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HONG KONG DEPOSITARY RECEIPTS (HDRs) Seminar on 17 September 2008 At Hong Kong Securities HONG KONG DEPOSITARY RECEIPTS (HDRs) Seminar on 17 September 2008 At Hong Kong Securities Institute By : Matthew Harrison, Research & Corporate Development, HKEX Bonnie Chan, Listing, HKEx

Hong Kong Depositary Receipts (HDRs) AGENDA Page 1. Nature of DRs 3 2. Global Hong Kong Depositary Receipts (HDRs) AGENDA Page 1. Nature of DRs 3 2. Global DR landscape 7 3. Why HDRs? 14 4. HDR framework 16 5. HDR operations 25 Appendix Further details on HDR operations 2

Hong Kong Depositary Receipts (HDRs) 1. Nature of depositary receipts Ø DRs are receipts Hong Kong Depositary Receipts (HDRs) 1. Nature of depositary receipts Ø DRs are receipts issued by a depositary representing underlying shares of a corporation which have been deposited with the depositary or its nominated custodian. Issuance of DRs DR holders DRs Depositary Issuance of shares Shareholders Shares Corporation 3

Hong Kong Depositary Receipts (HDRs) 1. Nature of depositary receipts Issuance of shares : Hong Kong Depositary Receipts (HDRs) 1. Nature of depositary receipts Issuance of shares : governed by local statute and corporation’s M&A. Issuance of DRs : governed by deposit agreement. Issuance of DRs Issuance of shares DR holders Shareholders Deposit agreement DRs Shares Depositary Statute / M&A Shares Issuing company 4

Hong Kong Depositary Receipts (HDRs) 1. Nature of depositary receipts Why DRs? For issuers Hong Kong Depositary Receipts (HDRs) 1. Nature of depositary receipts Why DRs? For issuers Ø Local regulations may discourage overseas issuance of shares or overseas share register. Ø Share size – DRs can be sized to fit host market practice. For investors Ø Convenience – no need for local registration, compliance with foreign investor regulations, currency translation, etc. 5

Hong Kong Depositary Receipts (HDRs) 1. Nature of depositary receipts DR product characteristics Ø Hong Kong Depositary Receipts (HDRs) 1. Nature of depositary receipts DR product characteristics Ø Mature product – 1 st DRs issued in 1927 by JP Morgan on UK retailer Selfridges. Ø Usually on shares, but may also be on other securities such as bonds, ETFs. (HDRs only on shares. ) Ø Most share-related DRs now sponsored by issuer. (HDRs must be. ) Ø Deposit agreement – concluded by issuer and depositary – defines investor rights – bridges local and host market practice Ø Legal character – contract, but similar to trust or custody arrangement Ø DR ratio – can be adjusted relatively easily (by board resolution and amendment of deposit agreement) Ø Depositary receipts – (strictly, ) confirmations of entitlement to depositary shares 6

Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape ADRs – – “American depositary Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape ADRs – – “American depositary receipts” Used almost universally by foreign companies listing in US Regulation follows that applicable to securities generally Level І : non-listed ІІ : listed without public capital-raising ІІІ : listed with public capital-raising GDRs – “Global depositary receipts” – Usually – a US leg (ADRs) settled in DTC – a European leg under Reg S settled in ICSD and traded on London’s IOB – Used by many foreign companies listing in London or Luxembourg – Concessionary regulation – viewed as professional product and listed under European minimum regulation ICSD = International Central Securities Depository IOB = International Order Book 7

Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape Global DR highlights Ø 20931 Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape Global DR highlights Ø 20931 sponsored DR programmes in issue (June 2008). Ø Indian-sponsored issues the most numerous, followed by Russia, UK, Brazil, Australia, Taiwan, China, Hong Kong. Ø Estimated value: US$1. 8 trillion at March 2008, up 35% Year on Year. Ø London and NYSE vie in DR capital raised. Ø Over US$2. 4 trillion traded YTD June 2008, up 85% on prior YTD. Ø NYSE leads in DR trading value, followed by Nasdaq, London. DRs represent about 4% of world listed equity market 1 Statistics from Bank of New York Mellon (Bo. NY) The Depositary Receipt Markets 2008 Mid-Year Review. 8

Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape New sponsored DRs Source: Bo. Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape New sponsored DRs Source: Bo. NY Recent trend of GDR issuance 9

Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape Annual DR capital raising Primary Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape Annual DR capital raising Primary and follow-on offerings ($bn) Source: Bo. NY GDR capital-raising has grown 10

Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape DR capital raising (US$9, 159 Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape DR capital raising (US$9, 159 million) By exchange, 1 H 2008 ($million) London and NYSE dominate in capital-raising Source: Bo. NY 11

Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape Annual DR trading U. S. Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape Annual DR trading U. S. -listed Source: Bo. NY DR trading is still growing strongly, despite general decline in world equity markets 12

Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape Global DR trading value (total Hong Kong Depositary Receipts (HDRs) 2. Global DR landscape Global DR trading value (total US$2, 460 billion) By exchange or market, 1 H 2008 ($bn) Source: Bo. NY NYSE dominates trading 13

Hong Kong Depositary Receipts (HDRs) 3. Why HDRs? Ø HKEx’s Strategic Plan: list more Hong Kong Depositary Receipts (HDRs) 3. Why HDRs? Ø HKEx’s Strategic Plan: list more overseas companies. Ø Roadshows / marketing trips to Russia, Vietnam, Kazakhstan, India, Mongolia, etc. Ø Feedback: HKEx Listing Rules mandating shares and Hong Kong share register considered a barrier. Ø Solution: HDR framework 14

Hong Kong Depositary Receipts (HDRs) 3. Why HDRs? Nature of HDR framework Ø No Hong Kong Depositary Receipts (HDRs) 3. Why HDRs? Nature of HDR framework Ø No policy change vis-à-vis existing regime – HDR listing requirements equivalent to those for shares Ø Not a concessionary regime (ie. unlike London’s). More like US-style Level ІІІ approach, ie. as for shares. Ø Essentially: instrumental facility for listing in DR form rather than share form. Ø No market consultation needed HDR framework introduced relatively quickly. Ø Available to all issuers which meet listing requirements. Ø Rule amendments apply spirit of existing rules to two-tier DR structure. 15

Hong Kong Depositary Receipts (HDRs) 4. HDR framework Key features Ø HDR framework applies Hong Kong Depositary Receipts (HDRs) 4. HDR framework Key features Ø HDR framework applies only to Main Board. Ø New Chapter 19 B, Appendices 1 E and 1 F; minor amendments to existing rules. Ø Existing Listing Rules (IPO procedures and continuing listing requirements) and CCASS Rules apply to HDRs except where specifically modified (Rule 19 B. 01). Ø SFO, Takeovers Code and prospectus provisions of Companies Ordinance apply to HDRs. Ø Trading, clearing and settlement procedures: same as for shares Ø Applicable Exchange fees and charges: same as for shares Ø Stamp duty: same as for shares (0. 1% per side). 16

Hong Kong Depositary Receipts (HDRs) 4. HDR framework Existing regime for listing overseas companies Hong Kong Depositary Receipts (HDRs) 4. HDR framework Existing regime for listing overseas companies applies to HDRs Ø Remains unchanged and applies equally to overseas issuers listing: – via HDRs; and – via ordinary shares Ø Set out in Chapter 19, supplemented by Joint Policy Statement Regarding the Listing of Overseas Companies issued by SEHK and SFC on 7 March 2007. Ø Joint Policy Statement is intended to: – clarify Listing Rules governing listing of overseas companies – provide roadmap to overseas companies incorporated outside the Recognised Jurisdictions (i. e. Bermuda, Cayman Islands and PRC) – state factors (not determinative) affecting eligibility for listing 17

Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B of Main Board Listing Rules Ø Issuer: – Includes a company whose shares are represented by HDRs that are listed or (Chapter 1) – HDR issuer does not have to be already listed overseas. – Issuer cannot list shares and HDRs on the Exchange at the same time (Rule 19 B. 06). – Must appoint approved share registrar to maintain HDR holder register, only (Rule 19 B. 13) Ø HDRs: – may be issued in respect of newly issued shares and/or shares placed with depositary by existing shareholders (Rule 19 B. 06) – must be freely transferable (Rule 19 B. 09(a)) – securities which HDRs represent must be fully paid and free from liens or restrictions (Rule 19 B. 09(b)) 18

Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B of Main Board Listing Rules (cont’d) Ø Depositary : – must be duly incorporated and in conformity with its constitutional document (Rule 19 B. 14) – must be suitably authorised and regulated financial institution acceptable to Exchange – includes overseas operators (Rule 19 B. 15) – have adequate experience in issuing and managing DR programmes in Hong Kong or overseas (Rule 19 B. 15) – issues HDRs as agent of issuer (Rule 19 B. 05) – holds shares to which HDRs relate on trust (or equivalent arrangements) for sole benefit of HDR holders (Rule 19 B. 16) 19

Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B of Main Board Listing Rules (cont’d) Ø Deposit Agreement (Rule 19 B. 16) – Vetted by the Listing Division – shareholder protection features in Joint Policy Statement dated 7 March 2007 should be complied with – Entered into between issuer and depositary and binding on HDR holders – Stipulates rights, duties and obligations of depositary, issuer, HDR holders, custodian; and stipulates depositary fee structure – Sets out procedures for replacement or removal of depositary and/or custodian – Sets out procedures for amendment of deposit agreement – material changes affecting HDR holders’ rights must have HDR holders’ prior approval international practice. Must not exclude Hong Kong jurisdiction for dispute resolution 20

Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B of Main Board Listing Rules (cont’d) Ø Public Float Requirement – Public float requirement applies to whole class of shares represented by HDRs provided fungible with HDRs (Rule 19 B. 08) – Illustration: Company A has: Ordinary shares Depositary Receipts (HDRs) (Note 1) 900 100 Note 1: Each HDR represent one ordinary share of Company A Question: If 200 ordinary shares and 50 HDRs are held by public, does Company A meet public float requirement under Rule 8. 08? 21

Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B of Main Board Listing Rules (cont’d) Ø Public Float Requirement – Illustration (cont’d) Issued ordinary shares 200 Ordinary shares upon full conversion of HDRs (50 x 1) Shares held by the public 250 (B) 50 Total issued share capital 1, 000 (A) % held by the public 25% (B)/(A) Conclusion: Company A is able to meet public float requirement of 25% under Rule 8. 08 22

Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B Hong Kong Depositary Receipts (HDRs) 4. HDR framework Highlights of new Chapter 19 B of Main Board Listing Rules (cont’d) Ø Number of HDRs sought for listing (Rule 19 B. 07) : – Issuer may seek to list HDRs up to any prescribed amount of share capital which HDRs represent. (Rule 8. 19 does not apply) – Headroom provision – No further application for listing of HDRs is required for creation and cancellation of listed HDRs resulting from conversion of shares into HDRs or vice versa if sufficient headroom. – No further application for listing of HDRs is required merely because issuer issues further shares. (Rule 8. 20 does not apply) 23

Hong Kong Depositary Receipts (HDRs) 4. HDR framework Effective date and way forward Ø Hong Kong Depositary Receipts (HDRs) 4. HDR framework Effective date and way forward Ø Effective date of HDR framework: 1 st July 2008 Ø FAQs and further information about HDRs on HKEx website Ø Revised Guidance for New Listing Applications (Main Board) has been updated. Ø Further enhancement of listing regime for overseas companies is under consideration. 24

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (1) Structure of share- / HDR Hong Kong Depositary Receipts (HDRs) 5. HDR operations (1) Structure of share- / HDR ownership (2) HDR initial listing (3) HDR creation and cancellation (4) Corporate action processing (5) Cash dividend (6) Scrip dividend (7) HKSCC Nominees service – voting (8) Benefit entitlements (9) Common fees and charges of depositary 25

