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 APPROVAL TO THE ANALYTICAL OPINIONS ON THE FEASIBILITY OF INVESTMENT PROJECTS USING PROCEEDS FROM THE INITIAL PUBLIC OFFERING OF A SHARES;

(II) PROPOSED IMPLEMENTATION OF THE GUIDING OPINIONS OF CSRC IN RELATION TO MATTERS RELEVANT TO DILUTION OF CURRENT RETURNS BY INITIAL PUBLIC OFFERING, REFINANCING AND MATERIAL ASSETS REORGANISATION; (III) PROPOSED AMENDMENTS TO THE ARTICLES; (IV) PROPOSED AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE;

(V) PROPOSED AMENDMENTS TO THE GENERAL MEETING RULES; AND (VI) PROPOSED AMENDMENTS TO THE BOARD MEETING RULES

Letter from the Board is set out on pages 5 to 14 of this circular.

The notices convening an extraordinary general meeting (“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 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 Wednesday, 23 March 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 15 to 21 of this circular.

The proxy forms for use at the EGM, the Domestic Share Class Meeting and the H Share Class Meeting are enclosed. 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 accompanying 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) as soon as practicable. 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.

8 March 2016

CONTENTS

			Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		. .	1
LETTER	FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. .	5
(I)	Proposed Approval to the Analytical Opinions on the Feasibility of
	Investment Projects Using Proceeds from the Initial Public Offering
	of A Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. .	6
(II)	Proposed Implementation of the Guiding Opinions of CSRC in relation
	to matters relevant to Dilution of Current Returns by Initial Public
	Offering, Refinancing and Material Assets Reorganisation . . . . . . . . .	. .	6
(III)	Proposed Amendments to the Articles . . . . . . . . . . . . . . . . . . . . . . . . . .	. .	7
(IV)	Proposed Amendments to the Articles in Relation to the A Share Issue	. .	7
(V)	Proposed Amendments to the General Meeting Rules . . . . . . . . . . . . . .	. .	8
(VI)	Proposed Amendments to the Board Meeting Rules . . . . . . . . . . . . . . . .	. .	11
NOTICE	OF EXTRAORDINARY GENERAL MEETING. . . . . . . . . . . . . . . . .	. .	15
NOTICE	OF DOMESTIC SHARE CLASS MEETING . . . . . . . . . . . . . . . . . . .	. .	18
NOTICE	OF H SHARE CLASS MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . .	. .	20
APPENDIX I – Analytical Opinions on the Feasibility of Investment
	Projects Using Proceeds from the Initial Public
	Offering of A Shares. . . . . . . . . . . . . . . . . . . . . . . . .	. .	I-1
APPENDIX II – Analysis on Dilution of Current Returns and
	Implementation of Remedial Measures And Relevant
	Undertakings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. .	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

“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 Shanghai Stock Exchange

“Articles”
the Articles of Association of the Company as amended from time to time
“Board”

the board of Directors

“Board Meeting Rules”

the Rules of Procedure for the Meetings of the Board of the Company as amended from time to time

“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)
“CSRC”
China Securities Regulatory Commission
“Director(s)”
director(s) of the Company, including independent nonexecutive directors
“Domestic Share(s)”

issued ordinary share(s) in the share capital 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 to be held at 10:00 a.m. on 23 March 2016 (Wednesday) or immediately after the conclusion of the EGM or any adjournment thereof (whichever is later) for holders of Domestic Shares to consider and approve, inter alia , the resolutions regarding (I) approval to the Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the initial public offering of A Shares; (II) implementation of the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation; and (III) amendments to the Articles in relation to the A Share Issue

– 1 –

DEFINITIONS

“EGM”

“General Meeting Rules”
“Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation”
“H Share(s)”
“H Share Class Meeting”

the extraordinary general meeting (or any adjournment thereof) of the Company to be convened and held at 9:00 a.m. on 23 March 2016 (Wednesday) 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, inter alia , the resolutions regarding (I) approval to the Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the initial public offering of A Shares; (II) implementation of the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation; (III) amendments to the Articles; (IV) amendments to the Articles in relation to the A Share Issue; (V) amendments to the General Meeting Rules; and (VI) amendments to the Board Meeting Rules

the Rules of Procedure for the General Meetings of the Company as amended from time to time

Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation promulgated by the CSRC (Zheng Jian Hui Gong Gao [2015] No. 31)

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

the H share class meeting to be held at 11:00 a.m. on 23 March 2016 (Wednesday) 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, inter alia , the resolutions regarding (I) approval to the Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the initial public offering of A Shares; (II) implementation of the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation; and (III) amendments to the Articles in relation to the A Share Issue

– 2 –

DEFINITIONS

“Henan Investment Group” Henan Investment Group Co., Ltd. (河南投資集團有限公司), a limited liability company incorporated in the PRC and held approximately 27.017% of the issued share capital of the Company as at the Latest Practicable Date “Hong Kong” Hong Kong Special Administrative Region of the PRC “Latest Practicable Date” 3 March 2016, being the latest practicable date before printing this circular for ascertaining information contained herein “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

“PRC” the People’s Republic of China, excluding, for the purpose of this circular, Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

“Relevant Entities” Henan Investment Group, and the Directors and senior management of the Company “Remuneration Committee” the Remuneration Committee of the Company “RMB” Renminbi, the lawful currency of the PRC “Senior Management Members” members of the senior management level of the Company “Shareholder(s)” shareholder(s) of the Company “State Council” the State Council of the PRC (中華人民共和國國務院) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Supervisor(s)” supervisor(s) of the Company “Supervisory Committee” the supervisory committee of the Company “%” per cent

– 3 –

DEFINITIONS

2. TECHNICAL TERMS

“Margin financing”
“Margin financing and securities lending”
“New Third Board”
“Securities repurchase”
“Stock pledged repurchase transaction”

an operating activity in which securities financial companies provide their own or legally raised funds and securities for securities firms to handle margin financing and securities lending; margin financing includes capital refinancing and securities refinancing

a collateral-backed operating activity in which securities firms 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)

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

– 4 –

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

8 March 2016

To the Shareholders,

Dear Sir/Madam,

(I) PROPOSED APPROVAL TO THE ANALYTICAL OPINIONS ON THE FEASIBILITY OF INVESTMENT PROJECTS USING PROCEEDS FROM THE INITIAL PUBLIC OFFERING OF A SHARES;

INTRODUCTION

Reference is made to the announcement of the Company dated 2 February 2016 in relation to, among other things, (I) proposed approval to the Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the Initial Public Offering of A Shares; (II) proposed

– 5 –

LETTER FROM THE BOARD

implementation of the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation; (III) proposed amendments to the Articles; (IV) proposed amendments to the Articles in Relation to the A Share Issue; (V) proposed amendments to the General Meeting Rules; and (VI) proposed amendments to the Board Meeting Rules.

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

(I) Proposed Approval to the Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the Initial Public Offering of A Shares

Pursuant to the Standards of Contents and Formats for Information Disclosure by Companies Publicly Issuing Securities No. 1 – Prospectuses (2015 Revised) promulgated by CSRC (《公開發行證券的公司信息披露內容與格式準則第1號 - 招股說明書(2015年修訂)》), the Company shall prepare its analytical opinions on the feasibility of investment projects using proceeds in relation to the A Share Issue, and explain the grounds of the suitability of the amount of proceeds and investment projects with the current scale of production and operation, financial condition, technical standard and management capability of the Company (the “ Analytical Opinions on the Feasibility of Investment Projects Using Proceeds ”).

Details of the Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the Initial Public Offering of A Shares are set out in Appendix I of this circular.

(II) Proposed Implementation of the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation

Pursuant to the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation and other requirements of CSRC, the Company shall prepare the analysis of the dilution of current returns and implementation of remedial measures in relation to the A Share Issue, and the Relevant Entities shall provide undertakings in relation to the concrete implementation of the remedial measures to fill the current returns (the “ Analysis of Dilution of Current Returns and Implementation of Remedial Measures And Relevant Undertakings ”).

The Board resolved at the Board meeting convened on 2 February 2016 that an ordinary resolution shall be put forward at the EGM, Domestic Share Class Meeting and H Share Class Meeting to consider and approve the Analysis of Dilution of Current Returns and Implementation of Remedial Measures And Relevant Undertakings, so as to implement the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation.

Details of the Analysis of Dilution of Current Returns and Implementation of Remedial Measures And Relevant Undertakings are set out in Appendix II of this circular.

– 6 –

LETTER FROM THE BOARD

(III) Proposed Amendments to the Articles

In view of the fact that the amendments to the Corporate Governance Code and Corporate Governance Report set out in Appendix 14 to the Listing Rules in relation to risk management and internal control shall become effective for accounting periods beginning on or after 1 January 2016, the Company proposed to make amendments to the relevant provisions of the Articles accordingly. At the same time, in order to further enhance the corporate governance structure of the Company, together with its development strategies and actual needs, the Company proposed to establish the position of the vice chairman (“ Vice Chairman ”). In accordance with the requirements in relation to the duties of the Vice Chairman pursuant to the Company Law of the People’s Republic of China (《中華人民共和國公司法》), the Company proposed to make amendments to the relevant provisions of the Articles.

Details of the amendments to the existing Articles are set out in Appendix III of this circular.

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

As stated above, in view of the fact that the amendments to the Corporate Governance Code and Corporate Governance Report set out in Appendix 14 to the Listing Rules in relation to risk management and internal control shall become effective for accounting periods beginning on or after 1 January 2016; at the same time, in order to further enhance the corporate governance structure of the Company, together with its development strategies and actual needs, the Company proposed to establish the position of Vice Chairman, and in accordance with the requirements in relation to the duties of the Vice Chairman pursuant to the Company Law of the People’s Republic of China (《中華人民共和國公司法》), the Company proposed to make amendments to the relevant provisions of the Articles.

