Central China Securities Co., Ltd.

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your securities broker or other registered securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Central China Securities Co., Ltd. (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, securities broker 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.

(a joint stock company incorporated in 2002 in Henan Province, the People’s Republic of China with limited liability under the Chinese corporate name “ ” and carrying on business in Hong Kong as “ ”) (Stock Code: 01375)

(I) PROPOSED EXTENSION OF THE VALIDITY PERIOD OF THE A SHARE ISSUE AND THE RELEVANT AUTHORISATION MATTERS; (II) PROPOSED AMENDMENTS TO THE ARTICLES; AND (III) PROPOSED AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

Letter from the Board is set out on pages 6 to 17 of this circular.

The notices convening an extraordinary general meeting (the “EGM”), a domestic share class meeting (the “Domestic Share Class Meeting”) and a H share class meeting (the “H Share Class Meeting”) of the Company to be held at 9:00 a.m., 10:00 a.m. or immediately after the conclusion of the EGM or any adjournment thereof (whichever is the later) and 11:00 a.m. or immediately after the conclusion of the Domestic Share Class Meeting or any adjournment thereof (whichever is the later) respectively on Friday, 18 November 2016 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, are set out on pages 18 to 26 of this circular.

The proxy forms for use at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting are enclosed and have been sent to you on 4 October 2016. Whether or not you are able to attend the EGM, the Domestic Share Class Meeting and the H Share Class Meeting in person, you are requested to complete and return the applicable proxy forms in accordance with the instructions printed thereon. In case of holders of H Shares, the proxy forms shall be lodged with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong; and in case of holders of Domestic Shares, the proxy forms shall be lodged at the head office of the Company in the PRC as soon as possible, but in any event, not less than 24 hours before the time scheduled for holding the relevant meetings (or any adjournment thereof) or the time appointed for the taking of the poll. Completion and delivery of the proxy forms will not preclude you from attending and voting in person at the relevant meetings or any adjournment if you so desire.

3 November 2016

CONTENTS

			Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		. .	1
LETTER	FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. .	6
(I)	Proposed Extension of the Validity Period of the A Share Issue and the
	Relevant Authorisation Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. .	7
(II)	Proposed Amendments to the Articles . . . . . . . . . . . . . . . . . . . . . . . . . .	. .	14
(III)	Proposed Amendments to the Articles in Relation to the A Share Issue	. .	14
NOTICE	OF EXTRAORDINARY GENERAL MEETING. . . . . . . . . . . . . . . . .	. .	18
NOTICE	OF DOMESTIC SHARE CLASS MEETING . . . . . . . . . . . . . . . . . . .	. .	21
NOTICE	OF H SHARE CLASS MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . .	. .	24
APPENDIX I – Business strategies of the Company . . . . . . . . . . . . . . . .		. .	I-1
APPENDIX II – Use of proceeds from the A Share Issue . . . . . . . . . . . . .		. .	II-1
APPENDIX III – Amendments to the Existing Articles . . . . . . . . . . . . . . .		. .	III-1
APPENDIX IV – Amendments to the Articles in Relation to the
	A Share Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. .	IV-1

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following terms have the following meanings:

1. GENERAL TERMS

“2014 Prospectus (Application Proof)”

the application proof of the prospectus in relation to the proposed A Share Issue published on the CSRC’s website (www.csrc.gov.cn) and the website of the Stock Exchange (www.hkexnews.hk) on 5 December 2014

“2016 Prospectus (Application Proof)”

the Central China Securities Co., Ltd. Initial Public Offering (A Shares) Prospectus (Application Proof Submitted on 12 September 2016) (《中原証券股份有限公司首次公開發行股票(A股)股說明書 (申報稿2016年9月 12日報送)》) in relation to the proposed A Share Issue, please refer to the announcements dated 14 October 2016 on the CSRC’s website (www.csrc.gov.cn) and the website of the Stock Exchange (www.hkexnews.hk) for details

“A Share(s)”
the ordinary share(s) to be subscribed for in RMB, which are proposed to be issued by the Company in connection with the A Share Issue
“A Share Issue”
the proposed initial public offering of no more than 877,205,000 A Shares by the Company, which will be listed on the SSE
“Articles”
the articles of association of the Company as amended from time to time
“Board” the board of Directors
“Central China Equity Exchange Co.”
Central China Equity Exchange Co., Ltd. (中原股權交易中心股份有限公司), a joint stock company incorporated in the PRC, and as at the Latest Practicable Date the Company holds 35% of its equity interest and the Company can exercise control at the meetings of its board of directors and at its general meetings; and in accordance with the requirements under IFRS, as at the Latest Practicable Date, it is regarded as a subsidiary of the Company

– 1 –

DEFINITIONS

“Central China Futures”
Central China Futures Co., Ltd. (中原期貨股份有限公司), a joint stock company incorporated in the PRC, and a subsidiary of the Company with 51.36% of its equity interest held by the Company as at the Latest Practicable Date
“Chairman” Chairman of the Board
“China”, “PRC” or “State”
the People’s Republic of China, excluding, for the purpose of this circular, Hong Kong, Macau Special Administrative Region of the PRC and Taiwan
“Company”
Central China Securities Co., Ltd. (中原証券股份有限公司) (carrying on business in Hong Kong as “中州証券”), a joint stock company incorporated on 8 November 2002 in Henan Province, the PRC with limited liability, the H Shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 01375)
“connected person(s)”
has the same meaning as ascribed to this term under the Listing Rules
“CSRC”
China Securities Regulatory Commission
“Director(s)”
director(s) of the Company, including independent nonexecutive directors
“Domestic Share(s)”
issued ordinary share(s) of the Company with a nominal value of RMB1.00 each, which are subscribed for or credited as fully paid in RMB
“Domestic Share Class Meeting”
the domestic share class meeting (or any adjournment thereof) of the Company to be held at 10:00 a.m. on Friday, 18 November 2016 or immediately after the conclusion of the EGM or any adjournment thereof (whichever is later) for holders of Domestic Shares to consider and approve the resolutions regarding, inter alia , (I) the extension of the validity period of the A Share Issue and the relevant authorisation matters; and (II) the amendments to the Articles in relation to the A Share Issue

– 2 –

DEFINITIONS

“EGM”

the extraordinary general meeting (or any adjournment thereof) of the Company to be convened and held at 9:00 a.m. on Friday, 18 November 2016 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC for the Shareholders to consider and approve the resolutions regarding, inter alia , (I) the extension of the validity period of the A Share Issue and the relevant authorisation matters; (II) the amendments to the Articles; and (III) the amendments to the Articles in relation to the A Share Issue

“Group” the Company and its subsidiaries
“H Share(s)”
overseas listed foreign ordinary share(s) in the share capital of the Company with a nominal value of RMB1.00 each, which are listed on the Main Board of the Stock Exchange
“H Share Class Meeting”
the H share class meeting (or any adjournment thereof) of the Company to be held at 11:00 a.m. on Friday, 18 November 2016 or immediately after the conclusion of the Domestic Share Class Meeting or any adjournment thereof (whichever is later) for holders of H Shares to consider and approve the resolutions regarding, inter alia , (I) the extension of the validity period of the A Share Issue and the relevant authorisation matters; and (II) the amendments to the Articles in relation to the A Share Issue
“Hong Kong”
Hong Kong Special Administrative Region of the PRC
“IFRS”
International Financial Reporting Standards, including standards, revisions and interpretations promulgated by International Accounting Standards Board, and International Accounting Standards and Interpretations promulgated by International Accounting Standards Committee
“Independent Third Party”
a third party independent of and not connected with the Group and its connected persons
“Latest Practicable Date”
1 November 2016, being the latest practicable date before printing this circular for ascertaining information contained herein

– 3 –

DEFINITIONS

“Listing Rules”

“PRC GAAP”

“Reporting Period”
“RMB”

“Shareholder(s)”

“SSE”

“State Council”

“Stock Exchange”

“Supervisory Committee”

“Wind Info”

“ZDKY Venture Capital”

“%”

the Rules Governing the Listing of Securities on the Stock Exchange

accounting rules and regulations governing the Chinese companies

the three years ended 31 December 2013, 2014 and 2015 and the six months ended 30 June 2016

Renminbi, the lawful currency of the PRC

shareholder(s) of the Company

Shanghai Stock Exchange

The State Council of the People’s Republic of China The Stock Exchange of Hong Kong Limited

the supervisory committee of the Company

Wind Info Co., Ltd. (上海萬得信息技術股份有限公司), a joint stock company incorporated in the PRC with limited liability and a service provider of financial data, information and software, being an Independent Third Party as at the Latest Practicable Date

Zhongding Kaiyuan Venture Capital Management Co., Ltd. (中鼎開源創業投資管理有限公司), a company incorporated in the PRC with limited liability and a subsidiary of the Company with 64.86% of its equity interest held by the Company as at the Latest Practicable Date

per cent.

– 4 –

DEFINITIONS

2. TECHNICAL TERMS

“Alternative investment”
“Direct investment”
“GDP”
“IPO”
“IT”
“Margin financing and securities lending”
“New Third Board”

“RQFII”

“Securities repurchase”
“Stock pledged repurchase transaction”

Investment in financial products other than those as set forth in the List of Securities and Proprietary Trading Types of Securities Companies (《證券公司證券自營投資品種清單》)

the business of the subsidiaries set up by a securities company engaging in direct investment whereby utilizing its own professional advantage in seeking and identifying high quality investment projects or companies and with an aim to obtain equity or bond income through equity or bond investments with its own capital or by way of fund raising

Abbreviation of “gross domestic product”

Abbreviation of “initial public offering”

Abbreviation of “information technology”

a collateral-backed operating activity in which securities companies provide clients with monies to buy listed securities or with listed securities for sale

abbreviation for “National Equities Exchange and Quotations System (全國中小企業股份轉讓系統)”, a national securities trading venue established upon approval by the State Council, subject to operation and management of National Equities Exchange and Quotations Co., Ltd. (全國中小企業股份轉讓系統有限責任公司)

Abbreviation for “RMB Qualified Foreign Institutional Investor” (人民幣合格境外投資者)

a transaction in which eligible clients sell underlying securities to the securities firms that manage their securities at an agreed price and agree to repurchase such securities from the securities firms at another agreed price on a future date, and the securities firms will return to the clients relevant yields arising from the underlying securities during the agreed repurchase period according to the agreement signed with the clients

a transaction in which eligible funds receivers get financing from eligible funds givers by pledging the stocks or other securities they hold and agree to return the funds and cancel the pledge some day in the future

– 5 –

LETTER FROM THE BOARD

Central China Securities Co., Ltd.

Executive Directors: Mr. JIAN Mingjun (Chairman) Mr. ZHOU Xiaoquan

Non-executive Directors: Mr. LI Xingjia Mr. WANG Lixin Mr. ZHANG Qiang Mr. ZHANG Xiaoqi Mr. YU Zeyang

Independent Non-executive Directors: Mr. YUAN Dejun Mr. YUEN Chi Wai Mr. NING Jincheng Mr. YU Xugang

Registered Address in the PRC: No. 10 Shangwu Waihuan Road Zhengdong New District Zhengzhou, Henan Province China

Headquarters/Principal Place of Business in the PRC: No. 10 Shangwu Waihuan Road Zhengdong New District Zhengzhou, Henan Province China

Principal Place of Business in Hong Kong: 18/F, Tesbury Centre 28 Queen’s Road East Wanchai, Hong Kong

3 November 2016

To the Shareholders,

Dear Sir/Madam,

(I) PROPOSED EXTENSION OF THE VALIDITY PERIOD OF THE A SHARE ISSUE AND THE RELEVANT AUTHORISATION MATTERS; (II) PROPOSED AMENDMENTS TO THE ARTICLES; AND (III) PROPOSED AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

INTRODUCTION

Reference is made to the announcement of the Company dated 29 September 2016 in relation to, among other things, (I) the extension of the validity period of the A Share Issue and the relevant authorisation matters; (II) the amendments to the Articles; and (III) the amendments to the Articles in relation to the A Share Issue.

The purpose of this circular is to provide you with details of the aforementioned items.