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (1) Structure of share- / HDR Hong Kong Depositary Receipts (HDRs) 5. HDR operations (1) Structure of share- / HDR ownership Structure of overseas listed company ownership Local register of members (ROM) Other intermediaries / nominees Local CSD nominee Local participants Custodian Depositary DRs Individual/ corporate shareholders CSD Individual/ corporate shareholders : Registered shareholders : Central securities depository Individual/ corporate shareholders DR holders : Beneficial owners 26

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (1) Structure of share- / HDR Hong Kong Depositary Receipts (HDRs) 5. HDR operations (1) Structure of share- / HDR ownership (cont’d) Structure of HDR ownership in Hong Kong market [See preceding slide] Overseas issuer: local ROM Depositary HDR ROM HKSCC Nominees Other intermediaries/ nominees GCP/DCP/custodian participants Investor participant HDR holders Individual/ corporate HDR holders : Registered shareholders Individual/ corporate HDR holders : Beneficial owners 27

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (1) Structure of share- / HDR Hong Kong Depositary Receipts (HDRs) 5. HDR operations (1) Structure of share- / HDR ownership (cont’d) Implications Ø Depositary and its custodian added to chain. – Information flow may take longer Ø Two-tier structure: to maintain regulatory equivalence – Usually look through to issuer/shares – In a few areas, look to depositary/HDR level Ø A few new concepts, e. g. “headroom”. 28

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (2) HDR initial listing Ø Listing Hong Kong Depositary Receipts (HDRs) 5. HDR operations (2) HDR initial listing Ø Listing can be by introduction – i. e. no capital raised in Hong Kong Ø Issuer must apply for headroom Ø IPO can be of HDRs, – on new shares (i. e. newly issued by issuer) – on existing shares (i. e. sold by major shareholder) Ø IPO process is same as for shares – Public offering required (if sizeable issue) – Yellow form, white form, etc. – Scrip created if white form used 29

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (3) HDR creation and cancellation HDR Hong Kong Depositary Receipts (HDRs) 5. HDR operations (3) HDR creation and cancellation HDR creation HK Market HK investor T-day HK broker Purchase underlying share Local Market Buy HDR SEHK T+2 day Notify broker to collect HDR certificate Custodian of local broker Local broker Underlying shares T-day Settlement day CCASS *Share Registrar Instruct broker to buy HDR, either (a) (b) Purchase in HK or Purchase underlying shares in local market and convert to HDR * Roles of registration and custody of HDRs To create HDR Depositary Bank (DB) Custodian appointed by DB Notification of share receipt Local stock Exchange/CSD 30

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (3) HDR creation and cancellation (cont’d) Hong Kong Depositary Receipts (HDRs) 5. HDR operations (3) HDR creation and cancellation (cont’d) HDR cancellation HK Market HK investor Sell HDR T-day T+2 day HK broker Transmission of net cash proceeds SEHK CCASS Withdrawal of HDR certificate * Share Registrar Deliver HDR certificate Instruct broker to sell HDR, either (a) (b) Sell in HK or Convert HDR to underlying shares and sell in local market * Roles of register and custody of HDR Notification of HDR receipt & cancellation Depositary Bank (DB) Local Market Custodian of local broker Local broker Underlying shares Custodian appointed by DB T-day Settlement day Instruction to release underlying share Local stock Exchange/CSD 31

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (3) HDR issuance and cancellation (cont’d) Hong Kong Depositary Receipts (HDRs) 5. HDR operations (3) HDR issuance and cancellation (cont’d) Highlights Ø Arbitrage between HDRs in Hong Kong and shares in local market (if not restricted) can take place. Ø HDR creation: no need to apply for listing – unless headroom exceeded. Ø HDR cancellation: no need to apply for withdrawal of listing – provided some HDRs remain listed. 32

