party/connected transactions.
TO HEAR THE RELEVANT REPORTS
- To hear the 2020 Work Report of the Independent Directors.
- To hear the 2020 Duty Performance Report of the Independent Directors.
- To hear the Special Description of the Performance Assessment and Remuneration of the Directors for the Year of 2020.
- 7 -
NOTICE OF AGM
- To hear the Special Description of the Duty Performance Appraisal and Remuneration of the Supervisors for the Year of 2020.
- To hear the Special Description of the Duty Performance, Performance Assessment and Remuneration of the Management for the Year of 2020.
By order of the Board
GF Securities Co., Ltd.
Sun Shuming
Chairman
Guangzhou, the PRC
April 15, 2021
As at the date of this notice, the Board of the Company comprises Mr. Sun Shuming, Mr. Lin Chuanhui, Ms. Sun Xiaoyan and Mr. Qin Li as executive directors; Mr. Li Xiulin, Mr. Shang Shuzhi and Mr. Guo Jingyi as non-executive directors; and Mr. Fan Lifu, Mr. Hu Bin, Ms. Leung Shek Ling Olivia and Mr. Li Wenjing as independent non-executive directors.
Notes:
- Details of the above said resolutions are set out in Appendix I to the circular of the Company dated April 15, 2021 (the "Circular"), of which details in respect of various resolutions are set out in Annex A to Annex E of Appendix I to this Circular, respectively.
- The following reports/special descriptions will be presented at the AGM for hearing, but no Shareholders' approval is required: (1) the 2020 Work Report of the Independent Directors; (2) the 2020 Duty Performance Report of the Independent Directors; (3) the Special Description of the Performance Assessment and Remuneration of the Directors for the Year of 2020; (4) the Special Description of the Duty Performance Appraisal and Remuneration of the Supervisors for the Year of 2020; and (5) the Special Description of the Duty Performance, Performance Assessment and Remuneration of the Management for the Year of 2020.
- Pursuant to the requirements of the Hong Kong Listing Rules, all votes of Shareholders at a general meeting must be taken by poll. Therefore, the resolutions as set out in the notice of AGM will be voted by poll. Results of the poll voting will be posted on the HKExnews website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk and the website of the Company at www.gf.com.cn upon the conclusion of the AGM.
- Any Shareholder entitled to attend and vote at the AGM convened by the above notice is entitled to appoint one or more proxies to attend and vote on his/her behalf at the meeting. A proxy needs not be a Shareholder of the Company.
- In order to be valid, the instrument appointing a proxy together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or authority, should be completed and deposited at the Board's office (for A Shareholders) or the Company's H Share registrar, Computershare Hong Kong Investor Services Limited (for H Shareholders), no less than 24 hours before the time appointed for holding the AGM. The address of the Company's Board office is at 51st Floor, GF Securities Tower, 26 Machang Road, Tianhe District, Guangzhou, Guangdong, the PRC, postal code: 510627, (phone: (86) 20 8755 0265; (86) 20 8755 0565; fax: (86) 20 8755 4163). Computershare Hong Kong Investor Services Limited, the Company's H Share registrar, is located at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong (phone: (852) 2862 8555). Completion and return of the proxy form will not preclude a Shareholder from attending and voting at the AGM in person should he/she so wish.
- 8 -
NOTICE OF AGM
- In order to determine the H Shareholders' entitlement to attend the AGM, the H Share register of members of the Company will be closed from Monday, May 10, 2021 to Thursday, May 13, 2021 (both days inclusive), during which period no transfer of shares will be registered. In order for H Shareholders to attend the AGM, all share transfer, documents accompanied by the relevant share certificates, must be lodged with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, by 4:30 p.m. on Friday, May 7, 2021. H Shareholders who are registered with Computershare Hong Kong Investor Services Limited on or before the aforementioned date are entitled to attend the AGM.
- The Board recommended the payment of a final dividend for the year ended December 31, 2020 in an aggregate amount expected to be RMB3,429,489,448.80 (tax inclusive), representing a cash dividend of RMB4.5 (tax inclusive) for every 10 Shares held on the basis of the number of Shares on the record date for dividend distribution. Cash dividends of H Shares are distributed in Hong Kong dollars, the actual amount of which is calculated based on the average benchmark exchange rate for conversion between RMB and Hong Kong dollar as announced by the People's Bank of China of the five business days before the date of the AGM (namely Thursday, May 6, 2021 to Wednesday, 12 May, 2021).
If the Shareholders approve the 2020 final dividend at the AGM, the Company's final dividend for the year ended December 31, 2020 will be paid to H Shareholders on Wednesday, July 7, 2021.
Separate announcements will be published by the Company in respect of the record date and book closure period for the payment of dividends on H Shares, as well as the record date and specific date for the payment of dividends on A Shares and other relevant matters.
Time arrangements of the record date, ex-entitlement date and final dividend payment date for investors of Northbound Trading of Shenzhen Connect are consistent with those for A Shareholders of the Company. Time arrangements of the record date, ex-entitlement date and final dividend payment date for Southbound Trading investors are consistent with those for H Shareholders of the Company. - Withholding and payment of enterprise income tax for non-resident enterprise Shareholders
According to the Enterprise Income Tax Law of the People's Republic of China (《中華人民共和國企業所得 稅法》) and its implementation regulations and other relevant rules and regulations, the Company is required to withhold and pay enterprise income tax at the rate of 10% before distributing the 2020 final dividend to non-resident enterprise Shareholders as appeared on the H Share register of members of the Company. Any Shares registered in the name of non-individual registered Shareholders, including HKSCC Nominees Limited, other nominees, trustees or other groups and organizations, will be treated as being held by non-resident enterprise Shareholders and therefore will be subject to the withholding of the enterprise income tax.
Upon receipt of such dividends, a non-resident enterprise Shareholder may apply to the competent tax authorities for relevant treatment under the tax treaties (arrangements) in person or through a proxy or a withholding agent and provide evidence in support of its status as a beneficial owner as defined in the tax treaties (arrangements). Upon verification by the competent tax authorities, the difference between the tax levied and the amount of tax payable as calculated at the tax rate under the tax treaties (arrangements) will be refunded.
Withholding and payment of individual income tax for individual foreign Shareholders
Pursuant to the Individual Income Tax Law of the People's Republic of China (《中華人民共和國個人所得稅 法》) and its implementation regulations and other relevant rules and regulations, the Company is required to withhold and pay individual income tax before distributing the 2020 final dividend to individual Shareholders as appeared on the H Share register of members of the Company (the "individual H Shareholders"). However, the individual H Shareholders may be entitled to certain tax preferential treatments pursuant to the tax treaties between the PRC and the countries (regions) in which the individual H Shareholders are domiciled and the tax arrangements between Mainland China and Hong Kong (Macau). In this regard, the Company will implement the following arrangements in relation to the withholding and payment of individual income tax for the individual H Shareholders: - for individual H Shareholders who are Hong Kong or Macau residents or whose country (region) of domicile is a country (region) which has entered into a tax treaty with the PRC stipulating a tax rate of 10%, the Company will withhold and pay individual income tax at the rate of 10% on behalf of the individual H Shareholders in the distribution of final dividend;
- 9 -
NOTICE OF AGM
- for individual H Shareholders whose country (region) of domicile is a country (region) which has entered into a tax treaty with the PRC stipulating a tax rate of less than 10%, the Company will temporarily withhold and pay individual income tax at the rate of 10% on behalf of the individual H Shareholders in the distribution of final dividend;
- for individual H Shareholders whose country (region) of domicile is a country (region) which has entered into a tax treaty with the PRC stipulating a tax rate of more than 10% but less than 20%, the Company will withhold and pay individual income tax at the effective tax rate stipulated in the relevant tax treaty in the distribution of final dividend;
- for individual H Shareholders whose country (region) of domicile is a country (region) which has entered into a tax treaty with the PRC stipulating a tax rate of 20%, or a country (region) which has not entered into any tax treaties with the PRC, or under any other circumstances, the Company will withhold and pay individual income tax at the rate of 20% on behalf of the individual H Shareholders in the distribution of final dividend.
If individual H Shareholders consider that the tax rate adopted by the Company for the withholding and payment of individual income tax on their behalf is not the same as the tax rate stipulated in any tax treaties between the PRC and the countries (regions) in which they are domiciled, please submit promptly to the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited, a letter of entrustment and all application materials showing that they are residents of a country (region) which has entered into a tax treaty with the PRC. The Company will then submit the above documents to competent tax authorities who will proceed with subsequent tax related arrangements.
Withholding of income tax for H Shareholders via Southbound Trading
Pursuant to the Notice on Relevant Taxation Policies Concerning the Pilot Inter-connected Mechanism for Trading on the Shenzhen Stock Market and the Hong Kong Stock Market (Cai Shui [2016] No. 127) (《關於 深港股票市場交易互聯互通機制試點有關稅收政策的通知》(財稅[2016]127號)) promulgated on December 5, 2016:
- for dividends received by Mainland individual investors from investing in the H Shares of the Company via Southbound Trading, the Company will withhold and pay individual income tax at the rate of 20% on their behalf. For dividends received by Mainland securities investment funds from investing in the H Shares of the Company via Southbound Trading, the tax payable will be the same as that for individual investors and will also be paid in the same way; and
- for dividends received by Mainland corporate investors from investing in the H Shares of the Company via Southbound Trading, the Company will not withhold and pay the income tax on their behalf and the Mainland corporate investors shall file the tax returns on their own. Dividends and bonus income of resident enterprises in the PRC obtained as they have continuously held H Shares for 12 months and enterprise income tax will be exempted according to laws.
Should the H Shareholders of the Company have any doubt in relation to the aforesaid arrangements, they are recommended to consult their tax advisors for relevant tax impact in Mainland China, Hong Kong and other countries (regions) on the possession and disposal of the H Shares of the Company.
- In the case of joint Shareholders, if more than one of them are present at the meeting, either in person or by proxy, the vote of the senior joint Shareholder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint Shareholder(s). For this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint shareholding.
- The AGM is expected to last for half day. Shareholders or their proxies attending the meeting shall be responsible for their own travelling and accommodation expenses. Shareholders or their proxies shall produce their identity documents when attending the AGM.
-
The abovementioned ordinary resolution no. 8 (the resolution regarding the 2021 expected daily related party/connected transactions) will be taken by poll by Shareholders who do not hold any interests in those resolutions.
Jilin Aodong, Liaoning Cheng Da, Zhongshan Public Utilities and their respective associates are required to abstain from voting on the abovementioned ordinary resolution no. 8 (the resolution regarding the 2021 expected daily related party/connected transactions), and shall not accept appointment from other Shareholders as proxies in voting.
- 10 -
APPENDIX I | BUSINESSES OF THE AGM |
ORDINARY RESOLUTIONS
1. To Consider and Approve the 2020 Directors' Report
Pursuant to the requirements of the Company Law and the Articles of Association, considering and approving Directors' Report is the function and power of the general meeting of the Company. According to the requirements of the Rules of General Meeting of Listed Companies issued by the CSRC, the Board shall report their work during the past year to the Shareholders at the AGM.
The 2020 Directors' Report of GF Securities was considered and approved by the 13th Meeting of the Tenth Session of the Board of Directors (the "Board Meeting") on March 29, 2021, it is hereby proposed to the AGM for consideration and approval by the Shareholders.
Details of the aforesaid Directors' Report are set out in Annex A to this circular.
2. To Consider and Approve the 2020 Supervisory Committee's Report
Pursuant to the relevant regulatory provisions and the requirements of the Articles of Association, considering and approving the Supervisory Committee's Report is the duty and authority of the general meeting of the Company. According to the requirements of the Rules of General Meeting of Listed Companies issued by the CSRC, the Supervisory Committee shall report their work during the past year to the Shareholders at the AGM.
The 2020 Supervisory Committee's Report of GF Securities was considered and approved by the 4th Meeting of the Tenth Session of the Supervisory Committee (the "Supervisory Committee Meeting") on March 29, 2021, it is hereby proposed to the AGM for consideration and approval by the Shareholders.
Details of the aforesaid Supervisory Committee's Report are set out in Annex B to this circular.
3. To Consider and Approve the 2020 Final Financial Report
The 2020 Final Financial Report of GF Securities was considered and approved by the Board at the Board Meeting on March 29, 2021 and is hereby proposed to the AGM for its consideration and approval.
Details of the aforesaid resolution are set out in Annex C to this circular.
4. To Consider and Approve the 2020 Annual Report
The 2020 Annual Report was considered and approved by the Board at the Board Meeting on March 29, 2021 and is hereby proposed to the AGM for its consideration and approval. For details about the Annual Report, please refer to the 2020 Annual Report/Annual Results Announcement dated March 29, 2021 posted on the HKExnews website of Hong Kong Exchanges and Clearing Limited at (www.hkexnews.hk) and the Company's website at (www.gf.com.cn).
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APPENDIX I | BUSINESSES OF THE AGM |
5. To Consider and Approve the 2020 Profit Distribution Plan
According to the 2020 Profit Distribution Plan of GF Securities which was considered and approved at the Board Meeting and disclosed by the Company on China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily and the website of CNINFO (www.cninfo.com.cn) on March 30, 2021, the annual profit distribution plan of the Company for 2020 is as follows:
In 2020, GF Securities, the parent company of the Group, achieved a net profit of RMB7,340,393,398.36, and in accordance with the provisions of the Articles of Association, each of the statutory surplus reserve, the general risk reserve, and the transaction risk reserve was credited with 10% of the net profit, amounting to RMB734,039,339.84 for each of the reserves. According to the Provisional Measures on Supervision and Administration of Risk Reserve of Public Offering of Securities Investment Funds (《公開募集證券投資基金風險準備 金監督管理暫行辦法》), a fund custodian should appropriate no less than 2.5% of the income from fund custodian fees to the risk reserve on a monthly basis. A sum of RMB590,764.45 was appropriated to the general risk reserve for asset custodian business, and the remaining distributable profit amounted to RMB23,600,893,624.83.
According to the Document No. [2007] 320 (機構字[2007]320號文) issued by the CSRC, securities companies shall not utilize the gains arising from fair value changes included in distributable profits to distribute cash dividends. After deducting the gains arising from fair value changes included in distributable profits, the distributable profits for cash dividends for the year amounted to RMB23,600,893,624.83.
Based on the number of Shares held as at the record date, it was proposed that a cash dividend of RMB4.5 (tax inclusive) for every 10 Shares be distributed to all Shareholders. Based on the Company's existing share capital of 7,621,087,664 Shares, the total cash dividend would be RMB3,429,489,448.80, and the remaining undistributed profit of RMB20,171,404,176.03 would be carried forward to the next financial year.
Dividends for A Shares will be paid in RMB and dividends for H Shares will be paid in Hong Kong dollars, the actual amount will be determined by the average benchmark exchange rate between RMB and Hong Kong dollars as announced by the People's Bank of China for the five business days prior to the date of the AGM of the Company (namely Thursday, May 6, 2021 to Wednesday, May 12, 2021).
The aforesaid 2020 Profit Distribution Plan was considered and approved by the Board at the Board Meeting on March 29, 2021 and is hereby proposed to the AGM for its consideration and approval, and authorization the management of the Company to deal with, including but not limited to, opening and operating dividend accounts and other specific matters relating to the implementation of profit distribution. If the Shareholders approve the 2020 final dividend at the AGM, the Company's final dividend for the year ended December 31, 2020 will be paid to H Shareholders on Wednesday, July 7, 2021.
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APPENDIX I | BUSINESSES OF THE AGM |
Separate announcements will be published by the Company in respect of the record date and book closure period for the payment of dividends on H Shares, as well as the record date and specific date for the payment of dividends on A Shares and other relevant matters.
Time arrangements of the record date, ex-entitlement date and final dividend payment date for investors of Northbound Trading of Shenzhen Connect are consistent with those for A Shareholders of the Company. Time arrangements of the record date, ex-entitlement date and final dividend payment date for Southbound Trading investors are consistent with those for H Shareholders of the Company.
6. To Consider and Approve the Resolution Regarding Engaging Auditors in 2021
Ernst & Young Hua Ming LLP and Ernst & Young are the auditors of the Company. In consideration of their professional level and service experience, the Board hereby proposes to re-appoint Ernst & Young Hua Ming LLP as the PRC domestic auditor of the Company in 2021, and Ernst & Young as the overseas auditor of the Company in 2021. It is hereby proposed to the shareholders' general meeting to authorize the management of the Company to negotiate and determine the 2021 auditing fee with the firms in accordance with market principle.
The aforesaid resolution was considered and approved by the Board at the Board Meeting on March 29, 2021 and is hereby proposed to the AGM for consideration and approval by the Shareholders.
7. To Consider and Approve the Resolution Regarding the Authorization of Proprietary Investment Quota for 2021
The aforesaid resolution was considered and approved by the Board at the Board Meeting on March 29, 2021 and is hereby proposed to the AGM for consideration and approval by the Shareholders. Details of the aforesaid resolution are set out in Annex D to this circular.
