Holly Futures : (1) PROPOSALS FOR PROFIT DISTRIBUTION PLAN (2) REMUNERATION PACKAGE FOR DIRECTORS AND SUPERVISORS (3) PROPOSED A SHARE OFFERING (4) PROPOSED AMENDMENTS TO THE EXISTING ARTICLES (5) PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES OF THE BOARD (6) PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES OF THE GENERAL MEETING (7) PROPOSED CHANGE OF AUDITORS (8) NOTICE OF ANNUAL GENERAL MEETING (9) NOTICE OF DOMESTIC SHAREHOLDERS' CLASS MEETING (10) NOTICE OF H SHAREHOLDERS' CLASS MEETIN

April 23, 2021 at 05:02 am EDT

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 stockbroker or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in Holly Futures (a joint stock company incorporated in the People's Republic of China with limited liability under the Chinese corporate name 弘業期貨股份有限公司 and carrying on business in Hong Kong as Holly Futures), you should at once hand this circular and the accompanying form of proxy and reply slip to the purchaser(s) or transferee(s) or to the bank, stockbroker or licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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.

Holly Futures

(a joint stock company incorporated in the People's Republic of China with limited liability under the Chinese

corporate name 弘業期貨股份有限公司 and carrying on business in Hong Kong as Holly Futures)

(Stock Code: 3678)

1. PROPOSALS FOR PROFIT DISTRIBUTION PLAN FOR THE YEAR 2020
REMUNERATION PACKAGE FOR DIRECTORS AND SUPERVISORS FOR THE YEAR 2020
1. 1. PROPOSED A SHARE OFFERING AND RELATED MATTERS
2. PROPOSED AMENDMENTS TO THE EXISTING ARTICLES OF ASSOCIATION
3. PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES

OF THE BOARD

PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES OF THE GENERAL MEETING

(7) PROPOSED CHANGE OF AUDITORS

1. NOTICE OF ANNUAL GENERAL MEETING
NOTICE OF THE 2021 FIRST DOMESTIC SHAREHOLDERS' CLASS MEETING AND
1. NOTICE OF THE 2021 FIRST H SHAREHOLDERS' CLASS MEETING

A letter from the Board is set out on pages 4 to 37 of this circular.

Notices convening the AGM, the Domestic Shareholders' Class Meeting and the H Shareholders' Class Meeting to be held at the Conference Room, 9/F, Holly Tower, No. 50 Zhonghua Road, Nanjing, the PRC at 2:00 p.m., 2:30 p.m. and 3:00 p.m. respectively on Friday, 14 May 2021 are set out on pages AGM-1 to AGM-5,DSCM-1 to DSCM-3 and HSCM-1 to HSCM-3 of this circular, respectively. Shareholders who intend to attend the AGM and/or the Class Meeting(s) (as the case maybe) should complete the reply slip and return it by hand or by post to the H Share registrar of the Company (for holders of H Shares) or to the headquarters in the PRC of the Company (for holders of Domestic Shares) on or before Saturday, 24 April 2021 (as the case may be).

Shareholders who are entitled to attend and vote at the AGM and/or the Class Meeting(s) may appoint one or more proxies to attend and vote on their behalves. A proxy need not be a Shareholder. In order to be valid, the form of proxy for the AGM and/or the Class Meeting(s) must be deposited by hand or post, for holders of H Shares, to the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, and, for holders of Domestic Shares, to the headquarters in the PRC of the Company not less than 24 hours before the time for holding the such meeting(s) (or any adjournment thereof) (i.e. by Thursday, 13 May 2021 at 2:00 p.m.) for taking the poll. If the form of proxy 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 form of proxy. Completion and return of the form of proxy will not preclude Shareholders from attending and voting in person at the AGM and/or the Class Meeting(s) or any adjourned meetings should they so wish.

Shareholders are reminded that the AGM and the Class Meetings originally scheduled on Wednesday, 12 May 2021 have been postponed to Friday, 14 May 2021, and the closure period of the register of members of the Company has also been changed to the period from Wednesday, 14 April 2021 to Friday, 14 May 2021, both days inclusive.

PRECAUTIONARY MEASURES FOR THE AGM

To safeguard the health and safety of the Shareholders and to prevent the spread of the coronavirus, the following precautionary measures will be implemented at the AGM:

Compulsory temperature checks;
Compulsory wearing of surgical face masks; and
No provision of refreshments.

Any person who does not comply with the precautionary measures may be denied entry to the AGM venue. The Company would like to encourage Shareholders to consider appointing the chairman of the AGM as their proxy to vote on the relevant resolutions at the AGM as an alternative to attending the AGM in person.

23 April 2021

	CONTENTS
		Page
DEFINITIONS .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX I	- THE AUTHORISATION TO THE BOARD TO DEAL
	WITH RELATED MATTERS IN CONNECTION
	WITH THE COMPANY'S APPLICATION FOR
	THE A SHARE OFFERING AND LISTING
	OF A SHARES AT ITS FULL DISCRETION . . . . . . . . .	I-1
APPENDIX II	- FEASIBILITY ANALYSIS REPORT ON
	THE INVESTMENT PROJECTS USING
	THE PROCEEDS FROM THE A SHARE
	OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
APPENDIX III	- IMPACTS AND REMEDIAL MEASURES
	ON DILUTION OF IMMEDIATE RETURN
	FROM THE A SHARE OFFERING . . . . . . . . . . . . . . . .	III-1
APPENDIX IV	- PRICE STABILISING PLAN FOR
	THE A SHARES WITHIN THREE YEARS
	AFTER THE A SHARE OFFERING . . . . . . . . . . . . . . .	IV-1
APPENDIX V	- DIVIDEND RETURN PLAN FOR SHAREHOLDERS
	WITHIN THREE YEARS AFTER THE A SHARE
	OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
APPENDIX VI	- REPORT OF THE USE OF RAISED FUNDS
	FROM THE PREVIOUS OFFERING . . . . . . . . . . . . . . .	VI-1
APPENDIX VII	- PUBLIC UNDERTAKINGS IN DOCUMENTS
	IN CONNECTION WITH THE A SHARE
	OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VII-1
APPENDIX VIII - RELATED PARTY TRANSACTIONS
	MANAGEMENT SYSTEM TO BE EFFECTIVE
	UPON THE A SHARE OFFERING AND
	THE LISTING OF THE A SHARES . . . . . . . . . . . . . . . .	VIII-1
APPENDIX IX	- SYSTEM CONCERNING THE INDEPENDENT
	DIRECTORS TO BE EFFECTIVE UPON THE
	A SHARE OFFERING AND THE LISTING
	OF THE A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IX-1

