Everbright Securities : ANNOUNCEMENT ON THE CHANGES IN ACCOUNTING POLICIES

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Everbright Securities Company Limited

光 大 證 券 股 份 有 限 公 司

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 6178)

ANNOUNCEMENT ON THE CHANGES IN ACCOUNTING POLICIES

This announcement is made by Everbright Securities Company Limited (the "Company") pursuant to the Inside Information Provisions (as defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules")) under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and Rule 13.09(2) and Rule 13.10B of the Listing Rules.

1. OVERVIEW
   With the adjustment of the Company's business planning, the Company reclassified the existing five business segments into six business segments, and correspondingly adjusted the statistical calibre of segment reports in periodic statements.
   The changes in accounting policies were considered and approved at the 26th meeting of the fifth session of the board of directors (the "Board") and the 16th meeting of the fifth session of the supervisory committee of the Company.
2. DETAILED INFORMATION AND THE IMPACTS ON THE COMPANY
3. 1. Changes in accounting policies and reasons
      With the adjustment of the Company's business planning to provide more reliable and relevant accounting information in financial reports, the Company has decided to adjust the statistical calibre of segment reports. Before the change in segment reporting, the segment was mainly divided into five business segments: brokerage and wealth management, credit business, institutional securities services, investment management, overseas business and others; and after the change, the segment was mainly divided into six business segments: wealth management, corporate financing, institutional customer, investment trading, asset management and equity investment and others.
      The changed business segments are mainly as follows:
      The wealth management business segment mainly includes the provision of securities brokerage, futures brokerage, bulk commodity warehouse receipts services and investment advisory services, distribution of financial products developed by the Company and other financial institutions, financing for exercising incentive stock options, credit business, and offshore brokerage and wealth management business, etc., for listed companies to retail clients.

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The corporate financing business segment mainly includes financing services such as equity financing, bond financing, M&A financing, NEEQ and structural financing, asset securitization, financial advisory and other financing services and financial leasing business for corporate and government clients.

The institutional customer business segment mainly includes integrated services such as securities trading and investment, investment research and prime brokerage for various institutional clients.

The investment trading business segment mainly includes stocks, bonds, derivatives, foreign exchange, commodities and other multi-species investment transactions and investment consulting services.

The asset management business segment mainly includes the provision of various types of brokerage asset management services and fund asset management services for institutional and individual clients.

The equity investment business segment mainly includes private security investment, private equity investment, alternative investment and PPP business.

Others mainly includes other businesses in addition to the above, including the operation of headquarters and investment holding platforms, and the management of general working capital.

1. Impact on the Company
   Such changes shall not affect the data and presentation of financial statements, but only the presentation of segment reporting.

3. CONCLUSIVE OPINIONS OF INDEPENDENT NON-EXECUTIVE DIRECTORS AND THE SUPERVISORY COMMITTEE ON THE CHANGES IN ACCOUNTING POLICIES

The independent non-executive directors of the Company are of the view that the changes in the accounting policies are made in order to reasonably provide more reliable and relevant accounting information and are in compliance with the relevant requirements of the regulatory authorities, such as the Ministry of Finance, the China Securities Regulatory Commission and the Shanghai Stock Exchange; the changes can reflect the Company's operating results in a more objective and fair manner, and are in line with the interests of the Company and its shareholders. The review procedure for the changes in the accounting policies satisfied the requirements of the relevant laws, regulations and the Articles of Association. The independent non-executive directors of the Company agree to the changes in accounting policies.

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The supervisory committee of the Company is of the view that the changes in the accounting policies are made in order to reasonably provide more reliable and relevant accounting information and are in compliance with the relevant requirements of the regulatory authorities, such as the Ministry of Finance, the China Securities Regulatory Commission and the Shanghai Stock Exchange; the changes can reflect the Company's operating results in a more objective and fair manner, and are in line with the interests of the Company and its shareholders. The review procedure for the changes in the accounting policies satisfied the requirements of the relevant laws, regulations and the Articles of Association. The supervisory committee of the Company agrees to the changes in accounting polices.

By order of the Board

Everbright Securities Company Limited

Chairman

Yan Jun

Shanghai, the PRC

26 August 2020

As at the date of this announcement, the Board of the Company comprises Mr. Yan Jun (Chairman, Executive Director), Mr. Liu Qiuming (Executive Director), Mr. Song Bingfang (Non-executive Director), Mr. Yin Lianchen (Non-executive Director), Mr. Chan Ming Kin (Non-executive Director), Mr. Xue Keqing (Non-executive Director), Mr. Xu Jingchang (Independent Non-executive Director), Mr. Xiong Yan (Independent Non-executive Director), Mr. Li Zheping (Independent Non-executive Director), Mr. Au Sing Kun (Independent Non-executive Director) and Mr. Wang Yong (Independent Non-executive Director).

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