Effective from 1 December 2017

CLSA SECURITIES DEALING SERVICES:
BOND ANNEX – CLSA LIMITED
1.

Definitions and Interpretation
In this Securities Dealing Services: Bond Annex, including the Schedule,
capitalised terms have the meaning given to them in the “CLSA Asia-PacificTerms of Business” (the “Terms of Business”), the “CLSA Asia-Pacific
Securities Dealing Services Annex” and the "CLSA Securities Dealing
Services: Hong Kong Market Annex" (together referred to herein as the“Existing Terms”). In addition, the following capitalised terms have thefollowing meaning:"Back-to-back Transaction" means, in this Annex and in circumstanceswhere an Affiliate of CLSA is a counterparty to a trade with you, whereCLSA: (a) having received a purchase order from you, the Affiliate of CLSA
purchases an investment product from another Affiliate of CLSA or a thirdparty and then sells that investment product to you; or (b) having received
a sell order from you, the Affiliate of CLSA purchases an investment
product from you and then sells that same investment product to anotherAffiliate of CLSA or a third party, and in either case the Affiliate of CLSA
with whom you are trading takes no market risk.
"Bonds" means (without limitation but including) any bond or note issued
by a corporation or sovereign of any description whatsoever andwheresoever issued, quoted, dealt in or located, and includes without
limitation bonds offered for subscription and listed as well as unlistedbonds offered for subscription via private placement.
“CLSA” means CLSA Limited.
"Professional Investor" has the meaning given to it in the "CLSA
Securities Dealing Services: Hong Kong Market Annex".

1.2

In addition to the definition in the Terms of Business, "Securities" includes
Bonds.

1.3

This Securities Dealing Services: Bond Annex – CLSA Limited is referred toherein as “this Annex”.

1.4

References in this Annex to “we”, “us” and “our” mean, unless the context
otherwise requires, CLSA and where the context requires will also include
any company in the CLSA Group, or persons connected with the CLSA
Group.

2.

Effect of Terms of Business; Amendment

2.1

The terms and conditions set out in this Annex shall apply to you if (a) you
are a Professional Investor; and (b) any of the following apply: (i) yourequested in your Application Form that we provide you with Securities
Dealing Services in respect of Bonds and your account is opened with CLSA; (ii) you otherwise request in writing that we provide you with Securities
Dealing Services in respect of Bonds and your account is opened withBonds Annex Dec 2017 v. 11

CLSA; or (iii) we currently provide you with Securities Dealing Services inrespect of Bonds through CLSA.
2.2

The terms and conditions set out in this Annex shall apply to all Securities
Dealing Services in respect of Bonds through an account opened withCLSA, provided by us to you in addition to, and supplemental to, the terms
and conditions set out in the Existing Terms. Accordingly, the terms andconditions in this Annex are legally binding and take effect when you
signify your acceptance by placing an order for Bonds through an accountopened with CLSA. In the event of any inconsistency between this Annex
and the Existing Terms, the provisions of this Annex shall prevail.

2.3

For the avoidance of doubt, the Existing Terms (including this Annex), theApplication Form, the Confirmation, as well as any contract notes, tradeconfirmations, statement of accounts and/ or receipts of transactions (eachdocument as amended and/or supplemented from time to time) constitutea legally binding contract and take effect when you signify your acceptanceby placing an order with us.

2.4

The English version of the Terms of Business shall prevail unless you haveconfirmed in writing to us that the Chinese version shall prevail.

3.

Trading with Affiliates of CLSA and Back-to-back Transactions

3.1

We may introduce you to Affiliates of CLSA for the purpose of effecting aBonds transaction.

3.1

Where we arrange a Back-to-back Transaction involving Bonds, we or theAffiliate of CLSA may make a trading profit of up to 10% of the investment
amount from the trade with you or as we otherwise notify you prior toentering into the transaction.

4.

Risk Disclosure Statement

4.1

You have confirmed (whether in theacknowledgement letter or otherwise) that:

ApplicationForm,the(a)

you acknowledge and confirm that the terms and conditions
applicable to the Services and the risk disclosure statements in theSchedule to this Annex (or otherwise provided) have been provided
to you in a language that you prefer and understand; and(b)you were invited to read the risk disclosure statements, to askquestions and take independent advice if you wish.

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2

Securities Dealing Services: Bond Annex
Risk Disclosure Statement ScheduleThis Risk Disclosure Statement Schedule (the “Schedule”) does not disclose allof the risks and other significant aspects of trading in Bonds. In light of the risks,
you should undertake such transactions only if you understand the nature of thecontracts (and contractual relationships) into which you are entering and theextent of your exposure to risk. You should carefully consider whether trading isappropriate for you in light of your experience, objectives, financial resources andother relevant circumstances. Please read this Schedule carefully, and ask
questions and take independent advice as you consider appropriate.
The price of Bonds can and does fluctuate and the price of any
individual Bonds or note may experience upward or downward
movements. There is a risk that losses may be incurred rather thanprofits made as a result of trading Bonds. A Bond may even becomevalueless.

A Bond is not an alternative to ordinary savings or time deposits.