8. To Consider and Approve the Resolution Regarding the 2021 Expected Daily Related Party/Connected Transactions
The aforesaid resolution was considered and approved by the Board at the Board Meeting on March 29, 2021 and is hereby proposed to the AGM for consideration and approval by the Shareholders. Details of the aforesaid resolution are set out in Annex E to this circular.
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ANNEX A | 2020 DIRECTORS' REPORT |
Dear Shareholders,
The directors of the Company (the "Directors") present the annual report and the audited consolidated financial statements of the Company and the Group for the year ended December 31, 2020. Contents of relevant section in the 2020 Annual Report ("Annual Report") of the Company mentioned in the cross references in the Directors' Report forms part of the Directors' Report.
- MAIN BUSINESSES OF THE COMPANY DURING THE REPORTING PERIOD
- The Group's Main Business Type
The Group is a provider of comprehensive capital market services with industry-leading innovation capabilities focused on serving China's quality enterprises and affluent individuals. The Group has built a diversified business serving the various needs of corporations, individuals (especially affluent individuals), institutional investors, financial institutions and government clients. The main business of the Group can be classified into four segments, namely investment banking, wealth management, trading and institution and investment management, and each operating indicator has ranked among forefront of the industry.
Products and services of the four business segments are set out in the table below:
Investment | Wealth | Trading and | Investment | ||||
Banking | Management | Institution | Management | ||||
Equity finance | Retail brokerage and | Equity and derivatives | Assets | ||||
Debt finance | wealth management | trading | management | ||||
Financial | Margin financing and | Fixed income sales | Public fund | ||||
advisory | securities lending | and trading | management | ||||
Repurchase | OTC sales and trading | Private fund | |||||
transactions | Alternative investment | management | |||||
Financial leasing | Investment research | ||||||
Asset custody |
Investment Banking: the Group earns its commissions, sponsor and consulting fees through underwriting stocks and bonds and providing sponsor and financial advisory services;
Wealth Management: the Group earns its fees, consulting fees and commissions through providing brokerage and investment advisory services, obtaining interest income from its business of financing and securities lending and borrowing, repurchase transactions, financial leasing, and fund management of settlement fund on behalf of clients, and earning its fees through acting as agent for the sales of financial products developed by the Group and other financial institutions;
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ANNEX A | 2020 DIRECTORS' REPORT |
Trading and Institution: the Group earns its investment income and interest income through investment transactions and market making services from equity, fixed income and derivatives, earning its fees and commissions through providing transaction consultation and execution, investment research services and the main broker services to institutional customers;
Investment Management: the Group earns its management fees, advisory fees and performance fee through providing services for the assets management, public fund management and private fund management.
During the Reporting Period, the principal businesses and the operating model of the Group have had no significant changes.
(II) Development Characteristics of the Industry in which the Group Operates
The main businesses of the Group have developed steadily in light of various driving factors, which mainly include the following aspects: (1) The importance of the securities industry has been improved and shows a steady and developing trend. The report of the 19th National Congress of the Communist Party of China clearly put forward the need to strengthen financial services for the real economy, raise the proportion of direct financing, and promote the healthy development of the multi-level capital markets, which reflects that the highest decision-makers attach great importance to the development of capital markets. There has a remarkable space for the development of the industry. (2) Capital market is an important platform for market-oriented allocation of resources and is of great significance to revitalizing the real economy. The direct financing demand of enterprises is huge, and the market for merger and acquisition is developing. Benefited from the government's policy to strongly support the development of real economy and to vigorously encourage direct financing, as well as the introduction of major reform initiatives such as the comprehensive implementation of the registration system nationwide, China's capital market has a strong growth potential. Besides, assets reorganization and mergers and acquisitions will play an important role in the economic transformation of China. (3) The wealth of residents has been accumulated and allocation structure has changed, and there will be a huge room for development in wealth management business. With the continuous growth of China's economy and the wealth of residents, asset management industry of China has developed rapidly, which has become one of the sectors with most dynamic and growth potential in finance subarea. The percentage of the financial assets in the household asset allocation of China will increase, and there will be a huge room for development in wealth management business for the wealth of residents. (4) There are changes in investor structure, with continuously increase in the proportion of institutional investors. The institutional investors will become the mainstream of the market. With the robust development of public fund and private fund, the degree of participation of institutional investors, such as insurance funds, pensions and offshore funds, has increased, which will generate new income sources and diversified business opportunities for securities industry. (5) The internationalization of capital markets has accelerated. On the one hand, the restrictions on foreign investment in China's securities industry and asset management industry have been further loosened. On the other hand, the Group actively introduced overseas
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ANNEX A | 2020 DIRECTORS' REPORT |
institutional investors by implementing various measures such as abolishing QFII quotas, lowering entry barriers and facilitating investments for overseas investment institutions and expanding cooperation with international indice agencies, and the internationalization of the capital market is accelerating. (6) The Outline Development Plan for the Guangdong-HongKong-Macao Greater Bay Area expressly stated establishing an international financial hub, putting great efforts on the development of the featured financial industry, orderly promoting the interconnectivity of the financial markets and providing support to optimize the modern financial service system, which will allow the Group to leverage on regional advantages to take
- lead in the Guangdong-HongKong-Macao Greater Bay Area through forward-looking strategic arrangements.
The primary business of securities industry of the Group relies on China's economic growth, accumulation of household wealth and the development and performance of China's capital markets, including the issuance, investment and trading of financial products (such as stocks, bonds and wealth management products). These important factors are affected by the economic environment, regulatory environment, investor sentiment and the international market and other factors, which have shown an overall spiraling growth trend.
- BUSINESS REVIEW
Business operations and business review of the Group for the year ended December 31,
2020 are set out in "Discussion and Analysis of Operations", which forms part of the Directors' Report, in Section 5 of the Annual Report.
III. ANALYSIS ON CORE COMPETITIVENESS
1. Market-oriented mechanism, balanced and diversified ownership structure, and perfect corporate governance
The Company has no controlling shareholder and de facto Controller. Over the past 21 years, the top three Shareholders of the Company have been Jilin Aodong, Liaoning Cheng Da and Zhongshan Public Utilities (all public listed companies) (excluding HKSCC Nominees, as the shares held by HKSCC Nominees are owned by non-registered Shareholders of H Shares). As of December 31, 2020, the shareholding percentages of Jilin Aodong and its concert parties, Liaoning Cheng Da and its concert parties and Zhongshan Public Utilities and its concert parties were 18.06%, 17.77% and 10.34%, respectively, forming a stable shareholding structure. A sustainable, balanced and diversified shareholding structure provides strong support for the Company to form a sound governance structure, and ensures that the Company's maintenance of its market operation mechanism in long run, which facilitates the Company to achieve sustained and healthy development.
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ANNEX A | 2020 DIRECTORS' REPORT |
2. Excellent corporate culture and stable management team
With the core value of "inquisitiveness, integrity, client focus and teamwork", the Company has carried out the management philosophy of "stable growth, continual
innovations, performance driven culture and business strategies" to seek sustained, healthy and stable development. Sound corporate culture will boost the Company's cohesion and momentum. The Company has a highly stable management team and a core business team with low turnover rate of talent. The management team members have an average of approximately 27 years of managerial experience in securities and finance and relevant sectors and have served an average term of over 20 years. Over the past three years, the voluntary turnover rates of the middle and high-level management team and the employees are approximately 2.4% and 2.5%, thus greatly boosting client confidence, the continuity and stability of the operation of various business lines.
3. Stable growth philosophy and improving compliance and risk control mechanism
The Company is one of the first batch of pilot compliance management brokerages selected by the CSRC, one of the first brokerages to implement a comprehensive risk management strategy in the industry, and one of four major brokerages which has not received investment or restructuring due to operating losses among the first batch of brokers established from the end of the 80's to the early 90's. Under the philosophy of "stable growth", the Company has firmly conforming to the compliance base line and continued to solidify the risk control life-line. The Company has set up and continued to improve the comprehensive risk management system with effective coverage of compliance and risk culture, governance structure, mechanism and practice, and infrastructure facilities to cover various risks, businesses, departments, sub-branches and controlling subsidiaries of the Company. Over the years, the Company's asset quality has been excellent, the main risk control indicators have been continually complying with the regulatory requirements, and the safety margin of leverage regulatory indicators is relatively huge, with a strong ability to resist risks.
4. The main operating indicators have ranked in the forefront of the industry for many years with continuous enhancement in brand value
The total assets, net assets, net capital, operating revenue, net profit and other main operating indicators of the Company rank among the top in the industry for consecutive years. From 2018 to 2020, the Company ranked the fourth, fifth and seventh in terms of total assets in the industry, respectively; ranked the fifth, fifth and sixth in terms of net assets in the industry, respectively; ranked the sixth, sixth and eighth in terms of net capital in the industry, respectively; ranked the fifth, fifth and sixth in terms of operating revenue in the industry, respectively; ranked the sixth, fifth and sixth in terms of net profit in the industry, respectively (among them, the indicative data of net capital represents the data for the parent company; the 2018 and 2019 indicators are based on audited statistical data in the consolidated statements; the 2020 indicators are based on unaudited statistical data for the parent company; Source: WIND Info, Securities Association of China, 2021).
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ANNEX A | 2020 DIRECTORS' REPORT |
While seeking economic benefits and market position, both reputation and brand of the Company have been enhancing persistently. From 2015 to 2020, the Company ranked top securities firms in China in "Hurun Brand List" for six consecutive years. The Company actively fulfilled the social responsibility, focusing on the two areas of helping the poor and providing student loan to promote education through "GF Securities Social Charity Foundation in Guangdong Province". The Company took initiative to fulfill its social responsibility with an aim of improving the reputation and brand influence of the Company.
5. Full licenses, balanced business structure and industry-leading ability to provide comprehensive financial services
Our Group possesses licenses for a full range of services including investment banking, wealth management, transaction and institution and investment management. The various main businesses of the Company have achieved balanced development and rank among the top in the industry for years in terms of main operating indicators. At present, the Group has built a financial group structure, enabling the Company to boost its customer service continuously.
6. Leading scientific and technological financial model in the industry
The Group attaches high importance to technological innovation in the long-term and sustainable development of the Company, and empowers each aspect of management, business and service through financial technology to promote its business development and enhance competitiveness. In 2020, the Group focused on the implementation of the strategic financial technology plan. In respect of wealth management, the Group constantly optimized the full-process wealth management platform with Yitaojin APP as the core; in respect of trading and institutional business, the Group continuously improved the quick trading system for the brokerage business and accelerated the digitization of institutional services. The self- developed "GF Touyitong (廣發投易通)" investment and trading terminal and "GF Zhihui (廣 發智匯)" APP have been providing customized and integrated comprehensive services to our corporate and institutional clients; in respect of investment and trading, the fully self- developed GFQG quantitative strategy platform has facilitated the Company to obtain the highest AA rating for its three types of options traded on the SSE and SZSE, and the award of the SSE's Outstanding Option Market Maker for 2019; in respect of investment banking, the Group is one of the securities firms propping up the development of investment banking business with financial technology at an earlier time. The Group has newly upgraded the new generation of investment banking business management system, realizing the online management and digital management and control of key points for the entire product portfolio and life cycle of investment banking; in respect of internal control and management, while meeting the regulatory requirements with data and AI technology, the Group has established a "Digital Compliance and Risk Control and Monitoring System" (DCAR), providing real-time, continuous and penetration-style compliance and risk management for the whole Group and businesses; in respect of big data and artificial intelligence, the Group has actively promoted the technology strategies of data center and intelligent center, established the GF-SMART platform, developed such technical applications as intelligent warning, intelligent recommendation, intelligent calling and knowledge map, and created the first AI virtual anchor
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ANNEX A | 2020 DIRECTORS' REPORT |
named "Xiaotian (小田)" in the industry which has the image of its real employee. As of the end of the Reporting Period, the Company has in aggregate applied for 39 invention patents, 3 utility model patents and 19 software copyrights; among them, the Company has obtained 1 invention patent, 1 utility model patent and 19 software copyrights.
IV. PROFIT DISTRIBUTION AND PROPOSED DIVIDEND
The formulation and implementation details of the Company's cash dividends policy and the profit distribution proposal for 2020 are set out in "I. Profit Distribution of Ordinary Shares and Conversion of Capital Reserves into Share Capital of the Company" and "II. Profit Distribution and Conversion of Capital Reserves into Share Capital during the Reporting Period" of Section 6 "Significant Events" in the Annual Report.
- SHARE CAPITAL CHANGES AND MATTERS RELATING TO BONDS
During the Reporting Period, there were no changes in the total number of ordinary shares and the shareholding structure of the Company.
For details on the issuance of securities (excluding preference shares) during the Reporting Period, please refer to "II. Securities Issuance and the Listing" of Section 7 "Changes in Shareholdings and Particulars about Shareholders" in the Annual Report.
For details on the issuance of corporate bonds, subordinated bonds, short-term financing bills and financial bond by the Company, please refer to Section 12 "Corporate Bonds" in the Annual Report.
VI. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT OF THE
COMPANY
For details of the composition of the Directors, Supervisors and senior management of the Company, its changes and biographies during the Reporting Period, please refer to Section 10 "Particulars about Directors, Supervisors, Senior Management and Employees" in the Annual Report.
VII. SERVICE CONTRACTS OF DIRECTORS AND SUPERVISORS
The Company has entered into "Service Contracts for Directors" and "Service Contracts for Supervisors" with each of the eleven Directors of the current Tenth Session of the Board of Directors and each of the five Supervisors of the current Tenth Session of the Supervisory Committee. The term of office of the Directors and Supervisors was effective from the date of approval by the General Meeting until the expiry date of the term of office for the Ninth Session of the Board of Directors and the Ninth Session of the Supervisory Committee. The "Service Contracts for Directors" and "Service Contracts for Supervisors" provide the agreed terms on the duties and responsibilities, term of office and remuneration of the Directors and Supervisors during their term of office.
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ANNEX A | 2020 DIRECTORS' REPORT |
In addition, none of the Directors and Supervisors of the Company has entered into any service contract with the Company or its subsidiaries which is not terminable within one year without payment of compensation, other than statutory compensation.
VIII. DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES OR DEBENTURES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS
Please refer to "8. Directors, Supervisors and Chief Executive's Interests and Short Positions in the Shares, Underlying Shares or Debentures of the Company and its Associated Corporations" under "III. Shareholders and De Facto Controllers" of Section 7 "Changes in Shareholdings and Particulars about Shareholders" in the Annual Report.
IX. SHARE PURCHASE RIGHTS OF DIRECTORS AND SUPERVISORS
Save as disclosed above, none of the Company or any of its subsidiaries has participated at any time during the year in any arrangement through which the Directors and Supervisors of the Company may benefit by purchasing shares or bonds of the Company or any other entities.
- PERMITTED INDEMNITY PROVISION
Appropriate insurance policy arrangements have been made by the Company in respect of the responsibilities of the Directors and members of the senior management to cover possible legal liabilities owed to third parties arising from corporate activities that may be faced by the Directors and members of the senior management.
XI. INTEREST OF DIRECTORS AND SUPERVISORS IN MATERIAL CONTRACTS
Except for the service contracts, neither the Company nor its subsidiaries have entered into any significant transactions, arrangements or contracts in which the Directors or Supervisors of the Company or their connected entities had or continue to have, directly or indirectly, a material interest during the Reporting Period.
XII. INTEREST OF DIRECTORS IN BUSINESSES IN COMPETITION WITH THE
COMPANY
Mr. Qin Li, our executive Director, was nominated to act as a director of E Fund, which is a fund management company in China, in which we held 22.65% equity interest as of December 31, 2020. E Fund provides asset management services to insurance companies, finance companies, corporate annuities, other institutional investors, high net worth individuals and National Social Security Fund. Since E Fund is primarily engaged in fund management business, it competes or may compete, directly or indirectly, with certain aspects of our business.
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ANNEX A | 2020 DIRECTORS' REPORT |
The Directors are of the view that we are able to operate our business independently of E Fund and conduct transactions on arm's length because (i) we can only appoint one director among the nine directors of E Fund, and hence we have no control over its board of directors,
- the management team of E Fund is independent of our Company, (iii) we do not participate in the day to day management of E Fund and do not share any operating facilities with E fund, and (iv) we are financially independent of E Fund.
Save as disclosed above, none of the Directors has any interest in any business that competes or may compete with our business, directly or indirectly.
XIII. MANAGEMENT CONTRACTS
For the year ended December 31, 2020, no contract has been entered into for the management and administration of the entire business or any material part of the business of the Group.
XIV. MAJOR CUSTOMERS
The Company provides diversified businesses and services to satisfy the diverse needs of customers, such as enterprises, individuals and institutional investors, financial institutions and the government. Our major customers are based in the PRC. With further progress in internationalization and the development of international business, the Company will provide services to more overseas customers. In 2020, income generated from the five largest customers of the Company contributed 0.92% to the total revenue and other income of the Company.
None of the Shareholders controlling more than 5% of the shareholding of the Company, Directors, Supervisors and their respective associates has any interest in the five largest customers of the Company. The Company has no major supplier due to the nature of its business.