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 at the EGM, Domestic Share Class Meeting and H Share Class Meeting and approval by or filing with the 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.

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LETTER FROM THE BOARD

(V) Proposed Amendments to the General Meeting Rules

As stated above, in order to further enhance the corporate governance structure of the Company, together with its development strategies and actual needs, the Company proposed to establish the position of Vice Chairman. Upon amendments to those provisions of the Articles, the Company proposed to make amendments to the relevant provisions of the General Meeting Rules accordingly as follows:

Article 7

Existing Article 7:

“The general meeting shall be convened by the Board in accordance with the laws and shall be presided over by the Chairman. If the Chairman is unable to perform his duties due to some reason, nor any person is so designated, the meetings shall be presided over by a Director jointly recommended by half or more of the Directors.

If the Board is unable or fails to fulfill the obligation of convening the meetings of the general meeting, the Supervisory Committee shall convene and preside over such meetings. If the Supervisory Committee does not convene or preside over such meetings, the shareholders individually or jointly holding no less than 10% of the shares for no less than 90 consecutive days may convene and preside over such meetings on their own in accordance with laws and regulations, regulative rules and the Articles of Association.”

Amended Article 7:

“The general meeting shall be convened by the Board in accordance with laws and shall be presided over by the Chairman. If the Chairman is unable to perform his duties due to some reason, the meetings shall be presided over by the Vice Chairman; if the Vice Chairman is also unable to perform his duties, the meetings shall be presided over by a Director jointly recommended by half or more of the Directors.

– 8 –

LETTER FROM THE BOARD

Article 31

Existing Article 31:

“The Chairman shall preside over and act as the chairman of the general meeting. If the Chairman cannot or does not fulfill the duty thereof, a Director elected by more than half of Directors shall preside over and act as the chairman of the meeting.

Where the general meeting is convened by the Supervisory Committee, the chairman of the Supervisory Committee shall preside over and act as the chairman of the meeting. If the chairman of the Supervisory Committee cannot or does not fulfill the duty thereof, a supervisor elected by more than half of the supervisors shall preside over and act as the chairman of the meeting.

Where the general meeting is convened by the shareholders, the convener shall elect a representative to preside over and act as the chairman of the meeting. If for any reason the shareholders cannot elect a person to act as chairman, the shareholder (including agent thereof) holding the most shares among the attending shareholders shall act as the chairman of the meeting.

Where a general meeting is held and the chairman of the meeting violates the rules of procedure which makes it difficult for the general meeting to continue, a person may be elected by more than half of the attending shareholders having the voting rights to act as chairman.”

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LETTER FROM THE BOARD

Amended Article 31:

“The Chairman shall preside over and act as the chairman of the general meeting. If the Chairman is unable or fails to perform his duties, the Vice Chairman shall preside over the meeting; if the Vice Chairman is also unable or fails to perform his duties, a Director jointly recommended by half or more of the Directors shall act as the chairman of the meeting and preside over the same.

The English version of the General Meeting Rules is an unofficial translation of the Chinese version. In the event of any inconsistency, the Chinese version shall prevail.

The aforesaid proposed amendments to the General Meeting Rules shall be conditional upon the approval by the Shareholders at the EGM by way of ordinary resolution.

– 10 –

LETTER FROM THE BOARD

(VI) Proposed Amendments to the Board Meeting Rules

As stated above, in view of the fact that the amendments to the Corporate Governance Code and Corporate Governance Report set out in Appendix 14 to the Listing Rules in relation to risk management and internal control shall become effective for accounting periods beginning on or after 1 January 2016; at the same time, in order to further enhance the corporate governance structure of the Company, together with its development strategies and actual needs, the Company proposed to establish the position of Vice Chairman. For this regard, the Company proposed to make amendments to the relevant provisions of the Board Meeting Rules accordingly as follow:

Article 2

Exiting Article 2:

“The Board shall exercise the following functions and powers:

......

(XVII) to determine Directors’ remunerations and distribution plan thereof, and submit special reports to the general meeting on the performance evaluation and remunerations of Directors;
(XVIII) to exercise other functions and powers as stipulated by laws and regulations, department rules, administrative regulations or Articles of Association.

......”

Amended Article 2:

“The Board shall exercise the following functions and powers:

......

(XVII) to determine Directors’ remunerations and distribution plan thereof, and submit special reports to the general meeting on the performance evaluation and remunerations of Directors;

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LETTER FROM THE BOARD

(XVIII) to evaluate and determine the nature and extent of the risks the Company is willing to take in achieving its strategic objectives, ensure that the company establishes and maintains appropriate and effective risk management and internal control systems, and oversee the Company’s risk management and internal control systems on an ongoing basis, oversee management in the design, implementation and monitoring of the risk management and internal control systems, and ensure that a review of the effectiveness of the Company’s and its subsidiaries’ risk management and internal control systems has been conducted at least annually;

(XIV) to exercise other functions and powers as stipulated by laws and regulations, department rules, administrative regulations or Articles of Association.

......”

Article 7

Existing Article 7:
“The notice of provisional Board meeting shall be served to all Directors and Supervisors five days before the date of the meeting. For circumstances specified under Rules (2) to (8) of Article 4 herein, when the Chairman is unable to perform his duties, a director shall be appointed to convene the provisional Board meeting on his behalf. If the Chairman fails to perform his duties for no reason nor any particular person has been appointed to perform the duties on his behalf, the meeting shall be convened by a Director jointly recommended by half or more of the Directors.”
Amended Article 7:

“The notice of provisional Board meeting shall be served to all Directors and Supervisors five days before the date of the meeting. For circumstances specified under Rules (2) to (8) of Article 5 herein, when the Chairman is unable to perform his duties, his duties shall be fulfilled by the Vice Chairman. When the Vice Chairman cannot perform his duties, the meeting shall be convened by a Director jointly recommended by half on more of the Directors.”

The English version of the Board Meeting Rules is an unofficial translation of the Chinese version. In the event of any inconsistency, the Chinese version shall prevail.

The aforesaid proposed amendments to the Board Meeting Rules shall be conditional upon the approval by the Shareholders at the EGM by way of ordinary resolution.

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LETTER FROM THE BOARD

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 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 Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the initial public offering of A Shares; (II) implementation of the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation; (III) amendments to the Articles; (IV) amendments to the Articles in relation to the A Share Issue; (V) amendments to the General Meeting Rules; and (VI) amendments to the Board Meeting Rules. 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 on (I) approval to the Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the initial public offering of A Shares; (II) implementation of the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation; and (III) 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 regulatory authorities in the PRC.

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 Wednesday, 23 March 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 15 to 21 of this circular.

No Shareholder is required to abstain from voting in connection with the matters to be resolved 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 are enclosed. 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 accompanying 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

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LETTER FROM THE BOARD

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) as soon as practicable. 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 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 needs not 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.

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 matters 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

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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 Wednesday, 23 March 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 resolution(s):

Unless otherwise indicated, capitalised terms used herein shall have the same meaning as those defined in the announcement of the Company dated 2 February 2016 (the “ Announcement ”).

AS SPECIAL RESOLUTIONS

“ That :

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 no. (1) above at the EGM, the amendments to the Articles in relation to the A Share Issue be approved and confirmed; and the taking effect of the amendments to the Articles in relation to the A Share Issue be approved and confirmed upon completion of the A Share Issue.

– 15 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

AS ORDINARY RESOLUTIONS

The Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the Initial Public Offering of A Shares be approved and confirmed.
The Analysis of Dilution of Current Returns and Implementation of Remedial Measures And Relevant Undertakings so as to implement the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation be approved and confirmed.
Subject to the passing of special resolution no. (1) above at the EGM, the proposed amendment to the General Meeting Rules 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 General Meeting Rules.
Subject to the passing of special resolution no. (1) above at the EGM, the proposed amendments to the Board Meeting Rules 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 Board Meeting Rules.”

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

Chairman

Henan, the PRC 5 February 2016

– 16 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

The register of members of the Company will be closed from 22 February 2016 to 23 March 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 19 February 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 of the Company.
In order to be valid, the proxy form for the EGM must be deposited by hand or by post, for holders of H shares of the Company, 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 and, for holders of domestic shares of the Company, 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 identification 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 of the Company) or to the head office in the PRC of the Company (for holders of domestic shares of the Company) on or before 3 March 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.

– 17 –

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 23 March 2016 (Wednesday) 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 2 February 2016 (the “ Announcement ”).

AS SPECIAL RESOLUTION

“ That :

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. (1) in the notice of EGM of the Company dated 5 February 2016) at the EGM, the amendments to the Articles in relation to the A Share Issue be approved and confirmed; and the taking effect of the amendments to the Articles in relation to the A Share Issue be approved and confirmed upon completion of the A Share Issue.

AS ORDINARY RESOLUTIONS

The Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the Initial Public Offering of A Shares be approved and confirmed.

– 18 –

NOTICE OF DOMESTIC SHARE CLASS MEETING

The Analysis of Dilution of Current Returns and Implementation of Remedial Measures And Relevant Undertakings so as to implement the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation be approved and confirmed.”

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

Henan, the PRC 5 February 2016

Notes:

The register of members of the Company will be closed from 22 February 2016 to 23 March 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 19 February 2016.
Shareholders 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 at the meeting. A proxy need not be a Shareholder of the Company.
In order to be valid, the proxy form for the Domestic Share Class Meeting must be completed and deposited by the holders of Domestic Shares in person 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 any Shareholder from attending and voting in person at the Domestic Share Class Meeting or any adjourned meetings should he so wish.
Shareholders or their proxies shall provide their identification documents when attending the EGM.
Shareholders 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 3 March 2016.
The Domestic Share Class Meeting takes an hour approximately. Shareholders attending the Domestic Share Class Meeting shall be responsible for their own travelling 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.