– 6 –

LETTER FROM THE BOARD

(I) PROPOSED EXTENSION OF THE VALIDITY PERIOD OF THE A SHARE ISSUE AND THE RELEVANT AUTHORISATION MATTERS

Current development of the A Share Issue

References are made to the announcements of the Company dated 29 September 2014 and 19 October 2015 respectively, and the circulars of the Company dated 29 October 2014 and 20 November 2015 respectively, in relation to, inter alia , the approval of the A Share Issue proposal and the authorisation granted to the Board and, with delegation by the Board, the Chairman to deal with matters relating to the A Share Issue (collectively known as “ A Share Issue and the relevant authorisation matters ”). References are also made to the announcements of the Company dated 1 December 2014, 29 December 2015, 22 June 2016 and 14 October 2016 respectively. The Company submitted an application in relation to the proposed A Share Issue to the CSRC on 26 November 2014. The CSRC has accepted the said application, which is currently under review and pending approval by the CSRC. On 29 December 2015, the Company received feedback opinion from the CSRC in relation to the application documents of the Company for the A Share Issue and prepared the relevant replies during the period. In accordance with the requirements under the relevant laws and regulations including the Measures for the Administration of Initial Public Offerings and Listing of Shares (China Securities Regulatory Commission Order No.122) (《首次公開發行股票並上市管理辦法》(中國證券監督管理委員會令第122 號)) and the Notice on Prior Disclosures and Other Matters in Connection with Initial Public Offerings (Fa Xing Jian Guan Han [2013] No. 328) (《關於首次公開發行股票預先披露等問題的通知》(發行監管函[2013]328號)), the Company timely updated the financial information set out in the 2014 Prospectus (Application Proof), and upon replying to the feedback opinion from the regulatory authorities including the CSRC and based on the notice from the examination and approval authorities, submitted the 2016 Prospectus (Application Proof) to the CSRC on 12 September 2016 for prior disclosures. Please refer to the announcements of the Company dated 14 October 2016 for details in relation to the 2016 Prospectus (Application Proof) and a summary of the financial information of the Group prepared under the PRC GAAP set out therein.

As at the Latest Practicable Date, the Company is awaiting the examination and approval of the application in relation to the A Share Issue by the CSRC Main Board Issuance Approval Committee (中國證監會主板發行審核委員會).

Validity period of the A Share Issue and the relevant authorisation matters

The original resolutions regarding the A Share Issue and the relevant authorisation matters were considered and approved at the extraordinary general meeting, the domestic share class meeting and the H share class meeting of the Company held respectively on 14 November 2014. The resolutions and authorisation were valid for 12 months from the date of passing of such resolutions at the said extraordinary general meeting, domestic share class meeting and H share class meeting.

Since the above resolutions and authorisation in relation to the A Share Issue and the relevant authorisation matters were due to expire, at the meeting of the Board held on 19 October 2015, the Board resolved to put forward the proposal to extend the validity period of

– 7 –

LETTER FROM THE BOARD

the A Share Issue and the relevant authorisation matters by 12 months from the day following the original expiry date (i.e. 14 November 2015) (the “ First Extension of Validity Period ”) for consideration and approval at the extraordinary general meeting, the domestic share class meeting and H share class meeting of the Company held respectively on 7 December 2015, other details of the proposed A Share Issue remained unchanged and continued to have effect. The resolutions in relation to the First Extension of Validity Period were passed in the said Shareholders’ meetings.

Since the resolutions and authorisation in relation to the First Extension of Validity Period will expire soon, at the meeting of the Board held on 29 September 2016, the Board resolved to put forward the proposal to extend the validity period of the A Share Issue and the relevant authorisation matters by 12 months from the day following the expiry date of the First Extension of Validity Period (i.e. 14 November 2016) for consideration and approval by way of special resolutions at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting, which has no impact towards the normal progress of the A Share listing. Other than the above further extension of the validity period of the A Share Issue and the relevant authorisation matters, other details of the proposed A Share Issue remain unchanged and shall continue to have effect.

The details of the A Share Issue and the relevant matters approved by special resolutions at the extraordinary general meeting, the domestic share class meeting and the H Share class meeting of the Company held on 14 November 2014, the validity period of which is extended for 12 months from the next day following the expiration of the original effective period as approved by special resolutions at the extraordinary general meeting, the domestic share class meeting and the H share class meeting of the Company held on 7 December 2015 are as follows:

Proposal of A Share Issue

Place of listing	:	SSE
Type of shares to be	:	Class A ordinary shares with a nominal value of
issued and nominal		RMB1.00 each
value
Number of A Shares to	:	The number of A Shares to be issued will be no more
be issued		than 877,205,000 shares (including any Shares that may
		be issued under the over-allotment option) and will not
		exceed 25% of the enlarged total issued share capital of
		the Company upon completion of the A Share Issue
		(including the H Shares, Domestic Shares and A Shares
		in issue). In particular, the total size of actual issue,
		over-allotment and proportion of allotment will be
		determined by the Board or persons authorised by the
		Board pursuant to the authorisations from the general
		meeting of the Company, based on the capital
		requirements of the Company, communication with the
		regulatory authorities and the prevailing market
		conditions at the time of the issuance

– 8 –

LETTER FROM THE BOARD

Target subscribers : Natural persons, legal entities and other institutional investors in the territory of China that which have maintained RMB ordinary shares (A Shares) holder accounts with the Shanghai Branch of China Securities Depository and Clearing Corporation Limited (except those prohibited by the PRC laws, administrative regulations, other applicable regulatory instruments and other regulatory requirements to which an issuer is subject to)
Strategic placing : According to the business cooperation and scale of financing needs, the Company intends to implement strategic placing under the A Share Issue so as to allot some of the A Shares to investors that satisfy the requirements of the laws and regulations and meet the development and strategic needs of the Company. The specific proportion of placing will be determined based on the requirements of the laws and regulations and subject to market conditions
Method of pricing : Subject to the approval of the A Share Issue by the CSRC, the Board will organise roadshow presentations with the sponsor and joint lead underwriters (the “ Lead Underwriters ”) and conduct cumulative bidding price consultations within the price range where the issue price will be determined based on the results of the cumulative bidding price consultations and market conditions; or other methods of pricing as recognised by the CSRC in accordance with the relevant laws, regulations and requirements effective as at the time of the A Share Issue[*]
In accordance with the relevant requirements under the Administrative Measures for the Issuance of Securities by Listed Companies (《證券發行與承銷管理辦法》) (approved at the 11th working meeting of the chairman of the CSRC on 8 October 2013, and amended pursuant to the Decisions of the CSRC in relation to amendment of Administrative Measures for the Issuance of Securities by Listed Companies (《關於修改< 證券發行與承銷管理辦法> 的決定》) as at 21 March 2014 and 30 December 2015 respectively), the issue price of securities under an initial public offering can be determined by price consultation with the investors or other legally viable methods such as direct negotiation between the issuer and the lead underwriter. The Company will adopt the former in determining the issue price range.

Meanwhile, in accordance with the relevant requirements under Article 127 of the Company Law of the People’s Republic of China (《中華人民共和國公司法》) currently in force, the issue price of shares may be determined on its nominal value or in excess of its nominal value, but not below its nominal value. As the nominal value of each of the A Shares under the proposed A Share Issue is RMB1.00, the issue price of the A Shares will not be less than RMB1.00 per share.

– 9 –

LETTER FROM THE BOARD

The issue price range will be determined at the initial price consultation stage by the following major steps:

(1) Upon the approval of the A Share Issue by the CSRC and receiving the approval documents from the relevant regulatory authorities, the Company will publish the indicatory prospectus for A Share Issue (A股發行招股意向書) on the website of the SSE. At the same time, the Company and the lead underwriter will publish a preliminary price consultation announcement disclosing the number and structure of the consultees participating in the preliminary price consultation;
(2) upon the publication of the preliminary price consultation announcement, the Lead Underwriters will provide an investment valuation report to the consultees and engage in the relevant promotion activities;
(3) the number of consultees would not be less than 20 (and where the scale of the A Share Issue reaches 400 million shares or above, the number of consultees would not be less than 50);
(4) the Lead Underwriters can collect written feedback from the consultees through a preliminary price consultation list (《初步詢價表》) at the preliminary price consultation stage;
(5) after the consultees have provided their quotations, the Company and the Lead Underwriters will remove the part of the highest price quotes within the total subscription volume whereby such removed part should not be less than 10% of the total subscription volume of all investors, and determine the issue price range by agreement based on the remaining price quotes and proposed subscription volume. The principles for determining the issue price range includes considering the remaining price quotes, the proposed subscription volume, the industry, the market condition, the valuation level of other listed companies in the industry, the amount of proceeds intended and the underwriting risks;

or in accordance with the guidance opinion of the CSRC on the issue window provided as at the time of the A Share Issue.

– 10 –

LETTER FROM THE BOARD

Method of issue : The A Share Issue will be conducted by a combination of offline price consultations to target placees and online initial public offering or other methods as recognised by the CSRC
Transfer of state-owned : The state-owned shareholders of the Company shall shares fulfill their obligations to transfer 10% of the Shares actually issued by the Company under the A Share Issue (including the additional 10% of the A Shares under the over-allotment option if exercised) as part of the transfer of shares of the Company to the National Council for Social Security Fund (全國社會保障基金理事會). The matters relating to the implementation of the transfer of state-owned shares under the A Share Issue and listing to the National Council for Social Security Fund shall be subject to the requirements of the relevant authorities of the State
Conversion into a joint : According to the plan of A Share Issue and taking into stock company with account the H Shares of the Company in issue, the limited liability with Company will apply for the conversion into a joint stock domestic and overseas company with limited liability with domestic and listed shares overseas listed shares
Validity of the : The proposal of A Share Issue was approved by resolution Shareholders at the extraordinary general meeting, domestic share class meeting and H share class meeting of the Company held on 14 November 2014. Upon approval, the proposal of A Share Issue shall be valid for 12 months from the date of passing of such resolution at the above extraordinary general meeting, domestic share class meeting and H share class meeting (i.e. 14 November 2014) to 13 November 2015*

Authorisation granted to the Board to deal with matters relating to the A Share Issue

The Board was authorised by the Shareholders and, with delegation by the Board, to authorize the Chairman to deal with all detailed matters relating to the A Share Issue in accordance with the laws (pursuant to which the Chairman may delegate other Directors to deal with matters relating to the A Share Issue), including but not limited to the following:

(1) engage intermediaries in connection with the A Share Issue and determine their fees;
(2) prepare, revise, execute and submit all documents relating to the A Share Issue;

The validity period of the resolution was extended for 12 months from the next day following the expiration of the original effective period (i.e. 14 November 2015) to 13 November 2016 as approved by special resolutions at the extraordinary general meeting, the domestic share class meeting and the H share class meeting of the Company held on 7 December 2015. The validity period of the resolution of the A Share Issue will further be extended for 12 months from the next day following the expiration of the previous effective period (i.e. 14 November 2016) to 13 November 2017 should such resolution be approved by special resolutions at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting respectively.

– 11 –

LETTER FROM THE BOARD

(3) determine details of the proposal of the A Share Issue pursuant to the proposal of A Share Issue passed at the EGM and the provisions or requirements of securities regulatory authorities of the State Council based on the prevailing conditions of the market where the A Share Issue takes place (including but not limited to the A Share issue price, issue size, strategic placing and over-allotment matters and proportion of placing, method of issue, target subscribers, timing of issue, proposed use of proceeds and other matters relating to the implementation of the proposal of the A Share Issue);
(4) submit the application of A Share listing to the SSE and deal with matters relating to the listing and circulation of A Shares;
(5) final confirmation of the terms such as the listing approval date and reference number, registered capital, shareholding structure, custodian of shares and information disclosure publications in the Articles based on the actual conditions of the A Share listing after the public offering and listing of A Shares by the Company, and deal with the registration of changes in particulars with the industry and commerce bureau; and
(6) deal with other matters relating to the A share Issue.

The above authorisation was valid for 12 months from the date of passing of such resolution at the extraordinary general meeting, domestic share class meeting and H share class meeting of the Company held on 14 November 2014 to 13 November 2015*.

Use of proceeds from the A Share Issue

The amount of the gross proceeds from the proposed A Share Issue will be determined by the issue price per share (to be fixed after the price consultation) multiplied by the number of A Shares to be issued. The gross proceeds, after deducting the expenses incurred for A Share Issue, are proposed to be fully used as working capital of the Company to support future business development of the Company and facilitate achievement of strategic growth objectives of the Company. Details relating to the business strategies of the Company and the use of proceeds from the A Share Issue as disclosed in the 2016 Prospectus (Application Proof) are set out in Appendices I and II of this circular respectively.