XV. CHARITABLE DONATIONS
During the Reporting Period, the Group's total expenditure on social charity was RMB35.6095 million. The GF Securities Social Charity Foundation in Guangdong Province (廣東省廣發証券社會公益基金會) established by the Group actively organized activities for poverty relief and provided financial support for education. The total expenditure on social charity for the full year was RMB30.4261 million.
XVI. RESERVES AND RESERVES FOR PROFIT DISTRIBUTION
For particulars about changes in reserves and reserves for profit distribution, please refer to the "Consolidated Statement of Changes in Equity" of Financial Statements and Notes 57 and 58 of the Notes to the Consolidated Financial Statements in the Annual Report.
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ANNEX A | 2020 DIRECTORS' REPORT |
XVII. EMPLOYEES
Human resources is one of the greatest assets of the Group. The Company is committed to increase effort in building its talents pool by enhancing training and improving the quality of employees. Please refer to "V. Information of the Staff of the Company" in Section 10 "Particulars about Directors, Supervisors, Senior Management and Employees" in the Annual Report.
XVIII. PRE-EMPTIVE RIGHT
Pursuant to the regulations under the PRC laws and the Articles of Association of the Company, Shareholders of the Company have no pre-emptive right.
XIX. ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTING AND
PERFORMANCE OF SOCIAL RESPONSIBILITIES
Regarding the performance of social responsibilities of the Company, please see "XV. Social Responsibilities" of Section 6 "Significant Events" in the Annual Report. For environmental policy and performance, the Company cares about environmental and ecological development, promotes low carbon environmental protection, advocates green business and green office ideas, upgrades video conferencing system, paperless meeting system, teleconferencing system, conference room reservation system etc., continues printing and copying outsourcing development, minimizes energy consumption, optimizes resources allocation, and actively contributes to the sustainable development of the society. The Company has complied with the "comply or explain" provisions as set out in the Environmental, Social and Governance Reporting Guide during the year, for details, please see "GF Securities Co., Ltd. 2020 Social Responsibility Report" published by the Company.
Regarding the governance of the Company, please see Section 11 "Corporate Governance" in the Annual Report. The Company has been improving the internal control management system and gradually enhancing the maturity, reasonability and effectiveness of internal control; the Company has further established and refined its rules and regulations, and each governance department of the Company has been fully performing their duties, complying with all provisions set out in the Corporate Governance Code contained in Appendix 14 to the Hong Kong Listing Rules and achieving most of the requirements of recommended best practices provided in the aforesaid rules.
XX. REVIEW OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The financial statements of the Company for the year ended December 31, 2020 have been reviewed by the Audit Committee of the Board of Directors of the Company.
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ANNEX A | 2020 DIRECTORS' REPORT |
XXI. EVENTS AFTER THE END OF THE REPORTING PERIOD
Please refer to Note 73 of the Notes to the Consolidated Financial Statements in the Annual Report for details of significant events after the Reporting Period.
By Order of the Board
Sun Shuming
Chairman
Guangzhou
March 29, 2021
Please kindly consider the above report.
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ANNEX B | 2020 SUPERVISORY COMMITTEE'S REPORT |
Dear Shareholders,
In 2020, the capital market reform and development in the PRC continued to deepen, which brought opportunities and challenges to the development of the securities industry. During the Reporting Period, the Company worked diligently at all levels to coordinate the epidemic prevention and control with business development, all major operation indicators continued to achieve leading positions in the industry. The Supervisory Committee of the Company, with support and co-ordination from the Board and the management, continued to strengthen its own building, optimize the policies and standards, conduct in-depth various types of supervision and inspection work soundly and perform supervisory duties practically by focusing on the key tasks of the Company in accordance with the provisions and requirements of laws and regulations, including the Company Law, the Securities Law, the Rules on Governance of Securities Companies, the Rules on Governance of Listed Companies, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the regulatory documents of supervision and administrative authorities, the Articles of Association and the Rules of Procedure for the Supervisory Committee, to promote compliance in operation and healthy development of the Company, and protect the legitimate rights and interests of the Company, customers, shareholders and employees. The report on the major tasks of the Supervisory Committee in 2020 are set out below:
- Major tasks of the Supervisory Committee during the Reporting Period
- Convening Supervisory Committee Meetings in compliance with laws and regulations to consider important matters of the Company
During the Reporting Period, the Supervisory Committee of the Company convened six meetings in total (each of the Ninth Session of the Supervisory Committee and the Tenth Session of the Supervisory Committee convened three meetings, respectively), including three on-site meeting and three teleconference meetings. A total of 26 reports and proposals were considered/heard, the contents included regular reports, compliance reports, risk management reports, audit reports, the Company's provision for assets impairment, social responsibility report, assessment report on the effectiveness of compliance management and performance appraisal of the Supervisors. The Supervisory Committee performed its supervision role in compliance with laws and regulations, and conducted sufficient discussions and enquiries in understanding the above matters, and passed resolutions on matters required to be determined.
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ANNEX B | 2020 SUPERVISORY COMMITTEE'S REPORT |
The specific details of the six meetings convened by the Supervisory Committee in 2020
are set out below:
Convening | Titles of resolutions of the | Status of | Disclosure | ||
Session of meeting | date | meeting | resolution | date | Disclosure index |
The Fourteenth Meeting of | March 27, | 1. the Internal Control and | All the | March 28, | It was published in |
the Ninth Session of the | 2020 | Evaluation Report of GF | resolutions | 2020 | China Securities |
Supervisory Committee | Securities for the Year of | were passed | Journal, Securities | ||
2019; 2. the Social | Times, Shanghai | ||||
Responsibility Report of GF | Securities News and | ||||
Securities for the Year of | Securities Daily and | ||||
2019; 3. the Annual Report | disclosed on the | ||||
of GF Securities for the | website of CNINFO | ||||
Year of 2019; 4. the | (www.cninfo.com.cn) | ||||
Resolution on Audit Opinion | and the HKEXnews | ||||
of 2019 Annual Report of | website of the Hong | ||||
GF Securities; 5. the | Kong Stock Exchange | ||||
Supervisory Committee | (www.hkexnews.hk) by | ||||
Report of GF Securities for | the Company | ||||
the Year of 2019; 6. the | |||||
Resolution on Performance | |||||
Assessment on Supervisors | |||||
for the Year of 2019; 7. the | |||||
Special Description of | |||||
Performance Assessment and | |||||
Remuneration of GF | |||||
Securities Supervisors for | |||||
the Year of 2019; 8. the | |||||
Resolution on Proposed | |||||
Amendments to the Rules of | |||||
Procedure for the | |||||
Supervisory Committee of | |||||
the Company; 9. the | |||||
Resolution on the Provision | |||||
for Assets Impairment for | |||||
2019; 10. the Review Report | |||||
on the Effectiveness of the | |||||
Compliance Management of | |||||
GF Securities for the Year | |||||
of 2019; 11. the Resolution | |||||
on Performance Salary for | |||||
Chairman of the Supervisory | |||||
Committee for the Year of | |||||
2019. | |||||
The Fifteenth Meeting of | April 21, | 1. the Resolution on | The resolution | April 22, | |
the Ninth Session of the | 2020 | Nominating Candidates for | was passed | 2020 | |
Supervisory Committee | Supervisors to the Tenth | ||||
Session of the Supervisory | |||||
Committee. | |||||
The Sixteenth Meeting of | April 28, | 1. the 2020 First Quarterly | The resolution | April 29, | |
the Ninth Session of the | 2020 | Report of GF Securities. | was passed | 2020 | |
Supervisory Committee | |||||
The First Meeting of the | June 9, | 1. the Resolution on | The resolution | June 10, | |
Tenth Session of the | 2020 | Election of the Chairman of | was passed | 2020 | |
Supervisory Committee | the Tenth Session of the | ||||
Supervisory Committee of | |||||
the Company. | |||||
The Second Meeting of the | August 28, | 1. the 2020 Interim Report | The resolution | August 29, | |
Tenth Session of the | 2020 | of GF Securities. | was passed | 2020 | |
Supervisory Committee | |||||
The Third Meeting of the | October 30, | 1. the 2020 Third Quarterly | The resolution | October 31, | |
Tenth Session of the | 2020 | Report of GF Securities. | was passed | 2020 | |
Supervisory Committee |
- B-2 -
ANNEX B | 2020 SUPERVISORY COMMITTEE'S REPORT |
- Attending general meetings and Board meetings, supervising the governance and compliance in the operation of corporate entities
During the Reporting Period, the Supervisors conducted supervision on meetings through attending general meetings and Board meetings. The Supervisors attended two general meetings and ten on-site Board meetings in total. Through attending the said meetings, supervision was conducted on the attendance of Directors and senior management in meetings, and on the compliance of the convening procedure, meeting contents and procedure and the process of resolution, and opinions and recommendations were provided. For Board meetings conducted by teleconference, the Supervisors also reviewed the relevant meeting materials carefully. The Chairman of the Supervisory Committee of the Company also attended important working meetings of the Company's management and provided opinions and recommendations from the perspectives of the Company and the employees in accordance with regulations and requirements, thus the duty of supervision on meetings was performed effectively.
During the Reporting Period, the Supervisory Committee conducted departure audit on senior management members to carry out objective evaluation on their performance during their term of office. The Supervisory Committee also carried out follow-up inspections on the implementation of the Company's system of three meetings and the implementation of the resolutions of the three meetings and put forward supervisory opinions and suggestions to ensure the governance and compliant operation of corporate entities.
- Implementing the new Securities Law requirements to earnestly perform information disclosure supervision duties
During the Reporting Period, the Supervisory Committee complied with the requirements of the new Securities Law and related supporting policies, amended the Rules of Procedure for the Supervisory Committee, established new policies, such as the Guidelines for Reviewing Periodic Reports of the Supervisory Committee, to provide system basis and guarantee for the Supervisory Committee and the Supervisors to perform information disclosure supervision duties diligently.
During the Reporting Period, the Supervisory Committee organized and carried out daily and special supervision and inspection on the implementation of the Company's information disclosure management system, from the inspection results, the Company had established and effectively implemented its information disclosure management system. It is hereby proposed that the Company should continue to improve information disclosure management level.
During the Reporting Period, the Supervisory Committee audited the securities issuance documents and periodic reports prepared by the Board and put forward written audit opinions, and all Supervisors signed written confirmation of opinions to ensure the timely and fair disclosure of information and the truthfulness, accuracy and completeness of the information disclosed by the Company.
- B-3 -
ANNEX B | 2020 SUPERVISORY COMMITTEE'S REPORT |
(IV) Performing compliance management, supervision duties of comprehensive risk management and anti-corruption and enabling the Company to enhance the standard of internal control
During the Reporting Period, the Supervisory Committee enforced the regulatory requirements to perform supervision duties conscientiously in the areas of compliance management, comprehensive risk management, money laundering risk management and anti-corruption.
The Supervisory Committee read and reviewed regular reports, compliance reports, risk management reports, anti-money laundering reports and audit work reports of the Company before convening a meeting, and opinions of review were provided in advance and timely communicated for discussion sufficiently at the meeting. Supervision opinions were expressed, and recommendations for improvement were suggested, on the basis of fully understanding the overall operating conditions and the existing compliance management and risk management conditions of the Company.
The Supervisory Committee engaged an external professional institution to conduct the annual evaluation on the effectiveness of compliance management in the Company to prevent and control compliance risks; took problems as guidance, timely followed up the problems found and involved in internal control review projects, compliance management effectiveness evaluation and daily supervision process, urged the implementation of rectification measures, further improved the internal control management system of the Company, and standardized the three defense lines of prevention, control and supervision.
- Giving full play to the role of employee Supervisor, liaising with business to conduct practical studies and supervision
During the Reporting Period, the Supervisory Committee took the actual status of the business into account and actively carried out research and supervision. It gave full use of the advantage of employee Supervisors concurrently taking positions in the Company's party committee and labor union, implemented the counterpart contact work system, and conducted in-depth research and visits. On one hand, it guided employees to actively carry out various works in relation to important company decisions and arrangements. On the other hand, it collected opinions, suggestions and concerns from employees to promote the implementation of solving and protecting their legitimate rights and interests.
(VI) Improving its own establishment continuously, and strengthening the performance
capabilities of the Supervisory Committee persistently
During the Reporting Period, the Supervisory Committee successfully completed a general election and achieved a smooth succession of members.
- B-4 -
ANNEX B | 2020 SUPERVISORY COMMITTEE'S REPORT |
During the Reporting Period, the Company organized trainings for Supervisors through various means to further improve their ability to perform duties: (1) organize the Supervisors to actively participate in the trainings on analysis of key points of the new Securities Law, learn to master the revisions of the Securities Law, the changes in the supporting rules of the CSRC, the latest judicial interpretations, and amendments to the Criminal Law; (2) actively participate in special surveys on the work of the Supervisory Committee, carry out topic researches and communications between peers, learn and draw on advanced experience, so as to explore effective supervision methods and channels; (3) prepare the Monthly Newsletters of the Directors and Supervisors (《董監事通訊》) and prepare the special editions of supervision information from time to time to disseminate the latest developments in supervision, market and the Company in a timely manner and to protect the Supervisors' right to be informed.
During the Reporting Period, the Supervisory Committee continued to improve various rules and systems. We complied with the requirements of the new Securities Law, amended the Articles of Association and the Rules of Procedure for the Supervisory Committee, and defined the functions and powers of the Supervisory Committee and the Supervisors in respect of the review and confirmation of the Company's securities issuance documents and periodic reports; established the Guidelines for Reviewing Periodic Reports to standardize the work standards for reviewing periodic reports; established the Guidelines for the Works in Relation to the Meetings of the Supervisory Committee to further standardize the rules of procedure for the meetings of the Supervisory Committee.
During the Reporting Period, the Supervisory Committee deeply promoted the intensive operation of internal supervision resources, made full use of the joint efforts of internal supervision institutions, gave further full play to the role of the Supervisory Committee for supervision and coordination from the perspective of corporate governance, shared supervision information and strengthened joint inspection and collaboration to improve the overall supervision efficiency and effect of the Company by utilizing the office meetings of the chairman of Supervisory Committee as the communication platform to prompt rectification measures in respect of important compliance risk matters.
- Opinions expressed by the Supervisory Committee on relevant matters of the Company in 2020
During the Reporting Period, the Supervisory Committee of the Company conducted supervision work in compliance with laws and regulations, on the basis of conscientious supervision and inspection, the following opinions were expressed:
- In 2020, the Company complied with the relevant laws and regulations, including the Company Law, the Securities Law and the Rules on Governance of Securities Companies, and the requirements of systems such as the Articles of Association, the decision-making process of the Company was lawful and effective, and the Company did not impair the legitimate rights and interests of Shareholders, the Company, employees, creditors and other stakeholders.
- B-5 -
ANNEX B | 2020 SUPERVISORY COMMITTEE'S REPORT |
On July 20, 2020, the Company received the Decision Regarding Implementation of Regulatory Measures including Ordering for Rectification, Limiting Business Activities and Ordering for Limiting Rights of Senior Management against GF Securities Co., Ltd. (《關於對廣發証券股份有限公司採取責令改正、限制業務活 動、責令限制高級管理人員權利監管措施的決定》) from the Guangdong Bureau of the CSRC, which states that the Company did not exercise proper due diligence, was deficient in terms of basic procedures of due diligence review, failed to have necessary professional cautiousness, implemented perfunctory internal quality control and failed to continuously perform the obligation of supervision and trustee management as required for various projects of Kangmei Pharmaceutical Co., Ltd., including the 2014 non-publicissuance of preference shares, the 2015 corporate bond project, the 2016 non-publicissuance of shares and the 2018 corporate bond project, as well as the 2017 exchangeable corporate bond project of Kangmei Industrial Investment Holding Co., Ltd. (康美實業投資控股有限公司). Guangdong Bureau of the CSRC took administrative regulatory measures on the Company, including ordering the Company to make rectifications, suspending the Company's sponsoring institution qualifications for 6 months, temporary suspension of accepting the related documents regarding the Company's bond underwriting business for 12 months and ordering for limiting the rights of senior management. The Supervisory Committee urged the Company to take rectification measures, strengthen internal control management continuously and establish a long-termmechanism to ensure that the Company was in a healthy state with sound internal control at all times.
- The Supervisory Committee conscientiously audited the accounting statements and financial information of the Company. Ernst & Young Hua Ming LLP and Ernst & Young audited the 2020 financial statements of the Company prepared according to PRC GAAP and International Accounting Standards, and issued standard and unqualified audit reports thereon. The Supervisory Committee believed that the financial report of the Company had truly, accurately and completely reflected the financial position and operating results of the Company.
- During the Reporting Period, the Company convened two general meetings, namely the 2019 Annual General Meeting and the 2020 First Extraordinary General Meeting with a total of 16 resolutions passed. The Supervisory Committee of the Company had supervised the implementation of the resolutions passed by the general meetings. In the opinion of the Supervisory Committee, the Board and the management of the Company earnestly implemented the relevant resolutions of the general meetings.
(IV) The Supervisory Committee reviewed the GF Securities 2020 Internal Control and Evaluation Report. The Supervisory Committee did not have any objection to the content of the Company's internal control assessment report.