– 19 –

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 23 March 2016 (Wednesday) 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 2 February 2016 (the “ Announcement ”).

AS SPECIAL RESOLUTION

“ That :

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. (1) in the notice of EGM of the Company dated 5 February 2016) at the EGM, the amendments to the Articles in relation to the A Share Issue be approved and confirmed; and the taking effect of the amendments to the Articles in relation to the A Share Issue be approved and confirmed upon completion of the A Share Issue.

AS ORDINARY RESOLUTIONS

The Analytical Opinions on the Feasibility of Investment Projects Using Proceeds from the Initial Public Offering of A Shares be approved and confirmed.

– 20 –

NOTICE OF H SHARE CLASS MEETING

The Analysis of Dilution of Current Returns and Implementation of Remedial Measures And Relevant Undertakings so as to implement the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation be approved and confirmed.”

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

Henan, the PRC 5 February 2016

Notes:

The register of members of the Company will be closed from 22 February 2016 to 23 March 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 19 February 2016.
Shareholders 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 at the meeting. A proxy need not be a Shareholder of the Company.
In order to be valid, the proxy form for the H Share Class Meeting must be completed and deposited by Holders of H Shares in person 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 any Shareholder from attending and voting in person at the H Share Class Meeting or any adjourned meetings should he so wish.
Shareholders or their proxies shall provide their identification documents when attending the H Share Class Meeting.
Shareholders 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 3 March 2016.
The H Share Class Meeting is expected to take an hour approximately. Shareholders attending the H Share Class Meeting shall be responsible for their own travelling 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.

– 21 –

APPENDIX I

ANALYTICAL OPINIONS ON THE FEASIBILITY OF INVESTMENT PROJECTS USING PROCEEDS FROM THE INITIAL PUBLIC OFFERING OF A SHARES

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 Analytical Opinions On the Feasibility of Investment Projects Using Proceeds from the Initial Public Offering of A Shares to be prepared and adopted by the Company with respect to the A Share Issue is set out as follows:

“Pursuant to Article 109 of the Standards of Contents and Formats for Information Disclosure by Companies Publicly Issuing Securities No. 1 - Prospectuses (2015 Revised) promulgated by CSRC (《公開發行證券的公司信息披露內容與格式準則第1號 – 招股說明書 (2015年修訂)》) “The issuer shall disclose the analytical opinions of its board of directors on the feasibility of investment projects using the proceeds raised, and explain the grounds of the suitability of the amount of proceeds and investment projects with the current scale of production and operation, financial condition, technical standard and management capability of the enterprise”, the analytical opinions of the Board of Central China Securities Co., Ltd. (hereinafter referred to as the “ Company ”) on the feasibility of investment projects using the proceeds from the initial public offering of A Shares of the Company are set out as follows:

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 optimized 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 of the People’s Republic of China (《中華人民共和國證券法》), Company Law of the People’s Republic of China (《中華人民共和國公司法》), and 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 optimizing 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”.

– I-1 –

APPENDIX I

ANALYTICAL OPINIONS ON THE FEASIBILITY OF INVESTMENT PROJECTS USING PROCEEDS FROM THE INITIAL PUBLIC OFFERING OF A SHARES

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 initial public offering and share capital increase etc.. The overall risk conditions of the Company is compatible with its risk tolerance capacity.

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, characterized by its expedited development. During the period of 2012, 2013, 2014 and 1 January 2015 up to 30 June 2015 (collectively 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 optimization 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.

– I-2 –

APPENDIX I

ANALYTICAL OPINIONS ON THE FEASIBILITY OF INVESTMENT PROJECTS USING PROCEEDS FROM THE INITIAL PUBLIC OFFERING OF A SHARES

(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	2015	2014	2013	2012
Gearing ratio
(Parent Company)	77.13%	66.09%	47.71%	35.75%

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)

During the Reporting Period, the gearing ratio of the Company experienced annual growth mainly due to the rapid development since 2012 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)

	January					For the
	– June	For the year	of	For the year	of	year of
	2015	2014		2013		2012
Item	Amount	Amount Growth(%)		Amount Growth(%)		Amount
Operating
Revenue	238,670.05	180,821.68	55.18	116,523.47	15.61	100,787.55
Net Profit	101,484.52	54,998.27	130.67	23,842.75	30.11	18,324.92
Net Capital	632,192.98	400,104.14	36.27	293,615.73	2.08	287,632.74

Note: Operating revenue and net profit were based on consolidated financial statements

During the Reporting Period, 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.

– I-3 –

ANALYTICAL OPINIONS ON THE FEASIBILITY OF INVESTMENT PROJECTS USING PROCEEDS FROM THE INITIAL PUBLIC OFFERING OF A SHARES

APPENDIX I

3. Suitability with current technical standard of the Company

The Company has been equipped with a centralized 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 “up.ccnew.com” (“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.

The Company intends to use these proceeds raised for optimization of information technology operation and management systems and information technology 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 optimized 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 organizations.

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 innovation 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.

The Board may make corresponding amendments to the contents of this Appendix I in accordance with the changes in the Reporting Period and the requirements of the CSRC.”

– I-4 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

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 Analysis of Dilution of Current Returns and Implementation of Remedial Measures And Relevant Undertakings to be prepared and adopted by the Company with respect to the A Share Issue so as to implement the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation is set out as follows:

“Pursuant to the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation (Zheng Jian Hui Gong Gao [2015] No. 31) (《關於首發及再融資、重大資產重組攤薄即期回報有關事項的指導意見》(證監會公告[2015]31號)) and other requirements of CSRC, Central China Securities Co., Ltd. (hereinafter referred to as the “ Company ”) has analysed the impact of this initial public offering of A Shares on the dilution of current returns and formulated specific remedial measures for the current returns while the Relevant Entities have provided undertakings for the concrete implementation of the remedial measures for the current returns, particulars of which are set out as follows:

I. IMPACT OF THIS ISSUANCE ON THE EARNINGS PER SHARE OF THE COMPANY

In order to support the smooth attainment of the business development target of the Company, upon the consideration and approval at the 6th extraordinary general meeting of the Company in 2014, the Company proposes to issue not more than 877.205 million A Shares, the amount of gross proceeds of which will be determined by the issue price per share (to be fixed after price consultation) multiplied by the number of A Shares to be issued. The gross proceeds from this issuance, after deducting the expenses incurred for A Share Issue, shall be fully used as working capital of the Company to support future business development and facilitate achievement of strategic growth objectives of the Company. After these proceeds are in place, the total capital of the Company shall increase to a certain extent. The current and future earnings per share of the Company will thus be subject to the risk of decrease.

After the actual receipt of the proceeds raised from this issuance, the total share capital and net assets of the Company will increase. As it is expected that a certain period of time will be needed from the input of the proceeds raised to the generation of benefits, the realization of the profits of the Company and Shareholders’ return still mainly relies on the current businesses of the Company. With the increase of the total share capital of the Company, indicators such as the future basic earnings per share and diluted earnings per share etc. will be subject to the risk of dilution.

– II-1 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

II. NECESSITY AND RATIONALITY OF THIS INITIAL PUBLIC OFFERING OF A SHARES

This initial public offering of A Shares intends to issue not more than 877.205 million A Shares, the amount of gross proceeds of which will be determined by the issue price per share (to be fixed after price consultation) multiplied by the number of A Shares to be issued. The gross proceeds from this issuance, after deducting the expenses incurred for A Share Issue, shall be fully used as working capital of the Company to support future business development and facilitate achievement of strategic growth objectives of the Company. The analysis of the necessity and rationality of this issuance is as follows:

(I) Necessity

1. These proceeds raised may further increase the scale of net capital of the Company, optimize the business structure, and enhance its profitability and risk resistance capacity.

Under the regulatory system with the net capital as the core, there is a high degree of relevance between a securities company’s development and its capital scale, which, to a very great extent, determines the market position, profitability and comprehensive competitiveness of the securities company. A strong capital scale is required to support a securities company to expand its traditional business advantages and develop innovative businesses. Net capital has become a critical factor for determining the future development of a securities company.

(1) Increased net capital will assist the Company to expand its business scale and enhance its competitiveness.

Pursuant to the Measures for the Risk Control Indexes of Securities Companies (《證券公司風險控制指標管理辦法》) promulgated by the CSRC, the net capital shall be the core of the regulatory system of the securities industry. The ability to obtain relevant business qualifications of the securities company and the size of its business scale are directly linked to the strength of its net capital; the development of traditional businesses including brokerage business, proprietary business, investment banking business and asset management business etc., as well as innovative businesses including direct investment business and margin financing and securities lending business etc. are closely related to the scale of net capital of the Company. Therefore, the Company has to further increase the scale of its net capital so as to obtain leading development opportunities in the increasingly intensive market competition.

– II-2 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

According to the data announced by the Securities Association of China, as at 31 December 2014, the net capital of the Company amounted to RMB4,001.04 million and ranked 48th within the industry. There is still a comparatively large shortfall when compared with the leading securities companies with the net capital over RMB10 billion. In addition, in the past two years, many listed securities companies in the industry have further enhanced their net capital level through refinancing means, which imposed greater challenges for the competitiveness of Company within the industry. There is an urgent need for the Company to increase its net capital through initial public offering so as to expand its business scale, consolidate its competitive advantage and enhance its market competitiveness.

(2) Increased net capital may further optimize the business structure and enhance the profitability of the Company.