Reasons for and benefits of the A Share Issue

Since the PRC securities industry implements net capital as the core of the risk control index system, the capital scale of securities firms directly determines the size of their business. Therefore, securities firms are actively taking a variety of ways to expand their scale of capital,

The authorisation was extended for 12 months from the next day following the expiration of the original effective period (i.e. 14 November 2015) to 13 November 2016 as approved by special resolutions at the extraordinary general meeting, the domestic share class meeting and the H share class meeting of the Company held on 7 December 2015. The authorisation will further be extended for 12 months from the next day following the expiration of the original effective period (i.e. 14 November 2016) to 13 November 2017 if approved by special resolutions at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting respectively.

– 12 –

LETTER FROM THE BOARD

while some leading securities firms in the industry have increased their capital through methods such as listing to expand their business scale, continuously optimize their revenue structures and vigorously develop innovative business. As the only securities firm registered and headquartered in Henan Province, the Company is facing the abundant development opportunities brought by the development of the securities industry which is strongly supported by the State, the continuous innovation of the financial markets, the implementation of “Central Plains Economic Zone (中原經濟區)” and “Zhengzhou Airport Economic Experimental Zone (鄭州航空港經濟綜合實驗區)” and other strategic plans of the State. As such, the Company needs to enhance its sustainable development capacity and promote the realisation of its strategic development goals by raising fund through the A Share Issue, thereby providing resources for the various uses as disclosed in the paragraph headed “Use of proceeds from the A Share Issue” above and Appendix II of this circular.

Effects of the A Share Issue on the shareholding structure of the Company

Assuming that a total of 877,205,000 A Shares under the A Share Issue are permitted for issuance and the issued share capital of the Company prior to completion of the A Share Issue remains unchanged, the shareholding structure of the Company as at the Latest Practicable Date and immediately after the completion of the A Share Issue is set out as follows:

Domestic Shares Domestic Shares in issue A Shares under the A Share Issue H Shares Total	As at the Latest Practicable Date Number of shares Approximate percentage of the Company issued share capital 1,973,705,700 61.22% – – 1,250,029,000 38.78% 3,223,734,700 100%	Immediately after the completion of the A Share Issue Number of shares Approximate percentage of the Company issued share capital 1,973,705,700 48.13% 877,205,000 21.39% 1,250,029,000 30.48% 4,100,939,700 100%	Immediately after the completion of the A Share Issue Number of shares Approximate percentage of the Company issued share capital 1,973,705,700 48.13% 877,205,000 21.39% 1,250,029,000 30.48% 4,100,939,700 100%
			100%

Public Float

As at the Latest Practicable Date, based on the publicly available information and to the Directors’ knowledge, the Company maintained 25.00% of the H Shares in public hands which satisfied the public float requirement under Rule 8.08 of the Listing Rules. The Company undertakes that it will continue to comply with the public float requirement under Rule 8.08 of the Listing Rules during the application process and upon completion of the A Share Issue.

– 13 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, the Company had not entered or proposed to enter into any agreement in relation to subscription of A Shares with any connected persons of the Company. If the Company enters into any agreement(s) in relation to subscription of A Shares with connected person(s) of the Company, or the A Shares are subscribed by connected person(s) of the Company, the Company will comply with the requirements under Chapter 14A of the Listing Rules.

Fundraising activities during the past 12 months

No H Share equity fundraising activities were conducted by the Company during the last 12 months preceding the Latest Practicable Date.

(II) Proposed Amendments to the Articles

Pursuant to the requirements under relevant documents including the Opinions of the General Office of the State Council on Accelerating the “Combination of Three Licenses into One” Registration System Reform (Guo Ban Fa [2015] No. 50) (《國務院辦公廳關於加快推進「三證合一」登記制度改革的意見》(國辦發[2015]50號)) and the Notice of Six Departments including the State Administration for Industry and Commerce on Implementing the Opinions of the General Office of the State Council on Accelerating the “Combination of Three Licenses into One” Registration System Reform (Gong Shang Qi Zhu Zi [2015] No. 121) (《工商總局等六部門關於貫徹落實<國務院辦公廳關於加快推進「三證合一」登記制度改革的意見>的通知》(工商企註字[2015]121號)), the Company completed the “Combination of Three Licenses into One” procedures for its business license, organisation code certificate and tax registration certificate and obtained a new business license issued by the Henan Administration for Industry and Commerce on 25 July 2016. The previous registration number of the corporate legal person business license, tax registration number and certificate of organisation code are no longer applicable. As shown on the new business license, the unified social credit code of the Company is 91410000744078476K while other registration items in the business license remain unchanged.

Accordingly, the Company proposed to make amendments to the relevant provisions of the existing Articles. Details of the amendments to the existing Articles are set out in Appendix III of this circular.

(III) Proposed Amendments to the Articles in relation to the A Share Issue

As stated above, pursuant to the requirements under relevant documents including the Opinions of the General Office of the State Council on Accelerating the “Combination of Three Licenses into One” Registration System Reform (Guo Ban Fa [2015] No. 50) (《國務院辦公廳關於加快推進「三證合一」登記制度改革的意見》(國辦發[2015]50號)) and the Notice of Six Departments including the State Administration for Industry and Commerce on Implementing the Opinions of the General Office of the State Council on Accelerating the “Combination of Three Licenses into One” Registration System Reform (Gong Shang Qi Zhu Zi [2015] No. 121) (《工商總局等六部門關於貫徹落實<國務院辦公廳關於加快推進「三證合一」登記制度改革

– 14 –

LETTER FROM THE BOARD

的意見>的通知》(工商企註字[2015]121號)), the Company completed the “Combination of Three Licenses into One” procedures for its business license, organisation code certificate and tax registration certificate and obtained a new business license issued by the Henan Administration for Industry and Commerce on 25 July 2016. As shown on the new business license, the unified social credit code of the Company is 91410000744078476K while other registration items in the business license remain unchanged.

Pursuant to the Company Law of the People’s Republic of China (《中華人民共和國公司法》), Securities Law of the People’s Republic of China (《中華人民共和國證券法》), Guidelines for the Articles of Association of Listed Companies (《上市公司章程指引》) and the relevant requirements of CSRC, and in accordance with the proposed amendments to the existing Articles, the Company proposed to make further amendments to the Articles in relation to the A Share Issue. Such further amendments to the Articles in relation to the A Share Issue are subject to approval by Shareholders by way of special resolutions at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting and approval by or filing with the relevant government and regulatory authorities and effective upon completion of the A Share Issue. The implementation shall take place on the date of the initial public offering and listing of A Shares of the Company. Prior to that, the existing Articles shall continue to apply.

Details of the further amendments to the Articles in relation to the A Share Issue are set out in Appendix IV of this circular.

GENERAL INFORMATION

Given that the A Share Issue is subject to approval by the CSRC and other relevant regulatory authorities and may or may not proceed, Shareholders and potential investors shall exercise caution when dealing in the H Shares of the Company. The Company shall make further announcement to disclose any major updates and developments in respect of the A Share Issue in accordance with the Listing Rules and other applicable laws and regulations.

The EGM will be convened by the Company to seek approval from Shareholders for, inter alia , (I) the extension of the validity period of the A Share Issue and the relevant authorisation matters; (II) the amendments to the Articles; and (III) the amendment to the Articles in relation to the A Share Issue. The Domestic Share Class Meeting and H Share Class Meeting will be convened by the Company, respectively, on the same day for the purpose of seeking the approval from holders of Domestic Shares and H Shares, respectively, on, inter alia , (I) the extension of the validity period of the A Share Issue and the relevant authorisation matters; and (II) the amendments to the Articles in relation to the A Share Issue. Please be noted that, other than approval from Shareholders, the amendments to the Articles in relation to the A Share Issue is still subject to the approval by the relevant government and regulatory authorities in the PRC.

– 15 –

LETTER FROM THE BOARD

EGM, DOMESTIC SHARE CLASS MEETING AND H SHARE CLASS MEETING

The notices convening the EGM, Domestic Share Class Meeting and H Share Class Meeting of the Company to be held at 9:00 a.m., 10:00 a.m. or immediately after the conclusion of the EGM or any adjournment thereof (whichever is later) and 11:00 a.m. or immediately after the conclusion of the Domestic Share Class Meeting or any adjournment thereof (whichever is later) respectively on Friday, 18 November 2016 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, are set out on pages 18 to 26 of this circular.

No Shareholder is required to abstain from voting on the resolutions to be proposed for approval at the EGM, Domestic Share Class Meeting or H Share Class Meeting.

The proxy forms for use at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting have been sent to you on 4 October 2016. Whether or not you are able to attend the EGM, the Domestic Share Class Meeting and the H Share Class Meeting in person, you are requested to complete and return the applicable proxy forms in accordance with the instructions printed thereon. In case of holders of H Shares, the proxy forms shall be lodged with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong; and in case of holders of Domestic Shares, the proxy forms shall be lodged at the head office of the Company in the PRC as soon as possible, but in any event, not less than 24 hours before the time scheduled for holding the relevant meetings (or any adjournment thereof) or the time appointed for the taking of the poll. Completion and delivery of the proxy forms will not preclude you from attending and voting in person at the relevant meetings or any adjournment if you so desire.

VOTING

According to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Therefore, the vote for the respective resolutions as stated in the notice of EGM, notice of Domestic Share Class Meeting and notice of H Share Class Meeting will be taken by way of a poll under the Article 116 of the Articles.

During the poll, every Shareholder present in person or by proxy (or in case of corporation, its duly authorised representative) at the EGM, Domestic Share Class Meeting or H Share Class Meeting shall have one vote for each share registered in his/her name in the register of members. A Shareholder entitled to more than one vote does not need to use all his/her votes or cast all the votes he/she uses in the same manner.

RECOMMENDATION

The Board considered that all resolutions to be proposed at the EGM, Domestic Share Class Meeting and H Share Class Meeting are in the interests of the Company and the Shareholders as a whole. Therefore, the Board recommends the Shareholders to vote in favour of all resolutions to be proposed at the meetings.

– 16 –

LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the 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 facts the omission of which would make any statement herein or this circular misleading.

ADDITIONAL INFORMATION

Your attention is drawn to the other information set out in the Appendices to this circular.

Yours faithfully, On behalf of the Board Central China Securities Co., Ltd. JIAN Mingjun Chairman

– 17 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Central China Securities Co., Ltd.

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of Central China Securities Co., Ltd. (the “ Company ”) will be held at 9:00 a.m. on Friday, 18 November 2016 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, for the purpose of considering and, if thought fit, passing the following resolutions.

Unless otherwise indicated, capitalised terms used herein shall have the same meaning as those defined in the announcement of the Company dated 29 September 2016 (the “ Announcement ”).

AS SPECIAL RESOLUTIONS

The extension of 12 months from the next day following the expiration of the First Extension of Validity Period (i.e. 14 November 2016) for A Share Issue proposal be approved and confirmed.
Subject to the passing of special resolution no. (1) above at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting, respectively, the extension of 12 months from the next day following the expiration of the First Extension of Validity Period (i.e. 14 November 2016) for the authorisation to the Board and, with delegation by the Board, the Chairman be approved and confirmed to deal with matters relating to the A Share Issue (pursuant to which the Chairman may delegate other Directors to deal with matters relating to the A Share Issue), including but not limited to:
(1) engage intermediaries in connection with the A Share Issue and determine their fees;
(2) prepare, revise, execute and submit all documents relating to the A Share Issue;
(3) determine details of the proposal of the A Share Issue pursuant to the proposal of A Share Issue passed at the extraordinary general meeting of the Company dated 14 November 2014 and the provisions or requirements of securities regulatory authorities of the State Council based on the prevailing conditions

– 18 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

of the market where the A Share Issue takes place (including but not limited to the A Share issue price, issue size, strategic placing and over-allotment matters and proportion of placing, method of issue, target subscribers, timing of issue, proposed use of proceeds and other matters relating to the implementation of the proposal of the A Share Issue);

(4) submit the application of A share listing to the Shanghai Stock Exchange and deal with matters relating to the listing and circulation of A Shares;
(5) final confirmation of the terms such as the listing approval date and reference number, registered capital, shareholding structure, custodian of shares and information disclosure publications in the Articles based on the actual conditions of the A share listing after the public offering and listing of A Shares by the Company, and deal with the registration of changes in particulars with the industry and commerce bureau; and
(6) deal with other matters relating to the A share Issue.
Subject to the approval by the relevant government authorities of the PRC, the proposed amendments to the Articles be approved and confirmed, and the Board be authorized to revise the wordings of such amendments as appropriate (no approval from Shareholders is required for such revision), and execute relevant documents and/or take all relevant actions as it considers necessary or expedient and in the interest of the Company to effect the proposed amendments, comply with the PRC laws and regulations and meet the requirements of the relevant regulatory authorities of the PRC (if any); and deal with other matters arising from the amendments to the Articles.
Subject to the approval of the relevant regulatory authorities of the PRC and the passing of special resolution of the proposed amendments to the Articles (being special resolution no. (3) in this notice) at the EGM, the amendment to the Articles in relation to the A Share Issue be approved and confirmed; and the taking effect of the amendment to the Articles in relation to the A Share Issue be approved and confirmed upon completion of the A Share Issue.