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (4) Corporate action processing HKSCC Investor Hong Kong Depositary Receipts (HDRs) 5. HDR operations (4) Corporate action processing HKSCC Investor HK Market CCASS Participant HDR Holder Share Registrar Depositary Local Market Issuer Custodian of underlying shares Corporate communication Instruction (1) Issuer provides corporate action details to local custodian (2) Local custodian gives information to depositary (3) Depositary via its appointed share registrar (SR) in HK distributes information to HDR holders (4) CCASS receives notification from SR then distributes information to CCASS participants (5) CCASS will collect instruction from CCASS participants and submit to SR (6) Depositary receives instructions from HDR holders via SR and submits them to Issuer through local custodian 33

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (5) Cash dividend Communications flow HDRs Hong Kong Depositary Receipts (HDRs) 5. HDR operations (5) Cash dividend Communications flow HDRs (anticipated) H shares (current) 1. Issuer announcement • local currency amount per share • local payment date (1) Issuer announcement of RMB amount per share 2. Depositary notice • approximate HK$ amount per HDR • approximate HDR payment date (2) Registrar notification of HK$ amount per share 3. Depositary notice • actual HK$ amount per HDR • actual HDR payment date 34

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (6) Scrip dividend Communications flow 1. Hong Kong Depositary Receipts (HDRs) 5. HDR operations (6) Scrip dividend Communications flow 1. Issuer announcement • share ratio • local payment date 2. Depositary notice • HDR ratio • approximate HDR payment date 3. Depositary notice • actual HDR payment date Similar to flow for cash dividend 35

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (7) HKSCC nominees service – voting Hong Kong Depositary Receipts (HDRs) 5. HDR operations (7) HKSCC nominees service – voting Ø Upon receipt of notice of meeting, depositary fixes record date notifies HDR holders via SR. Voting Share Registrar (SR) appointed by Depositary Proxy form or Corporate Representative Appointment letter HKSCC Nominees Limited Corporate Representative instruction &/or voting instruction Non-Investor Participants and Ø Beneficial owners submit instructions through CCASS Participants to HKSCC for votes to be cast on their behalf, or request to be appointed as corporate representative to attend and vote at shareholders’ meeting. Ø HKSCC collects instructions and passes on to depositary, who relays to local custodian for action Corporate Representative instruction &/or voting instruction Beneficial Owners 36

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (8) Benefit entitlements / corporate actions Hong Kong Depositary Receipts (HDRs) 5. HDR operations (8) Benefit entitlements / corporate actions (NOT REQUIRING exercise of discretion) Dividend payment / Issue of Bonus shares Ø Examples: dividend payment, issue of bonus shares. Share Registrar (SR) appointed by Depositary Dividend / Bonus shares HKSCC Nominees Limited Dividend / Bonus shares Non-Investor Participants Dividend / Bonus shares Investor Participants Ø Upon receipt of payment (net of any fees, expenses, tax withheld and depositary’s own fee) in either HKD or USD / bonus shares in respect of HKSCC Nominees’s shareholding at record date, HKSCC will credit payment/ bonus shares to CCASS participants’ bank account (net of CCASS dividend collection fee) / stock account respectively. Beneficial owners 37

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (8) Benefit entitlements / corporate actions Hong Kong Depositary Receipts (HDRs) 5. HDR operations (8) Benefit entitlements / corporate actions (cont’d) (REQUIRING exercise of discretion) Subscription / Take-over offer Ø Examples: open offer, take-over offer, subscription Share Registrar (SR) appointed by Depositary Expenses, shares, Form of Acceptance Ø HKSCC will collect instructions from CCASS Participants and take action on their behalf or to facilitate the taking of actions by Participants directly. Entitlement / shares HKSCC Nominees Limited Subscription, Take-over instruction Entitlement / shares Non-Investor Participants Subscription, Take-over instruction Entitlement / shares Beneficial Owners Subscription, Take-over instruction Entitlement / shares Investor Participants Ø Rights issues – Pre-emptive rights must be passed on to DR holder – This will entail obtaining authorisation of the rights prospectus (ie. by Exchange) 38