- B-6 -
ANNEX B | 2020 SUPERVISORY COMMITTEE'S REPORT |
- The Company had established and effectively implemented its information disclosure management system, and the Company was recommended to continue to improve the management level of information disclosure affairs.
(VI) The Supervisory Committee did not discover any insider dealings in the Company nor any resulting harm to the interest of certain shareholders or loss of assets in the Company.
(VII) Related party transactions of the Company were fair and reasonable. None of the related parties had appropriated funds of the Company (except in the course of operating business), nor any harm to the interest of the Company was caused.
- Proposals of the Supervisory Committee to the Board and management of the Company
Based on the responsible attitude towards Shareholders, the Company, customers and employees, the Supervisory Committee made the following proposals to the Board and management on the work plan for 2021:
- Strengthen strategic guidance and enhance development capabilities
2021 is the final year of the Company's previous five-year development strategic plan. In the past five years, the Company continued to transform to the operation method of customer-centric service and achieved positive results. It is hereby proposed that the Company shall further optimize the strategic management system, strengthen top-down overall coordination, strengthen the evaluation of the implementation of the strategy, conduct a comprehensive review, summary and reflection on the effectiveness of the implementation of the strategy and any problems existed, and start a new round of five-year development strategic plan as and when appropriate. Through closely focusing on serving the national strategy and the new tasks and requirements of the capital market. and combining its actual situation and own resource endowment, the Company shall clarify the future strategic direction, implementation pathway and key measures, build consensus, and promote the full implementation of various development strategies in operation and management, so as to enhance the Company's development capabilities.
- Continue to enhance risk compliance management and focus on the organic integration of business internal control
The reform and opening up of the capital market continues to deepen, and the securities industry is facing rare development opportunities, which also poses higher challenges to risk management capabilities. The Company must strengthen the intermediary positioning as the "gatekeeper" of the capital market to perform its duties, and implement the industry culture construction requirements of "compliance, integrity, professionalism and soundness", to effectively improve the quality of business practices. It is hereby proposed that the Company
- B-7 -
ANNEX B | 2020 SUPERVISORY COMMITTEE'S REPORT |
shall continue to strengthen the construction of the compliance risk control system, build the three lines of defense of internal control, especially the first line of defense, and focus on the high-level dynamic balance and organic integration of business development and internal control construction.
IV. Major work arrangements of the Supervisory Committee for 2021
In 2021, the Supervisory Committee will continue to comply with laws and regulations, perform duties faithfully and diligently, give full play to its supervisory role by focusing on the development strategies and key tasks of the Company, in accordance with the relevant provisions of laws and regulations, regulatory requirements and the Articles of Association, and in compliance with external regulatory concepts and policies. It will continue to enhance the governance standard of corporate entities, promote sustainable, stable and healthy development of the Company, protect the interests of various parties, including the Shareholders, the Company, the customers and the employees.
- The Supervisory Committee will convene the Supervisory Committee Meeting strictly in accordance with regulations, and will attend relevant meetings of the Board and the general meetings. The Supervisory Committee will optimize and enhance the meeting procedures, supervision capability and efficiency in conducting the Supervisory Committee Meeting, consider regular reports of the Company and other important matters. It will actively attend meetings of the Board and general meetings, and will supervise the lawfulness and legal compliance of the topics, procedures and decision-making process of the aforesaid meetings. It will review the meeting materials carefully, provide timely supervisory opinions and proposals, and will continue to supervise and examine the enforcement of the three-meeting system and the implementation of the resolutions of the three meetings and information disclosure management.
- The Supervisory Committee will continue to supervise the performance of duties by Directors and senior management members. The Supervisory Committee will increase supervision efforts on the duty performance of Directors and senior management members in accordance with external regulatory regulations and requirements of internal system of the Company to facilitate the Directors and senior management members to perform their duties diligently, responsibly and in compliance with regulations through various means, such as supervision reminders and monitored rectifications, and to promote the comprehensive implementation of the Company's various development strategies in operation and management to improve the Company's quality.
- The Supervisory Committee will perform supervision duties, such as compliance management and comprehensive risk management, to enable continuous enhancement of management standards of internal control. The Supervisory Committee will continue to enhance the supervisory efforts on Directors and senior management members in performing their duties, such as compliance management,
- B-8-
ANNEX B | 2020 SUPERVISORY COMMITTEE'S REPORT |
comprehensive risk management, money-laundering risk management and anti- corruption practices, in accordance with laws and regulations and requirements of rules and regulations of the Company to carry out the evaluation of the effectiveness of compliance management. It will also supervise the first line of defense to improve practice ability, standardize operations and enhance risk prevention awareness; supervise the second and third lines of defense to continue to enhance professional capabilities and strengthen inspection and supervision; pay attention to the effectiveness of management and control over subsidiaries under the Group's comprehensive risk management system to promote the continuous enhancement of internal control standard of the Company.
(IV) The Supervisory Committee will deeply promote the intensive operation of internal supervision resources, give full play to the service supporting role of the supervision system. The Supervisory Committee will further play the role of supervision and coordination from the perspective of corporate governance, promote the intensive operation of the resources supervision of internal supervision agencies such as audit, compliance, risk management and disciplinary inspection and supervision, and strengthen joint supervision force through the coordination and linkage of supervision and inspection projects, and the exchange and sharing of supervision and inspection results, so as to improve the overall supervision efficiency and effectiveness of the Company and assist the steady development of the Company.
- The Supervisory Committee will actively support the employee Supervisors to perform duties in according to laws. The Supervisory Committee will continue to support the employee Supervisors to conduct basic-level studies, and examine the implementation and enforcement of the system of rules and regulations relating to the personal interests of the employees and to practically protect the interests of employees.
(VI) The Supervisory Committee will continue to improve its own building. The Supervisory Committee will improve the system of the Supervisory Committee of the Company, continue strengthening the training and guidance for Supervisors, actively participate in the exchange activities with regulatory institutions, associations and peer institutions. It will continue to promote the construction of the supervision module of the Supervisory Committee in the DCAR system, explore supervision measures empowered by technology, with a view to further enhance the capability and level of duty performance by the Supervisory Committee.
Please kindly consider the above report.
- B-9 -
ANNEX C | 2020 FINAL FINANCIAL REPORT |
Dear Shareholders,
We hereby present the 2020 Final Financial Report of GF Securities as follows:
- Financial Position of 2020:
As of the end of 2020, total assets of the Group were RMB457,464 million, representing an increase of RMB63,073 million from the beginning of the year. The changes in the Group's portfolio of assets between the beginning and the end of the year were mainly: (1) the total amount of bank balances and clearing settlement funds was RMB123,282 million, increased by RMB23,026 million from the beginning of the year; (2) margin financing amounted to RMB86,153 million, increased by RMB31,365 million from the beginning of the year; (3) securities held under resale agreements were RMB16,794 million, decreased by RMB3,895 million from the beginning of the year, mainly due to the decrease in the scale of the pledge-style bond repurchase; (4) the aggregate balance of financial investment assets was RMB200,012 million (including financial assets held for trading, debt investments, other debt investments and other equity instrument investments), increased by RMB6,644 million from the beginning of the year, mainly due the increase in the size of bond investments; (5) balance of refundable deposit of RMB11,046 million, increased by RMB4,399 million from the beginning of the year, mainly due to the increase in the scale of trading deposits; (6) the balance of long-term equity investments was RMB7,197 million, increased by RMB470 million from the beginning of the year, mainly due to the recognition of RMB1,005 million in investment gains from associates and joint ventures, other equity movements decreased by RMB111 million, net investments of associates and joint ventures increased by RMB157 million, receipt of cash dividends of RMB581 million.
As of the end of 2020, total liabilities of the Group were RMB355,190 million, increased by RMB54,936 million from the beginning of the year. Total equity of shareholders amounted to RMB102,274 million, increased by RMB8,137 million from the beginning of the year. The changes in the Group's liabilities and owners' equity between the beginning and the end of the year were mainly: (1) the balance due to banks and other financial institutions was RMB6,121 million, increased by RMB3,137 million from the beginning of the year; (2) the balance of financial assets sold under repurchase agreements was RMB94,612 million, decreased by RMB785 million from the beginning of the year; (3) the balance of accounts payable to brokerage customers was RMB102,941 million, increased by RMB23,260 million from the beginning of the year, (4) the balance of long-term and short-term debts (including issuance of corporate bonds, structured notes, long-term and short-term liabilities) was RMB129,494 million, increased by RMB27,362 million from the beginning of the year; (5) financial liabilities held for trading were RMB5,565 million, increased by RMB2,423 million from the beginning of the year, mainly due to the increase brought by the issue of income certificates and structured notes; (6) shareholders' equity attributable to the parent company was RMB98,162 million, increased by RMB6,928 million from the beginning of the year, mainly
- C-1 -
ANNEX C | 2020 FINAL FINANCIAL REPORT |
comprising the net profit of RMB10,038 million attributable to shareholders of the parent company realized during the year, a decrease of RMB443 million in capital reserves due to movements of other consolidated income, and a distribution of cash dividends of RMB2,667 million.
The size of net capital of the parent company was RMB64,897 million, increased by RMB4,034 million from the beginning of the year.
- Profit realized in 2020:
In 2020, there saw a structural bull market for A shares, with a significant improvement in the activity level of market transactions. The bonds market first rose and then fell, ending up with a rising but generally flat yield curve. IPO issuance was significantly accelerated under the registration system, and the financing size of bonds also increased significantly. The Company further strengthened the internal control system, continuously forged a "customer-centric" business model, and posted good operating results. The Group realized total operating revenue of RMB29,153 million, total profit of RMB13,599 million, net profit attributable to shareholders of the parent company of RMB10,038 million, representing an increase of 27.81%, 32.34% and 33.15% from the previous year, respectively.
The changes in the revenue items of the Group were:
1. the Group realized net fee income from brokerage business of RMB6,572 million, increased by 56.56% from the previous year, mainly due to the increase of 61.40% in the trading volume of stock and fund in A share market from the previous year, thus net fee income from brokerage business of the parent company increased significantly; 2. the Group realized net income of RMB649 million from investment banking business, decreased by 54.89% from the previous year; 3. the Group realized net fee income of RMB6,598 million from asset management and fund management fees, increased by 68.72% from the previous year, mainly due to the significant increase in the net income from management fee of GF Fund; 4. the Group's investment business realized an aggregate amount of RMB10,115 million in interest income, investment gains and profit or loss from fair value changes, decreased by RMB47 million from the previous year, which was mainly due to the good income contributions from fixed income investments and equity investments of the parent company and the increase in the income of equity investments of its subsidiaries; 5. the Group recognized an investment income of RMB1,005 million from associates, increased by 125.11% from the previous year, which mainly was attributable to the investment incomes from the associates and joint ventures of E Fund; 6. other business income realized by the Group was RMB1,770 million, decreased by RMB145 million from the previous year, such income was mainly the business income of warehouse receipts of the commercial trading subsidiary of GF Futures; and 7. the Group realized other income of RMB1,132 million, increased by RMB307 million from the previous year, mainly due to the increase brought by the receipt of government grants of RMB1,088 million.
- C-2 -
ANNEX C | 2020 FINAL FINANCIAL REPORT |
The changes in operating expenses of the Group were: 1. The Group's business and management fees were RMB12,744 million, increased by 35.67% from the previous year, which were mainly attributable to the increase in remunerations, information technology investments and business expansion expenses of the Group resulting from the recruitment of excellent talents and the increase in technological financial investments for the expansion, transformation and development of its businesses; 2. the Group made provision for credit impairment loss of RMB854 million, of which the provision for impairment losses on debt investments and other debt investments, lending amounts and lease receivables was RMB307 million, RMB81 million and RMB307 million, respectively, which was mainly based on the impairment test results; and 3. the Group's other business costs were RMB1,756 million, including mainly the business costs of warehouse receipts of RMB1,753 million.
III. Operating conditions of subsidiaries:
In 2020, GF Futures realized operating revenue of RMB2,474 million and a net profit of RMB244 million; GFHK realized operating revenue of RMB736 million and a net profit of RMB237 million; GF Xinde realized operating revenue of RMB1,503 million and a net profit of RMB921 million; GF Qianhe realized operating revenue of RMB885 million and a net profit of RMB563 million; GF Asset Management realized operating revenue of RMB1,731 million and a net profit of RMB924 million; GFFL realized operating revenue of RMB90 million and a net profit of RMB-198 million; GF Hexin realized operating revenue of RMB19 million and a net profit of RMB11 million; GF Fund realized operating revenue of RMB6,251 million and a net profit of RMB1,824 million.
IV. Key financial indicators of the Group and risk control indicators of the parent company:
1. Key financial indicators: | ||
Item | 2020 | 2019 |
Earnings per share (RMB) | 1.32 | 0.99 |
Net assets per share attributable to owners of | ||
the parent company (RMB) | 12.88 | 11.97 |
Return on weighted average net assets | 10.60% | 8.48% |
- C-3 -
ANNEX C | 2020 FINAL FINANCIAL REPORT |
2. Key regulatory indicators of the parent company:
End of | Pre-warning | Regulatory | |
Item | 2020 | standard | standard |
Net capital | RMB64,897 | ≥ RMB240 | ≥ RMB200 |
million | million | million | |
Risk coverage ratio | 197.62% | ≥120% | ≥100% |
Capital leverage ratio | 18.24% | ≥9.6% | ≥8% |
Liquidity coverage ratio | 206.96% | ≥120% | ≥100% |
Net stable funding ratio | 179.15% | ≥120% | ≥100% |
Net capital/net assets | 75.90% | ≥24% | ≥20% |
Net capital/liabilities | 27.79% | ≥9.6% | ≥8% |
Net assets/liabilities | 36.61% | ≥12% | ≥10% |
Proprietary equity securities and | 35.33% | ≤80% | ≤100% |
securities derivatives/net capital | |||
Proprietary non-equity securities and | 243.89% | ≤400% | ≤500% |
securities derivatives/net capital |
All regulatory indicators of the parent company were in compliance with the regulatory standard in 2020.
Please kindly consider the above report.
- C-4 -
ANNEX D RESOLUTION REGARDING THE AUTHORIZATION OF PROPRIETARY INVESTMENT QUOTA FOR 2021
Dear Shareholders,
Pursuant to the requirements of the Regulations for Supervision and Administration of Securities Companies (《證券公司監督管理條例》), the Administrative Measures for Risk Control Indicators of Securities Companies (《證券公司風險控制指標管理辦法》), the Provisions on Strengthening the Supervision and Administration of Listed Securities Companies (as amended in 2020) (《關於加強上市證券公司監管的規定)(2020年修訂)》), the Provisions on the Investment Scope for Proprietary Securities Business of Securities Companies and Related Matters (《關於證券公司證券自營業務投資範圍及有關事項的規 定》), the Norms for the Comprehensive Risk Management of Securities Companies (《證券 公司全面風險管理規範》), the Guidelines on Proprietary Securities Business of Securities Companies (《證券公司證券自營業務指引》) and the Guidelines for the Liquidity Risk Management of Securities Companies (《證券公司流動性風險管理指引》), in order to further improve the authorization and management of proprietary investment of the Company, in conjunction with the actual conditions of the Company, the authorization of the investment quota for the proprietary business of the Company is proposed as follows:
- To authorize the Board of Directors, subject to compliance with the relevant requirements of the CSRC and self-regulation organization regarding the supervision and administration of securities companies, management of proprietary investment and risk management, and provided that the investment quota of the proprietary securities business of the Company shall not exceed the maximum limit prescribed in the rules and regulations and regulatory documents of the CSRC, to determine reasonably the total amount of maximum limit for the proprietary investment of the Company, and make adjustments to the allocation of the proprietary investment quota in accordance with market conditions, regulatory environment and operating performance, the scope of proprietary investment is limited to the types of securities listed in the List of Securities Investment Products of Proprietary Trading by Securities Companies (《證券公司證券自營投資品種清 單》) and its subsequent amendments.
- To authorize the management of the Company to allocate the investment quota for the proprietary business scientifically within the scope of regulatory standards for risk indicators prescribed under the Administrative Measures for the Risk Control Indicators of Securities Companies (《證券公司風險控制指標管理辦法》), Rules on Computation Standards for Risk Control Indicators of Securities Companies (《證券公司風險控制指標計算標準規定》) and its subsequent amendments and carefully set the risk limit of proprietary business. To authorize the Board with the right to adjust the proprietary investment quota of the management of the Company within the extent authorized under Item 1.
- D-1 -
ANNEX D RESOLUTION REGARDING THE AUTHORIZATION OF PROPRIETARY INVESTMENT QUOTA FOR 2021
3. To authorize the management of the Company to make reasonable adjustments to the size of the proprietary business and the risk limit as needed when amendments are made to external laws and regulations to ensure that the proprietary securities business quota of the Company will not exceed the requirements as stipulated in the rules and regulations and regulatory documents of the CSRC.
It should be noted that the above quota is the maximum limit for the proprietary investment quota determined according to the relevant requirements of the CSRC and the characteristics of market volatility, and its total quantity and variation are not representation of judgments made by the Board of Directors and the management of the Company in respect of the market. The above quota does not include the investment quota for long-term equities to be invested by the Company, the investment quota for long-term equities is still required to be determined and executed in accordance with the relevant decision-making procedures of the Company.