Subject to the restrictions from the level of net capital and working capital, as with the majority of securities companies, a comparatively large portion of the current operating revenue of the Company originates from the securities brokerage business. The scales of other businesses are relatively small, thus resulting in a less reasonable profit model for the Company. During the periods for the years of 2012, 2013, 2014 and from 1 January 2015 up to 30 June 2015 (collectively the “ Reporting Period ”), the proportion of revenue from the brokerage business to the operating revenue was 40.72%, 50.60%, 45.87% and 53.43% respectively. Meanwhile, the contribution by the investment banking business, margin financing and securities lending business, asset management business and direct investment business etc. towards the operating revenue remains at a low level, resulting in an unbalanced business structure which is not conducive for the Company to attain an advantageous position in the keen market competition. The Company is in great need of capital replenishment to optimize the overall business structure and develop innovative businesses in order to lay the solid foundation for increasing the business revenue and enhancing the profitability of the Company.

(3) Increased net capital may enhance risk resistance capacity of the Company.

Risk control has always been a core concern for the business development of a securities company. With continuous launches of innovative products within the securities industry, it is necessary to further enhance the risk management of their traditional businesses and innovative businesses. The strength of the risk resistance of a securities company also has a direct impact on its continuous profitability, existence and development. As a capital intensive industry, the risk resistance capacity of a securities Company is directly linked with its capital scale. Only with maintaining a capital scale matching the business development scale various risks such as market risks, credit risks, operational risks and liquidity risks etc. can be better prevented and resolved. Therefore, through this initial public offering of A Shares, the net capital scale of the Company can further be enhanced, thus strengthening the risk resistance capacity of the Company.

– II-3 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

2. It is necessary to attain the strategic development targets of the Company.

Under the background of accelerated transformation and development of the PRC economy and profound changes for the PRC capital market environment, a series of new policies has been launched in succession in the capital market. This is a crucial period for the transformation of the PRC securities industry, and also a critical period in breaking and reshaping the market layout.

Facing the aforementioned changes, the Company has still focused on the inherent development strategy and operational targets, and proactively implemented the construction of marketization mechanism and adjustment of business structure, expedited the nurturing of the core competitiveness of the “six-in-one” whole industry chain model of the Company as well as the innovation development and high-standard development of the internet finance business, and embraced with determination the transformation and upgrade of traditional businesses in order to maintain rapid and steady enhancement of the operation results. In order to attain the strategic targets of the Company as soon as possible, it is necessary for the Company to expedite the adjustment of the revenue structure and enhance its continuous profitability. The attainment of the aforementioned targets requires the support of strong capital strength. Through this initial public offering of A Shares, the Company will extensively increase its net capital scale so as to lay a solid foundation for attaining the strategic targets as soon as possible.

3. The aggravated potential competition in the PRC securities industry has forced securities companies to implement a capital-intensive reform of innovative businesses.

In light of the changes in the existence environment, it is necessary for the securities companies to re-position and transform themselves so as to stimulate the demand for business innovation, followed by incubating new operation models to finally attain the transformation and development of these securities companies. It is thus necessary for the securities companies to determine their strategic positioning based on different market environments and identify the transformation directions and targets.

– II-4 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

With the accelerated opening up of the PRC securities industry, banks, insurance companies and trustee companies has gradually penetrated into the bond financing, financial consultancy and asset management businesses which are the businesses of securities companies, thus suppressing the room of businesses for securities companies. These companies also have comparative advantage in capital scale and sales channels etc.. Following the gradual elimination of entry barriers and the rapid development of information technology, cross-sector operation will become a trend. Meanwhile, many international investment banks have entered into the PRC securities market by means of joint venture. With the competitive advantages in terms of management standard and the experience in international operation of the capital scale etc., these international investment banks will impose great challenges on the domestic securities companies. According to the statistics from the Securities Association of China, as at 30 June 2015, the PRC has 125 securities companies with total assets worth RMB8.27 trillions, net assets worth RMB1.30 trillions and net capital worth RMB1.14 trillions. However, compared with the matured overseas market, there is a considerable gap in terms of the number of securities companies and the scale of total assets. Therefore, the PRC securities market is in urgent need of on-going maturity and improvement.

In order to better cope with potential competitions from various aspects, the CSRC made material adjustments on regulatory positioning and presented the overall roadmap of “the construction of top tier international investment banks with PRC characteristics” in order to provide comprehensive room of development of the securities industry in 2012. At present, the PRC securities industry reform is accelerating gradually. The regulatory authorities are vigorously promoting the open competition and innovation development within the industry, which in turn provide opportunities and challenges for the development of securities companies. In the several years to come, the development of securities companies will surely face an industry reshuffle and layout restructuring. Those securities companies relying on traditional business channels in a way of “depending on heaven for food” (“靠天吃飯”) will be eliminated gradually. The innovation-oriented market reform will bring about fundamental changes to the homogeneous competition layout of securities companies.

(II) Rationality

Judging from the policy conditions, pursuant to the requirement under 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》), “expanding the financing channels of securities companies” is an important component for further optimizing relevant policies and fostering the steady growth of capital markets. 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 encourage securities companies to replenish capital via multiple means and remove the restrictive requirements for the equity financing of the securities companies. Therefore this capital replenishment carries the aspect of policy rationality.

– II-5 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

Judging from the market conditions, the securities industry is currently at the stage of recovery and improvement. With the rise of asset scale and profitability, favourable market conditions are available for this capital replenishment.

Judging from the company conditions, with the comparatively optimized corporate governance structure and comparatively sound internal control system, the Company has comparatively strong risk control capability. Meanwhile the Company has comparatively strong profitability with good financial condition together with no false entries in its financial accounting documents. There is also no material violation of the laws and regulations by the Company.

In conclusion, the raising of proceeds by the Company through initial public offering of A Shares is on rational grounds.

III. RELATIONSHIP BETWEEN INVESTMENT PROJECTS USING PROCEEDS FROM THIS OFFERING AND CURRENT BUSINESS OF THE COMPANY , AND THE CONDITIONS OF ASPECTS INCLUDING PERSONNEL, TECHNOLOGICAL AND MARKET RESERVES ETC. FOR THE COMPANY IN RELATION TO THE OFFERING AND INVESTMENT PROJECTS

The gross proceeds from this issuance, after deducting the expenses incurred for A Share Issue, shall be fully used as working capital of the Company to support future business development and facilitate achievement of strategic growth objectives of the Company. The proceeds of this initial public offering will not be involved in construction of investment projects.

(I) Personnel reserves

The Company has all along stressed the importance of nurturing and introducing talents. At present, the Company possesses an optimal personnel allocation system after years of operation. Furthermore, the Company has developed its overseas business in places including Hong Kong and been successfully listed on the Stock Exchange with the establishment of its subsidiaries in Hong Kong. Meanwhile, the Company has correspondingly been equipped with the necessary personnel to expedite the development of its offshore business. The Company has possessed comparatively stable high calibre talents and management teams since its incorporation. As at 30 June 2015, the Company has a total of 2,240 employees including 338 with master degrees and above and 17 management members. The aforementioned personnel reserves have laid the solid foundation for the business development after securing the proceeds. Meanwhile, the Company, after completion of the proceeds raising, will expand the scale of its brokerage business, capital-based intermediary business, proprietary business, investment banking business, asset management business and innovative business etc., coupled with the corresponding introduction of more talents to meet the needs for expanding the business scale.

– II-6 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

(II) Technological reserves

As a strategic resource for the development of the Company, information technology is related to the strategic deployment, business development and brand image of the Company. The Company has possessed a centralized trading system, an online securities trading system, an asset management-related system, a financial system and a risk control system etc. for processing the transactions, storing data and controlling risks. In addition, the Company has attached great importance to the application of information technology in the securities brokerage business. The Company has possessed an advanced online entrustment system and a telephone entrustment system etc.. In early 2014, the internet finance platform “up.ccnew.com” (“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 them.

In future, the Company will consolidate the information technology development trends of the industry and the business and management information needs of the Company in order to further improve its information technology infrastructure, increase the establishment and input of information technology systems for new businesses, expand the construction of the internet finance system, and enhance the back-office service support in line with the rapid development of the front-office business of the Company.

(III) Market reserves

As the only securities company incorporated in the Henan Province, the Company has developed into a comprehensive securities company with unique territorial advantages after over ten years. As at 30 June 2015, the Company has set up 57 operation branches with good clientele in the Henan Province, as well as 16 securities operation branches in 13 prosperous coastal cities or core cities in the central and western regions including Beijing, Shanghai, Tianjin, Shenzhen, Guangzhou, Hangzhou, Jinan, Qingdao, Xi’an, Changsha, Shijiazhuang, Zhangjiagang and Wuhan. In addition, the Company possesses business qualifications on futures and funds etc. to further expand its scope of business operation and market coverage of its comprehensive services. At present, the core businesses of the Company, which are the securities brokerage business and the investment banking business, have taken the leading positions in the Henan market. The tremendous economic scale, demographic dividend and comparatively lower securitization rate of the Henan Province provides a very large market room. The Company has established a management headquarter in Shanghai with a concentrated research and investment capacity in Shanghai. The number of companies listed in the New Third Board has occupied a leading position within the nation with projects coming from all parts of the PRC. After being listed in Hong Kong, the Company has set up Central China International Financial Holdings Company Limited and its four subsidiaries in Hong Kong to expedite the development of the Group and its internationalization. The layout of the Company with its base in the central part of the PRC, its spread over the whole PRC and its movement towards internationalization has been established.