Key Product Risks
In particular, you should be aware of the following risk factors:
Credit risk – Bonds are subject to the risk of the issuer (being the entity
issuing the Bonds) and the guarantor (if applicable, being an entity
guaranteeing the issuer's debt) defaulting on its obligations. Any changes tothe credit rating of the issuer or guarantor will affect the price and value ofthe Bonds. The lower the credit rating (for example, non-investment grade
Bonds), the higher the risk of default or possibility of happening of the otheradverse credit events (for example defaults on coupon, debt restructuring,etc.). If a Bond is not rated by credit agencies (i.e. in respect of an unratedBond), investor will not be able to track the change of the credit worthiness of
the Bond/issuer. Credit ratings assigned by credit rating agencies do notguarantee the creditworthiness of the issuer. Loss of your entire investment ispossible if the issuer / guarantor becomes insolvent.

Liquidity risk - The secondary market for Bonds is considerably less liquidthan the secondary market for equity securities. There can be no assurance
that an active secondary market in the Bonds shall exist or that any available
bid price will represent fair value. Accordingly, in the event you wish to sell
Bonds prior to their maturity it may be difficult or even impossible to find abuyer, either at all or in some cases without a significant discount to fairvalue. Investors may incur significant costs or losses in this regard.

Interest rate risk – Bonds are more susceptible to fluctuations in interest
rates and generally prices of Bonds will fall when interest rates rise.

Currency risk – Where the Bonds are denominated in a foreign currency,
there may be an exchange loss when converting the redemption amount backto the local or base currency.

Bonds Annex Dec 2017 v. 13

Key Product Risks For High-Yield Bonds
In circumstances where you invest in high-yield Bonds (such as non-investment
grade Bonds or unrated Bonds), you should be aware of the following additionalrisks:
Higher credit risk – high-yield bonds are typically rated below investment
grade or are unrated and as such are often subject to a higher risk of issuer
default; and

Vulnerability to economic cycles - during economic downturns high-yield
Bonds typically fall more in value than investment grade Bonds as (i)investors become more risk averse and (ii) default risk rises.

Key Product Risks For Sovereign Bonds
Sovereign Bonds are debt securities issued by a government. Such bonds are
subject to the risk that the sovereign will either fail or refuse to meet debt
repayments. A sovereign's ability to repay will be impacted by the sovereign's
economy and its willingness to pay will be impacted by its political system,
leadership and stability. Investors in sovereign Bonds also face risk fromhyperinflation in relation to that sovereign's currency, which could result in thedevaluation of principal and coupon payments.
Key Product Risks For Perpetual Bonds
Perpetual Bonds do not have a maturity date and can only be monetised by a salein the secondary market or if the security is callable, where it is called at the sole
option of the issuer. Perpetual Bonds are not principal protected. The making of
coupon payments will depend on the viability of the issuer in the very long termand such payments may be deferred and may also be non-cumulative, subject tothe terms and conditions of the issue. Where the security is redeemed by theissuer, proceeds received by the investor may be much less than the initialinvestment amount.
Furthermore, in such a situation, investors will be faced with reinvestment risk,
which means that prevailing market conditions may have changed and investors
may not be able to reinvest the proceeds at the same rate or for the same returnat such point in time. In addition, compared to investors in senior bonds,
perpetual Bonds are subordinated in ranking and investors in perpetual Bonds will
have a lower priority of claim (and consequently bear higher risk) in the case of
liquidation of the issuer.
Key Product Risks For Subordinated Bonds
Subordinated Bonds are unsecured and have a lower priority of claim than anadditional senior debt claim in the same asset. Investors in subordinated Bonds
will bear higher risks than investors in senior bonds of the issuer due to a lower
priority of claim in the event of the issuer’s liquidation. In addition, subordinatedBonds usually also have a lower credit rating than senior Bonds. Investors should
pay specific attention to the credit information on this product, including thecredit rating of the issuer, the subordinated Bonds and/or the guarantor, as thecase may be.

Bonds Annex Dec 2017 v. 14

Key Product Risks For Bonds denominated in Renminbi (RMB) or with
underlying assets that are denominated in RMB
You should note that the value of Renminbi against other foreign currencies
fluctuates and will be affected by, amongst other things, the government of thePeople's Republic of China's regulation of conversion between Renminbi andforeign currencies. This may adversely affect your return under this product when
you convert Renminbi into your home currency. Renminbi is not a freely
convertible currency. Any conversion of Renminbi through banks in Hong Kong
may be subject to certain restrictions prevailing at the relevant time.
Key Product Risks For Other Bonds With Special Features
The terms of features and risks of Bonds are not uniform and some Bonds may
contain special features and risks. You should read the terms of any Bonds prior
to investing. In particular you should be aware that Bonds may in somecircumstances: be callable, meaning investors face reinvestment risk when the issuer
exercises its right to redeem the Bond before it matures, as the call proceeds
may be substantially below the amount of the initial investment; have variable and/or deferral of interest payment terms, meaning
investors would face uncertainty over the amount and time of the interest
payments received; have extendable maturity dates, meaning investors would not have adefinite schedule of principal repayment; be convertible or exchangeable in nature, meaning investors are subject toboth equity and Bond investment risk;
 have contingent write down or loss absorption features, meaning theBond may be written-off fully or partially or converted to common stock on
the occurrence of a trigger event; and/or
 be supported by a Keepwell agreement which is a contract between theparent company and its subsidiary to maintain solvency and financial backing
throughout the term set in the agreement. The Keepwell agreement is not aguarantee, and there is the risk that timely payments may not be made if
there are changes to capital control laws or other regulations in the othercountry.
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