- i -

CONTENTS

APPENDIX X	- ADMINISTRATION SYSTEM OF RAISED
	FUNDS TO BE EFFECTIVE UPON
	THE A SHARE OFFERING AND THE LISTING
	OF THE A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	X-1
APPENDIX XI	- COMPARISON OF THE EXISTING ARTICLES OF
	ASSOCIATION AGAINST THE ARTICLES OF
	ASSOCIATION TO BE EFFECTIVE UPON
	THE A SHARE OFFERING AND THE LISTING
	OF THE A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	XI-1
APPENDIX XII - COMPARISON OF THE EXISTING RULES OF
	PROCEDURES OF THE GENERAL MEETINGS
	AGAINST THE RULES OF PROCEDURES OF
	THE GENERAL MEETINGS TO BE EFFECTIVE
	UPON THE A SHARE OFFERING AND
	THE LISTING OF THE A SHARES . . . . . . . . . . . . . . .	XII-1
APPENDIX XIII - COMPARISON OF THE EXISTING RULES OF
	PROCEDURES OF THE BOARD OF DIRECTORS
	AGAINST THE RULES OF PROCEDURES
	OF THE BOARD OF DIRECTORS TO BE
	EFFECTIVE UPON THE A SHARE
	OFFERING AND THE LISTING OF
	THE A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	XIII-1
NOTICE OF ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . .	AGM-1
NOTICE OF THE 2021 FIRST DOMESTIC
SHAREHOLDERS' CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	DSCM-1
NOTICE OF THE 2021 FIRST H SHAREHOLDERS'
CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	HSCM-1

- ii -

DEFINITIONS

In this circular, unless otherwise defined or the context otherwise requires, the following expressions have the following meanings:

"AGM"	the annual general meeting of the Company to be
	convened and held on Friday, 14 May 2021 at 2:00
	p.m. at Conference Room, 9/F, Holly Tower, No. 50
	Zhonghua Road, Nanjing, the PRC, and any
	adjournment thereof
"A Share Offering"	the Company's proposed initial public offering of not
	more than 120,000,000 A Shares, which are proposed
	to be listed on the Shenzhen Stock Exchange
"A Share(s)"	ordinary share(s) proposed to be issued by the
	Company pursuant to the A Share Offering and to be
	subscribed for in Renminbi
"Articles of Association"	the articles of association of the Company, as amended
	from time to time
"Board"	the board of Directors
"Board Meeting"	the Board meeting held on 26 March 2021
"Class Meeting(s)"	the H Shareholders' Class Meeting and/or the Domestic
	Shareholders' Class Meeting (as the case may be)
"Company"	Holly Futures Co., Ltd.（弘業期貨股份有限公司）, a joint
	stock limited company established under the laws of
	the PRC on 29 November 2012, whose H Shares are
	listed and traded on the Stock Exchange (stock code:
	3678)
"Companies Ordinance"	the Companies Ordinance (Chapter 622 of the Laws of
	Hong Kong), as amended, supplemented or otherwise
	modified from time to time
"connected person(s)"	has the meaning ascribed to it under the Listing Rules
"CSRC"	China Securities Regulatory Commission
"Director(s)"	the director(s) of the Company
"Domestic Share(s)"	the ordinary share(s) in the capital of the Company
	with a nominal value of RMB1.00 each, which are
	subscribed for or credited as paid up in Renminbi
"Domestic Shareholder(s)"	holder(s) of Domestic Share(s)

- 1 -

	DEFINITIONS
"Domestic Shareholders' Class	the class meeting of the holders of Domestic Shares to
Meeting"	be convened and held on or around Friday, 14 May
	2021 (or any adjournment thereof) immediately after
	the conclusion of the AGM to be held on the same date
	at the same place (or any adjournment thereof)
"Group"	the Company and its subsidiaries
"H Share(s)"	overseas listed foreign ordinary shares in the share
	capital of the Company with a nominal value of
	RMB1.00 each listed on the Main Board of Stock
	Exchange
"H Shareholder(s)"	holder(s) of H Share(s)
"H Shareholders' Class Meeting"	the class meeting of the holders of H Shares to be
	convened and held on or around Friday, 14 May 2021
	(or any adjournment thereof) immediately after the
	conclusion of the Domestic Shareholders' Class
	Meeting to be held on the same date at the same place
	(or any adjournment thereof)
"H Share Offering"	the initial public offering of the Company's H Shares
	globally and the Listing
"Hong Kong"	Hong Kong Special Administrative Region of the PRC
"Latest Practicable Date"	20 April 2021, being the latest practicable date prior to
	the printing of this circular for ascertaining certain
	information contained herein
"Listing Rules"	the Rules Governing the Listing of Securities on The
	Stock Exchange of Hong Kong Limited
"PRC"	the People's Republic of China which shall, for the
	purpose of this circular, excludes Hong Kong, the
	Macau Special Administrative Region of the PRC and
	Taiwan
"RMB"	Renminbi, lawful currency of the PRC
"Rules of Procedures of the	the rules of procedures of the Board
Board"
"Rules of Procedures of the	the rules of procedures of the general meeting of the
General Meeting"	Company

- 2 -

	DEFINITIONS
"Share(s)"	share(s) with a nominal value of RMB1 each in the
	share capital of the Company
"Shareholder(s)"	holder(s) of the Share(s)
"Supervisor(s)"	the supervisor(s) of the Company
"Supervisory Committee"	the supervisory committee of the Company
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"subsidiary(ies)"	has the meaning ascribed thereto under the Listing
	Rules
"Substantial Shareholder(s)"	has the meaning ascribed thereto under the Listing
	Rules
"%"	per cent.