– II-7 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

The Company will fully utilise its own advantages to speed up the development of other traditional businesses such as underwriting, sponsorship and proprietary trading of securities etc. as well as the innovative businesses including direct investment and margin financing and securities lending etc.. Meanwhile, various new businesses such as the New Third Board, private placement bonds of small and medium enterprises, securities repurchase, proxy sale of financial products, funds and stock pledged repurchase transactions have been on the rise. The future revenue structure of the Company will further be diversified. All of the above have provided better market reserves for this proceeds raising by the Company.

IV. SPECIFIC MEASURES FORMULATED BY THE COMPANY FOR REMEDYING THE RETURNS

(I) Operating conditions, development momentum, major risks and improvement measures of the current business segments of the Company

1. Operating conditions of current business segments of the Company.

The business scope of the Company has been expanding after years of development, and has formed a diversified business development layout including securities brokerage, investment banking, securities investment, margin financing and securities lending, asset management and futures brokerage. The current major business segments of the Company are as follows:

(1) Brokerage Business

Securities brokerage business is a dominant business of the Company and has maintained a leading position in the Henan Province. With the establishment of nationwide new network points and adjustment of strategic layout, the Company has 16 securities operation branches in 13 prosperous coastal cities or core cities in the central and western regions. The strategic framework of “in-depth cultivation in Henan with nationwide expansion” (“深耕河南、面向全國”) has gradually been formed.

(2) Investment Banking Business

The investment banking business of the Company mainly includes of the securities underwriting and sponsorship business, the bond underwriting business, the financial consultancy business, and host brokerage business for the National Equities Exchange and Quotations System (全國中小企業股份轉讓系統) (formerly Entrusted Share Transfer System (代辦股份轉讓系統)). In recent years, by virtue of the advantage in the resource of the Henan Province, the Company has focused on serving the Henan capital market and kept on improving the nationwide business layout in order to create with full strength the “Central China Investment Banking” brand.

– II-8 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

(3) Proprietary Investment Business

As a comprehensive securities company approved by the CSRC, the Company has obtained the qualification for securities proprietary trading business since its incorporation. During the development process, the securities proprietary business has adhered to the principles of value investing and “flexible allocation and stable operation” (“靈活配置,穩健操作”), resulting in the effective control of investment risks with good investment returns.

(4) Capital-based Intermediary Business

The Credit Business Headquarter (formerly the Margin Financing and Securities Lending Headquarter) established by the Company is responsible for the development planning, business management and related innovation for the capitalbased intermediary business including margin financing and securities lending, stock pledged repurchase transaction and securities repurchase businesses etc.. In June 2012, the Company obtained the qualification for the margin financing and securities lending business. In April 2013, the Company took part in the capital refinancing business upon obtaining the qualification for capital refinancing business. In June 2014, the Company obtained the qualification for securities refinancing business. In July 2013, the Company obtained the respective authorization for stock pledged repurchase transaction from the Shenzhen Stock Exchange and the Shanghai Stock Exchange; and in October 2012 and April 2013, respectively, the Company obtained the respective authorization for securities repurchase from the Shanghai Stock Exchange and the Shenzhen Stock Exchange.

(5) Asset Management Business

The Company has adhered to the principle of “Professionalization, Marketization and Standardization” to provide clients with all-rounded, professional and personalized wealth management services. Under the premise of effective risk control and through professional management and scientific investment operations, the Company has gradually created four major business segments comprising integrated wealth management, targeted wealth management, entrustment consultancy and market value management. At present, the asset management business of the Company has formed comparatively optimized systems for product development, sales investment management, risk control and service.

– II-9 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

(6) Futures Brokerage Business

The Company has developed the futures business through its subsidiary Central China Futures Co., Ltd (中原期貨有限公司) (“ Central China Futures ”). Central China Futures places great emphasis on the establishment of the sales team and research and development of the service capacity. Through measures including proactive introduction of external talented personnel, improvement on the sales awards and assessment colligation mechanism, strengthened training for the sales personnel, enhancement of the analytical and judgment capability on market conditions and strengthened research and development support etc., Central China Futures further expedites its futures business development with good business development momentum.

(7) Direct Investment Business

The Company has developed the direct investment business through its wholly owned subsidiary Zhongding Kaiyuan Venture Capital Management Co., Ltd. (中鼎開源創業投資管理有限公司) (“ ZDKY Venture Capital ”) and its subsidiaries. Since its incorporation, ZDKY Venture Capital has, on one side, established internal rules and regulations, strengthened internal management and imposed stringent risk control in strict compliance with corporate governance and regulatory requirements; and, on the other side, proactively expanded the markets and continuously reserved potential high quality investment projects in accordance with the requirement of professionalization, standardization and marketization, thus achieving good periodical results.

2. Overall business development momentum 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, characterized by its expedited development. In recent years, 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. In the future, the Company will continue to adopt the stable operational style to further develop the market in Henan and its peripheral markets to consolidate the territorial advantage and keep on increasing its nationwide market share, while vigorously expanding the Hong Kong and overseas markets. At the same time, the Company will further enhance the operational and risk control standards to facilitate the smooth realisation of the Company’s strategic development targets.

– II-10 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

3. Major risks faced by the Company in the business operation and improvement measures.

As affected by the characteristics of the industry and business of the Company, its securities business faces particular operational risks including: market risks associated with the adverse effect on the Company’s business and operational results, financial conditions and liquidity due to changes in marco-economic environment and changes in the securities market; risks associated with businesses or services including securities brokerage, investment banking, proprietary trading, asset management, futures, direct investment, funds, margin financing and securities lending etc.; and credit risks, operational risks and liquidity risks etc..

In light of the various risks above, the Company has set up a practically effective risk management system and internal control system. The Company will continue to improve the risk management models and methods based on the operational features, development requirements and risk characteristics of each business in order to ensure the attainment of the development strategic targets of the Company and maximization of the benefits for the Shareholders and the Company.

(II) Specific measures for raising daily operation efficiency, lowering operating cost and enhancing operating results of the Company

In order to ensure the effective use of these proceeds raised, effective prevention of the risk of dilution of Shareholders’ current returns and enhancement of the capability for persistent future returns, the Company will expedite the development of its core businesses and raise the overall operation efficiency, while at the same time expedite the use of these proceeds raised and increase future revenue upon completion of this public offering of shares, so as to reduce the impact of this issuance on the dilution of Shareholders’ current returns. The concrete measures to be adopted by the Company are as follows:

1. Comprehensive development of various businesses and expedited development of core businesses with innovation as the driving force.

On the basis of persistent development of securities brokerage, investment banking, proprietary investment, asset management and futures businesses, the Company will vigorously develop the capital-based intermediary business with its emphasis on margin financing and securities lending and stock pledged repurchase transactions, and the innovation businesses represented by stock option, over-the-counter market and market maker etc.; meanwhile proactively develop new businesses and profit growth points to expedite the creation of the “six-in-one” (“六為一體”) industry chain led by Central China Equity Exchange Co., Ltd. (中原股權交易中心股份有限公司) and proactively develop internet finance and expand the offshore business, so as to expedite the implementation of the development of the core businesses of the Company.

– II-11 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

2. Increase middleand back-office support to enhance overall operational efficiency.

The Company will enhance the middle- and back-office establishment by means of enhancing the research of its businesses, risk control and compliance management, human resources management, information technology management and financial planning management, so as to raise the overall operational efficiency and provide support and protection for the Company’s front-office business development. At the same time, the Company will enhance its research on strategic cost management to continue to optimize the total cost management and increase its cost management capability.

3. Expedite the use of proceeds raised and enhance the effectiveness of the use of proceeds.

These proceeds raised by this issuance by the Company will be used to increase the scale of capital allocation for the capital-based intermediary business; proactively expand its offshore business; increase and optimize the network layout; construct the off-site service platform; enhance the overall strength of the brokerage business; properly expand the scale of proprietary trading business according to the market situation; enhance the underwriting capacity of investment banks and the business capability of the personnel; stabilize and strengthen the asset management business; upgrade the investment research and comprehensive sales capability; increase the capital of ZDKY Venture Capital; increase the capital of Central China Futures; increase the capital support to innovative business; expedite the internet finance construction; and strengthen the information technology establishment. After the proceeds from this issuance are in place, the Company will expedite the use of the proceeds, and endeavor to enhance the effectiveness in using the proceeds, so as to strengthen the operational strength and risk resistance capability of the Company, promote the development of various businesses, enhance the operating results of the Company, and strengthen the annual Shareholders’ returns in future years in order to reduce the risk of dilution of current returns to Shareholders as a result of this issuance.

4. Stringent execution of the dividend policy of the Company to safeguard the Shareholders’ benefit and return.

Pursuant to the Notice Regarding Further Implementation of Cash Dividends Distribution of Listed Companies (《關於進一步落實上市公司現金分紅有關事項的通知》) and Guideline No. 3 for the Supervision and Administration of Listed Companies – Cash Dividend for Listed Companies (《上市公司監管指引第3號 – 上市公司現金分紅》) promulgated by the CSRC, the Company has considered and approved the initial public offering of A Shares of the Company and the Articles in relation to the A Share Issue applicable after listing and dividend return plan for shareholders in the 6th extraordinary general meeting in 2014 in order to improve and provide details for the profit distribution policy of the Company. The Company will strictly execute the dividend policy of the Company to definitively uphold the lawful interests of investors and safeguard the Shareholders’ benefit and return.