Please kindly consider the above resolution.
- D-2 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED |
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |
Dear Shareholders,
Pursuant to the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange (hereinafter referred to as the "SZSE Listing Rules") and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (hereinafter referred to as the "Hong Kong Listing Rules"), the Company has made an estimation of the daily related party/connected transactions that will occur in 2021.
- Estimation of Daily Related Transactions under the SZSE Listing Rules for 2021
Actual occurrence in 2020 | ||||||
Percentage | ||||||
in the same | ||||||
Particulars of | Estimated amount of income/ | Related | Actual | category of | ||
Category | Type of transaction | the relevant transaction | expenses for 2021 | parties Note 1 | amount | business |
(RMB ten | ||||||
thousand) | (%) |
Investment | Income from | Income generated from the |
Banking | securities | provision of securities |
underwriting and | underwriting and | |
sponsorship | sponsorship business | |
services by the Company | ||
to related legal entities. |
Pricing will be determined by | All related parties | 584.94 | 1.05 |
reference to market level, | of the Company |
however, since the issue size of securities is highly influenced by market conditions, the trading volume is unpredictable, therefore, it is difficult to predict this income item of the Company and the amount actually occurred will be used for computation.
Income from financial | Income generated from the |
advisory | provision of financial |
advisory business | |
services by the Company | |
to related legal entities. |
Pricing will be determined by | All related parties | 23.58 | 0.32 |
reference to market level, | of the Company |
however, since customer demand is unpredictable, therefore, it is difficult to predict this income item of the Company and the amount actually occurred will be used for computation.
- E-1 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED | ||||
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |||||
Actual occurrence in 2020 | |||||
Percentage | |||||
in the same | |||||
Particulars of | Estimated amount of income/ | Related | Actual | category of | |
Category | Type of transaction the relevant transaction | expenses for 2021 | parties Note 1 | amount | business |
(RMB ten | |||||
thousand) | (%) |
Wealth | Commission income | Seat income generated |
Management | from securities | from the provision of |
brokerage business | trading service to E | |
Fund Management Co., | ||
Ltd. and other related | ||
parties by the Company | ||
and controlled | ||
subsidiaries through | ||
specific trading seats. | ||
Commission income | ||
generated from the | ||
provision of trading | ||
services by the Company | ||
to related natural | ||
persons and related | ||
entities. |
Pricing will be determined by reference to market level, however, since the trading volume is affected by market news, market trends and investment decisions, the transaction amount is unpredictable, therefore, it is difficult to predict this income item of the Company and the amount actually occurred will be used for computation.
E Fund | 3,841.01 | 0.65 |
Management | ||
Co., Ltd. | ||
Harvest Fund | 2,889.48 | 0.49 |
Management | ||
Co., Ltd. | ||
Jilin Aodong | 25.11 | 0.00 |
Pharmaceutical | ||
Group Co., Ltd. | ||
and its | ||
controlled | ||
subsidiaries | ||
Other related | 33.26 | 0.01 |
parties |
Interest income from | Interest income received |
margin financing | by the Company and |
and securities | controlled subsidiaries |
lending, repurchase | by provision of margin |
transactions, | financing and securities |
financial leasing | lending, repurchase |
and money lending | transactions, financial |
business (Hong | leasing and money |
Kong) | lending business (Hong |
Kong) to related parties. |
Pricing will be determined by | All related parties | 1.79 | 0.00 |
reference to market level, | of the Company |
however, since the trading volume is affected by market news and market trends, the relevant business size is unpredictable, therefore, it is difficult to predict this income item of the Company and the amount actually occurred will be used for computation.
- E-2 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED | |||||
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | ||||||
Actual occurrence in 2020 | ||||||
Percentage | ||||||
in the same | ||||||
Particulars of | Estimated amount of income/ | Related | Actual | category of | ||
Category | Type of transaction | the relevant transaction | expenses for 2021 | parties Note 1 | amount | business |
(RMB ten | ||||||
thousand) | (%) | |||||
Commission income | Commission income | Pricing will be determined by | E Fund | 52.21 | 0.12 | |
from futures | generated from the | reference to market level, | Management | |||
brokerage business | provision of trading | however, since the trading | Co., Ltd. | |||
(GF Futures Co., | service to E Fund | volume is affected by market | Other related | 0.54 | 0.00 | |
Ltd. provides | Management Co., Ltd. | news, market trends and | parties | |||
futures brokerage | and other related parties | investment decisions, the | ||||
service) | by the Company and | transaction volume is | ||||
controlled subsidiaries | unpredictable, therefore, it is | |||||
through specific trading | difficult to predict this | |||||
seats. | income item of the Company | |||||
and the amount actually | ||||||
occurred will be used for | ||||||
computation. | ||||||
Income from sales of | Since the Company sells | Pricing will be determined by | E Fund | 5,720.05 | 9.68 | |
fund products as | products from E Fund | reference to market level, | Management | |||
agent | Management Co., Ltd. | however, since subscription | Co., Ltd. | |||
and other related parties | for funds is the discretionary | Harvest Fund | 774.17 | 1.31 | ||
in the capacity of sales | act of customers and affected | Management | ||||
agent, it will receive | by market news and market | Co., Ltd. | ||||
application fees, | trends, the application | |||||
redemption fees, | amount and redemption | |||||
subscription fees, | amount are unpredictable, | |||||
conversion fees, | therefore, it is difficult to | |||||
customer maintenance | predict this income item of | |||||
fees (trailing | the Company and the amount | |||||
commission) and other | actually occurred will be | |||||
fees. | used for computation. |
- E-3 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED |
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |
Particulars of
Category | Type of transaction | the relevant transaction |
Trading and | Trading of securities | Purchase financial assets |
Institution | and financial | (such as bonds) under |
products | resale agreements or sell | |
financial assets under | ||
repurchase agreements | ||
and conduct proprietary | ||
trading with related | ||
parties in the interbank | ||
market and the stock | ||
exchange market. |
Estimated amount of income/ | Related |
expenses for 2021 | parties Note 1 |
Pricing will be determined by | All related parties |
reference to market level, | of the Company |
however, since trading | |
securities and financial | |
products are discretionary | |
acts of customers and | |
affected by market news and | |
market trends, the transaction | |
amount is unpredictable, | |
therefore, it is difficult to | |
predict this income item of | |
the Company and the amount | |
actually occurred will be | |
used for computation. |
Actual occurrence in 2020
Percentage
in the same
Actual | category of |
amount business
(RMB ten
thousand) (%)
6,754,192.13 0.36
Note 2
Interest expenses for | Interest expenses incurred | Pricing will be determined by | All related parties |
issuance of | when the Company | reference to market level, | of the Company |
structured notes | issues structured notes | however, since subscription | |
to related parties. | for structured notes is the | ||
discretionary acts of | |||
Issuance of structured | Liabilities incurred when | customers and affected by | All related parties |
notes | the Company issues | market news and market | of the Company |
structured notes to | trends, the subscription | ||
related parties. | amount is unpredictable, | ||
therefore, it is difficult to | |||
predict the scale of this | |||
expense/liability item of the | |||
Company and the amount | |||
actually occurred will be | |||
used for computation. |
32.69 0.04
15,005 0.27
- E-4 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED | ||||
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |||||
Actual occurrence in 2020 | |||||
Percentage | |||||
in the same | |||||
Particulars of | Estimated amount of income/ | Related | Actual | category of | |
Category | Type of transaction the relevant transaction | expenses for 2021 | parties Note 1 | amount | business |
(RMB ten | |||||
thousand) | (%) |
Income/expenses from | Income/expenses generated |
market-making | by the Company when |
business | providing market-making |
services to related | |
parties listing on the | |
new third board (or | |
NEEQ). |
Pricing will be determined by | All related parties | - | - |
reference to market level, | of the Company | ||
however, since the volume of | |||
market-making target and | |||
market volatility level are | |||
unpredictable, therefore, it is | |||
difficult to predict this | |||
income item of the Company | |||
and the amount actually | |||
occurred will be used for | |||
computation. |
OTC transfer and | Income/expenses generated |
trading | by the Company when |
providing liquidity for | |
products held by | |
customers of related | |
parties in the OTC | |
market. |
Pricing will be determined by | All related parties | - | - |
reference to market level, | of the Company | ||
however, since the customer | |||
demand for liquidity is | |||
affected by market news and | |||
market trends, therefore, it is | |||
difficult to predict this | |||
income item of the Company | |||
and the amount actually | |||
occurred will be used for | |||
computation. |
- E-5 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED | ||||
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |||||
Actual occurrence in 2020 | |||||
Percentage | |||||
in the same | |||||
Particulars of | Estimated amount of income/ | Related | Actual | category of | |
Category | Type of transaction the relevant transaction | expenses for 2021 | parties Note 1 | amount | business |
(RMB ten | |||||
thousand) | (%) |
Custody and fund | Income generated by the |
service business | Company when |
providing custody and | |
fund service business to | |
related parties. |
Pricing will be determined by | All related parties | 1.22 | 0.02 |
reference to market level, | of the Company |
since the scale of products of the custody and fund service business provided is unpredictable, therefore, it is difficult to predict this income item of the Company and the amount actually occurred will be used for computation.
Investment | Income from asset | Management fees, |
Management | management | commissions and other |
business for | fees generated by wealth | |
customers | management products of | |
GF Securities Asset | ||
Management | ||
(Guangdong) Co., Ltd. | ||
and GF Futures, being | ||
subsidiaries of the | ||
Company, held by | ||
related legal entities and | ||
related natural persons | ||
of the Company. |
Pricing will be determined by | All related parties | 72.79 | 0.06 |
reference to market level, | of the Company |
since asset size of the related parties entrusted to the Company and the income generated according to management results are uncertain and affected by market news with relatively high volatility, therefore, it is difficult to predict this income item of the Company and the amount actually occurred will be used for computation.
- E-6 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED |
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |
Particulars of
Category | Type of transaction | the relevant transaction |
Income of | Management fees and |
management fees | other income generated |
from fund products | by wealth management |
products, such as funds | |
issued by GF Fund | |
Management Co., Ltd. | |
and its controlled | |
subsidiaries, held by | |
related legal entities and | |
related natural persons | |
of the Company. | |
Management fees and | |
other income generated | |
by fund products issued | |
by GF Xinde Investment | |
Management Co., Ltd. | |
held by related legal | |
entities and related | |
natural persons of the | |
Company. |
Actual occurrence in 2020 | |||
Percentage | |||
in the same | |||
Estimated amount of income/ | Related | Actual | category of |
expenses for 2021 | parties Note 1 | amount | business |
(RMB ten | |||
thousand) | (%) | ||
The products are issued at net | All related parties | 746.49 | 0.14 |
value and the fees are | of the Company | ||
charged according to market | |||
standards, the actual income | |||
amount depends on market | |||
news and investment | |||
judgment, therefore, it is | |||
difficult to predict this | |||
income item and the amount | |||
actually occurred will be | |||
used for computation. | |||
All related parties | 149.46 | 0.03 | |
of the Company |
Joint investment with | The subsidiary of the | Pricing will be determined by | All related parties | 52,000 | 29.04 |
related parties | Company engaging in | reference to market level, | of the Company | Note 3 | |
investment business and | since the occurrence and size | ||||
related party act as joint | of business are uncertain, the | ||||
promoters to establish | amount actually occurred | ||||
equity investment fund | will be used for computation. | ||||
partnership and | |||||
investment related |
enterprises according to daily business development needs.
- E-7 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED |
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |
Note 1: Related parties mentioned in the above table refers to related legal entities and related natural persons as defined in accordance with the SZSE Listing Rules and the Notice on Matters Relating to Further Enhancing Supervisions on Related Transactions of Securities Companies under Jurisdiction issued by Guangdong Bureau of the CSRC (《中國證監會廣東監管局關於進一步加強轄區證券公司關聯交易監管有關事項的通知》) (Guangdong Zheng Jian Fa [2018] No. 77).
Note 2: The transaction amount represents the amount of financial products held under resale agreements, the amount of financial products sold under repurchase agreements and proprietary trading amounts, including bonds conducted by the Company with its related parties which are financial institutions, namely, China Life Insurance Co., Ltd., Bank of Guizhou Co., Ltd., Bank of Guiyang Co., Ltd., E Fund Management Co., Ltd. and Harvest Fund Management Co., Ltd.
Note 3: The transaction amount represents the amount of a related/connected transaction conducted by the fund which the Company's subsidiary engaging in investment business has invested and established jointly with related/connected parties, namely Zhongshan Public Utilities Environmental Protection Industry Investment Co., Ltd., Zhongshan Zhonghui Investment Group Company Limited and Jilin Aodong Pharmaceutical Group Co., Ltd. according to the need of daily business development, respectively.
Other than the aforesaid expected daily related transactions, when the Company entered into the following related transactions with related parties, it is exempted from performing the relevant obligations pursuant to Chapter 10 of the SZSE Listing Rules and Article 38 of the Related-Party Transaction Management Policy (《關聯交易管理制度》) of the Company:
- when one party subscribes in cash for the public offering of shares, corporate bonds or enterprise bonds, convertible corporate bond or other types of derivative products of the other party;
- when one party acts as a member of the underwriting consortium to underwrite the public offering of shares, corporate bonds or enterprise bonds, convertible corporate bonds or other types of derivative products of the other party;
- when one party collects dividends, bonus or returns according to the resolution of a general meeting of the other party;
- other transactions recognized by the SZSE.
-
Introduction to Major Related Parties and Related Relationship in Related Transactions under the SZSE Listing Rules which are Confirmed to Occur in 2021
E Fund Management Co., Ltd. ("E Fund") has registered capital of RMB132 million, its
scope of business includes: management of securities investment fund issued by public offering, sales of funds, asset management for specific customers (operating activities may only commence after approval from the relevant authorities have been obtained for projects which require approval pursuant to the laws). Its address is at "Room 105 - 42891 (Office Zone), No. 6 Baohua Road, Hengqin New District, Zhuhai, Guangdong Province". As of December 31, 2020, the amount of total assets of E Fund was RMB18,434 million and the amount of its net assets was RMB11,018 million. In 2020, the operating revenue of E Fund was RMB9,205 million, net profit attributable to shareholders of the parent company was
- E-8 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED |
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |
RMB2,754 million. As of March 29, 2021, the Company held 22.65% equity interest in E Fund and was its largest shareholder. Mr. Qin Li, the executive Director and chief officers of the Company, is also a director of E Fund. E Fund has satisfied with the requirements of related relationship provided under Clause 3 of Article 10.1.3 of the SZSE Listing Rules, such related person has good contract performance and payment capabilities. E Fund does not constitute a connected person under the Hong Kong Listing Rules.
AVIC Fund Management Co., Ltd. ("AVIC Fund") was established on June 16, 2016 with its headquarter in Beijing, and its scope of business includes fundraising, fund sales, asset management for specific customers, asset management and other businesses as approved by the CSRC (source of information: official website of AVIC Fund, 2021). Mr. Fan Lifu, an Independent Non-executive Director of the Company, is an independent director of AVIC Fund. AVIC Fund has satisfied with the requirements of related relationship provided under Clause 3 of Article 10.1.3 of the SZSE Listing Rules, such related person has good contract performance and payment capabilities. AVIC Fund does not constitute a connected person under the Hong Kong Listing Rules.
Harvest Fund Management Co., Ltd. ("Harvest Fund") was established in March 1999, one of the first 10 fund management companies established in the PRC. It has developed into
- comprehensive international asset management group with "fully-licensed" businesses (source of information: official website of Harvest Fund, 2021). Mr. Tang Xin, a former Independent Non-executive Director of the Company, is an independent director of Harvest Fund. Harvest Fund has satisfied with the requirements of related relationship provided under Clause 2 of Article 10.1.6 of the SZSE Listing Rules, it ceased to be a related person of the Company since June 9, 2021, such related person has good contract performance and payment capabilities. Harvest Fund does not constitute a connected person under the Hong Kong Listing Rules.
III. Daily Connected Transactions under the Hong Kong Listing Rules in 2021
The connected transactions of the Company as defined under the Hong Kong Listing Rules will be conducted and the relevant decision making and disclosure procedures of the Company are performed in strict accordance with the provisions under Hong Kong Listing Rules and the Related-Party Transactions Management Policy of GF Securities.
- E-9 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED |
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |
Concurrently, the Company is exempted from performing the relevant obligations in accordance with the provisions under Chapter 14A of Hong Kong Listing Rules and Article 30 of the Related-Party Transactions Management Policy of the Company, when the following related/connected transactions occur between the Company and related/connected parties:
- transactions that meet the de minimis level;
- financial assistance;
- issuance of new securities by listed group companies;
- trading of securities on stock exchanges;
- directors' service contracts and insurance;
- repurchase of securities by listed group companies;
- purchase or sales of consumer products or consumer services;
- sharing of administration and management services;
- transactions with the associate(s) of passive investors; and
- transactions with connected parties at the subsidiary level.