By order of the Board Central China Securities Co., Ltd. JIAN Mingjun Chairman

Henan, the PRC

4 October 2016

– 19 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

The register of members of the Company will be closed from 19 October 2016 to 18 November 2016 (both days inclusive), during which period no transfer of shares of the Company can be registered. In order to qualify to attend and vote at the EGM, all transfer documents accompanied by the relevant share certificates must be lodged with the H share registrar of the Company, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H shares of the Company) or the head office in the PRC of the Company (for holders of domestic shares of the Company), no later than 4:30 p.m. on 18 October 2016.
Shareholders who are entitled to attend and vote at the EGM may appoint one or more proxies to attend and vote on their behalves. A proxy need not be a Shareholder.
In order to be valid, the proxy form for the EGM must be deposited by hand or by post, for holders of H Shares, to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong or, for holders of Domestic Shares, to the head office in the PRC of the Company not less than 24 hours before the time for holding the EGM (or any adjournment thereof) for taking the poll. If the proxy form is signed by a person under a power of attorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at the same time as mentioned in the proxy form. Completion and return of the proxy form will not preclude Shareholders from attending and voting in person at the EGM or any adjourned meetings should they so wish.
Shareholders or their proxies shall provide their identity documents when attending the EGM.
Shareholders who intend to attend the EGM should complete the reply slip and return it by hand or by post to the H share registrar of the Company (for holders of H Shares) or to the head office in the PRC of the Company (for holders of Domestic Shares) on or before 29 October 2016.
The EGM is expected to take one hour approximately. Shareholders attending the EGM shall be responsible for their own travel and accommodation expenses.
The address of the head office in the PRC of the Company is No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC.

– 20 –

NOTICE OF DOMESTIC SHARE CLASS MEETING

Central China Securities Co., Ltd.

NOTICE OF DOMESTIC SHARE CLASS MEETING

NOTICE IS HEREBY GIVEN that a domestic share class meeting (the “ Domestic Share Class Meeting ”) of Central China Securities Co., Ltd. (the “ Company ”) will be held at 10:00 a.m. on Friday, 18 November 2016 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC (or as soon thereafter as the EGM shall have been concluded or adjourned, whichever is later), for the purpose of considering and, if thought fit, passing the following resolutions.

Unless otherwise indicated, capitalised terms used herein shall have the same meaning as those defined in the announcement of the Company dated 29 September 2016 (the “ Announcement ”).

AS SPECIAL RESOLUTIONS

The extension of 12 months from the next day following the expiration of the First Extension of Validity Period (i.e. 14 November 2016) for A Share Issue proposal be approved and confirmed.
Subject to the passing of special resolution no. (1) above at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting, respectively, the extension of 12 months from the next day following the expiration of the First Extension of Validity Period (i.e. 14 November 2016) for the authorisation to the Board and, with delegation by the Board, the Chairman be approved and confirmed to deal with matters relating to the A Share Issue (pursuant to which the Chairman may delegate other Directors to deal with matters relating to the A Share Issue), including but not limited to:
(1) engage intermediaries in connection with the A Share Issue and determine their fees;
(2) prepare, revise, execute and submit all documents relating to the A Share Issue;

– 21 –

NOTICE OF DOMESTIC SHARE CLASS MEETING

(3) determine details of the proposal of the A Share Issue pursuant to the proposal of A Share Issue passed at the extraordinary general meeting of the Company dated 14 November 2014 and the provisions or requirements of securities regulatory authorities of the State Council based on the prevailing conditions of the market where the A Share Issue takes place (including but not limited to the A Share issue price, issue size, strategic placing and over-allotment matters and proportion of placing, method of issue, target subscribers, timing of issue, proposed use of proceeds and other matters relating to the implementation of the proposal of the A Share Issue);
(4) submit the application of A share listing to the Shanghai Stock Exchange and deal with matters relating to the listing and circulation of A Shares;
(5) final confirmation of the terms such as the listing approval date and reference number, registered capital, shareholding structure, custodian of shares and information disclosure publications in the Articles based on the actual conditions of the A share listing after the public offering and listing of A Shares by the Company, and deal with the registration of changes in particulars with the industry and commerce bureau; and
(6) deal with other matters relating to the A share Issue.
Subject to the approval of the relevant regulatory authorities of the PRC and the passing of special resolution of the proposed amendments to the Articles (being special resolution no. (3) in the notice of EGM of the Company dated 4 October 2016) at the EGM, the amendment to the Articles in relation to the A Share Issue be approved and confirmed; and the taking effect of the amendment to the Articles in relation to the A Share Issue be approved and confirmed upon completion of the A Share Issue.

By order of the Board Central China Securities Co., Ltd. JIAN Mingjun Chairman

Henan, the PRC 4 October 2016

– 22 –

NOTICE OF DOMESTIC SHARE CLASS MEETING

Notes:

The register of members of the Company will be closed from 19 October 2016 to 18 November 2016 (both days inclusive), during which period no transfer of shares of the Company can be registered. In order to qualify to attend and vote at the Domestic Share Class Meeting, all transfer documents accompanied by the relevant share certificates must be lodged with the head office in the PRC of the Company no later than 4:30 p.m. on 18 October 2016.
Holders of Domestic Shares who are entitled to attend and vote at the Domestic Share Class Meeting may appoint one or more proxies to attend and vote on their behalves. A proxy need not be a Shareholder.
In order to be valid, the proxy form for the Domestic Share Class Meeting must be deposited by hand or by post to the head office in the PRC of the Company not less than 24 hours before the time for holding the Domestic Share Class Meeting (or any adjournment thereof) for taking the poll. If the proxy form is signed by a person under a power of attorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at the same time as mentioned in the proxy form. Completion and return of the proxy form will not preclude holders of Domestic Shares from attending and voting in person at the Domestic Share Class Meeting or any adjourned meetings should they so wish.
Holders of Domestic Shares or their proxies shall provide their identity documents when attending the Domestic Share Class Meeting.
Holders of Domestic Shares who intend to attend the Domestic Share Class Meeting should complete the reply slip and return it by hand or by post to the head office in the PRC of the Company on or before 29 October 2016.
The Domestic Share Class Meeting is expected to take one hour approximately. Holders of Domestic Shares attending the Domestic Share Class Meeting shall be responsible for their own travel and accommodation expenses.
The address of the head office in the PRC of the Company is No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC.

– 23 –

NOTICE OF H SHARE CLASS MEETING

Central China Securities Co., Ltd.

NOTICE OF H SHARE CLASS MEETING

NOTICE IS HEREBY GIVEN that a H Share Class Meeting (the “ H Share Class Meeting ”) of Central China Securities Co., Ltd. (the “ Company ”) will be held at 11:00 a.m. on Friday, 18 November 2016 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC (or as soon thereafter as the Domestic Share Class Meeting shall have been concluded or adjourned, whichever is later), for the purpose of considering and, if thought fit, passing the following resolutions.

Unless otherwise indicated, capitalised terms used herein shall have the same meaning as those defined in the announcement of the Company dated 29 September 2016 (the “ Announcement ”).

AS SPECIAL RESOLUTIONS

The extension of 12 months from the next day following the expiration of the First Extension of Validity Period (i.e. 14 November 2016) for A Share Issue proposal be approved and confirmed.
Subject to the passing of special resolution no. (1) above at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting, respectively, the extension of 12 months from the next day following the expiration of the First Extension of Validity Period (i.e. 14 November 2016) for the authorisation to the Board and, with delegation by the Board, the Chairman be approved and confirmed to deal with matters relating to the A Share Issue (pursuant to which the Chairman may delegate other Directors to deal with matters relating to the A Share Issue), including but not limited to:
(1) engage intermediaries in connection with the A Share Issue and determine their fees;
(2) prepare, revise, execute and submit all documents relating to the A Share Issue;

– 24 –

NOTICE OF H SHARE CLASS MEETING

(3) determine details of the proposal of the A Share Issue pursuant to the proposal of A Share Issue passed at the extraordinary general meeting of the Company dated 14 November 2014 and the provisions or requirements of securities regulatory authorities of the State Council based on the prevailing conditions of the market where the A Share Issue takes place (including but not limited to the A Share issue price, issue size, strategic placing and over-allotment matters and proportion of placing, method of issue, target subscribers, timing of issue, proposed use of proceeds and other matters relating to the implementation of the proposal of the A Share Issue);
(4) submit the application of A share listing to the Shanghai Stock Exchange and deal with matters relating to the listing and circulation of A Shares;
(5) final confirmation of the terms such as the listing approval date and reference number, registered capital, shareholding structure, custodian of shares and information disclosure publications in the Articles based on the actual conditions of the A share listing after the public offering and listing of A Shares by the Company, and deal with the registration of changes in particulars with the industry and commerce bureau; and
(6) deal with other matters relating to the A share Issue.
Subject to the approval of the relevant regulatory authorities of the PRC and the passing of special resolution of the proposed amendments to the Articles (being special resolution no. (3) in the notice of EGM of the Company dated 4 October 2016) at the EGM, the amendment to the Articles in relation to the A Share Issue be approved and confirmed; and the taking effect of the amendment to the Articles in relation to the A Share Issue be approved and confirmed upon completion of the A Share Issue.

By order of the Board Central China Securities Co., Ltd. JIAN Mingjun Chairman

Henan, the PRC 4 October 2016

– 25 –

NOTICE OF H SHARE CLASS MEETING

Notes:

The register of members of the Company will be closed from 19 October 2016 to 18 November 2016 (both days inclusive), during which period no transfer of shares of the Company can be registered. In order to qualify to attend and vote at the H Share Class Meeting, all transfer documents accompanied by the relevant share certificates must be lodged with the H share registrar of the Company, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on 18 October 2016.
Holders of H Shares who are entitled to attend and vote at the H Share Class Meeting may appoint one or more proxies to attend and vote on their behalves. A proxy need not be a Shareholder.
In order to be valid, the proxy form for the H Share Class Meeting must be deposited by hand or by post to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 24 hours before the time for holding the H Share Class Meeting (or any adjournment thereof) for taking the poll. If the proxy form is signed by a person under a power of attorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at the same time as mentioned in the proxy form. Completion and return of the proxy form will not preclude holders of H Shares from attending and voting in person at the H Share Class Meeting or any adjourned meetings should they so wish.
Holders of H Shares or their proxies shall provide their identity documents when attending the H Share Class Meeting.
Holders of H Shares who intend to attend the H Share Class Meeting should complete the reply slip and return it by hand or by post to the H share registrar of the Company on or before 29 October 2016.
The H Share Class Meeting is expected to take one hour approximately. Holders of H Shares attending the H Share Class Meeting shall be responsible for their own travel and accommodation expenses.
The address of the head office in the PRC of the Company is No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC.

– 26 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

The passages in relation to the business strategies of the Company as disclosed in the 2016 Prospectus (Application Proof) are set out as follows:

“I. STRATEGIC TARGETS OF THE COMPANY AND ITS THREE YEAR FUTURE DEVELOPMENT PLAN

The Company will capture the significant opportunities arising from its listing in Hong Kong and speed up its progress on the A Share listing and with realising the H+A dual listing goal as its core motivation, aim to become a PRC first-class and world-renowned, modern and internationalised large-scale financial group comprising of securities, futures, direct investment and fund businesses, combining overall strengths and economic efficiency to maintain a leading position in the PRC securities industry.

To achieve the aforementioned strategic goals, the Company has prepared the following three year business development plan.

(I) All-round development of all businesses with innovation as its driving force

The overall framework of the business development of the Company is as follows: on the basis of continuous development of its securities brokerage, investment banking, proprietary trading and investment, asset management and futures businesses, the Company will actively expand the capital-based intermediary businesses with its emphasis on margin financing and securities lending and stock pledged repurchase transactions as well as innovative businesses represented by stock option, over-the-counter market and market maker businesses; meanwhile, actively explore new businesses and profit growth points which mainly include speeding up the formation of the “six-in-one” industry chain led by Central China Equity Exchange Co. and actively develop internet finance and expansion of offshore businesses.