Certain amounts and percentage figures set out in this circular have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables and the currency conversion or percentage equivalents may not be an arithmetic sum of such figures.

- 3 -

LETTER FROM THE BOARD

Holly Futures

(a joint stock company incorporated in the People's Republic of China with limited liability under the Chinese

corporate name 弘業期貨股份有限公司 and carrying on business in Hong Kong as Holly Futures)

(Stock Code: 3678)
Executive Directors:	Registered Office and Headquarters
Mr. Zhou Yong（周勇）(Chairman)	in the PRC:
Ms. Zhou Jianqiu（周劍秋）	No. 50 Zhonghua Road
	Nanjing, the PRC
Non-executive Directors:
Mr. Xue Binghai（薛炳海）	Place of Business in Hong Kong
Mr. Shan Bing（單兵）	registered under Part 16 of the
Mr. Jiang Lin（姜琳）	Companies Ordinance:
	40th Floor, Dah Sing Financial Centre
Independent non-executive Directors:	No. 248 Queen's Road East
Mr. Wang Yuetang（王躍堂）	Wanchai, Hong Kong

Mr. Lam Kai Yeung（林繼陽）

Mr. Huang Dechun（黃德春）

23 April 2021

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR PROFIT DISTRIBUTION PLAN FOR THE YEAR 2020
1. REMUNERATION PACKAGE FOR DIRECTORS AND SUPERVISORS FOR THE YEAR 2020
2. 1. PROPOSED A SHARE OFFERING AND RELATED MATTERS

PROPOSED AMENDMENTS TO THE EXISTING ARTICLES OF ASSOCIATION
PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES OF THE BOARD
PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES OF THE GENERAL MEETING

(7) PROPOSED CHANGE OF AUDITORS

1. NOTICE OF ANNUAL GENERAL MEETING
NOTICE OF THE 2021 FIRST DOMESTIC SHAREHOLDERS' CLASS MEETING AND
1. NOTICE OF THE 2021 FIRST H SHAREHOLDERS' CLASS MEETING

- 4 -

LETTER FROM THE BOARD

INTRODUCTION

Reference is made to the announcements published by the Company dated 26 March

2021 which include certain resolutions to be proposed at the AGM and the Class Meetings (as the case may be) in relation to, among other things, (i) the proposal for the A Share Offering and other relevant resolutions; (ii) the proposed amendments to the existing Articles of Association; (iii) the proposed amendments to the existing Rules of Procedures of the Board; (iv) the proposed amendments to the existing Rules of Procedures of the General Meeting; (v) the proposed change of auditors; (vi) the profit distribution plan for the year 2020; and (vii) the remuneration package for Directors and Supervisors for the year 2020.

The Board approved and resolved to submit to the AGM and the Class Meetings (as the case may be) for the approval of certain matters: (1) the proposal of the A Share Offering; (2) authorisation to the Board to deal with related matters in connection with the Company's application for the A Share Offering and the listing of the A Shares at its full discretion; (3) feasibility analysis report on the investment projects using the raised funds from the A Share Offering; (4) impacts and remedial measures on dilution of immediate return from the A Share Offering; (5) price stabilising plan for the A Shares within three years after the A Share Offering; (6) dividend return plan for Shareholders within three years after the A Share Offering; (7) report of the use of raised funds from the previous offering;

public undertakings in documents in connection with the A Share Offering; (9) proposed formulation of Articles of Association with effect upon the A Share Offering and the listing of the A Shares; (10) proposed formulation of the Rules of Procedures of the General Meeting with effect upon the A Share Offering and the listing of A Shares; (11) proposed formulation of the Rules of Procedures of the Board with effect upon A Share Offering and the listing of the A Shares; (12) attribution of accumulated undistributed profits or accumulated uncovered losses prior to the A Share Offering and the listing of the A Shares;

proposed formulation of related party transactions management system with effect upon the A Share Offering and the listing of the A Shares; (14) proposed formulation of the system concerning the independent Directors with effect upon the A Share Offering and the listing of the A Shares; (15) proposed formulation of the administration system of raised funds with effect upon the A Share Offering and the listing of A Shares; (16) the proposed amendments to the existing Articles of Association; (17) the proposed amendments to the existing Rules of Procedures of the Board; (18) the proposed amendments to the existing Rules of Procedures of the General Meeting; (19) the proposed change of auditors; (20) the profit distribution plan for the year 2020; and (21) the remuneration package for Directors and Supervisors for the year 2020.

The proposals of (1) to (6), (8) to (12), and (16) to (18) above are to be approved by the Shareholders by way of special resolutions and the proposals of (7), (13) to (15), (19) to

above are to be approved by the Shareholders by way of ordinary resolutions at the AGM.

The proposals of (1) to (6), (8) and (12) are also to be approved by way of special resolutions by the Domestic Shareholders at the Domestic Shareholders' Class Meeting and by the H Shareholders at the H Shareholders' Class Meeting, respectively.