IV. Pricing Principles
All businesses occurring between the Company and related/connected parties follow market-oriented pricing principles. The specific pricing principles for the major operations of the Company are as follows:
- Income from agency sale of funds and other products: charges are made according to the unified sales policy when the products are issued by fund companies;
- Commission income from brokerage business: pricing is determined with reference to the commission rates for similar trading services in the market;
- Income from securities underwriting and sponsorship: pricing is determined with reference to the market level and industry practice;
- Income from entrusted customer asset management business: pricing is determined by reference to the market level and industry practice;
- E-10 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED |
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |
- Subscription of fund products: subscription is made at net asset value and handling fees are paid based on market standards;
- Interest income from margin financing and securities lending, repurchase transaction services and money lending (Hong Kong): pricing is determined with reference to the market level;
- Interest expenses arising from the issuance of structured notes: pricing is determined with reference to the market level and industry practice;
- Income from market-making business: pricing is determined with reference to the market level;
- Custody and fund service business: pricing is determined with reference to the market level.
- Purposes of the Transactions and Impact on the Company
- Each of the related/connected transactions contemplated by the Company is beneficial for the Company in developing new businesses and broadening its income stream during its daily operations;
- The pricing of the relevant related/connected transactions can be made with reference to market prices available, for which the Company intends to implement at a fair price, which will not damage the interests of the Company and minority Shareholders;
- The relevant related/connected transactions do not affect the independence of the Company. The major businesses of the Company have not relied on the related/connected parties as a result of the above related/connected transactions.
VI. Opinions of the Independent Directors
The Independent Directors have issued the following independent opinions on the "Resolution Regarding the 2021 Expected Daily Related Party/Connected Transactions":
- The related party/connected transactions are intended to be executed at a fair price and will not damage the interests of the Company and minority Shareholders;
- Carrying out the relevant businesses is beneficial for promoting the business growth of the Company, which is in line with the actual business needs of the Company, and is beneficial for the long-term development of the Company;
- E-11 -
ANNEX E | RESOLUTION REGARDING THE 2021 EXPECTED |
DAILY RELATED PARTY/CONNECTED TRANSACTIONS | |
- The relevant related party/connected transactions shall be disclosed in the annual report and the interim report of the Company in accordance with the SZSE Listing Rules and Hong Kong Listing Rules;
- It is agreed that the "Resolution Regarding the 2021 Expected Daily Related Party/Connected Transactions" be submitted to the Board for consideration.
It is hereby proposed to the general meetings:
- to agree the implementation of the above related/connected transactions; and agree that the Company shall perform its information disclosure obligations and perform the relevant procedures in accordance with the requirements under Chapter 14A of Hong Kong Listing Rules, if the above related party/connected transactions constitute connected transactions under Hong Kong Listing Rules;
- to authorize the Board and approve the Board to delegate the management to enter into new agreements or renew the relevant agreements within the scope of the expected daily related/connected transactions in 2021 based on business needs.
Related/connected shareholders including Jilin Aodong and persons acting in concert; Liaoning Cheng Da and persons acting in concert; Zhongshan Public Utilities and persons acting in concert shall abstain from voting on this resolution, and shall not vote under the entrustment of other shareholders.
Please kindly consider the above resolution.
- E-12 -
APPENDIX II 2020 WORK REPORT OF THE INDEPENDENT DIRECTORS
Dear Shareholders,
2020 Work Report of the Independent Directors of GF Securities Co., Ltd.
- Performance of Duties by Independent Directors
In 2020, the Company has convened 15 Board meetings and 2 general meetings. The Independent Directors of the Company have actively participated in all Board meetings and general meetings. During the period of duty performance, Independent Directors of the Company have given sufficient time and efforts in performing duties. Before the meetings, the Independent Directors have read the meeting materials conscientiously, and expressed sufficient professional and independent opinions at the meetings; and they are not influenced by the substantial shareholders and other interested units or individuals of the Company when making independent judgement.
In 2020, specific details of attendance of Independent Directors at the Board meetings and general meetings are set out in the table below:
Attendance at | ||||||
Board meetings | Attendance | Attendance at | Attendance | No. of | ||
Name of | required during | at on-site | Board meetings by | at Board | absence at | Attendance |
Independent | the Reporting | Board | telecommunication/ | meetings | Board | at general |
Director | Period | meetings | correspondence | by proxy | meetings | meetings |
Fan Lifu | 15 | 1 | 14 | 0 | 0 | 1/2 |
Hu Bin | 11 | 1 | 9 | 1 | 0 | 0/1 |
Leung Shek | ||||||
Ling Olivia | 11 | 0 | 11 | 0 | 0 | 0/1 |
Li Wenjing | 11 | 1 | 10 | 0 | 0 | 0/1 |
Yang Xiong | 4 | 0 | 4 | 0 | 0 | 0/1 |
Tang Xin | 4 | 0 | 4 | 0 | 0 | 0/1 |
Chan Kalok | 4 | 0 | 4 | 0 | 0 | 0/1 |
- Participation of Independent Directors in the Work of Special Committees
There are five special committees under the Board of the Company, namely the Strategy Committee, the Nomination Committee, the Remuneration and Appraisal Committee, the Audit Committee and the Risk Management Committee.
- II-1 -
APPENDIX II 2020 WORK REPORT OF THE INDEPENDENT DIRECTORS
On June 9, 2020, the Company convened the first meeting of the Tenth Session of the Board, at which Mr. Hu Bin was elected as a member of the Strategy Committee of the Tenth Session of the Board. On January 6, 2021, the Company convened the twelfth meeting of the Tenth Session of the Board, at which Mr. Lin Chuanhui was elected as a member of the Strategy Committee of the Tenth Session of the Board of the Company and Mr. Hu Bin ceased to serve as the member of the Strategy Committee of the Tenth Session of the Board of the Company.
As at June 9, 2020, three Independent Directors, namely Mr. Tang Xin, Mr. Yang Xiong and Mr. Fan Lifu served as members of the Nomination Committee, and Mr. Tang Xin assumed the role of the Chairman of the Nomination of Committee of the Ninth Session of the Board. On June 9, 2020, the Company convened the first meeting of the Tenth Session of the Board, at which Mr. Hu Bin, Mr. Fan Lifu and Mr. Li Wenjing were elected as members of the Nomination Committee of the Tenth Session of the Board of the Company. At the same date, the Company convened the first meeting for 2020 of the Nomination Committee of the Tenth Session of the Board, at which Mr. Hu Bin was elected as the Chairman of the Nomination Committee of the Tenth Session of the Board.
As at June 9, 2020, three Independent Directors, namely Mr. Tang Xin, Mr. Yang Xiong and Mr. Fan Lifu, served as members of the Remuneration and Appraisal Committee, and Mr. Tang Xin assumed the role of the Chairman of the Remuneration and Appraisal Committee of the Ninth Session of the Board. On June 9, 2020, the Company convened the first meeting of the Tenth Session of the Board, at which Mr. Hu Bin, Mr. Fan Lifu and Ms. Leung Shek Ling Olivia were elected as members of the Remuneration and Appraisal Committee of the Tenth Session of the Board of the Company. At the same date, the Company convened the first meeting for 2020 of the Remuneration and Appraisal Committee of the Tenth Session of the Board, at which Mr. Hu Bin was elected as the Chairman of the Remuneration and Appraisal Committee of the Tenth Session of the Board.
As at June 9, 2020, three Independent Directors, namely Mr. Yang Xiong, Mr. Chan Kalok and Mr. Fan Lifu, served as members of the Audit Committee, and Mr. Yang Xiong assumed the role of the Chairman of the Audit Committee of the Ninth Session of the Board. On June 9, 2020, the Company convened the first meeting of the Tenth Session of the Board, at which Mr. Li Wenjing, Mr. Fan Lifu and Ms. Leung Shek Ling Olivia were elected as members of the Audit Committee of the Tenth Session of the Board of the Company. At the same date, the Company convened the first meeting for 2020 of the Audit Committee of the Tenth Session of the Board, at which Mr. Li Wenjing was elected as the Chairman of the Audit Committee of the Tenth Session of the Board.
As at June 9, 2020, Mr. Tang Xin served as member of the Risk Management Committee of the Ninth Session of the Board. On June 9, 2020, the Company convened the first meeting of the Tenth Session of the Board, at which Ms. Leung Shek Ling Olivia and Mr. Li Wenjing were elected as members of the Risk Management Committee of the Tenth Session of the Board of the Company.
- II-2 -
APPENDIX II 2020 WORK REPORT OF THE INDEPENDENT DIRECTORS
In 2020, according to the rules of procedure for special committees of the Board of the Company, the Strategy Committee of the Board convened one meeting, the Nomination Committee of the Board convened five meetings, the Remuneration and Appraisal Committee of the Board convened two meetings, the Audit Committee of the Board convened nine meetings, and the Risk Management Committee of the Board convened two meetings. During the term of office, the Independent Directors have attended all meetings of the special committees and provided professional opinions and advice for scientific decisions of the Board.
III. Work of the Independent Directors in 2020
- In 2020, the Independent Directors of the Company expressed independent opinions on the relevant matters in accordance with legal procedures and pursuant to the relevant national laws and regulations and the Articles of Association, the specific details are set out below:
-
On January 22, 2020, the Independent Directors, namely Mr. Yang Xiong, Mr. Tang Xin, Mr. Chan Kalok and Mr. Fan Lifu, issued views of prior approval and independent opinions on the Connected Transactions between GF Fund Management Co., Ltd. and Kangmei Healthcare Industry Investment Co., Ltd.
The independent opinion of Mr. Tang Xin, an Independent Director, was that "due to the complexity of the relevant transaction plan, the relevant meeting materials are not sufficient as the basis for me to make judgments and form an accurate opinion." - On March 27, 2020, the Independent Directors, namely Mr. Yang Xiong, Mr. Tang Xin, Mr. Chan Kalok and Mr. Fan Lifu, issued independent opinions on the Profit Distribution Proposal for 2019, the Internal Control and Evaluation Report for the Year of 2019, Distribution of Performance-based Remunerations for the Management for the Year of 2019, the Use of the Company's Funds by the Controlling Shareholders or other Associated Parties, External Guarantees provided by the Company, Expected Ordinary Related/connected Transactions of 2020 and the Company's Provision for Assets Impairment, and issued views of prior approval and independent opinions on the Re-appointment of the Accounting Firm.
- On April 21, 2020, the Independent Directors, namely Mr. Yang Xiong, Mr. Tang Xin, Mr. Chan Kalok and Mr. Fan Lifu, issued independent opinions on the Appointment of the General Manager of the Company and Nominating Candidates for Directors to the Tenth Session of the Board of Directors.
- On June 9, 2020, the Independent Directors, namely Mr. Fan Lifu, Mr. Hu Bin, Ms. Leung Shek Ling Olivia and Mr. Li Wenjing issued independent opinions on the Election of the Chairman of the Board, Matters Nominated by the Chairman of the Board, Appointment of the General Manager of the Company, and Matters Nominated by the General Manager.
-
On January 22, 2020, the Independent Directors, namely Mr. Yang Xiong, Mr. Tang Xin, Mr. Chan Kalok and Mr. Fan Lifu, issued views of prior approval and independent opinions on the Connected Transactions between GF Fund Management Co., Ltd. and Kangmei Healthcare Industry Investment Co., Ltd.
- II-3 -
APPENDIX II 2020 WORK REPORT OF THE INDEPENDENT DIRECTORS
- On August 28, 2020, the Independent Directors, namely Mr. Fan Lifu, Mr. Hu Bin, Ms. Leung Shek Ling Olivia and Mr. Li Wenjing issued independent opinions on the Use of the Company's Funds by the Controlling Shareholders or other Associated Parties and External Guarantees provided by the Company.
- On September 22, 2020, the Independent Directors, namely Mr. Fan Lifu, Mr. Hu Bin, Ms. Leung Shek Ling Olivia and Mr. Li Wenjing issued independent opinions on Nominating Candidates for Non-executive Directors to the Tenth Session of the Board of Directors, and issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd. and Zhongshan Public Utilities Environmental Protection Industry Investment Co., Ltd.
- On September 28, 2020, the Independent Directors, namely Mr. Fan Lifu, Mr. Hu Bin, Ms. Leung Shek Ling Olivia and Mr. Li Wenjing issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd., GF Qianhe Investment Co., Ltd. and Zhongshan Zhonghui Investment Group Company Limited.
- On December 11, 2020, the Independent Directors, namely Mr. Fan Lifu, Mr. Hu Bin, Ms. Leung Shek Ling Olivia and Mr. Li Wenjing issued independent opinions on Nominating Candidates for Executive Directors to the Tenth Session of the Board of Directors and the Appointment of the General Manager of the Company.
- On December 18, 2020, the Independent Directors, namely Mr. Fan Lifu, Mr. Hu Bin, Ms. Leung Shek Ling Olivia and Mr. Li Wenjing issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd., GF Qianhe Investment Co., Ltd. and Jilin Aodong Pharmaceutical Group Co., Ltd.
-
On the audit work of the Company in 2020, the Independent Directors of the Company strictly complied with the Annual Report Regulations of Independent Directors of GF Securities (《廣發証券獨立董事年報工作規定》) and ensured that sufficient time and energy were dedicated to perform their duties and timely communicated with the certified public accountants responsible for the annual audit before and after the audit. The Independent Directors conducted inspection in the Company and provided guidance in person, and heard reports from the audit institution on the operating conditions, financial position and audit work of the Company during the process of auditing.
Three out of four Independent Directors of the Ninth and Tenth Session of the Board of the Company are members of the Audit Committee, they have participated in the communication with the certified public accountants before and after the audit in the dual capacity of Audit Committee member and Independent Director and expressed their opinions. On December 10, 2020, the Independent Directors heard the reporting of the 2020 Annual Financial Results (unaudited) prepared by the finance department of the - II-4-
APPENDIX II 2020 WORK REPORT OF THE INDEPENDENT DIRECTORS
Company, communicated with the certified public accountants responsible for the annual audit, and consented to the annual audit work plan and reminded, and urged audit institutions to carry out audit procedures in place during the audit process, and the finance department and other related departments of the Company to actively cooperate with the audit work. On March 24, 2021, the Independent Directors heard the reporting of Ernst
- Young on 2020 annual audit. After full communication with the certified public accountants responsible for the annual audit, the Independent Directors are of the view that Ernst & Young has carried out appropriate audit procedures in the annual audit in strict accordance with requirements of the Auditing Standards for CPAs of China and the International Standards on Auditing.
IV. Other Explanatory Matters
- During the Reporting Period, the Independent Directors of the Company were diligent and active in duly performing their duties, proposed improvement recommendations on individual matters required for consideration, please see the Work Report of the Independent Directors for details.
-
During the Reporting Period, the Independent Directors dissented from some individual resolutions of the Board, the details are as follows:
Mr. Tang Xin, an Independent Director, abstained from voting on the Resolution on the Connected Transaction between GF Fund Management Co., Ltd. and Kangmei Healthcare Industry Investment Co., Ltd. (《關於廣發基金管理有限公司與康美健康產業投資有限公 司關連交易的議案》) at the 25th Meeting of the Ninth Session of the Board of the Company.
- During the Reporting Period, no incident has occurred in the Company where an Independent Director has proposed to convene a Board meeting.
(IV) During the Reporting Period, no incident has occurred in the Company where an Independent Director has proposed to appoint or dismiss an accounting firm.
-
During the Reporting Period, no incident has occurred in the Company where an Independent Director has appointed an overseas audit institution and consulting institution.
Independent Directors of the Ninth Session of the Board: Yang Xiong, Tang Xin, Chan Kalok and Fan Lifu
Independent Directors of the Tenth Session of the Board: Fan Lifu, Hu Bin, Leung Shek Ling Olivia and Li Wenjing
Please kindly hear the above report.
- II-5 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
Dear Shareholders,
2020 Duty Performance Report of the Independent Directors of GF Securities Co., Ltd.
Fan Lifu
In 2020, as an Independent Director of GF Securities Co., Ltd., I participated in decision-making of significant events of GF Securities independently and objectively pursuant to the relevant requirements of relevant laws and regulations and the Articles of Association, performed responsibilities truthfully and diligently, protected the interests of the Company and the minority Shareholders effectively, and promoted the role of an Independent Director into full play. I hereby present the 2020 duty performance report of the Independent Directors as follows:
- Attendance at Board Meetings in 2020
In 2020, the Board convened a total of 15 Board meetings, I should participate and have actually participated in 15 meetings. During the period of my duty performance, I have dedicated sufficient time and energy to perform duties; reviewed the meeting materials conscientiously before the meetings, fully expressed professional and independent opinions at the meetings; and was not influenced by the substantial shareholders of the Company and other units or individuals that own interests in the Company when making independent judgement. In 2020, I have exercised voting rights actively, without voting against or abstention from voting on any proposal.