1. Continue to promote the transformation and upgrade of securities brokerage, investment banking, proprietary trading and investment, asset management and futures businesses

(1) Securities brokerage business

The Company will proactively explore the demand of its core clients and the development potential of the securities business in the Henan area so as to further enhance the leading position of its brokerage business in the Henan market and continue its expansion in the PRC; deepen the transformation of its brokerage business from traditional channel-based services to value-added services and its branch offices from exclusively brokerage business to one-stop integrated financial service platforms.

– I-1 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

(2) Investment banking business

Facing onshore and offshore markets, the Company will adopt a methodology combining its inherent development and external expansion to develop a new large-scale investment banking business model, and, on the basis of continuing to consolidate its traditional leading positions in mergers and acquisitions and New Third Board listing, actively pursue room for development in new businesses, and promote the development level of the investment banking business, thereby fostering the investment banking business of the Company to become a nationwide leading player. To achieve these goals, the following measures are proposed to be adopted:

① the Company will give full play to the brand advantage developed through its listing status in Hong Kong, and strive to recommend more enterprises in the Henan Province to pursue listing in Hong Kong, thereby increasing its financial advisory income. At the same time, the Company will utilise its Hong Kong subsidiary platform to accelerate the development of its new investment banking business characterised by its cross-border business;

② the Company will continue to consolidate its leading position in the Henan market and strengthen its efforts in developing its services and businesses for state-owned enterprises managed on the provincial level, in particular, the refinancing and financial advisory business of listed companies, while actively explore high-quality small and medium-sized and micro enterprise resources; and at the same time, accelerate the investment banking business throughout the PRC leveraging its markets in Beijing, Shanghai and Shenzhen;

③ utilising its advantage and experience in the New Third Board business, the Company will further strengthen the development of its New Third Board projects and actively promote one-stop service incorporating listing, refinancing, reorganisation, market making and board transfer in order to form new features and advantages;

④ at the same time as pursuing its traditional sponsorship business, the Company will develop its merger and acquisition and asset securitisation businesses and enhance the overall business coverage;

⑤ the Company will continue to strengthen the full-process compliance and risk management of its investment banking business and improve its compliance operational levels.

– I-2 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

(3) Proprietary trading and investment

We will further improve the investment business management system and risk control system in line with the principle of risk identification, controllability and affordability. Based on the Company’s basic judgment on factors such as market characteristics, the Company’s assets and liabilities, and the structure of fund use, the Company will reasonably determine the scale of investment, the risk limit and the proportion of asset allocation, and continuously expand new business fields, investment methods and investment products, cultivate and enhance the investment management and fund scale and operation capabilities, and strive to raise investment income above the industry average.

(4) Asset management

The Company attaches great importance to the development of asset management business strategically and regards asset management business as an important tool to enhance the comprehensive financial services capability of the Company. On the basis of continuing to develop Yanhuang Series (炎黃系列), Lianmeng Series (聯盟系列), Changsheng Series (長升系列) and Xinghuo Series (星火系列) products, the Company will firmly grasp the opportunities of asset securitisation, enhance the scale of asset management business, innovate the business model, promote effective connection between asset management business and other businesses and the internet business of the Company. The Company will also develop its large-scale asset management business while actively promote the preparatory work for the establishment of subsidiary companies.

(5) Futures business

The Company carries out its futures business through its subsidiary Central China Futures. Central China Futures expanded its scale of capital through the introduction of strategic investors for the implementation of joint-stock reform. It will form a full scale business model incorporating brokerage, investment advisory, risk management and asset management businesses, which will promote Central China Futures to become a relatively highly influential futures company in the Henan Province and nationwide that is managerially regulated with high operational efficiency, provision of quality service and productivity.

– I-3 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

2. Accelerate the expansion of capital-based intermediary businesses with emphasis on margin financing and securities lending and stock pledged repurchase transactions as well as innovative businesses represented by stock option, over-the-counter market and market maker businesses

(1) Accelerate the expansion of capital-based intermediary businesses with emphasis on margin financing and securities lending and stock pledged repurchase transactions

Margin financing and securities lending and stock pledged repurchase transactions, with margin financing business in particular, will be one of the major profit growth points for a period of time from now on. To this end, the Company intends to implement the following measures:

① the Company will give priority to resource support, strengthen its support for organisation building, staffing, technical systems and business collaboration, etc., and enhance its professional capabilities and grasp the business development opportunities;

② the Company will provide effective capital support to give full play to the advantages of a listed company, optimise the efficiency and cost of capital-based raising and enhance the competitiveness of capital-based intermediary business;

③ the Company will establish a market-oriented incentive and restraint mechanisms to motivate the various departments of the Company and the enthusiasm of different parties to play the role of an integrated financial platform, and actively organise market development ensure the continuous development of its business scale;

④ the Company will establish a stringent risk control system, carry through the Company’s culture of risk control, optimise the business processes and control indicators, strengthen risk identification and business checks and balances, and realise the sustainable development of the capital-based intermediary business.

– I-4 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

(2) Accelerate the expansion of innovative businesses represented by stock option, over-the-counter market and market maker businesses

In the face of financial innovation market opportunities, the company will uphold the development concept of “transformation promoting innovation, and innovation triggering transformation (以轉型促創新、以創新促轉型)”, the Company will attach great importance to innovative businesses such as stock options, over-the-counter market and market makers etc., conduct active planning by way of advance layout setting, and promote innovative business to be an important income source and new profit growth point of the Company. To this end, the Company intends to implement the following measures: ① the Company will optimise the work mechanism of the innovative business, establish a joint meeting system for innovative business, timely grasp the development of innovative business in the domestic and foreign industries and the Company’s internal demand for innovation, and scientifically plan and develop the innovative business;

② the Company will accelerate the promotion of various approved innovative businesses, in particular the development of equity transfer system market maker business. As an important part of the “six-in-one” whole industry chain, the market maker business shall, by increasing the allocation of funds, handpicking and increasing New Third Board projects to be undertaken by the Company, accelerate the pace of development and create synergies with the development of other businesses while speed up the application for new business qualifications including the interest rate swaps business;

③ the Company will vigorously develop alternative investment business, and cultivate the Company’s new profit growth points. Under the prerequisite of effective risk control, specialised management will be carried out to expand the scope of investment in financial products. In the initial stage, it will mainly invest in fixed income products such as trusts, asset management plans and asset securitisation, and will gradually expand into other fields including quantitative trading, hedge funds, large scale commodities and artwork, and expand the scale of investment by constantly enriching investment product types, thereby forming the Company’s new profit growth point, changing the Company’s revenue structure and accelerating innovation and transformation;

④ the Company will improve the innovative business incentive mechanism, strengthen the training and introduce innovative talents, organise innovative business training and improve the level of innovative business;

⑤ the Company will strengthen the awareness of risk control of innovative business, and establish healthy internal control and risk management systems to raise the capabilities for risk control and management.

– I-5 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

3. Actively explore new business and profit growth points

(1) Speeding up the formation of the “six-in-one” whole industry chain led by Central China Equity Exchange Co.

The Company will build a “six-in-one” industrial chain led by Central China Equity Exchange Co. and link up the various businesses brought about by medium and small-sized and micro enterprises seeking services from Central China Equity Exchange Co. including listing and financing, direct investments, New Third Board listing, market maker business, transfer of listing, and post-board transfer refinancing and equity pledge financing in order to build a sustainable whole value chain with higher comprehensive income, thereby effectively enhancing the Company’s core competitiveness. To this end, the Company intends to implement the following measures:

① the Company will firmly grasp the opportunities for direct investment subsidiaries to implement its equity diversification and continuously strengthen the capital of direct investment companies, thereby enhancing the investment scale and investment capabilities;

② the Company will deepen the investment opportunities in Henan, give full play to the advantage brought about by the comprehensive strategic cooperation agreement entered into by thirteen provinces and cities, carefully screen the direct investment projects, and form a relatively comprehensive, rich and multi-level project reserves;

③ the Company will, according to the characteristics of the project, realise the diversification of investment income by way of investment in stocks, bonds or a combination of stocks and bonds as appropriate with flexibility in the investment lengths and types, thereby maximising its investment income level;

④ the Company will further improve the direct investment business incentive and restraint mechanisms and follow-by investment mechanism (跟投機制) to fully mobilise the enthusiasm of all parties to enhance the scale of investment such that the direct investment business will gradually become one of the Company’s main profit growth points;

⑤ the Company will establish and operate the Henan Province Technological Innovation Venture Capital Fund (河南省科技創新風險投資基金) jointly funded by the Department of Finance (財政廳) and the Department of Technology (科技廳) of the Henan Province, and timely apply for the establishment of fund products including merger and acquisition funds and industrial funds to further enrich the field of investment for the direct investment business.

– I-6 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

(2) Accelerate the business development of Central China Equity Exchange Co.

Central China Equity Exchange Co, jointly funded and established by the Company (as approved by the Henan Provincial Government to be a promoter and controlling shareholder), was founded on 29 June 2015. As a provincial-level regional equity exchange approved for establishment by the Henan Provincial Government supervised by the State Securities Regulatory Department (國家證券監管部門) and Henan Provincial Government regulatory department, Central China Equity Exchange Co. is a new market-oriented financing platform independent of commercial banks and exchanges. It will serve as a major “bridge” through which medium and small-sized and micro enterprises may contact with investors, an “incubator” that introduces them to the New Third Board, GEM Board (創業板) and SME Board (中小板), and will dock with the Company’s investment banking, direct investment, asset management and other businesses, subject to compliance. The Company will seize the opportunity to exert its business synergies and accelerate the business development of Central China Equity Exchange Co., and strive to become the new profit growth point of the Company and the source of the whole “six-in-one” industrial chain as soon as possible.

(3) Actively develop internet finance

With the rapid development of internet finance, the product service system and marketing mode of the securities industry will change relatively significantly. The Company grasps the development trend of the industry and is developing its internet financial business in three steps. The first step is to build the internet financial platform of the Company and implement the online operation of its offline business. The Company has currently successfully launched its internet financial platform “Cai Sheng Web (財升網)”. The second step is to expand the internet finance business through cooperation with various internet companies. Products such as “Central China e-financing – small scale stock pledged financing (中原e融 – 小額股票質押融資)” have been successfully developed. The third step is the establishment of an internet finance company to comprehensively carry out its internet finance business. The Company will further increase its allocation of resources in the field of internet finance, enabling it to multiply the Company’s business scale and income.

(4) Actively expand offshore business

The Company will take its Hong Kong subsidiaries as the foothold to complete the acquisition of Hong Kong investment banks as soon as possible and to accelerate the construction of the Company’s offshore platform in order to realise the goal of its international operation. The Company will vigorously promote the business of Shanghai-Hong Kong Stock Connect, while at the same time actively promote the development of securities brokerage business (including stock trading, margin trading, futures contract transactions, etc.), and gradually carry out investment

– I-7 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

banking business (including Hong Kong listing sponsorship and underwriting, merger and acquisition advisory, independent financial advisory, bond issuance and underwriting, etc.), asset management business (including RQFII, structured products, etc.) and other cross-border businesses, in order to form the Company’s new profit growth point as soon as possible.

(II) Increase support in middle and back office departments, and improve overall operating efficiency

With the rapid development of the Company’s businesses, strengthening the establishment of the middle and back office is conducive to the implementation and progression of the Company’s strategic plan, and will support and safeguard the Company’s development goals for the next three years.

1. Research business

The securities research center will be built into a full-featured and outstanding research institution carrying certain brand influence with a wide coverage and a definitive focus. To this end, the Company intends to implement the following measures:

(1) adhering to the concept of “active service, efficient research, pragmatic research (主動服務、高效研究、務實研究)”, the Company will improve the research quality and enhance the market impact of the institute;
(2) the Company will further strengthen the research support for business departments of the Company including brokerage, investment banking, proprietary management, asset management and futures, and, in particular, the business lines in relation to the new profit growth points, and actively explore and improve the cooperation mechanism with various business departments;
(3) the Company will establish market-oriented incentives and restraint mechanisms and continue to strengthen the establishment of the research team;
(4) the Company will continue to improve the research methods, methodologies and contents, form a product research system and a sales system suitable to the Company’s businesses and customer needs, strengthen the characteristic researches targeting Henan’s competitive industries and listing companies, and promote the conversion of research output;
(5) the Company will increase its research efforts on stocks listed in Hong Kong and the Hong Kong market and provide research support for Shanghai-Hong Kong Stock Connect, offshore business development and market value management.