- 5 -

LETTER FROM THE BOARD

The purpose of this circular is to provide you with the information regarding, among other things, proposed resolutions of (1) to (21) above to enable you to make an informed decision on whether to vote for or against the proposed resolutions at the AGM, the Domestic Shareholders' Class Meeting and the H Shareholders' Class Meeting (as the case may be).

PROPOSED A SHARE OFFERING AND RELATED MATTERS

The proposed A Share Offering and other related resolutions below are conditional and subject to market conditions and obtaining Shareholders' approval as ordinary resolutions or special resolutions (as the case may be) at the AGM and the Class Meetings (as the case may be) and necessary approvals from the CSRC and other relevant regulatory authorities.

Proposed A Share Offering
1. Proposed A Share Offering
Classes of Shares:
Nominal value per Share:
Proposed stock exchange for the listing of the A Shares:
Proposed offering size:

Domestically listed RMB ordinary Shares (A Shares)

RMB1.00

Shenzhen Stock Exchange

The total number of A Shares to be issued will not exceed 120,000,000, representing approximately 13.23% of the total existing issued share capital of the Company as at the Latest Practicable Date and before the issue, and approximately 11.68% of the total issued share capital of the Company as enlarged by the issue, assuming that there are no other changes to the issued share capital of the Company between the Latest Practicable Date and the date of the completion of the A Share Offering.

The actual offering size will be determined by the Board as authorised by the Shareholders at the AGM and the Class Meetings based on the prevailing market conditions at the time of the A Share Offering.

- 6 -

LETTER FROM THE BOARD


Target subscriber:	The	target subscribers	of	the	A	Share
	Offering are qualified participants in the
	price consultation process as well as social
	public investors (including natural persons
	and institutional investors) (except those who
	are prohibited by the PRC laws, regulations
	and	regulatory	requirements	from
	subscribing). It is expected that none of the
	target subscribers of the A Shares is or will
	become a connected person of the Company.
	If any of the subscribers of the A Share
	Offering is or will become a connected
	person of the Company, the Company will
	comply with the relevant PRC laws,
	regulations,	regulatory	documents	and
	relevant requirements under Chapter 14A of
	the Listing Rules.
Method of offering:	The	A Share	Offering	will	be	conducted

through a combination of offline placing to participants of the price consultation process, and online offering at a fixed price, or through any other methods of offering as approved by the CSRC and/or other regulatory authorities.

- 7 -

LETTER FROM THE BOARD

Pricing methodology:	Pursuant to the applicable laws and
	regulations, and taking into account the
	interests of the existing Shareholders as a
	whole, the capital market condition at the
	time of the A Share Offering and the actual
	situation of the Company, the issue price of
	A Shares shall be determined through price
	consultation with offline participants, or
	through negotiation between the Company
	and the lead underwriters, or any other
	methods permitted by the CSRC. The issue
	price of the A Shares will be determined
	with reference to, amongst others, (i) the
	financial performance of the Company; (ii)
	the valuation of the comparable companies
	engaging in the same or similar industry;
	(iii) the then prevailing industry and market
	condition; (iv) the funding need of the
	Company; and (v) the risk of underwriting
	the A Shares. In any event, according to
	Article 127 of the Company Law of the
	People's Republic of China, the issue price
	of the A Shares shall not be less than the
	nominal value of the Shares, i.e. RMB1.00.
Form of underwriting:	The A Share Offering will be underwritten
	by a group of underwriters led by the lead
	underwriter on a standby commitment basis.

Conversion into a joint stock limited liability company with domestic and overseas offering and listing of shares:

According to the A Share Offering plan and the actual situation of the issued A Shares, application will be filed to convert the Company into a joint stock limited liability company with domestic and overseas offering and listing of shares.

Conversion of unlisted issued	The unlisted issued Shares will be converted
Shares to A Shares:	into A Shares upon the completion of the A
	Share Offering and listed on the stock
	exchange in the PRC.

- 8 -

LETTER FROM THE BOARD

Valid period of the resolutions:

The proposed A Share Offering shall be subject to approval by the Shareholders at the AGM and the Class Meetings. Upon such approval, the proposed A Share Offering and related resolutions will be valid for 12 months from the date of passing each of the resolutions at the AGM and the Class Meetings.

As the progress of the application for the A Share Offering is dependent on the approval process of the CSRC and other regulatory authorities and is likely to take more time under the current market conditions, the Directors consider a validity of 12 months for the resolutions relating to the A Share Offering flexible and practical to the application of the A Share Offering. In the event that the resolutions described herein expire prior to the completion of the A Share Offering, the Directors will seek the Shareholders' approval to extend the validity period of the resolutions relating to the A Share Offering.

The A Shares will be issued under specific mandate.

This proposal has been approved by the Board, and shall be submitted to the AGM and the Class Meetings for consideration and approval as special resolution.

- 9 -

LETTER FROM THE BOARD

2. Authorisation to the Board to deal with related matters in connection with the Company's application for the A Share Offering and the listing of the A Shares at its full discretion

A special resolution will be proposed at the AGM and the Class Meetings, to authorise the Board and any individual(s) authorized by the Board (either individually or collectively) to deal with the related matters in connection with the A Share Offering and the listing of the A Shares.

Please refer to Appendix I to this circular for the details of the authorisation to the Board to deal with related matters in connection with the Company's application for the A Share Offering and the listing of the A shares at its full discretion.

The above authorisation shall be valid for 12 months from the date of passing such resolution at the AGM and the Class Meetings.