Specific details of my attendance at the meetings in 2020 are set out as follows:
Attendance | |||||
at Board | |||||
meetings | |||||
required | Attendance | Attendance at | Attendance | No. of | |
Name of | during the | at on-site | Board meetings by | at Board | absence |
Independent | Reporting | Board | telecommunication/ | meetings | at Board |
Director | Period | meetings | correspondence | by proxy | meetings |
Fan Lifu | 15 | 1 | 14 | 0 | 0 |
In 2020, I did not raise objection against any Board resolutions and other resolutions.
- Participation in the Work of Special Committees in 2020
Before June 9, 2020, I was the member of the Nomination Committee, member of the Remuneration and Appraisal Committee and member of the Audit Committee of the Ninth Session of the Board. Since June 9, 2020, I have been the member of the Nomination Committee, member of the Remuneration and Appraisal Committee and member of the Audit Committee of the Tenth Session of the Board.
- III-1 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
In 2020, according to the rules of procedure for special committees of the Board of the Company, I participated in five meetings of the Nomination Committee of the Ninth and Tenth Session of the Board, two meetings of the Remuneration and Appraisal Committee of the Ninth and Tenth Session and nine meetings of the Audit Committee of the Ninth and Tenth Session of the Board. I have attended all meetings of the special committees and provided professional opinions and consulting advice for the scientific decision-making of the Board.
III. Expression of Independent Opinions in 2020
In 2020, I, being an Independent Director, expressed independent opinions on the relevant matters with other Independent Directors in accordance with the relevant national laws and regulations, the Articles of Association and legal procedures, the specific details are set out below:
- On January 22, 2020, I issued views of prior approval and independent opinions on the Connected Transactions between GF Fund Management Co., Ltd. and Kangmei Healthcare Industry Investment Co., Ltd.
- On March 27, 2020, I issued independent opinions on the Profit Distribution Proposal for 2019, the Internal Control and Evaluation Report for the Year of 2019, Distribution of Performance-based Remunerations for the Management for the Year of 2019, the Use of the Company's Funds by the Controlling Shareholders or other Associated Parties, External Guarantees provided by the Company, Expected Ordinary Related/connected Transactions of 2020 and the Company's Provision for Assets Impairment, and issued views of prior approval and independent opinions on the Re-appointment of the Accounting Firm.
- On April 21, 2020, I issued independent opinions on the Appointment of the General Manager of the Company and Nominating Candidates for Directors to the Tenth Session of the Board of Directors.
- On June 9, 2020, I issued independent opinions on the Election of the Chairman of the Board, Matters Nominated by the Chairman of the Board, Appointment of the General Manager of the Company, and Matters Nominated by the General Manager.
- On August 28, 2020, I issued independent opinions on the Use of the Company's Funds by the Controlling Shareholders or other Associated Parties and External Guarantees provided by the Company.
- On September 22, 2020, I issued independent opinions on Nominating Candidates for Non-executive Directors to the Tenth Session of the Board of Directors, and issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd. and Zhongshan Public Utilities Environmental Protection Industry Investment Co., Ltd.
- On September 28, 2020, I issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd., GF Qianhe Investment Co., Ltd. and Zhongshan Zhonghui Investment Group Company Limited.
- III-2 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
- On December 11, 2020, I issued independent opinions on Nominating Candidates for Executive Directors to the Tenth Session of the Board of Directors and the Appointment of the General Manager of the Company.
- On December 18, 2020, I issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd., GF Qianhe Investment Co., Ltd. and Jilin Aodong Pharmaceutical Group Co., Ltd.
IV. Other Relevant Work
-
On the audit work of the Company in 2020, I strictly complied with the Annual Report Regulations of Independent Directors of GF Securities (《廣發証券獨立董事 年報工作規定》) and ensured that sufficient time and energy were dedicated to performing duties and timely communicated with the certified public accountants responsible for the annual audit before and after the audit. During the process of auditing, I participated in the dual capacity of a member of the Audit Committee and an Independent Director in the communication with the certified public accountants responsible for the annual audit before and after the audit, and expressed opinions; I also heard reports from the audit institution on the operating conditions, financial position and audit work of the Company.
On December 10, 2020, the Independent Directors heard the reporting of the 2020 Annual Financial Results (unaudited) prepared by the finance department of the Company, communicated with the certified public accountants responsible for the annual audit, and consented to the annual audit work plan and reminded, and urged audit institutions to carry out audit procedures in place during the audit process, and the finance department and other related departments of the Company to actively cooperate with the audit work. On March 24, 2021, the Independent Directors heard the reporting of Ernst & Young on 2020 annual audit. After full communication with the certified public accountants responsible for the annual audit, the Independent Directors are of the view that Ernst & Young has carried out appropriate audit procedures in the annual audit in strict accordance with requirements of the Auditing Standards for CPAs of China and the International Standards on Auditing. - On the training and learning aspects, I have been focusing on learning the latest laws, regulations and various rules and systems, and actively participating in the relevant training sessions organized by the Company and conducted in various forms, in order to improve my duty performance capabilities continuously, enhance my own ability to supervise the Company's operation, and provide better opinions and recommendations on scientific decision-making and risk prevention of the Company to facilitate further regulated operation of the Company. On March 27, 2020, I attended the training on analysis of key revisions of the new Securities Law, organized by the Company; on April 24, 2020, I attended the training on analysis of new requirements of the Securities Law regarding impact and challenges on listed companies, organized by the Liaoning Listed Companies Association; on September 4, 2020, I attended the training on analysis on key points of the new Securities Law organized by the Securities Association of China; on November 26, 2020, I attended the special training on improving quality of listed companies, organized by the CSRC, Liaoning branch.
Independent Director: Fan Lifu
- III-3 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
Dear Shareholders,
2020 Duty Performance Report of the Independent Directors of GF Securities Co., Ltd.
Hu Bin
In 2020, as an Independent Director of GF Securities Co., Ltd., I participated in decision-making of significant events of GF Securities independently and objectively pursuant to the relevant requirements of relevant laws and regulations and the Articles of Association, performed responsibilities truthfully and diligently, protected the interests of the Company and the minority Shareholders effectively, and promoted the role of an Independent Director into full play. I hereby present the 2020 duty performance report of the Independent Directors as follows:
- Attendance at Board Meetings in 2020
In 2020, the Board convened a total of 15 Board meetings, I should participate and have actually participated in 11 meetings. During the period of my duty performance, I have dedicated sufficient time and energy to perform duties; reviewed the meeting materials conscientiously before the meetings, fully expressed professional and independent opinions at the meetings; and was not influenced by the substantial shareholders of the Company and other units or individuals that own interests in the Company when making independent judgement. In 2020, I have exercised voting rights actively, without voting against or abstention from voting on any proposal.
Specific details of my attendance at the meetings in 2020 are set out in the table below:
Attendance | |||||
at Board | |||||
meetings | |||||
required | Attendance | Attendance at | Attendance | No. of | |
Name of | during the | at on-site | Board meetings by | at Board | absence |
Independent | Reporting | Board | telecommunication/ | meetings | at Board |
Director | Period | meetings | correspondence | by proxy | meetings |
Hu Bin | 11 | 1 | 9 | 1 | 0 |
In 2020, I did not raise objection against any Board resolutions and other resolutions.
- Participation in the Work of Special Committees in 2020
From June 9, 2020 to January 6, 2021, I was the member of the Strategy Committee of the Tenth Session of the Board, and from June 9, 2020, I have been the Chairman of the Nomination Committee and Chairman of the Remuneration and Appraisal Committee of the Tenth Session of the Board.
- III-4 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
In 2020, according to the rules of procedure for special committees of the Board of the Company, I participated in three meetings of the Nomination Committee of the Tenth Session of the Board and one meeting of the Remuneration and Appraisal Committee of the Tenth Session of the Board. I have attended all meetings of the special committees and provided professional opinions and consulting advice for the scientific decision-making of the Board.
III. Expression of Independent Opinions in 2020
In 2020, I, being an Independent Director, expressed independent opinions on the relevant matters with other Independent Directors in accordance with the relevant national laws and regulations, the Articles of Association and legal procedures, the specific details are set out below:
- On June 9, 2020, I issued independent opinions on the Election of the Chairman of the Board, Matters Nominated by the Chairman of the Board, Appointment of the General Manager of the Company, and Matters Nominated by the General Manager.
- On August 28, 2020, I issued independent opinions on the Use of the Company's Funds by the Controlling Shareholders or other Associated Parties and External Guarantees provided by the Company.
- On September 22, 2020, I issued independent opinions on Nominating Candidates for Non-executive Directors to the Tenth Session of the Board of Directors, and issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd. and Zhongshan Public Utilities Environmental Protection Industry Investment Co., Ltd.
- On September 28, 2020, I issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd., GF Qianhe Investment Co., Ltd. and Zhongshan Zhonghui Investment Group Company Limited.
- On December 11, 2020, I issued independent opinions on Nominating Candidates for Executive Directors to the Tenth Session of the Board of Directors and the Appointment of the General Manager of the Company.
- On December 18, 2020, I issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd., GF Qianhe Investment Co., Ltd. and Jilin Aodong Pharmaceutical Group Co., Ltd.
- III-5 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
IV. Other Relevant Work
-
On the audit work of the Company in 2020, I strictly complied with the Annual Report Regulations of Independent Directors of GF Securities (《廣發証券獨立董事 年報工作規定》) and ensured that sufficient time and energy were dedicated to performing duties and timely communicated with the certified public accountants responsible for the annual audit before and after the audit. During the process of auditing, I participated in the capacity of an Independent Director in the communication with the certified public accountants responsible for the annual audit before and after the audit, and expressed opinions; I also heard reports from the audit institution on the operating conditions, financial position and audit work of the Company.
On December 10, 2020, the Independent Directors heard the reporting of the 2020 Annual Financial Results (unaudited) prepared by the finance department of the Company, communicated with the certified public accountants responsible for the annual audit, and consented to the annual audit work plan and reminded, and urged audit institutions to carry out audit procedures in place during the audit process, and the finance department and other related departments of the Company to actively cooperate with the audit work. On March 24, 2021, the Independent Directors heard the reporting of Ernst & Young on 2020 annual audit. After full communication with the certified public accountants responsible for the annual audit, the Independent Directors are of the view that Ernst & Young has carried out appropriate audit procedures in the annual audit in strict accordance with requirements of the Auditing Standards for CPAs of China and the International Standards on Auditing. - On the training and learning aspects, I have been focusing on learning the latest laws, regulations and various rules and systems, and actively participating in the relevant training sessions organized by the Company and conducted in various forms, in order to improve my duty performance capabilities continuously, enhance my own ability to supervise the Company's operation, and provide better opinions and recommendations on scientific decision-making and risk prevention of the Company to facilitate further regulated operation of the Company. On June 10, 2020, I attended the finance forum hosted by the Institute of Finance & Banking of the Chinese Academy of Social Sciences; on July 16, 2020, I attended the international academic seminar on the "Impact of the COVID-19 pandemic and the Macro Policy Response", jointly organized by the Institute of Finance & Banking of the Chinese Academy of Social Sciences, the Nomura Research Institute and the National Institution for Finance & Development; on August 29, 2020, I attended the Eighth China Wealth Management Development Forum-Starting a New Journey for High-Quality Development, hosted by the China Securities Jinniu; on September 11, 2020, I attended the press conference on the "Blue Book on Financial Regulation: China's Financial Regulatory Report (2020)", organized by the Institute of Finance & Banking of the Chinese Academy of Social Sciences and the National Institution for Finance & Development of the Chinese Academy of Social Sciences; on December 12, 2020, I attended the international academic seminar on the "Central Bank Digital Currencies and Development of Digital Society" jointly organized by the Institute of Finance & Banking of Chinese Academy of Social Sciences, the Nomura Research Institute and the National Institution for Finance & Development.
Independent Director: Hu Bin
- III-6 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
Dear Shareholders,
2020 Duty Performance Report of the Independent Directors of GF Securities Co., Ltd.
Leung Shek Ling Olivia
In 2020, as an Independent Director of GF Securities Co., Ltd., I participated in decision-making of significant events of GF Securities independently and objectively pursuant to the relevant requirements of relevant laws and regulations and the Articles of Association, performed responsibilities truthfully and diligently, protected the interests of the Company and the minority Shareholders effectively, and promoted the role of an Independent Director into full play. I hereby present the 2020 duty performance report of the Independent Directors as follows:
- Attendance at Board Meetings in 2020
In 2020, the Board convened a total of 15 Board meetings, I should participate and have actually participated in 11 meetings. During the period of my duty performance, I have dedicated sufficient time and energy to perform duties; reviewed the meeting materials conscientiously before the meetings, fully expressed professional and independent opinions at the meetings; and was not influenced by the substantial shareholders of the Company and other units or individuals that own interests in the Company when making independent judgement. In 2020, I have exercised voting rights actively, without voting against or abstention from voting on any proposal.
Specific details of my attendance at the meetings in 2020 are set out in the table below:
Attendance | |||||
at Board | |||||
meetings | |||||
required | Attendance | Attendance at | Attendance | No. of | |
Name of | during the | at on-site | Board meetings by | at Board | absence |
Independent | Reporting | Board | telecommunication/ | meetings | at Board |
Director | Period | meetings | correspondence | by proxy | meetings |
Leung Shek | |||||
Ling | |||||
Olivia | 11 | 0 | 11 | 0 | 0 |
In 2020, I did not raise objection against any Board resolutions and other resolutions.
- Participation in the Work of Special Committees in 2020
Since June 9, 2020, I have been a member of the Remuneration and Appraisal Committee, the Audit Committee and the Risk Management Committee of the Tenth Session of the Board.
- III-7 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
In 2020, according to the rules of procedure for special committees of the Board of the Company, I participated in one meeting of the Remuneration and Appraisal Committee of the Tenth Session of the Board, six meetings of the Audit Committee of the Tenth Session of the Board and one meeting of the Risk Management Committee of the Tenth Session of the Board. I have attended all meetings of the special committees and provided professional opinions and consulting advice for the scientific decision-making of the Board.
III. Expression of Independent Opinions in 2020
In 2020, I, being an Independent Director, expressed independent opinions on the relevant matters with other Independent Directors in accordance with the relevant national laws and regulations, the Articles of Association and legal procedures, the specific details are set out below:
- On June 9, 2020, I issued independent opinions on the Election of the Chairman of the Board, Matters Nominated by the Chairman of the Board, Appointment of the General Manager of the Company, and Matters Nominated by the General Manager.
- On August 28, 2020, I issued independent opinions on the Use of the Company's Funds by the Controlling Shareholders or other Associated Parties and External Guarantees provided by the Company.
- On September 22, 2020, I issued independent opinions on Nominating Candidates for Non-executive Directors to the Tenth Session of the Board of Directors, and issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd. and Zhongshan Public Utilities Environmental Protection Industry Investment Co., Ltd.
- On September 28, 2020, I issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd., GF Qianhe Investment Co., Ltd. and Zhongshan Zhonghui Investment Group Company Limited.
- On December 11, 2020, I issued independent opinions on Nominating Candidates for Executive Directors to the Tenth Session of the Board of Directors and the Appointment of the General Manager of the Company.
- On December 18, 2020, I issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd., GF Qianhe Investment Co., Ltd. and Jilin Aodong Pharmaceutical Group Co., Ltd.
- III-8 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
IV. Other Relevant Work
-
On the audit work of the Company in 2020, I strictly complied with the Annual Report Regulations of Independent Directors of GF Securities (《廣發証券獨立董事 年報工作規定》) and ensured that sufficient time and energy were dedicated to performing duties and timely communicated with the certified public accountants responsible for the annual audit before and after the audit. During the process of auditing, I participated in the dual capacity of a member of the Audit Committee and an Independent Director in the communication with the certified public accountants responsible for the annual audit before and after the audit, and expressed opinions; I also heard reports from the audit institution on the operating conditions, financial position and audit work of the Company.
On December 10, 2020, the Independent Directors heard the reporting of the 2020 Annual Financial Results (unaudited) prepared by the finance department of the Company, communicated with the certified public accountants responsible for the annual audit, and consented to the annual audit work plan and reminded, and urged audit institutions to carry out audit procedures in place during the audit process, and the finance department and other related departments of the Company to actively cooperate with the audit work. On March 24, 2021, the Independent Directors heard the reporting of Ernst & Young on 2020 annual audit. After full communication with the certified public accountants responsible for the annual audit, the Independent Directors are of the view that Ernst & Young has carried out appropriate audit procedures in the annual audit in strict accordance with requirements of the Auditing Standards for CPAs of China and the International Standards on Auditing. - On the training and learning aspects, I have been focusing on learning the latest laws, regulations and various rules and systems, and actively participating in the relevant training sessions organized by the Company and conducted in various forms, in order to improve my duty performance capabilities continuously, enhance my own ability to supervise the Company's operation, and provide better opinions and recommendations on scientific decision-making and risk prevention of the Company to facilitate further regulated operation of the Company. On June 16, 2020, I attended the ACCA Professional Conduct Demonstration Training organized by the ACCA (United Kingdom & Hong Kong); on November 12, 2020, I attended the ACCA Forum for Educators in China, hosted by ACCA (China), and gave a keynote speech.