– I-8 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

2. Risk control and compliance management

The Company will meet the regulatory requirements of the capital market in Hong Kong, comply with business development needs, further improve the risk control and compliance management system to form a comprehensive, professional and process-andinformation-oriented management model to ensure compliant operations and to ensure the business risk remains measurable, controllable and affordable. To this end, the Company intends to implement the following measures:

(1) the Company will learn from the advanced management experience from the international financial industry, implement active risk management concept and complete the transfer of risk “control” to “management”;
(2) the Company will further improve the risk control and compliance management mechanism, improve the comprehensive risk management system and strengthen the liquidity risk management;
(3) the Company will strengthen the Company’s comprehensive business line risk control and compliance management responsibility mechanism, and in particular, strengthen the risk management of core business lines;
(4) the Company will utilise risk analysis models and quantitative index tools to optimise the risk model and the index system;
(5) the Company will improve the application and support of information technology, continuously build and improve the Company’s dynamic risk monitoring technology platform and stress testing technology system, and improve the dynamic tracking and implementation mechanism of risk control and compliance management.

3. Human resource management

The Company will actively build a team to cope with the Company’s business development needs and a human resource management system to realise the Company’ development strategies and provide talent protection for the businesses and management work. To this end, the Company intends to implement the following measures:

(1) the Company will conscientiously study and learn from the Hong Kong market and international investment banks the advanced experiences in the recruitment of talent, the use of cadres and performance appraisal etc. to enhance the Company’s human resources management standards;
(2) the Company will strengthen the effort in cultivating high-end talents such as sponsors, Chartered Financial Analysts (CFA) and Certified International Investment Analysts (CIIA), and utilize them as the backbone force of the development of the Company’s primary businesses;

– I-9 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

(3) the Company will constantly improve the performance-oriented reward-andpunishment system within the human resource management mechanism to create an environment where promotion and demotion, employment and dismissal, salary increase and decrease are constantly in the flux, thereby effectively stimulating vitality for the Company’s development;
(4) the Company will further motivate and promote the management and staff loyalty through incentive programs where applicable laws and regulations permit;
(5) the Company will strengthen the building of the capacity of the human resource system and the human resource management standard, and gradually satisfy the diverse human resource service needs of each business department of the Company to provide human resource safeguard to realise the Company’s overall strategic objectives.

4. Information technology management

The Company will further strengthen IT infrastructure establishment and information security, improve the information system management standards, and provide technical support and strong protection for the Company’s businesses. To this end, the Company intends to implement the following measures:

(1) the Company will continue to increase its input for optimisation of the information technology infrastructure and structure, deepen the application of information technology, and continuously improve the informatisation level of the Company;
(2) the Company will further strengthen the building of the information system security and information system backup capacity, effective manage the IT risks to keep IT risk measurable and controllable and to ensure information system security, efficient and stable;
(3) the Company will rationally use the IT resources and provide strong support for the development of various businesses of the Company, in particular, the internet finance and new businesses;
(4) the Company will further improve the information technology governance mechanism and operational model, strengthen its management and establish a “monitor-manage-control” all-in-one information technology management system.

– I-10 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

5. Planned financial management

In the next three years, the Company will, basing on accounting information and focusing on, in particular, treasury management, improve the accounting report system and financial management system, optimise the allocation of resources and control financial risks for strengthened financial management, and continue to maintain its first-rate top quality of financial management and accounting information within the industry. To this end, the Company intends to implement the following measures:

(1) the Company will continue to strengthen the basic accounting standards, and constantly improve the quality of accounting information;
(2) the Company will strengthen financial management analysis and decision support, implement the performance appraisal-based objective management system and realise the optimal combination of resource allocation and Company’s development strategies;
(3) the Company will improve the overall budget management, and timely adjust the financial strategies based on the analysis of projected execution results; strengthen fund management, improve capital efficiency, and continuously improve the financial management standards;
(4) the Company will improve the establishment of financial information system, and realise the full coordination of financial audit, budget management, capital management and tax management functions;
(5) the Company will strengthen strategic cost management research, continue to improve the full cost management and improve cost management capabilities.

(III) Raise financial leverage and return on equity through a variety of financing channels

The company will give full play to the advantages of the platform as a listed company, combining the development strategic and business development needs to continuously develop new financing channels. On the basis of continuing to perform well in company bond issuance such as onshore short-term notes, securities company short term bonds and subordinated bonds, the Company will select a right opportunity to utilise the Hong Kong subsidiary platform to conduct financial arrangements such as issuance of offshore debt issuance instruments; in particular, upon the completion of A Share listing, utilise the domestic listing company platform to give full play to synergy effects of initial public offering, placing and rights issue, enhance its capital and financial strengths and provide financial support for the Company to increase its scale and strengths.

– I-11 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

(IV) Relying on regional advantages to enhance the competitiveness of the Company

Henan Province is the largest province in terms of the economy output among the 18 provinces in the State’s middle-west regions, ranking the fifth in terms of GDP in the PRC for consecutive eleven years. Benefiting from the “Rise of Central China Strategy (中部崛起戰略)”, Henan’s economy has grown rapidly. According to the statistics from Wind Info, the average compound annual GDP growth rate of Henan Province from 2004 to 2015 is 14.24% with the GDP of 2015 reaching RMB3.70 trillion. Situated in the core location connecting the eastern and western regions, Henan Province can seize the opportunity to transfer the industries from more developed southeast coastal regions to the middle-west regions.

Since the State’s implementation of the “Rise of Central China Strategy” in 2006, Henan Province has achieved rapid economic development and benefited from several State supporting strategic plans for the Central China economic zone (中原經濟區). In August 2009, the State Council approved the Outline for the Construction of the Henan Core Area for the National Food Strategic Project (《國家糧食戰略工程河南核心區建設規劃綱要》), pursuant to which the Henan Province has become the core area of national food production, and is expected to develop a long-term and stable growth plan for food production. In September 2011, the State Council issued the Guiding Opinions of the State Council on Supporting the Acceleration of the Construction of the Central China Economic Zone by Henan Province (《國務院關於支持河南省加快建設中原經濟區的指導意見》), positioning Henan Province as a demonstrative area for the coordinated development of industrialisation, urbanisation and agricultural modernisation, and an important national economic growth plate, while at the same time it states that the State Council will improve the financial institutions, financial markets and financial products to form a multi-level capital market system and speed up the construction of Zhengdong New District as the core functional areas for financial concentration. In March 2013, the State Council approved the Zhengzhou Airport Economic Development Experimental Zone Development Plan (《鄭州航空港經濟綜合實驗區發展規劃》). The experimental area will be positioned as the modern industry base led by aviation economy, an important gateway to the inland areas and the growth pole of the Central China Economic Zone. Continued implementation of the three major strategic plans relating to Henan will make a significant contribution to local economic development and social wealth accumulation, thus bringing opportunities to the financial services industry in the Henan Province.

Henan Province is China’s most populous province, the urbanisation and industrial development potential of which is enormous. As of 31 December 2013, the total population of Henan Province exceeds 100 million, but the urbanisation rate was only 43.8%, an average of 10 percentage points lower than the national average. Henan Provincial Government is accelerating the process of urbanisation and strives to reach a resident population urbanisation rate of around 56% by 2020. Henan Province will develop high-growth manufacturing industries such as electronic information, equipment manufacturing, automobile and parts, food, modern home and apparel. Its potential for the industrial development is enormous.[1]

1 Source: “Henan Province, the new urbanisation planning (2014-2020)”, contained in the Henan Provincial Government Portal

– I-12 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

Henan Province has a vast space for capital markets. According to Wind Info statistics, as of 31 December 2015, the securitisation rate of Henan Province was 24.35%, which was far below the national average of 77.51%. The total turnover volume from the stock and fund transactions in Henan Province accounted for 317.21% of Henan Province’s GDP in 2015, which was far below the national average of 788.05%. Henan Provincial Government attaches great importance to the development of local capital market and support qualified enterprises to obtain financing by way of IPO, refinancing, issuance of bonds and other financing means so as to construct a multi-level capital market system for corporate finance and share transfer. Policy support will promote the capital market in the Henan Province and the rapid development of the securities industry.

The Company is the only securities company registered in the Henan Province, having over ten years of experience in the Henan Province, and has deep knowledge of the Henan market environment and customer needs. It has established good cooperation relationship with local government authorities and enterprises, and, with its unique local advantage and sound brand image, developed into an integrated securities company with unique regional advantages.

The company will fully rely on these regional advantages to actively expand the business and further enhance the core competitiveness.

II. THE ASSUMPTIONS ON WHICH THE ABOVE PLANS ARE BASED AND THE DIFFICULTIES TO BE FACED

(I) The assumptions on which the above plans are based

national macro-political, economic, legal and social environment is stable, and there are no events that have significant adverse impact on the development of the Company or force majeure events;
the State policy on the securities industry will not change significantly;
other risks anticipated by the Company are effectively resisted and there are no other risks likely to have a significant impact on the Company’s business;
the financing from this issue can be successfully completed;
there are no other irresistible and unforeseeable factors that have significant impact on the Company’s development.

– I-13 –

BUSINESS STRATEGIES OF THE COMPANY

APPENDIX I

(II) The possible major difficulties in the implementation of the plans

The securities industry in which the Company situates has a certain level of dependence upon the development and future market trend of the securities industry. At the same time, the national macroeconomic fluctuations and financial policy changes will also have a certain degree of impact on the Company’s business development. In addition to its inherent factors, a stable political, economic and legal environment and the favorable situation of the development of the securities market will also play a crucial role in whether the Company, acting as an intermediary service entity between the financial market and the investors, can achieve the formulated strategic development goals.

III. THE RELATIONSHIP BETWEEN THE DEVELOPMENT PLANS ABOVE AND THE EXISTING BUSINESS OF THE COMPANY

The Company’s business development plans are formulated based on the analysis of its available business operation condition, asset size and position within the industry and arrived at after combining with the Company’s current operation status, business characteristics and competitive advantages and comprehensive studies of macro-economy and industry development trends. The effective implementation of the business development plans will help the Company determine the strategic positioning of each business and expansion of its scales, highlight the Company’s core competitiveness and build the Company’s relatively comprehensive financial service system, and form the solid foundation for realising the strategic objective of the Company to become a “PRC first-class and world-renowned, modern and internationalised large-scale financial group comprising of securities, futures, direct investment and fund businesses.”

– I-14 –

USE OF PROCEEDS FROM THE A SHARE ISSUE

APPENDIX II

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

The passages in relation to the use of proceeds raised from the A Share Issue as disclosed in the 2016 Prospectus (Application Proof) is set out as follows:

“I. THE TOTAL AMOUNT OF PROCEEDS TO BE RAISED

To support the smooth realisation of the Company’s business development objectives, as considered and approved at the sixth extraordinary general meeting of 2014 of the Company, the Company intends to issue a maximum of 877.205 million A shares and the total amount of proceeds raised will be determined according to the issue price of each share as confirmed by price consultation multiplied by the number of shares issued.

II. USE OF PROCEEDS RAISED AND MANAGEMENT AND OPERATION ARRANGEMENTS

According to the resolution of the general meeting of the Company, the gross proceeds, after deducting the issuance expense, will be fully used to supplement the working capital of the Company to support future business development of the Company and facilitate achievement of strategic growth objectives of the Company. Specific purposes and arrangements of the proceeds raised are as follows:

(I) Increase the scale of fund allocation for capital-based intermediary business

Capital-based intermediary business such as margin financing and securities lending, securities repurchases and stock pledged repurchase transaction not only provides stable interest income to securities companies, but also generates brokerage business and other product innovation opportunities, which have already become an important source of revenue and profit for securities companies. The expansion of the scale of capital-based intermediary business requires continuous increase of fund allocation by securities companies. After this listing by way of public offering, the Company will increase investment in the aforementioned capital-based intermediary business according to the needs of business development in order to enhance customer penetration rate, expand the business scale and increase the market share, while actively expand other exchange and over-the-counter capital-based intermediary business as permitted by regulatory authorities in the future.

(II) Actively expand the offshore business

The Company will actively promote the business development of its Hong Kong subsidiaries and conduct securities brokerage, investment banking, securities investment and asset management business according to the market conditions, and accelerate the construction of offshore platforms using Hong Kong subsidiaries as a foothold.

– II-1 –

APPENDIX II USE OF PROCEEDS FROM THE A SHARE ISSUE

(III) Increase and optimise network layout and construction of off-site service platform to enhance the overall strength of brokerage business

1. Establish new business outlets and optimise network layout while opportunity arises

With the changes in the competition landscape of domestic brokerage business, the number and layout of business outlets have gradually become one of the main factors restricting the development of the Company’s brokerage business, and are mainly reflected in: firstly, the absolute small number of business outlets which directly affect the expansion of the Company’s brokerage business scale and enhancement of market share; and secondly, the irrational distribution structure of business outlets, in particular, the relatively small number of business outlets outside the province, resulting in lower coverage in the county market.