3. Feasibility analysis report on the investment projects using the proceeds from the A Share Offering

After deducting the expenses in connection with the A Share Offering, all of the proceeds will be used for supplementing the capital of the Company, in particular, including but not limited to, (i) supplementing the capital of the Company and its domestic subsidiaries, optimizing the construction of multi-level outlet system and enhancing the Company's futures brokerage business and risk management business service capabilities;

supplementing the capital of the Company's overseas subsidiaries to provide protection for their business development; (iii) increasing the investment in research and development and investment consulting business as well as promoting the development and deployment of innovative business; (iv) enhancing the development of wealth management business and promoting the corporate transformation and upgrading; (v) strengthening the information technology system construction and improving the service capabilities of the middle and back office; and (vi) actively seeking the opportunity for mergers and acquisitions and reorganisation, increasing the market competitiveness and comprehensive financial service capabilities of the Company to realise a leapfrog development.

In preparation for the application of the A Share Offering, the Company has prepared the feasibility analysis report on the investment projects using the proceeds from the A Share Offering.

Please refer to Appendix II to this circular for the details of the feasibility analysis report on the investment projects using the proceeds from the A Share Offering.

This proposal has been approved by the Board, and shall be submitted to the AGM and the Class Meetings for consideration and approval by way of special resolution.

- 10 -

LETTER FROM THE BOARD

4. Impacts and remedial measures on dilution of immediate return from the A Share Offering

In order to enhance the development of the Company and the protection of the interests of the Shareholders, the Company has conducted an analysis on the impacts of dilution of immediate return arising from the A Share Offering and shall carry out certain relevant remedial measures.

Please refer to Appendix III to this circular for the details of the impacts and remedial measures on dilution of immediate return from the A Share Offering.

This proposal has been approved by the Board, and shall be submitted to the AGM and the Class Meetings for consideration and approval by way of special resolution.

5. Price stabilising plan for the A Shares within three years after the A Share Offering

In order to strengthen the integrity obligations of the Company, the controlling Shareholders and the directors and senior management of the company, as well as to effectively protect the interests of the small and medium Shareholders, the Company has formulated a price stabilising plan for the A Shares within three years after the A Share Offering in accordance with the relevant laws and regulations.

Please refer to Appendix IV to this circular for the details of the price stabilising plan for the A shares within three years after the A Share Offering.

This proposal has been approved by the Board, and shall be submitted to the AGM and the Class Meetings for consideration and approval by way of special resolution.

6. Dividend return plan for Shareholders within three years after the A Share Offering

In order to further improve Shareholders' returns, strengthen and improve the cash dividend distribution policy and offer clarity on the investment returns to the Shareholders and transparency on the decision-making process of the Company relating to dividend distribution, the Company has formulated the dividend return plan for Shareholders within three years after the A Share Offering in accordance with the relevant laws and regulations and the Articles of Association after taking into account various factors. The plan will also be proposed at the AGM to authorise the Board to adjust the plan based on any changes in laws, regulations, regulatory documents and related policies or the opinions of domestic and overseas regulatory authorities.

Please refer to Appendix V to this circular for the details of the dividend return plan for shareholders within three years after the A Share Offering.

This proposal has been approved by the Board, and shall be submitted to the AGM and the Class Meetings for consideration and approval by way of special resolution.

- 11 -

LETTER FROM THE BOARD

7. Report of the use of raised funds from the previous offering

The Company has prepared the status report on the use of proceeds from the H Share Offering as of 31 December 2020 in accordance with the relevant laws and regulations of the PRC. The Company issued in total 249,700,000 Shares in the H Share Offering, and the aggregate proceeds raised after deducting the underwriting and sponsor fee and the offering expenses pre-paid by the sponsor were approximately HK$591,300,000.

Please refer to Appendix VI to this circular for the details of the report of the use of raised funds from the previous offering.

This report has been approved by the Board, and shall be submitted to the AGM for consideration and approval by way of ordinary resolution.

8. Public undertakings in documents in connection with the A Share Offering

In accordance with the Opinions Regarding Further Promotion of Structural Reforms on Issue of New Shares（《關於進一步推進新股發行體制改革的意見》）issued by CSRC as well as other related laws, regulations and regulatory documents, the Company shall issue the public undertakings in documents in connection with the A Share Offering.

Please refer to Appendix VII to this circular for the details of the public undertakings in documents in connection with the A Share Offering.

This proposal has been approved by the Board, and shall be submitted to the AGM and the Class Meetings for consideration and approval by way of special resolution.

9. Proposed formulation of the related party transactions management system with effect upon the A Share Offering and the listing of the A Shares

To perfect its corporate governance, manage its related party transactions and other operational risks and in accordance with the relevant laws and regulations, the Company has formulated the related party transactions management system, which will be effective upon the A Share Offering and the listing of the A Shares.

Please refer to Appendix VIII to this circular for the details of the related party transactions management system to be effective upon the A Share Offering and the listing of the A Shares.

This proposal has been approved by the Board, and shall be submitted to the AGM for consideration and approval by way of ordinary resolution.

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LETTER FROM THE BOARD

10. Proposed formulation of the system concerning the independent Directors with effect upon the A Share Offering and the listing of the A Shares

In accordance with the related laws, regulations and regulatory documents, the Board has formulated the system concerning the independent Directors, which will be effective upon the A Share Offering and the listing of the A Shares.

Please refer to Appendix IX to this circular for the details of the system concerning the independent directors to be effective upon the A Share Offering and the listing of the A Shares.

This proposal has been approved by the Board, and shall be submitted to the AGM for consideration and approval by way of ordinary resolution.

11. Proposed formulation of the administration system of raised funds with effect upon the A Share Offering and the listing of the A Shares

In accordance with the related laws, regulations and regulatory documents, the Board has formulated the system concerning the administration of raised funds, which will be effective upon the A Share Offering and the listing of the A Shares.

Please refer to Appendix X to this circular for the details of the administrative system of raised funds to be effective upon the A Share Offering and the listing of the A Shares.

This proposal has been approved by the Board and shall be submitted to the AGM for consideration and approval by way of ordinary resolution.