– II-12 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

V. UNDERTAKINGS OF HENAN INVESTMENT GROUP, DIRECTORS AND SENIOR MANAGEMENT MEMBERS OF THE COMPANY IN RELATION TO THE CONCRETE IMPLEMENTATION OF THE REMEDIAL MEASURES OF THE COMPANY FOR THE RETURNS

Pursuant to the Guiding Opinions of CSRC in relation to matters relevant to Dilution of Current Returns by Initial Public Offering, Refinancing and Material Assets Reorganisation and other requirements of CSRC, Henan Investment Group, Directors and Senior Management Members of the Company undertake in relation to the concrete implementation of the remedial measures of the Company for the returns as follows:

(I) Undertakings of the Directors and Senior Management Members

They shall neither transfer interests without compensation or under unfair conditions to other units or individuals nor harm the interest of the Company by other means.
They shall restrict the position-related expenditure conduct of the Directors and Senior Management Members.
They shall not use the assets of the Company to engage in investment or consumption activities unrelated to the performance of position-related duties.
The remuneration system formulated by the Board or the Remuneration Committee shall be linked to the execution of the remedial measures of the Company for the returns.
After the A Share Issue and listing, the execution conditions of the share option scheme to be announced by the Company shall be linked to the execution of the remedial measures of the Company for the returns.
After the A Share Issue and listing, they shall cause the Board to formulate a persistent and stable cash dividend scheme to realize, in accordance with the Company Law of the People’s Republic of China (《中華人民共和國公司法》) and other laws and regulations and the Articles, the level of annual cash dividend not lower than the standard in the dividend return plan of the initial public offering of RMB ordinary shares (A Shares) of the Company; and shall vote for the relevant resolutions at the Board meetings.
In the event of failure to perform the aforementioned undertakings, they shall publicly explain the specific reasons for the failure to perform and make apologies to the Shareholders and the general investors in society in the general meetings and the newspapers designated by the CSRC. The responsibilities shall be held in accordance with the laws for compensating the loss caused to the Company or the shareholders due to breach of the undertakings.

– II-13 –

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

In the event that the Company’s interests are harmed by transfer of interests without compensation or under unfair conditions to other units or individuals, the Directors or the Senior Management Members in charge of such a decision to perform the act should bear the corresponding responsibilities for compensation. Those Directors or Senior Management Members being regarded by the securities regulatory authorities as reluctant to implement the remedial measures for the dilution of current returns shall not be entitled to take part in the share option scheme of the Company.

(II) Undertakings of Henan Investment Group

Henan Investment Group Co., Ltd. (河南投資集團有限公司) shall neither exceed its authority to intervene in the operation and management activities of the Company nor infringe the interests of the Company.
Henan Investment Group shall cause the general meeting to consider and approve a persistent and stable cash dividend scheme to realize, in accordance with the Company Law of the People’s Republic of China (《中華人民共和國公司法》) and other laws and regulations and the Articles, the level of annual cash dividend not lower than the standard in the dividend return plan of the initial public offering of RMB ordinary shares (A Shares) of the Company; and shall vote for the relevant resolutions at the general meetings.
In the event of failure to perform the aforementioned undertakings, the reasons shall be publicly stated and apology shall be publicly made at the general meeting and in the newspaper designated by the CSRC.

The Board may make corresponding amendments to the contents of this Appendix II in accordance with the changes in the Reporting Period and the requirements of the CSRC.”

– II-14 –

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 the Articles

Amended Provisions of the Articles

Effects of Amendments

Article 72

If the Board is unable or fails to fulfill the obligation of convening the meetings of the general meeting, the supervisory committee shall convene and preside over such meetings. If the supervisory committee does not convene or preside over such meetings, the shareholders individually or jointly holding no less than 10% of the shares for no less than 90 consecutive days may convene and preside over such meetings on their own in accordance with laws and regulations, regulative rules and the Articles of Association.”

“The general meeting shall be convened by the Board and shall be presided over by the Chairman. If the Chairman is unable or fails to perform his duties, the meetings shall be presided over by the Vice Chairman; if the Vice Chairman is unable or fails to perform his duties, the meetings shall be presided over by a Director jointly recommended by half or more of the Directors.

Addition of the power of the Vice Chairman to preside over the shareholders’ general meeting in the event that the Chairman is unable or fails to perform his duties to preside over the shareholders’ general meeting.

– III-1 –

AMENDMENTS TO THE EXISTING ARTICLES

APPENDIX III

Existing Provisions of the Articles

Article 97

“The Chairman shall preside over and act as chairman of the general meeting. If the Chairman cannot or does not fulfill the duty thereof, a Director elected by more than half of Directors shall preside over and act as chairman of the meeting.

Where the general meeting is convened by the supervisory committee, the chairman of the supervisory committee shall preside over and act as chairman of the meeting. If the chairman of the supervisory committee cannot or does not fulfill the duty thereof, a supervisor elected by more than half of the supervisors shall preside over and act as chairman of the meeting.

Where the general meeting is convened by the shareholders, the convener shall elect a representative to preside over and act as chairman of the meeting. If for any reason the shareholders cannot elect a person to act as chairman, the shareholder (including agent thereof) holding the most shares among the attending shareholders shall act as chairman of the meeting.

Amended Provisions of the Articles

Article 97

“The Chairman shall preside over and act as chairman of the general meeting. If the Chairman cannot or does not fulfill the duty thereof, the Vice Chairman shall preside over the meeting; if the Vice Chairman cannot or does not fulfill the duty thereof, a Director elected by more than half of Directors shall preside over and act as chairman of the meeting.

Where the general meeting is convened by the shareholders, the convener shall elect a

representative to preside over and act as chairman of the meeting. If for any reason the shareholders cannot elect a person to act as chairman, the shareholder (including agent thereof) holding the most shares among the attending shareholders shall act as chairman of the meeting.

Effects of Amendments

– III-2 –

AMENDMENTS TO THE EXISTING ARTICLES

APPENDIX III

Existing Provisions of Amended Provisions of the Articles the Articles Effects of Amendments Article 160 Article 160

“The Board shall consist of 11 Directors, including 1 Chairman.”

“The Board shall consist of 11 Directors, including 1 Chairman and 1 Vice Chairman.”

Addition of the position of 1 Vice Chairman to the Board.

Article 163 Article 163

“The Board shall be accountable to the general meeting and exercise the following function and powers: .....

(XVII) to determine Directors’ remunerations and distribution plan thereof, and submit special reports to the general meeting on the performance evaluation and remunerations of Directors

“The Board shall be accountable to the general meeting and exercise the following function and powers: .....

(XVII) to determine Directors’ remunerations and distribution plan thereof, and submit special reports to the general meeting on the performance evaluation and remunerations of Directors

Addition of the duties of the Board in respect of (1) supervising the risk management and internal control systems of the Company, and (2) exercising other duties stipulated in the regulations and the regulatory documents.

(XVIII) to exercise other functions (XVIII) to evaluate and determine and powers as stipulated by the nature and extent of the laws, administrative risks the Company is regulations, department willing to take in achieving rules or Articles of its strategic objectives, Association. ensure that the company establishes and maintains
.....” appropriate and effective risk management and internal control systems, and oversee the Company’s risk management and internal control systems on an ongoing basis, oversee management in the design, implementation and monitoring of the risk management and internal control systems, and ensure that a review of the effectiveness of the Company’s and its subsidiaries’ risk management and internal control systems has been conducted at least annually;

– III-3 –

AMENDMENTS TO THE EXISTING ARTICLES

APPENDIX III

Existing Provisions of Amended Provisions of the Articles the Articles

Effects of Amendments

(XIX) to exercise other functions and powers as stipulated by laws and regulations, departmental rules, regulatory documents or Articles of Association.

.....”

Article 169

“The Chairman shall be a Director of the Company and shall be elected or removed by a majority of the Directors. The Chairman shall serve a term of three years, and is eligible for reelection.”

“The Chairman and Vice Chairman shall be Directors of the Company and shall be elected or removed by a majority of the Directors. The Chairman and Vice Chairman shall serve a term of three years, and are eligible for reelection.”

Article 171

“In the event that Chairman cannot or fails to perform his duties, a majority of the Directors shall recommend one Director to perform the duties.”

“In the event that the Chairman cannot or fails to perform his duties, the Vice Chairman shall perform the duties; in the event that the Vice Chairman cannot or fails to perform his duties, a majority of the Directors shall recommend one Director to perform the duties.”

Article 188

“.....
“.....

Primary duties of the audit committee are as follows:

(I) examining the Company’s accounting information and disclosure of major events.....
(I) examining the Company’s accounting information and disclosure of major events.....
..... .....

Addition of the position of the Vice Chairman to serve a term of three years and be eligible for reelection.

Addition of the power of the Vice Chairman to perform the duties in the event that the Chairman is unable or fails to perform his duties.

(1) (For the purpose of Chinese version of the existing Articles only) revision of the wordings of sub-Article (I)(6) of the existing Articles in respect of the primary duties of the audit committee; and (2) addition of the primary duties of the audit committee in relation to the overseeing of risk management and internal control systems.