The Company intends to dedicate the proceeds raised in the establishment and layout optimisation of business outlets, the establishment of additional business outlets, particularly light scale business outlets, within and outside key area in the province and the optimisation of existing outlets to relocate or reform certain outlets under the unreasonable layout.

2. Strengthen the building of professional financial management team and promote the transformation of brokerage business

Following on the Company’s strong business expansion and transformation, the Company’s existing professional sales and marketing team cannot fully meet the needs for the future development of brokerage business. The Company intends to use the proceeds raised to optimise the structure of brokerage business participants and strengthen the building of professional financial management team in order to deepen the transformation of brokerage business from channel-based service to wealth management value-added service and enhance the wealth management capability, in addition to steadily improve the institutional sales and investment research businesses.

(IV) Expand the scale of our proprietary trading business moderately according to market conditions

Once the proceeds raised are in place, the Company will moderately expand the scale of the proprietary trading business, develop new investment products types and commence quantitative trading and derivatives investment under the premise of prudent operation and risk control in order to improve the proprietary trading and investment structure and increase investment income.

– II-2 –

USE OF PROCEEDS FROM THE A SHARE ISSUE

APPENDIX II

(V) Improve the underwriting capabilities and staff capabilities of investment banking

With the development of investment banking business, the Company’s securities underwriting capabilities will be limited by the Company’s capital scale, mainly reflected in the limitation in the underwriting amount and the number of projects undertaken. With the proceeds raised, the Company can undertake more equity financing and debt financing projects and enhance the underwriting capabilities of investment banking. At the same time, the Company will strengthen the building of its investment banking team, expand the labour force of investment banking, increase investment in training and comprehensively improve the capacities of securities sponsorship and underwriting and financial advisory services.

(VI) Steadily strengthen the asset management business and improve investment research and integrated marketing capabilities

The Company plans to increase allocation of resources in investment research and marketing in the future with an aim to establish its own brand and actively develop financing asset management business and asset securitisation business to further expand the scale of asset management business, thereby fostering the asset management business to become an important profit growth point of the Company.

(VII) Capital increase to ZDKY Venture Capital

With the commencement of direct investment business, ZDKY Venture Capital will actively promote the establishment of fund products such as direct investment funds, merger and acquisition funds, technological innovation funds and industrial funds while gradually increase equity investment and debt investment on medium and small-sized and micro enterprises, and hence capital demand will further be increased. The Company plans to provide timely capital support for the business expansion of ZDKY Venture Capital and increase its capital according to its business development situation once the proceeds raised are in place in order to further enhance its investment scale and investment capabilities and accelerate the establishment of “six-in-one” industry chain.

(VIII) Capital increase to Central China Futures

Central China Futures has relatively large capital needs in the area of team building, sales department layout and business transformation. The Company will increase Central China Futures’ capital according to its capital requirement and further increase its net capital scale once the proceeds raised are in place in order to promote the continuous development and growth of its business.

– II-3 –

USE OF PROCEEDS FROM THE A SHARE ISSUE

APPENDIX II

(IX) Increase financial support for innovative business

With the acceleration of financial innovation, new business types and investment tools will provide a broader development space for China’s securities industry. The Company keeps up with the pace of the industry, promotes the business and product innovation from strategic and global perspectives, continuously nurtures new profit growth points to promote the business transformation and expansion of the Company and reduce the dependence on the traditional businesses. In view of the capital needs of the innovative business, the Company will determine the capital investment according to the actual business development once the proceeds raised are in place and focus on the development of innovative business such as stock options, over-the-counter market and market marker businesses.

(X) Accelerate the construction of internet finance

The Company has launched the internet finance platform Central China “Cai Sheng Web (財升網)” in 2014, and will further increase its investment in the field of internet finance while accelerate the construction and improvement of the internet finance platform. Currently, an internet finance company has been set up and will carry out internet finance business comprehensively.

(XI) Strengthening the building of information system

The Company will perfect its IT operation management system and IT backup capabilities, enhance its database application system, improve its IT infrastructure and increase investment in the building of new business information system to further improve the support and service capabilities for business development.

The sponsor is of the view that the use of the proceeds raised by the issuer is compliant with the requirements of national industrial policies, environmental protection, land management and other laws, regulations and rules.

The issuer’s legal advisor is of the view that the use of the proceeds raised by the issuer are complaint with the requirements of national policies and laws, regulations and regulatory documents.

III. ESTABLISHMENT AND IMPLEMENTATION OF SPECIALISED DEPOSIT SYSTEM FOR THE PROCEEDS RAISED

The Company has formulated the Administrative Measures for the Proceeds raised by Central China Securities Co., Ltd (《中原証券股份有限公司募集資金管理辦法》) according to the relevant laws and regulations. The proceeds raised shall be kept in the specialised account approved by the Board for centralised management. The Company shall, within one month after the proceeds are received, sign a tripartite supervisory agreement with the sponsor and the commercial bank with which the proceeds are deposited for the specialised proceeds deposit account.

– II-4 –

USE OF PROCEEDS FROM THE A SHARE ISSUE

APPENDIX II

IV. ANALYTICAL OPINION OF THE BOARD ON THE FEASIBILITY OF INVESTMENT PROJECTS USING THE PROCEEDS RAISED
(I) The raising of these proceeds is in fulfillment of the conditions required by the laws, regulations and regulatory documents

With the Company’s comparatively optimised corporate governance structure, comparatively sound internal control system and good financial condition together with no material violation of the laws and regulations by the Company, the Company fulfills the issuance conditions for the initial public offering and listing of shares pursuant to the requirements under the Securities Law (《證券法》), the Company Law (《公司法》), and the Measures for the Administration of Initial Public Offering and Listing of Stocks (《首次公開發行股票並上市管理辦法》).

(II) The raising of these proceeds is in accordance with the directions of the state industrial policies

As expressed by Some Opinions of the State Council on Promoting the Reform, Opening and Steady Growth of Capital Markets (《國務院關於推進資本市場改革開放和穩定發展的若干意見》), “expansion of the financing channels of securities companies” is an important component for further optimising relevant policies and fostering the steady growth of capital markets. At the same time, the aforementioned document further expresses “to continue to support qualified securities companies to raise long term funds through public offering of shares or bond issuance”.

As expressed by Some Opinions on the Financial Support for Accelerating the Development of the Service Sector (《關於金融支持服務業加快發展的若干意見》), it is necessary to further enhance the comprehensive competitiveness of the securities industry, and actively guide and support the securities companies to develop innovative initiatives, enhance self-innovation capability, strengthen the core competitiveness, improve the profit model and raise the proportion of direct financing on the premises that the risks can be estimated and controlled.

In September 2014, the CSRC issued the Notice on Encouraging Securities Companies to Further Replenish Capital (《關於鼓勵證券公司進一步補充資本的通知》) to require each securities company to place emphasis on capital replenishment, and to ensure the compatibility of business scale and capital strength through capital replenishment by way of listing through IPO and share capital increase etc.. The overall risk conditions of the Company is compatible with its risk tolerance capacity.

– II-5 –

USE OF PROCEEDS FROM THE A SHARE ISSUE

APPENDIX II

(III) The grounds of the suitability of amounts of these proceeds and investment projects with the current scale of production and operation, financial condition, technical standard and management capability of the Company

1. Suitability with current scale of production and operation of the Company

As the only securities company incorporated in the Henan Province, after more than ten years of development, the Company has become a comprehensive securities company with unique territorial advantages and successfully listed in Hong Kong, characterised by its expedited development. During the Reporting Period, the Company operated in compliance and developed steadily in the businesses including securities brokerage, securities investment, investment banking, capital-based intermediary, futures brokerage etc., resulting in a comparatively greater advantage in respect of territorial competition and market branding with persistently steady development trend in various businesses. Through the raising of these proceeds, it enables further development in the scale of various businesses and optimisation of the business structure of the Company, leading to the increase of the business revenue and profitability of the Company.

2. Suitability with current financial conditions of the Company

(1) Suitability with net capital

Pursuant to the requirements of the CSRC, the net capital to net assets ratio of the Company shall not be lower than 40%, the net capital to debt ratio shall not be lower than 8% and the net assets to debt ratio shall not be lower than 20%. In order to ensure that the Company can continue to meet the aforementioned regulatory indicators, it is necessary to increase the net capital using these proceeds raised. Meanwhile, the increase of net capital will enhance the operational strength and risk tolerance capacity of the Company, which is beneficial to the development of various businesses linked to the net capital of the Company.

(2) Suitability with gearing ratio

During the Reporting Period, the gearing ratios of the Company were as follows:

	30 June	31 December	31 December	31 December
Item	2016	2015	2014	2013
Gearing Ratio
(Parent
company)	68.86%	66.81%	66.09%	47.71%

Note: Gearing ratio = (total liabilities – funds from securities trading agency – funds from securities brokerage for margin transaction)/(total assets – funds from securities trading agency – funds from securities brokerage for margin transaction)

– II-6 –

USE OF PROCEEDS FROM THE A SHARE ISSUE

APPENDIX II

During the Reporting Period, the gearing ratio of the Company experienced annual growth mainly due to the rapid development of the capital-based intermediary business such as margin financing and securities lending. The Company continued to develop financing channels and expand the scale of financing to meet the development of various businesses by means of short-term notes, corporate bonds, subordinated bonds, repurchase business, margin financing and receipt of interbank funds to meet the needs for development of various businesses. The on-going increase in the gearing ratio has strengthened the necessity of raising these proceeds by the Company.

(3) Suitability with growth of operating revenue and net profit

During the Reporting Period, the growth of operating revenue and net profit of the Company was set out in the following table:

Unit: RMB (ten thousands)

							For the
							year of
	January -	June 2016	For the year	of 2015	For the year	of 2014	2013
Items	Amount	Increase	Amount	Increase	Amount	Increase	Amount
		*(%)*		*(%)*		*(%)*
Operating
revenue	96,272.37	–	400,312.71	121.39	180,821.68	55.18	116,523.47
Net profit	31,437.86	–	140,058.75	154.66	54,998.27	130.67	23,842.75
Net capital	632,209.34	–	701,080.14	75.22	400,104.14	36.27	293,615.73

Note: Operating revenue and net profit were presented on the basis of consolidated financial statements.

From 2013 to 2015, the Company achieved annual growth in net capital through bond issuance and H Shares listing and placing. The increase of net capital motivated the development of various businesses, leading to the persistent growth of the operating revenue and net profit of the Company, and is in suitability with the further enhancement of the capital strength of the Company by these proceeds.

3. Suitability with current technical standard of the Company

The Company has been equipped with a centralised trading system, an online securities trading system, an asset management related system, a financial system and a risk control system for processing transactions, storing data and controlling risks. In addition, the Company has attached great importance to the application of information technology to the business of securities brokerage, and has been equipped with an advanced online entrustment system and a telephone entrustment system in place. Also, in early 2014, the internet finance platform “Cai Sheng Web (財升網)” was launched with various on-site and off-site trading means available for customers, thus provided convenient, efficient and highly effective information service channels for customers.

– II-7 –

USE OF PROCEEDS FROM THE A SHARE ISSUE

APPENDIX II

The Company intends to use these proceeds raised for optimisation of IT operation and management systems and IT backup capacity, the enhancement of database application system, the improvement of information technology infrastructure, and the increased launch of new business information system establishment. These are in suitability with the current technical standard of the Company.

4. Suitability with current management capability of the Company

The company has set up the sound and optimal corporate governance structure comprising the general meeting, the Board, the Supervisory Committee and the senior management. The general meeting, the Board and the Supervisory Committee have operated effectively and independently in accordance with the relevant laws and regulations, the duties specified in the Articles and their respective rules of meeting. The Company has also established a comparatively optimised risk control system and internal control system to ensure compliant operations of various businesses. The Company has an experienced management team to ensure the implementation of various systems of the Company and the effective operation of internal organisations.

After these proceeds raised are in place, the Company will expand the scale of the brokerage business, the capital-based intermediary business, the proprietary trading business, the investment banking business, the asset management business and the innovative business etc., coupled with the corresponding introduction of more talented personnel to meet the needs for the business scale expansion. These are in suitability with the current management capability of the Company.