12. Attribution of accumulated undistributed profits or accumulated uncovered losses prior to the A Share Offering and the listing of the A Shares

The Board has resolved that the Company's accumulated undistributed profits or accumulated uncovered losses prior to the A Share Offering and the listing of the A Shares shall be shared or borne by all of the Shareholders in proportion to their shareholding in the Company by then upon the completion of the A Share Offering.

This proposal has been approved by the Board, and shall be submitted to the AGM and the Class Meetings for consideration and approval by way of special resolution

13. Proposed formulation of Articles of Association with effect upon the A Share Offering and the listing of the A Shares

In accordance with the related laws, regulations and regulatory documents, the Company has formulated the Articles of Association, which will be effective upon the A Share Offering and the listing of the A Shares.

Please refer to Appendix XI to this circular for the details of the comparison of the existing Articles of Association against the Articles of Association to be effective upon the A Share Offering and the listing of the A Shares.

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LETTER FROM THE BOARD

This proposal has been approved by the Board, and shall be submitted to the AGM for consideration and approval by way of special resolution.

14. Proposed formulation of the rules of procedures of the general meeting and the Board with effect upon the A Share Offering and the listing of the A Shares

In accordance with the related laws, regulations and regulatory documents, the Board has formulated the rules of procedures of the general meeting and the Board, which will be effective upon the A Share Offering and the listing of the A Shares.

Please refer to Appendix XII and XIII to this circular for the details of the comparison of the existing rules of procedures of the general meeting and the Board against the rules of procedures of the general meeting and the Board to be effective upon the A share Offering and the listing of the A Shares.

This proposal has been approved by the Board, and shall be submitted to the AGM for consideration and approval by way of special resolution.

Reasons and Benefits of the A Share Offering

The Directors consider that the A Share Offering will enable the Company to meet its capital needs for its continuous development, to implement its strategical development plan and to enhance its financing platforms.

Therefore, the Directors consider that the A Share Offering is in the interest of the Company and the Shareholders as a whole.

Fund Raising Activities in the Past Twelve Months

The Company has not conducted any fund-raising activities in relation to the issue of equity securities of the Company in the period of 12 months immediately preceding the Latest Practicable Date.

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LETTER FROM THE BOARD

Public Float

As at the Latest Practicable Date, based on the publicly available information and to the best of the Directors' knowledge, approximately 26.61% of the total issued Shares are held by the H-share public, and the Company has maintained a public float above the minimum requirements as prescribed in the Listing Rules.

The Company undertakes that it will continue to comply with the public float requirement as prescribed in the Listing Rules during the application process and after the completion of the A Share Offering.

Effects of the A Share Offering on the Shareholding Structure of the Company

For reference and illustration purposes only, assuming that (i) a total of 120,000,000 A Shares are to be issued under the A Share Offering, and (ii) there are no other changes to the issued share capital of the Company between the Latest Practicable Date and the date of the completion of the A Share Offering, the shareholding structure of the Company (a) as at the Latest Practicable Date and (b) immediately after completion of the A Share Offering are set out as follows:

		Immediately after
As at the Latest	completion of the
Practicable Date	A Share Offering
Number of	Approximate	Number of	Approximate
Shares	%	Shares	%

NON-PUBLIC

SHAREHOLDERS

-	Domestic Shares	657,300,000	72.47	657,300,000	64.00
-	H Shares	8,300,000	0.92	8,300,000	0.81

PUBLIC

SHAREHOLDERS

A Shares under the proposed

A Share Offering	-		-	120,000,000	11.68
- H Shares	241,400,000	26.61	241,400,000	23.51
Total
	907,000,000	100.00	1,027,000,000	100.00

Note: Certain amounts and percentage figures set out in the table above have been subject to rounding adjustments. Accordingly, figures shown as totals in the table above and the currency conversion or percentage equivalents may not be an arithmetic sum of such figures.

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LETTER FROM THE BOARD

III. PROPOSED AMENDMENTS TO THE EXISTING ARTICLES OF ASSOCIATION

As disclosed in the announcements of the Company dated 26 March 2021, the Board resolved at the Board Meeting to make certain amendments to the existing Articles of Association. A special resolution will be proposed at the AGM to approve the amendments of the existing Articles of Association.

Details of the amendments are set out as follows:

Article 7 which originally reads as:
"Article 7 The Articles of Association shall become effective from the date on which the Company conducts overseas initial public offering of shares and is listed on the Stock Exchange of Hong Kong Limited (the Hong Kong Stock Exchange").
......"
be amended as follows:
"Article 7 The Articles of Association shall become effective from the date on which the Company conducts overseas initial public offering of shares and is listed on the Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") and being approved at the general meeting.
......"
Article 29 which originally reads as:
"Article 29 The Company may, in accordance with the requirements under laws, regulations and these Articles of Association, repurchase its shares under the following circumstances:
1. cancelling its shares for the purpose of reducing its registered capital;
2. merging with another company which holds the shares of the Company;
3. granting shares as incentive to the staff of the Company;
4. acquiring the shares of shareholders who vote against any resolution adopted at the shareholders' general meeting on the merger or demerger of the Company and request the Company to acquire their shares; and
5. other circumstances permitted by laws and administrative regulations.

Other than the above-mentioned circumstances, the Company shall not engage in any activities for the purchase or sale of its shares.

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LETTER FROM THE BOARD

Any acquisition of shares by the Company for the purpose of clauses (1) to (3) shall be approved at a shareholders' general meeting. In the event that the Company has acquired its shares under the circumstance set out in clause (1), such shares shall be cancelled within 10 days from the date of repurchase, and for circumstances set out in clauses (2) and (4), such shares shall be transferred or cancelled within six months from the date of repurchase.