– III-4 –

AMENDMENTS TO THE EXISTING ARTICLES

APPENDIX III

Existing Provisions of	Existing Provisions of	Amended Provisions of	Amended Provisions of
the Articles		the Articles		Effects of Amendments
6.	compliance with the Hong	6.	compliance with the Hong
	Kong Listing Rules as well		Kong Listing Rules as well
	as laws and regulations		as laws and regulations
	related to financial		related to financial
	reporting;		reporting;
.....		.....
(III)	supervising the Company’s	(III)	overseeing the Company’s
	financial reporting system,		financial reporting system,
	and reviewing and		risk management and
	evaluating the Company’s		internal control systems,
	internal control, including:		including:
1.	to review and evaluate the	1.	to review the Company’s
	soundness and effectiveness		financial controls;
	of the financial control,
	internal control and risk	2.	to review and evaluate the
	management system of the		implementation of risk
	Company;		management and internal
			control rules and systems
2.	to review and evaluate the		by the departments and
	implementation of internal		branch offices of the
	control rules and systems		Company. The evaluation
	by the departments and		results will be important
	branch offices of the		reference and basis for
	Company. The evaluation		annual performance
	results will be important		assessment;
	reference and basis for
	annual performance	3.	to discuss the risk
	assessment;		management and internal
			control systems with the
3.	to discuss the internal		management to ensure that
	control system with the		the management has
	management and ensure an		performed its duty to have
	effective internal control		effective systems in place.
	system was in place. The		The discussion shall
	discussion shall include the		include the adequacy of
	adequacy of resources,		resources, qualification and
	qualification and		experience of employees,
	experience of employees,		training of employees and
	training of employees and		the relevant budget in
	the relevant budget in		accounting and financial
	accounting and financial		reporting of the Company;
	reporting of the Company;

– III-5 –

AMENDMENTS TO THE EXISTING ARTICLES

APPENDIX III

Existing Provisions of Amended Provisions of the Articles the Articles Effects of Amendments 4. to study the important 4. to study the important investigation results of investigation results of risk internal supervisory and management and internal control issues and feedback control issues and feedback of management on the of management on the investigation results investigation results proactively or under the proactively or under the instruction of the Board; delegation of the Board;
..... ..... 9. to review the system and 9. to review the system and arrangement for employees arrangement for employees to anonymously report any to anonymously report any irregularities in financial irregularities in financial reporting, internal control reporting, risk management, and other aspects of the internal control and other Company. The committee aspects of the Company. shall ensure appropriate The committee shall ensure arrangements are in place appropriate arrangements to allow the Company to are in place to allow the carry out fair and Company to carry out fair independent investigations and independent and appropriate actions on investigations and such matters; appropriate actions on such matters;

	carry out fair and independent investigations and appropriate actions on such matters;		Company to carry out fair and independent investigations and appropriate actions on such matters;
.....”
		.....”
Article 189		Article 189
“.....		“.....		Addition of the primary duties of
				the risk control committee in
Primary duties of the risk control		Primary duties of the risk control		relation to “reviewing the
committee are as follows:		committee are as follows:		Company’s risk management and
				internal control systems” and
.....		.....		“reviewing the Company’s
				compliance with the Appendix 14
(IV)	reviewing and opining on	(IV)	reviewing and opining on	of the Hong Kong Listing Rules,
	compliance reports and risk		compliance reports and risk	the Corporate Governance
	evaluation reports approved		evaluation reports approved	Codes, and relevant disclosure in
	by the Board;		by the Board;	the Corporate Governance
				Report, including but not limited
(V)	formulating the Company’s	(V)	reviewing the Company’s	to how the Company meets its
	corporate governance		risk management and	responsibilities in its review of
	policies, reviewing the		internal control systems;	the risk management and internal
	implementation and making			control systems and the
	suggestion to the Board;			effectiveness of the Company’s
				internal audit function”.

– III-6 –

AMENDMENTS TO THE EXISTING ARTICLES

APPENDIX III

Existing Provisions of	Existing Provisions of	Amended Provisions of	Amended Provisions of
the Articles		the Articles		Effects of Amendments
(VI)	reviewing and supervising	(VI)	formulating the Company’s
	Directors and senior		corporate governance
	management’s training and		policies, reviewing the
	their continuing		implementation and making
	professional development;		suggestion to the Board;
(VII)	reviewing and supervising	(VII)	reviewing and supervising
	whether Company’s		Directors and senior
	policies is in compliance		management’s training and
	with laws and supervisory		their continuing
	regulations, and the		professional development;
	implementation;
		(VIII)	reviewing and supervising
(VIII)	formulating, reviewing and		whether Company’s
	supervising professional		policies is in compliance
	code of conduct and		with laws and supervisory
	compliance manual (if any)		regulations, and the
	of employees and		implementation;
	Directors;
		(IX)	formulating, reviewing and
(IX)	reviewing the Company’s		supervising professional
	compliance with the		code of conduct and
	Appendix 14 of the Hong		compliance manual (if any)
	Kong Listing Rules, the		of employees and
	Corporate Governance		Directors;
	Codes and relevant
	disclosure in the Corporate	(X)	reviewing the Company’s
	Governance Report;		compliance with the
			Appendix 14 of the Hong
(X)	other duties specified by		Kong Listing Rules, the
	the Articles of Association.		Corporate Governance
			Codes and relevant
.....”			disclosure in the Corporate
			Governance Report,
			including but not limited to
			how the Company meets its
			responsibilities in its
			review of the risk
			management and internal
			control systems and the
			effectiveness of the
			Company’s internal audit
			function;
		(XI)	other duties specified by
			the Articles of Association.
		.....”

– III-7 –

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 relation to the A Share Issue

Amended Provisions of the Articles in relation to the A Share Issue

Effects of Amendments

Article 74

– IV-1 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

Existing Provisions of the Articles in relation to the A Share Issue

Article 100

Amended Provisions of the Articles in relation to the A Share Issue

Article 100

Effects of Amendments

– IV-2 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

Existing Provisions of the Articles in relation to the A Share Issue

Article 118

“List of Director and supervisor candidates shall be provided by way of proposals at the general meeting.

The Board shall provide the shareholders with resumes and basic information of Director and supervisor candidates.

The Director candidates shall be nominated by the previous section of the Board, or the shareholders individually or jointly holding no less than 3% of the total of the Company’s shares. The nomination methods and procedures of independent Directors shall be performed in accordance with the laws, regulations, relevant provisions of the securities regulatory authorities of the place where the Company’s shares are listed and relevant rules in relation to independent Directors.

The non-employee representative supervisor candidates shall be nominated by the previous section of supervisory committee, or the shareholders individually or jointly holding no less than 3% of the Company’s shares. Employee representative supervisor candidates shall be democratically elected by employees of the Company.

If the number of Directors nominated by any shareholder of the Company accounts for no less than one half of the total members of the Board, then the number of shareholder representative supervisors nominated by such shareholder shall not exceed one third of the total members of the supervisory committee.”

Amended Provisions of the Articles in relation to the A Share Issue

Article 118

“List of Director and supervisor candidates shall be provided by way of proposals at the general meeting.

The Board shall provide the shareholders with resumes and basic information of Director and supervisor candidates.

When voting at the election of Directors and supervisors, the general meeting may implement the cumulative voting method in accordance with the Articles of Association or the resolution of the general meeting.

The aforementioned cumulative voting method refers to the voting for Directors or supervisors where each share is entitled to the same number of votes which equals to the total number of Directors or supervisors to be elected, and shareholders may consolidate their voting rights when casting a vote.

Effects of Amendments

The “cumulative voting method” is provided for election of Directors and Supervisors at the general meeting, that is, each share is entitled to the same number of votes which equals to the total number of Directors or Supervisors to be elected, and shareholders may consolidate their voting rights when casting a vote.

– IV-3 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

Existing Provisions of the Amended Provisions of the Articles in relation to the Articles in relation to the A Share Issue A Share Issue Effects of Amendments The non-employee representative supervisor candidates shall be nominated by the previous section of supervisory committee, or the shareholders individually or jointly holding no less than 3% of the Company’s shares. Employee representative supervisor candidates shall be democratically elected by employees of the Company. If the number of Directors nominated by any shareholder of the Company accounts for no less than one half of the total members of the Board, then the number of shareholder representative supervisors nominated by such shareholder shall not exceed one third of the total members of the supervisory committee.”

Article 171 Article 171

“The Board shall consist of 11 Directors, including 1 Chairman.”

“The Board shall consist of 11 Directors, including 1 Chairman and 1 Vice Chairman.”

Addition of the position of 1 Vice Chairman to the Board.

Article 174 Article 174

“The Board shall be accountable “The Board shall be accountable to the general meeting and to the general meeting and exercise the following functions exercise the following functions and powers: and powers:

..... .....

(XVII) to determine Directors’ remunerations and distribution plan thereof, and submit special reports to the general meeting on the performance evaluation and remunerations of Directors;

(XVII) to determine Directors’ remunerations and distribution plan thereof, and submit special reports to the general meeting on the performance evaluation and remunerations of Directors;

– IV-4 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

Existing Provisions of the	Amended Provisions of the
Articles in relation to the	Articles in relation to the
A Share Issue	A Share Issue	Effects of Amendments
(XVIII)to exercise other functions	(XVIII)to evaluate and determine
and powers as stipulated by	the nature and extent of the
laws, administrative	risks the Company is
regulations, department	willing to take in achieving
rules or Articles of	its strategic objectives,
Association.	ensure that the company
	establishes and maintains
.....”	appropriate and effective
	risk management and
	internal control systems,
	and oversee the Company’s
	risk management and
	internal control systems on
	an ongoing basis, oversee
	management in the design,
	implementation and
	monitoring of the risk
	management and internal
	control systems, and ensure
	that a review of the
	effectiveness of the
	Company’s and its
	subsidiaries’ risk
	management and internal
	control systems has been
	conducted at least annually;

(XIX) to exercise other functions and powers as stipulated by laws and regulations, departmental rules, regulatory documents or Articles of Association.

.....”

Article 180

“The Chairman shall be a Director of the Company and shall be elected or removed by a majority of the Directors. The Chairman shall serve a term of three years, and is eligible for reelection.”

Addition of the position of the Vice Chairman to serve a term of three years and be eligible for reelection.

– IV-5 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

Existing Provisions of the Articles in relation to the A Share Issue

Amended Provisions of the Articles in relation to the A Share Issue

Article 182

“In the event that Chairman cannot or fails to perform his duties, a majority of the Directors shall recommend one Director to perform the duties.”

Article 199

“.....

“.....