Independent Director: Leung Shek Ling Olivia
- III-9 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
Dear Shareholders,
2020 Duty Performance Report of the Independent Directors of GF Securities Co., Ltd.
Li Wenjing
In 2020, as an Independent Director of GF Securities Co., Ltd., I participated in decision-making of significant events of GF Securities independently and objectively pursuant to the relevant requirements of relevant laws and regulations and the Articles of Association, performed responsibilities truthfully and diligently, protected the interests of the Company and the minority Shareholders effectively, and promoted the role of an Independent Director into full play. I hereby present the 2020 duty performance report of the Independent Directors as follows:
- Attendance at Board Meetings in 2020
In 2020, the Board convened a total of 15 Board meetings, I should participate and have actually participated in 11 meetings. During the period of my duty performance, I have dedicated sufficient time and energy to perform duties; reviewed the meeting materials conscientiously before the meetings, fully expressed professional and independent opinions at the meetings; and was not influenced by the substantial shareholders of the Company and other units or individuals that own interests in the Company when making independent judgement. In 2020, I have exercised voting rights actively, without voting against or abstention from voting on any proposal.
Specific details of my attendance at the meetings in 2020 are set out as follows:
Attendance | |||||
at Board | |||||
meetings | |||||
required | Attendance | Attendance at | Attendance | No. of | |
Name of | during the | at on-site | Board meetings by | at Board | absence |
Independent | Reporting | Board | telecommunication/ | meetings | at Board |
Director | Period | meetings | correspondence | by proxy | meetings |
Li Wenjing | 11 | 1 | 10 | 0 | 0 |
In 2020, I did not raise objection against any Board resolutions and other resolutions.
- Participation in the Work of Special Committees in 2020
Since June 9, 2020, I have been a member of the Nomination Committee, the Chairman of the Audit Committee and a member of the Risk Management Committee of the Tenth Session of the Board.
- III-10 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
In 2020, according to the rules of procedure for special committees of the Board of the Company, I participated in three meetings of the Nomination Committee of the Tenth Session of the Board, six meetings of the Audit Committee of the Tenth Session of the Board and one meeting of the Risk Management Committee of the Tenth Session of the Board. I have attended all meetings of the special committees and provided professional opinions and consulting advice for the scientific decision-making of the Board.
III. Expression of Independent Opinions in 2020
In 2020, I, being an Independent Director, expressed independent opinions on the relevant matters with other Independent Directors in accordance with the relevant national laws and regulations, the Articles of Association and legal procedures, the specific details are set out below:
- On June 9, 2020, I issued independent opinions on the Election of the Chairman of the Board, Matters Nominated by the Chairman of the Board, Appointment of the General Manager of the Company, and Matters Nominated by the General Manager.
- On August 28, 2020, I issued independent opinions on the Use of the Company's Funds by the Controlling Shareholders or other Associated Parties and External Guarantees provided by the Company.
- On September 22, 2020, I issued independent opinions on Nominating Candidates for Non-executive Directors to the Tenth Session of the Board of Directors, and issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd. and Zhongshan Public Utilities Environmental Protection Industry Investment Co., Ltd.
- On September 28, 2020, I issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd., GF Qianhe Investment Co., Ltd. and Zhongshan Zhonghui Investment Group Company Limited.
- On December 11, 2020, I issued independent opinions on Nominating Candidates for Executive Directors to the Tenth Session of the Board of Directors and the Appointment of the General Manager of the Company.
- On December 18, 2020, I issued views of prior approval and independent opinions on the Related/connected Transaction of Joint Investment by GF Xinde Investment Management Co., Ltd., GF Qianhe Investment Co., Ltd. and Jilin Aodong Pharmaceutical Group Co., Ltd.
- III-11 -
APPENDIX III | 2020 DUTY PERFORMANCE REPORT OF |
THE INDEPENDENT DIRECTORS | |
IV. Other Relevant Work
-
On the audit work of the Company in 2020, I strictly complied with the Annual Report Regulations of Independent Directors of GF Securities (《廣發証券獨立董事 年報工作規定》) and ensured that sufficient time and energy were dedicated to performing duties and timely communicated with the certified public accountants responsible for the annual audit before and after the audit. During the process of auditing, I participated in the dual capacity of a member of the Audit Committee and an Independent Director in the communication with the certified public accountants responsible for the annual audit before and after the audit, and expressed opinions; I also heard reports from the audit institution on the operating conditions, financial position and audit work of the Company.
On December 10, 2020, the Independent Directors heard the reporting of the 2020 Annual Financial Results (unaudited) prepared by the finance department of the Company, communicated with the certified public accountants responsible for the annual audit, and consented to the annual audit work plan and reminded, and urged audit institutions to carry out audit procedures in place during the audit process, and the finance department and other related departments of the Company to actively cooperate with the audit work. On March 24, 2021, the Independent Directors heard the reporting of Ernst & Young on 2020 annual audit. After full communication with the certified public accountants responsible for the annual audit, the Independent Directors are of the view that Ernst & Young has carried out appropriate audit procedures in the annual audit in strict accordance with requirements of the Auditing Standards for CPAs of China and the International Standards on Auditing. - On the training and learning aspects, I have been focusing on learning the latest laws, regulations and various rules and systems, and actively participating in the relevant training sessions organized by the Company and conducted in various forms, in order to improve my duty performance capabilities continuously, enhance my own ability to supervise the Company's operation, and provide better opinions and recommendations on scientific decision-making and risk prevention of the Company to facilitate further regulated operation of the Company. From October 21 to October 23, 2020, I attended the 8th International Business School Shanghai Conference with the theme of "Leading in a Turbulent World", organized by the Antai College of Economics and Management of Shanghai Jiao Tong University; on November 1, 2020, I attended the forum on the "Management Research in Serving the Society" hosted by the School of Management of Zhejiang University; from December 4 to December 6, 2020, I attended the forum on the "2020 Leadership Dialogue between Deans and Secretary of China Business School" hosted by the School of Business of Sun Yat-sen University, and made a speech themed as "Some Thoughts on Business Administration Research"; on December 7, 2020, I attended the forum on the "Construction of Free Trade Port and Development of Business Schools" hosted by the Management School of Hainan University, and made a speech themed as "Challenges and Opportunities for the Business Schools under the New Situation, and the Countermeasure Recommendations".
Independent Director: Li Wenjing
- III-12 -
APPENDIX IV | SPECIAL DESCRIPTION OF THE PERFORMANCE ASSESSMENT |
AND REMUNERATION OF THE DIRECTORS FOR THE YEAR OF 2020 | |
Dear Shareholders,
In 2020, according to the relevant requirements of laws and regulations including the Company Law (《公司法》) and the Rules on Governance of Securities Companies (《證券公 司治理準則》), as well as the Articles of Association, the Duty Performance Appraisal and Remuneration Management Regulations for Directors and Supervisors (《董事、監事履職考核 與薪酬管理辦法》) and the Performance Appraisal and Remuneration Management Regulations for the Management (《經營管理層績效考核與薪酬管理辦法》), by taking the actual circumstances of the Company into consideration and making reference to industry standards, the Company conducted duty performance appraisal of its Directors for the year of 2020 and determined the remuneration of its Directors on this basis. The particulars are set out as follows:
- Principles of Duty Performance Appraisal and Remuneration for Directors in 2020
According to the requirements of the Duty Performance Appraisal and Remuneration Management Regulations for the Directors and Supervisors (《董事、監事履職考核與薪酬管 理辦法》), the duty performance appraisal on Directors in 2020 was performed by the Company based on the principles that "duty performance appraisal on directors shall include, inter alia, attendance at meetings as required under the law, speeches at legally convened meetings, whether punishment has been imposed by the regulatory authorities and whether the interest of the Company has been seriously harmed".
Remuneration of non-executive Directors of the Company is in the form of annual allowance and distributed in equal amounts on a monthly basis. The Company withholds and pays individual income tax on their behalf. Remuneration of executive Directors of the Company includes salaries, bonus and welfare benefits, which is distributed in according to the human resources management policies and other relevant requirements. Personnel subject to the Performance Appraisal and Remuneration Management Regulations for the Management (《經營管理層績效考核與薪酬管理辦法》) shall also follow the requirements of these
Regulations.
- The Procedure of Duty Performance Appraisal for Directors in 2020
The duty performance appraisal for Directors of the Company is composed of three stages, namely self-appraisal by Directors, appraisal by the Remuneration and Appraisal Committee of the Board, and consideration and determination by the Board. When the Remuneration and Appraisal Committee of the Board and the Board deliberate on the duty performance of each Director, the Director being appraised shall abstain from voting.
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APPENDIX IV | SPECIAL DESCRIPTION OF THE PERFORMANCE ASSESSMENT |
AND REMUNERATION OF THE DIRECTORS FOR THE YEAR OF 2020 | |
Other relevant requirements, including the human resources management policies and the Performance Appraisal and Remuneration Management Regulations for the Management are also applicable to the procedure of duty performance appraisal for executive Directors of the Company.
III. Duty Performance Appraisal Results and Remuneration of Directors in 2020
According to the aforementioned principles and procedure, the duty performance appraisal results and remuneration for each of the Directors in 2020 are set out below:
- The duty performance appraisal results for each of the Directors of the Company in 2020 are satisfactory.
- The annual remuneration of non-executive Directors has adopted the allowance policies, under which the annual allowance for an Independent Non-executive Director is RMB270,000 per annum (tax inclusive), the annual allowance of non-executive Director employed by a unit of the Shareholder is RMB180,000 per annum (tax inclusive). The above allowances are distributed by the Company on a monthly basis, and individual income tax is withheld and paid on their behalf. The expenses incurred by non-executive Directors relating to attending the Board meetings and general meetings of the Company and performing the duties of Directors shall be borne by the Company.
- Executive Directors shall be appraised, and their remuneration shall be determined, in accordance with the relevant policies of the Company.
Please kindly hear the above report.
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APPENDIX V SPECIAL DESCRIPTION OF THE DUTY PERFORMANCE APPRAISAL AND REMUNERATION OF THE SUPERVISORS FOR THE YEAR OF 2020
Dear Shareholders,
In 2020, according to the relevant requirements of laws and regulations including the Company Law (《公司法》) and the Rules on Governance of Securities Companies (《證券公 司治理準則》), as well as the Articles of Association, the Duty Performance Appraisal and Remuneration Management Regulations for Directors and Supervisors (《董事、監事履職考核 與薪酬管理辦法》) and the Performance Appraisal and Remuneration Management Regulations for Chairman of Supervisory Committee (《監事長績效考核與薪酬管理辦法》), by taking the actual circumstances of the Company into consideration and making reference to industry standards, the Company formulated the Duty Performance Supervision and Assessment Implementation Plan of the Supervisory Committee of GF Securities for Supervisors for the year of 2020 (《廣發証券監事會對監事2020年度履職監督評價實施方 案》), and according to such implementation plan, conducted duty performance appraisal of its Supervisors for the year of 2020 and determined the remuneration of its Supervisors on this basis. The particulars are set out as follows:
- Principles of Duty Performance Appraisal for Supervisors in 2020
According to the requirements of the Duty Performance Appraisal and Remuneration Management Regulations for the Directors and Supervisors (《董事、監事履職考核與薪酬管 理辦法》), the duty performance appraisal on Supervisors in 2020 was performed by the Company based on the principles that "duty performance appraisal on supervisors shall include, inter alia, attendance at meetings as required under the law, speeches at legally convened meetings, whether punishment has been imposed by the regulatory authorities and whether the interest of the Company has been seriously harmed".
- The Procedure of Duty Performance Appraisal for Supervisors in 2020
The duty performance appraisal for Supervisors of the Company is composed of three stages, namely self-appraisal by Supervisors, mutual appraisal by Supervisors, and consideration and determination by the Supervisory Committee. When the Supervisory Committee deliberates on the duty performance of each Supervisor, the Supervisor being appraised shall abstain from voting.
The human resources management policies and other relevant requirements are also applicable to the appraisal and remuneration determination of employee Supervisor of the Company. Meanwhile, the employee Supervisor of the Company has submitted an annual work report to all staff representatives of the Company and received comments in a democratic manner from staff representatives. The Performance Appraisal and Remuneration Management Regulations for Chairman of Supervisory Committee (《監事長績效考核與薪酬管理辦法》) are also applicable to the Chairman of the Supervisory Committee.
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APPENDIX V SPECIAL DESCRIPTION OF THE DUTY PERFORMANCE APPRAISAL AND REMUNERATION OF THE SUPERVISORS FOR THE YEAR OF 2020
III. Duty Performance Appraisal Results and Remuneration of Supervisors in 2020
According to the aforementioned principles and procedure, and pursuant to the Duty Performance Supervision and Assessment Implementation Plan of the Supervisory Committee of GF Securities for Supervisors for the Year of 2020 (《廣發証券監事會對監事2020年度履職 監督評價實施方案》), the duty performance appraisal results and remuneration for each of the Supervisors in 2020 are set out below:
- The duty performance appraisal results for each of the Supervisors of the Company in 2020 are satisfactory.
- A Supervisor is entitled to receive commensurate remuneration if the annual appraisal result is satisfactory. The annual remuneration of non-employee Supervisor has adopted the allowance policies, under which the standard allowance for a non-employee Supervisor is RMB150,000 per annum (tax inclusive). The above allowances are distributed by the Company on a monthly basis, and individual income tax is withheld and paid on his behalf. The expenses incurred by a non-employee Supervisor relating to attending the Supervisory Committee Meetings, auditing Board meetings and attending general meetings of the Company and performing the duties of Supervisors shall be borne by the Company.
- The human resources management policies and other relevant requirements are applicable to determine the remuneration of employee Supervisor of the Company, and the Performance Appraisal and Remuneration Management Regulations for Chairman of Supervisory Committee (《監事長績效考核與薪酬管理辦法》) are applicable to the Chairman of the Supervisory Committee.
Please kindly hear the above report.
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APPENDIX VI SPECIAL DESCRIPTION OF THE DUTY PERFORMANCE, PERFORMANCE ASSESSMENT AND REMUNERATION OF THE MANAGEMENT FOR THE YEAR OF 2020
Dear Shareholders,
In 2020, according to the relevant requirements of laws and regulations including the Company Law (《公司法》) and the Rules on Governance of Securities Companies (《證券公 司治理準則》), as well as the Articles of Association, the Duty Performance Appraisal and Remuneration Management Regulations for Directors and Supervisors (《董事、監事履職考核 與薪酬管理辦法》), the Performance Appraisal and Remuneration Management Regulations for the Management (《經營管理層績效考核與薪酬管理辦法》) and Duty Performance Appraisal and Remuneration Management Regulations for Chief Compliance Officer (《合規 總監履職考核與薪酬管理辦法》), by taking the actual circumstances of the Company into consideration and making reference to industry standards, the Company conducted appraisal of the duty performance of the management for the year of 2020 and determined the remuneration of the management on this basis. The particulars are set out as follows:
- Duty Performance of the Management in 2020
In 2020, the Management of the Company was able to implement all resolutions of the general meetings, Board meetings and meetings of the Supervisory Committee of the Company conscientiously, and performed its duties diligently. It actively pursued and completed each of the work plans and arrangements of the Company with strong execution ability. It regulated its own practice and conduct in a voluntary manner, applied for abstention from voting to avoid matters with conflicts of interest, and operated the business with integrity. Non-compliance acts under laws and regulations or corporate systems and rules did not occur, nor incidents of harmful acts to the interest of the Company or equity of shareholders. The Management was able to perform the obligations of honesty and diligence practicably to protect the legitimate interests of customers, employees and Shareholders.
- Appraisal of the Management in 2020
In 2020, the procedure of performance appraisal for the Management of the Company was implemented according to the human resources management system and other relevant regulations including the Performance Appraisal and Remuneration Management Regulations for the Management (《經營管理層績效考核與薪酬管理辦法》). The duty performance appraisal for the Chief Compliance Officer was implemented by the Company according to the regulatory requirements and the requirements of the Performance Appraisal and Remuneration Management Regulations for the Management and the Duty Performance Appraisal and Remuneration Management Regulations for Chief Compliance Officer (《合規總監履職考核與 薪酬管理辦法》), and the relevant report was filed with the Guangdong Bureau of the CSRC.
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APPENDIX VI SPECIAL DESCRIPTION OF THE DUTY PERFORMANCE, PERFORMANCE ASSESSMENT AND REMUNERATION OF THE MANAGEMENT FOR THE YEAR OF 2020
III. Remuneration of the Management in 2020
The annual remuneration of the Management was composed of two parts, namely basic remuneration and performance-based remuneration. The basic remuneration was determined in accordance with the human resources management and remuneration policies of the Company. Independent opinions were expressed by Independent Directors and written opinions were issued by the Remuneration and Appraisal Committee on the distribution plan of performance- based remuneration, the final decision of which will be determined by the Board according to the comprehensive operating conditions and results of the Company.
The distribution of performance-based remuneration will be implemented according to the relevant requirements of the Rules on Governance of Securities Companies (《證券公司治 理準則》) and the relevant regulations of the Company.
Please kindly hear the above report.
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GF Securities Co. Ltd. published this content on 14 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 April 2021 10:48:04 UTC.