Where the Company has repurchased its shares pursuant to clause (3), shares so repurchased shall not exceed 5% of the total issued shares of the Company. The repurchase shall be funded by the profit after tax of the Company, and the shares so repurchased shall be transferred to employees within one year."

be amended as follows:

"Article 29 The Company may, in accordance with the requirements under laws, regulations and these Articles of Association, acquireits shares under the following circumstances:

reducing its registered capital;
merging with another company which holds the shares of the Company;
using shares for employee stock ownership plans or equity incentives;
acquiring the shares of shareholders who vote against any resolution adopted at the shareholders' general meeting on the merger or demerger of the Company and request the Company to acquire their shares; and
using shares for conversion pursuant to the convertible corporate bonds issued by the Company;
to maintain corporate value and shareholder' interests as the Company deems necessary.

Other than the above-mentioned circumstances, the Company shall not engage in any activities for the purchase or sale of its shares.

Any acquisition of shares by the Company for the purpose of clauses (1) and (2)shall be approved at a shareholders' general meeting. Where the Company is to acquire its shares pursuant to clause (3), (5) and (6), shall do so in accordance with the requirements of these Articles or as authorized at the shareholders' general meeting, resolved at a Board meeting with more than two-thirdof the director present.In the event that the Company has acquired its shares under the circumstance set out in clause (1), such shares shall be cancelled within 10 days from the date of acquisition, and for circumstances set out in clauses (2) and (4), such shares shall be transferred or cancelled within six months from the date of acquisition. In the event that the Company has acquired its shares under the

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LETTER FROM THE BOARD

circumstance set out in clauses (3), (5) and (6), the total amount of shares held by the Company shall not exceed 10% of the total issued shares of the Company, and such shares shall be transferred or cancelled within 3 years."

Article 44 which originally reads as:
"Article 44 No registration of changes as a result of share transfers may be entered in the register of shareholders within 30 days prior to the date of a shareholders' general meeting or within 5 days before the record date set by the Company for the purpose of distribution of dividends."
be amended as follows:
"Article 44 Any laws, regulations and listing rules of the place where the shares of the Company are listed concerning the book closure period prior to the holding of a general meeting to dividend distributions by the Company shall be observed."
Article 56 which originally reads as:
"Article 56 In the event of any of the following circumstances, The Company shall promptly notify all Shareholders in writing or make an announcement, and report to the local office of the CSRC at its place of domicile:
......
If the Company and its subsidiaries are subject to the regulatory measures and administrative penalties made by CSRC and its local branch offices according to the article 56(2) and (4) or article 57 of the Administrative Regulations on Futures Trading （《期貨交易管理條例》), the Company shall give a written notice to all Shareholders or make an announcement."
be amended as follows:
"Article 56 In the event of any of the following circumstances, The Company shall promptly notify all Shareholders in writing or make an announcement, and report to the local office of the CSRC at its place of domicile:
......
If the Company and its subsidiaries are subject to the regulatory measures and administrative penalties made by CSRC and its local branch offices according to the article 55(2) and (4) or article 56of the Administrative Regulations on Futures Trading （《期貨交易管理條例》）, the Company shall give a written notice to all Shareholders or make an announcement."

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LETTER FROM THE BOARD

5. Article 57 which originally reads as:

"Article 57 Approval of the CSRC shall be obtained for change of shareholdings in the Company in any of the circumstances below:

Change of controlling shareholder or the largest shareholder;
Shareholding of a single shareholder or the aggregate shareholding of affiliated shareholders amounts to 100%;
Shareholding of a single shareholder or the aggregate shareholding of affiliated shareholders amounts to over 5% and foreign shareholders are involved.

Besides the above regulations, the approval of the branch office of CSRC at the place of domicile of the Company is required where the shareholding by single shareholder or affiliated shareholders of the Company amounts to over 5%.

......"

be amended as follows:

"Article 57 Approval of the CSRC shall be obtained for change of shareholdings in the Company in any of the circumstances below:

Change of controlling shareholder or the largest shareholder;
Shareholding of a single shareholder or the aggregate shareholding of affiliated shareholders amounts to over 5% and foreign shareholders are involved.

......"

6. Article 58 which originally reads as:

"Article 58 Shareholders holding 5% or more equity or de facto controllers of the Company shall notify the Company in writing within three working days in any of the following circumstances:

Shares of the Company they hold have been frozen, sealed up or under enforcement measures;
Shares of the Company they hold are pledged;

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LETTER FROM THE BOARD

They decide to transfer Shares of the Company they hold;
Shareholders are unable to properly exercise the rights or assume the obligations thereof as Shareholders, which may cause significant deficiencies in the governance of the Company;
They are under investigation or being subject to compulsory measures taken by competent authorities for alleged grave violations of laws and regulations;
They receive administrative or criminal penalty due to serious violations of laws and regulations;
Names are changed;
They are involved in merger, division or major asset or debt restructuring;
They are subject to regulatory measures including suspension of operation for recertification, cancellation, takeover or custody, or enter into dissolution, bankruptcy or closure procedure;
They are involved in other circumstances that may affect equity changes of the Company or operation of the Company as a going concern.

Shareholders holding 5% or more equity of the Company fall under any of the circumstances prescribed in the preceding paragraph, the Company shall report the relevant information to the local office of the CSRC at its domicile within three working days upon receipt of the notice given by the said Shareholders.