V. THE EFFECT ON THE INDUSTRY COMPETITION AND INDEPENDENCE OF THE ISSUER AFTER THE IMPLEMENTATION OF THE INVESTMENT PROJECTS USING THE PROCEEDS RAISED

The gross proceeds, after deducting the issuance expense, will be fully used to supplement the working capital of the Company. The proceeds raised do not involve specific projects that may lead to competition within the industry, nor involve joint utilisation of the proceeds with others parties, thus will not have any negative impact on the issuer’s independence.

VI. THE NEED FOR ADDITIONAL WORKING CAPITAL

Securities company is a capital-intensive industry, and the Administrative Measures for the Management of Risk Control Indicators by Securities Companies (《證券公司風險控制指標管理辦法》) puts forward specific requirements for the capital scale of each business of securities companies and establishes a risk control index system with net capital as the core. The obtaining of the relevant business qualifications of a securities company, the ability to resist risks, the business scale and its capital scale are directly linked. Changes in the overall market environment and increased potential industry competition may force the re-positioning and transformation of securities companies to implement innovative business reform. Securities companies which intend to expand their business scopes and optimise their profit models must have sufficient capital support.

– II-8 –

USE OF PROCEEDS FROM THE A SHARE ISSUE

APPENDIX II

In recent years, the Company has seen steady improvements in its profitability and constantly optimised its income structure. However, when compared with large securities companies within the same industry, there is still a visible gap in terms of operation scope, capital strength and other aspects. The Company needs to, on the one hand, consolidate its traditional businesses and enhance its market competitiveness; and on the other hand, actively prepare and launch a variety of innovative businesses and expand its room for development, which requires constant replenishment of working capital. The utilisation of the proceeds raised will expand the Company’s capital scale, purport innovative development for various businesses, enhance its competence in risk resistance and build and promote its core competiveness to lay a solid foundation for the realisation of the Company’s strategic goals.

VII. THE IMPACT OF THE USE OF PROCEEDS RAISED ON THE MAJOR FINANCIAL CONDITIONS AND THE OPERATING RESULTS

The use of proceeds raised will have direct impact on the Company’s financial conditions and operating results in the following areas:

(I) Impact on net assets

Through the A Share Issue, the Company’s net assets and net asset per share will increase. On the other hand, proceeds raised will promote the growth of the Company’s business and will have an impact on the Company’s net assets.

(II) Impact on net capital

Upon receiving the proceeds raised the net capital of the Company will increase, which will significantly enhance the Company’s operational capacity and its risk resistance ability, and is beneficial to the Company in expanding various businesses linked with the net capital.

(III) Impact on operating results

In the long run, this issuance will help enhance the Company’s net capital strength, promote the Company’s business development and enhance the Company’s operating performance. However, in the short term, due to the fact that a process has to be gone through from the completion of this issuance to the corresponding expansion of the business scale, operational performance elevation may not be realised in the short run.”

– II-9 –

AMENDMENTS TO THE EXISTING ARTICLES

APPENDIX III

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

The full text of the amendments to the existing Articles is set out as follows:

Existing Provisions of Amended Provisions of the Articles the Articles Effects of Amendments Article 2 Article 2 “The Company is a joint stock company “The Company is a joint stock company Deletion of business with limited liability established in with limited liability established in addition of unified social accordance with the Company Law , the accordance with the Company Law , the addition of country code Securities Law and other applicable Securities Law and other applicable and fax numbers regulations. regulations.

Deletion of business license number; addition of unified social credit code; and addition of country code in the telephone and fax numbers

The Company was jointly established by Xuji Group Co., Ltd., Henan Economic and Technology Development Co., Ltd., Henan Construction & Investment Group Co., Ltd., Anyang Iron & Steel Group Co., Ltd., Anyang Economic Development Group Co., Ltd., Anyang Trust & Investment Company Limited, Henan Shenhuo Group Co., Ltd., Jiaozuo Economic and Technology Development Co., Ltd., Hebi Construction & Investment Group Co., Ltd. upon approval of the China Securities Regulatory Commission (the “CSRC”) (ZJJGZ [2002] No. 326 Approval on Commencement of Business of Central China Securities Co., Ltd. ) and the People’s Government of Henan Province (YGPZ [2002] No. 31 Approval on Establishment of Central China Securities Co., Ltd. ); it was registered with and was issued a Business License for Enterprise’s Legal Person by the Henan Administration for Industry & Commerce on November 8, 2002. Company’s business license no. is 410000100009831.

The Company was jointly established by Xuji Group Co., Ltd., Henan Economic and Technology Development Co., Ltd., Henan Construction & Investment Group Co., Ltd., Anyang Iron & Steel Group Co., Ltd., Anyang Economic Development Group Co., Ltd., Anyang Trust & Investment Company Limited, Henan Shenhuo Group Co., Ltd., Jiaozuo Economic and Technology Development Co., Ltd., Hebi Construction & Investment Group Co., Ltd. upon approval of the China Securities Regulatory Commission (the “CSRC”) (ZJJGZ [2002] No. 326 Approval on Commencement of Business of Central China Securities Co., Ltd. ) and the People’s Government of Henan Province (YGPZ [2002] No. 31 Approval on Establishment of Central China Securities Co., Ltd. ); it was registered with and was issued a Business License for Enterprise’s Legal Person by the Henan Administration for Industry & Commerce on November 8, 2002. The Company’s unified social credit code is 91410000744078476K.

– III-1 –

AMENDMENTS TO THE EXISTING ARTICLES

APPENDIX III

Existing Provisions of Amended Provisions of the Articles the Articles Effects of Amendments Article 2 Article 2 Registration Name of the Company: Registration Name of the Company Chinese Name: 中原証券股份有限公司 Chinese Name: 中原証券股份有限公司 English Name: CENTRAL CHINA English Name: CENTRAL CHINA SECURITIES CO., LTD. SECURITIES CO., LTD.

Company Address: No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou City.

P.C.: 450018 P.C.: 450018 Tel.: 371-6558 5118 Tel.: 86-371-6558 5118 Fax: 371-6558 5118” Fax: 86-371-6558 5118”

– III-2 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

The English version of this appendix is an unofficial translation of its Chinese version. In case of any discrepancies, the Chinese version shall prevail.

The full text of the amendments to the Articles in relation to the A Share Issue is set out as follows:

Existing Provisions of the Articles in Amended Provisions of the Articles in relation to the relation to the A Share Issue A Share Issue Effects of Amendments

Article 2

“The Company is a joint stock company with limited liability established in accordance with the Company Law , the Securities Law and other applicable regulations.

Deletion of business license number; addition of unified social credit code; and addition of country code in the telephone and fax numbers

The Company was jointly established by Xuji Group Co., Ltd., Henan Economic and Technology Development Co., Ltd., Henan Construction & Investment Group Co., Ltd., Anyang Iron & Steel Group Co., Ltd., Anyang Economic Development Group Co., Ltd., Anyang Trust & Investment Company Limited, Henan Shenhuo Group Co., Ltd., Jiaozuo Economic and Technology Development Co., Ltd., Hebi Construction & Investment Group Co., Ltd. upon approval of the China Securities Regulatory Commission (the “CSRC”) (ZJJGZ [2002] No. 326 Approval on Commencement of Business of Central China Securities Co., Ltd. ) and the People’s Government of Henan Province (YGPZ [2002] No. 31 Approval on Establishment of Central China Securities Co., Ltd. ); it was registered with and was issued a Business License for Enterprise’s Legal Person by the Henan Administration for Industry & Commerce on November 8, 2002. The Company’s unified social credit code is 91410000744078476K.

– IV-1 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

Existing Provisions of the Articles in Amended Provisions of the Articles in relation to the relation to the A Share Issue A Share Issue Effects of Amendments Article 2 Article 2 Registration Name of the Company: Registration Name of the Company Chinese Name: 中原証券股份有限公司 Chinese Name: 中原証券股份有限公司 English Name: CENTRAL CHINA English Name: CENTRAL CHINA SECURITIES CO., LTD. SECURITIES CO., LTD. Company Address: No. 10 Shangwu Company Address: No. 10 Shangwu Waihuan Road, Zhengdong New District, Waihuan Road, Zhengdong New District, Zhengzhou City. Zhengzhou City. P.C.: 450018 P.C.: 450018 Tel.: 371-6558 5118 Tel.: 86-371-6558 5118 Fax: 371-6558 5118” Fax: 86-371-6558 5118”

– IV-2 –

AI assistant

Central China Securities Co., Ltd. — Proxy Solicitation & Information Statement 2016

49885_rns_2016-11-02_2fd60ff1-4d14-4453-9b4f-a118518631a5.pdf

Central China Securities Co., Ltd.

(I) PROPOSED EXTENSION OF THE VALIDITY PERIOD OF THE A SHARE ISSUE AND THE RELEVANT AUTHORISATION MATTERS; (II) PROPOSED AMENDMENTS TO THE ARTICLES; AND (III) PROPOSED AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

DEFINITIONS

1. GENERAL TERMS

DEFINITIONS

DEFINITIONS

DEFINITIONS

2. TECHNICAL TERMS

Central China Securities Co., Ltd.

INTRODUCTION

(I) PROPOSED EXTENSION OF THE VALIDITY PERIOD OF THE A SHARE ISSUE AND THE RELEVANT AUTHORISATION MATTERS

Current development of the A Share Issue

Validity period of the A Share Issue and the relevant authorisation matters

Proposal of A Share Issue

LETTER FROM THE BOARD

Authorisation granted to the Board to deal with matters relating to the A Share Issue

Use of proceeds from the A Share Issue

Reasons for and benefits of the A Share Issue

LETTER FROM THE BOARD

Effects of the A Share Issue on the shareholding structure of the Company

Public Float

Fundraising activities during the past 12 months

(II) Proposed Amendments to the Articles

(III) Proposed Amendments to the Articles in relation to the A Share Issue

LETTER FROM THE BOARD

GENERAL INFORMATION

EGM, DOMESTIC SHARE CLASS MEETING AND H SHARE CLASS MEETING

VOTING

RECOMMENDATION

RESPONSIBILITY STATEMENT

ADDITIONAL INFORMATION

Central China Securities Co., Ltd.

NOTICE OF EXTRAORDINARY GENERAL MEETING

AS SPECIAL RESOLUTIONS

Central China Securities Co., Ltd.

NOTICE OF DOMESTIC SHARE CLASS MEETING

AS SPECIAL RESOLUTIONS

NOTICE OF DOMESTIC SHARE CLASS MEETING

Central China Securities Co., Ltd.

NOTICE OF H SHARE CLASS MEETING

AS SPECIAL RESOLUTIONS

NOTICE OF H SHARE CLASS MEETING

NOTICE OF H SHARE CLASS MEETING

“I. STRATEGIC TARGETS OF THE COMPANY AND ITS THREE YEAR FUTURE DEVELOPMENT PLAN

(I) All-round development of all businesses with innovation as its driving force

1. Continue to promote the transformation and upgrade of securities brokerage, investment banking, proprietary trading and investment, asset management and futures businesses

(1) Securities brokerage business

(2) Investment banking business

(3) Proprietary trading and investment

(4) Asset management

(5) Futures business

3. Actively explore new business and profit growth points

(3) Actively develop internet finance

(4) Actively expand offshore business

(II) Increase support in middle and back office departments, and improve overall operating efficiency

1. Research business

2. Risk control and compliance management

3. Human resource management

4. Information technology management

5. Planned financial management

(III) Raise financial leverage and return on equity through a variety of financing channels

(IV) Relying on regional advantages to enhance the competitiveness of the Company

APPENDIX I

(I) The assumptions on which the above plans are based

(II) The possible major difficulties in the implementation of the plans

III. THE RELATIONSHIP BETWEEN THE DEVELOPMENT PLANS ABOVE AND THE EXISTING BUSINESS OF THE COMPANY

“I. THE TOTAL AMOUNT OF PROCEEDS TO BE RAISED

II. USE OF PROCEEDS RAISED AND MANAGEMENT AND OPERATION ARRANGEMENTS

(I) Increase the scale of fund allocation for capital-based intermediary business

(II) Actively expand the offshore business

(IV) Expand the scale of our proprietary trading business moderately according to market conditions

(V) Improve the underwriting capabilities and staff capabilities of investment banking

(VI) Steadily strengthen the asset management business and improve investment research and integrated marketing capabilities

(VII) Capital increase to ZDKY Venture Capital

(VIII) Capital increase to Central China Futures

(IX) Increase financial support for innovative business

(X) Accelerate the construction of internet finance

Central China Securities Co., Ltd. Proxy Solicitation & Information Statement 2016