Primary duties of the audit committee are as follows:

(I) examining the Company’s accounting information and disclosure of major events.....
(I) examining the Company’s accounting information and disclosure of major events.....

..... .....

compliance with the Hong Kong Listing Rules as well as laws and regulations related to financial reporting.
compliance with the Hong Kong Listing Rules as well as laws and regulations related to financial reporting;

Effects of Amendments

Addition of the power of the Vice Chairman to perform the duties in the event that the Chairman is unable or fails to perform his duties.

(1) (For the purpose of Chinese version of the Articles in relation to the A Share Issue only) revision of the wordings of subArticle (I)(6) of the Articles in relation to the A Share Issue in respect of the primary duties of the audit committee; and (2) addition of the primary duties of the audit committee in relation to the overseeing of risk management and internal control systems.

..... .....

– IV-6 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

Existing Provisions of the Articles in relation to the A Share Issue

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

(III) supervising the Company’s financial reporting system, and reviewing and evaluating the Company’s internal control, including:
(III) overseeing the Company’s financial reporting system, risk management and internal control systems, including:

1.	to review and	1.	to review the
	evaluate the		Company’s financial
	soundness and		controls;
	effectiveness of the
	financial control,	2.	to review and
	internal control and		evaluate the
	risk management		implementation of
	system of the		risk management and
	Company;		internal control rules
			and systems by the
2.	to review and		departments and
	evaluate the		branch offices of the
	implementation of		Company. The
	internal control rules		evaluation results
	and systems by the		will be important
	departments and		reference and basis
	branch offices of the		for annual
	Company. The		performance
	evaluation results		assessment;
	will be important
	reference and basis	3.	to discuss the risk
	for annual		management and
	performance		internal control
	assessment;		systems with the
			management to
3.	to discuss the		ensure that the
	internal control		management has
	system with the		performed its duty to
	management and		have effective
	ensure an effective		systems in place. The
	internal control		discussion shall
	system was in place.		include the adequacy
	The discussion shall		of resources,
	include the adequacy		qualification and
	of resources,		experience of
	qualification and		employees, training
	experience of		of employees and the
	employees, training		relevant budget in
	of employees and the		accounting and
	relevant budget in		financial reporting of
	accounting and		the Company;
	financial reporting of
	the Company;

– IV-7 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

ng Provisions of the	ng Provisions of the	Amended Provisions of the	Amended Provisions of the
es in	relation to the	Articles in	relation to the
re Issue		A Share Issue		Effects of Amendments
4.	to study the	4.	to study the
	important		important
	investigation results		investigation results
	of internal		of risk management
	supervisory and		and internal control
	control issues and		issues and feedback
	feedback of		of management on
	management on the		the investigation
	investigation results		results proactively or
	proactively or under		under the delegation
	the instruction of the		of the Board;
	Board;
		.....
.....
		9.	to review the system
9.	to review the system		and arrangement for
	and arrangement for		employees to
	employees to		anonymously report
	anonymously report		any irregularities in
	any irregularities in		financial reporting,
	financial reporting,		risk management,
	internal control and		internal control and
	other aspects of the		other aspects of the
	Company. The		Company. The
	committee shall		committee shall
	ensure appropriate		ensure appropriate
	arrangements are in		arrangements are in
	place to allow the		place to allow the
	Company to carry		Company to carry
	out fair and		out fair and
	independent		independent
	investigations and		investigations and
	appropriate actions		appropriate actions
	on such matters;		on such matters;
.....”		.....”

Existing Provisions of the Articles in relation to the A Share Issue

– IV-8 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

Existing Provisions of the	Existing Provisions of the	Amended Provisions of the	Amended Provisions of the
Articles in relation to the		Articles in relation to the
A Share Issue		A Share Issue		Effects of Amendments
Article 200		Article 200
“.....		“.....		Addition of the primary duties of
				the risk control committee in
Primary duties of the risk control		Primary duties of the risk control		relation to “reviewing the
committee are as follows:		committee are as follows:		Company’s risk management and
				internal control systems” and
.....		.....		“reviewing the Company’s
				compliance with the Appendix 14
(IV)	reviewing and opining on	(IV)	reviewing and opining on	of the Hong Kong Listing Rules,
	compliance reports and risk		compliance reports and risk	the Corporate Governance Codes
	evaluation reports approved		evaluation reports approved	and relevant disclosure in the
	by the Board;		by the Board;	Corporate Governance Report,
				including but not limited to how
(V)	formulating the Company’s	(V)	reviewing the Company’s	the Company meets its
	corporate governance		risk management and	responsibilities in its review of
	policies, reviewing the		internal control systems;	the risk management and internal
	implementation and making			control systems and the
	suggestion to the Board;	(VI)	formulating the Company’s corporate governance	effectiveness of the Company’s internal audit function”.
(VI)	reviewing and supervising		policies, reviewing the
	Directors and senior		implementation and making
	management’s training and		suggestion to the Board;
	their continuing
	professional development;	(VII)	reviewing and supervising
			Directors and senior
(VII)	reviewing and supervising		management’s training and
	whether Company’s		their continuing
	policies is in compliance		professional development;
	with laws and supervisory
	regulations, and the	(VIII)	reviewing and supervising
	implementation;		whether Company’s
			policies is in compliance
(VIII)	formulating, reviewing and		with laws and supervisory
	supervising professional		regulations, and the
	code of conduct and		implementation;
	compliance manual (if any)
	of employees and
	Directors;

– IV-9 –

AMENDMENTS TO THE ARTICLES IN RELATION TO THE A SHARE ISSUE

APPENDIX IV

Existing Provisions of the Articles in relation to the A Share Issue

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

(IX) reviewing the Company’s (IX) formulating, reviewing and compliance with the supervising professional Appendix 14 of the Hong code of conduct and Kong Listing Rules, the compliance manual (if any) Corporate Governance of employees and Codes and relevant Directors; disclosure in the Corporate Governance Report ; (X) reviewing the Company’s
Governance Report ; (X) reviewing the Company’s compliance with the
(X) other duties specified by Appendix 14 of the Hong the Articles of Association. Kong Listing Rules, the Corporate Governance
.....” Codes and relevant disclosure in the Corporate Governance Report , including but not limited to how the Company meets its responsibilities in its review of the risk management and internal control systems and the effectiveness of the Company’s internal audit function;
(X) other duties specified by the Articles of Association.
(XI) other duties specified by the Articles of Association.

.....”

– IV-10 –

AI assistant

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

49885_rns_2016-03-07_3ca3b435-ebbe-43f4-bf6f-6a6a506b66f1.pdf

Central China Securities Co., Ltd.

DEFINITIONS

1. GENERAL TERMS

DEFINITIONS

“EGM”

DEFINITIONS

2. TECHNICAL TERMS

Central China Securities Co., Ltd.

To the Shareholders,

INTRODUCTION

(III) Proposed Amendments to the Articles

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

(V) Proposed Amendments to the General Meeting Rules

Article 7

LETTER FROM THE BOARD

Article 31

LETTER FROM THE BOARD

LETTER FROM THE BOARD

(VI) Proposed Amendments to the Board Meeting Rules

Article 2

LETTER FROM THE BOARD

Article 7

GENERAL INFORMATION

EGM, DOMESTIC SHARE CLASS MEETING AND H SHARE CLASS MEETING

LETTER FROM THE BOARD

VOTING

RECOMMENDATION

RESPONSIBILITY STATEMENT

ADDITIONAL INFORMATION

Central China Securities Co., Ltd.

NOTICE OF EXTRAORDINARY GENERAL MEETING

AS SPECIAL RESOLUTIONS

“ That :

AS ORDINARY RESOLUTIONS

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

NOTICE OF EXTRAORDINARY GENERAL MEETING

Central China Securities Co., Ltd.

NOTICE OF DOMESTIC SHARE CLASS MEETING

AS SPECIAL RESOLUTION

“ That :

AS ORDINARY RESOLUTIONS

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

Central China Securities Co., Ltd.

NOTICE OF H SHARE CLASS MEETING

AS SPECIAL RESOLUTION

“ That :

AS ORDINARY RESOLUTIONS

NOTICE OF H SHARE CLASS MEETING

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

ANALYTICAL OPINIONS ON THE FEASIBILITY OF INVESTMENT PROJECTS USING PROCEEDS FROM THE INITIAL PUBLIC OFFERING OF A SHARES

II. THE RAISING OF THESE PROCEEDS IS IN ACCORDANCE WITH THE DIRECTIONS OF THE STATE INDUSTRIAL POLICIES

ANALYTICAL OPINIONS ON THE FEASIBILITY OF INVESTMENT PROJECTS USING PROCEEDS FROM THE INITIAL PUBLIC OFFERING OF A SHARES

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

2. Suitability with current financial conditions of the Company

(1) Suitability with net capital

APPENDIX I

ANALYTICAL OPINIONS ON THE FEASIBILITY OF INVESTMENT PROJECTS USING PROCEEDS FROM THE INITIAL PUBLIC OFFERING OF A SHARES

(2) Suitability with gearing ratio

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

3. Suitability with current technical standard of the Company

4. Suitability with current management capability of the Company

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

I. IMPACT OF THIS ISSUANCE ON THE EARNINGS PER SHARE OF THE COMPANY

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

II. NECESSITY AND RATIONALITY OF THIS INITIAL PUBLIC OFFERING OF A SHARES

(I) Necessity

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

2. It is necessary to attain the strategic development targets of the Company.

APPENDIX II

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

(II) Rationality

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

(I) Personnel reserves

ANALYSIS OF DILUTION OF CURRENT RETURNS AND IMPLEMENTATION OF REMEDIAL MEASURES AND RELEVANT UNDERTAKINGS

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