Hong Kong Depositary Receipts (HDRs) 5. HDR operations (9) Common fees & charges of Hong Kong Depositary Receipts (HDRs) 5. HDR operations (9) Common fees & charges of depositary (based on ADR experience) Ø Charges are made to the investor (via his broker or custodian) – Issuance fee – Cancellation fee – Cash distribution fee – Stock distribution / rights exercise fee – Other distribution fee – Annual depositary service fee Notes: 1. The above is for reference only; the depositaries’ charges for HDRs have not yet been published. 2. It should be noted that CCASS’s normal charges will apply to HDRs in any event. 39

Appendix Hong Kong Depositary Receipts (HDRs) FURTHER DETAILS ON HDR OPERATIONS Deposit of HDR Appendix Hong Kong Depositary Receipts (HDRs) FURTHER DETAILS ON HDR OPERATIONS Deposit of HDR Certificate Participants must ensure that they have full authority to deposit such HDR certificate into CCASS. 1. HDR certificate Instrument of Transfer CCASS Depository 10: 00 a. m. to 3: 45 p. m. Monday to Friday + Stock Deposit Form 3. Input the deposit details to CCASS. 2. Inspect all the documents submitted. 4. Immediately credit to Participant’s stock account. 5. Certificates will be delivered to the share registrar for re-registration in name of HKSCC Nominees. This process will take 10 business days. Share Registrar (SR) appointed by depositary 6. After 10 business days New certificate (HKSCC) Nominee 40

Appendix Hong Kong Depositary Receipts (HDRs) FURTHER DETAILS ON HDR OPERATIONS (cont’d) Withdrawal of Appendix Hong Kong Depositary Receipts (HDRs) FURTHER DETAILS ON HDR OPERATIONS (cont’d) Withdrawal of HDR Certificate 1. Participants input withdrawal order (W/O) via CCASS. 10: 00 a. m. to 3: 45 p. m. Monday to Friday 6. The authorized representative of the Participant with the duly signed Stock Collection Authorization Form collects the Certificates from the counter. 10: 00 a. m. to 5: 00 p. m. Monday to Friday 5. Stock Withdrawal Receipt, Certificates and Instrument of Transfer pass to counter of CCASS Depository 2. Once a W/O is accepted by the system, the Participant's specified stock account will be debited by the system with the withdrawal quantity of shares. 3. HKSCC staff retrieves the certificates of the withdrawn stock from the vault. 4. HKSCC staff signs the Instrument of Transfer. 41

Appendix Hong Kong Depositary Receipts (HDRs) FURTHER DETAILS ON HDR OPERATIONS (cont’d) Ways to Appendix Hong Kong Depositary Receipts (HDRs) FURTHER DETAILS ON HDR OPERATIONS (cont’d) Ways to receive corporate communication through HKSCC Nominees Ltd. Share Registrar (SR) appointed by Depositary Sends out corporate communication HKSCC will provide a list of the names and addresses of recipients to the depositary via registrar. CCASS Participants inform HKSCC of the name & address of the recipients. Beneficial owners They may request through CCASS Participants to receive corporate communication directly from depositary. Investor Participants They may submit a standing instruction to receive corporate communication directly from depositary. Depositary receipts registered in name of HKSCC Nominees Ltd. Registered Holders Depositary receipts registered in investors’own name 42

Appendix Hong Kong Depositary Receipts (HDRs) FURTHER DETAILS ON HDR OPERATIONS (cont’d) Corporate action Appendix Hong Kong Depositary Receipts (HDRs) FURTHER DETAILS ON HDR OPERATIONS (cont’d) Corporate action processing Share Registrar (SR) appointed by Depositary Instructions Corporate communication/ Entitlement Consolidated instruction representing those submitted by CCASS participants HKSCC Entitlement Instruction s Process between SR and the beneficial owners CCASS participants Instruction s Entitlement Corporate announcement / Beneficial owners entitlement Process among HKSCC, CCASS participants & beneficial owners 43