De facto controllers of the Company fall under any of the circumstances listed in items 5 to 9 of the preceding paragraph, the Company shall report the relevant information to the local office of the CSRC at its domicile within three working days upon receipt of the notice given by the de facto controllers."

be amended as follows:

"Article 58 Shareholders holding 5% or more equity or and the de facto controllers of the Company shall notify the Company in writing within three working days in a proactive, accurate and complete manner,in any of the following circumstances:

Shares of the Company they hold have been frozen, sealed up or under enforcement measures;
Shares of the Company they hold are pledged or the pledged shares are released;
They decide to transfer Shares of the Company they hold;

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LETTER FROM THE BOARD

Shareholders are unable to properly exercise the rights or assume the obligations thereof as Shareholders, which may cause significant deficiencies in the governance of the Company;
Material changes in equity, business scope and in operation and management;
Changes in the chairman, general manager, or directors and senior management who perform corresponding duties on their behalf;
Factors such as national laws and regulations, major policy adjustments or force majeure that may have a material adverse effect on the operation and management of the Company;
They are under investigation or being subject to compulsory measures taken by competent authorities for alleged grave violations of laws and regulations;
They receive administrative or criminal penalty due to serious violations of laws and regulations;
Names are changed;
They are involved in merger, division or major asset or debt restructuring;
They are subject to regulatory measures including suspension of operation for recertification, cancellation, takeover or custody, or enter into dissolution, bankruptcy or closure procedure;
They are involved in other circumstances that may affect equity changes of the Company or operation of the Company as a going concern.

De facto controllers of the Company fall under any of the circumstances listed in items 8 to 12of the preceding paragraph, the Company shall report the relevant information to the local office of the CSRC at its domicile within three working days upon receipt of the noticegiven by the de facto controllers."

7. Article 61 which originally reads as:

"Article 61 The shareholders' general meeting shall exercise the following functions and powers:

......

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LETTER FROM THE BOARD

to consider any other matters to be resolved by shareholders' general meeting as required by the laws, administrative regulations, departmental rules and the Articles of Association."

be amended as follows:

"Article 61 The shareholders' general meeting shall exercise the following functions and powers:

......

1. to consider any other matters to be resolved by shareholders' general meeting as required by the laws, administrative regulations, departmental rules, the listing rules of the place where the Company's shares are listedand the Articles of Association."
Article 65 which originally reads as:
"Article 65 Where the Company convenes a general meeting, a written notice shall be given 45 days prior to the date of the meeting to notify all the Shareholders in the Shareholders' register of the issues to be considered at the meeting, and the date and venue of the meeting. Any Shareholder who intends to attend the meeting shall deliver to the Company a written reply stating his or her intention to attend 20 days prior to the meeting.
When calculating the starting date, the date of the meeting shall be excluded."
be amended as follows:
"Article 65 Where the Company convenes an annualgeneral meeting, a written notice shall be given at least 20 workingdays prior to the date of the meeting to notify all the Shareholders; where the Company convenes an extraordinary general meeting, a public announcement shall be published at least 10 working days or 15 days (whichever is longer) prior to the date of the meeting to notify all the Shareholders.Any Shareholder who intends to attend the meeting shall deliver to the Company a written reply stating his or her intention to attend within the period stipulated in the meeting notice.
When calculating the starting date, the date of the meeting shall be excluded."
Article 67 which originally reads as:
"Article 67 The Company shall, based on the written replies received 20 days before the date of convening the shareholders' general meeting, calculate the number of shares with voting right represented by the shareholders who intend to attend the meeting. If the number of shares with voting rights represented by the shareholders who intend to attend the meeting reaches one half or more of the Company's total shares with voting rights, the Company may convene the

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LETTER FROM THE BOARD

shareholders' general meeting. Otherwise, the Company shall within 5 days notify the shareholders again by way of an announcement of the matters to be considered at, and the date and place for, the meeting. After giving notice by announcement, the Company may convene the meeting.

An extraordinary general meeting shall not make decisions on matters not stated in the notice of meeting."

be amended as follows:

"Article 67 Proposals not set out in the notice of general meeting or not complying with the provision herein shall not be voted on or resolved at the general meeting."

Article 69 which originally reads as:
"Article 69 ......
The announcement referred to in the preceding paragraph shall be published in one or more newspapers designated by the competent securities authorities of the State Council within the interval between forty-five days and fifty days before the date of convening the meeting; after the publication of the announcement, all holders of domestic shares shall be taken to have received notice of the relevant shareholders' meeting.
......"
be amended as follows:
"Article 69 ......
The announcement referred to in the preceding paragraph shall be published on the website of the stock exchange and the media that meet the requirements of the securities regulatory authority of the State Council within the period stipulated in Article 65 of this Articles of Association;after the publication of the announcement, all holders of domestic shares shall be taken to have received notice of the relevant shareholders' meeting.
......"
Article 85 which originally reads as:
"Article 85 A general meeting convened by the Board shall be presided over and chaired by the chairman of the Board. If the chairman is unable to attend the meeting for reasons, the Board may designate a director to convene and take the chair of the meeting in his stead. If no chairman of the meeting has been designated, shareholders present shall choose one (1) person to be the chairman of the meeting. Where the shareholders fail to elect a chairman for any reasons, the

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LETTER FROM THE BOARD

shareholder (including his proxy) presents in person or by proxy who holds the largest number of shares carrying the right to vote thereat shall be the chairman of the meeting.

......"

be amended as follows:

"Article 85 A general meeting convened by the Board, shall be presided over and chaired by the chairman of the Board. If the chairman is unable or fails to perform his duties, the meetings shall be presided over by a director jointly recommended by more than half of the directors,and take the chair of the meeting in his stead. If no chairman of the meeting has been designated, shareholders present shall choose one (1) person to be the chairman of the meeting. Where the shareholders fail to elect a chairman for any reasons, the shareholder (including his proxy) presents in person or by proxy who holds the largest number of shares carrying the right to vote thereat shall be the chairman of the meeting.

If the Board is unable or fails to fulfil the obligation of convening the general meeting, the Supervisory Committee shall convene and preside over such meeting. If the Supervisory Committee does not convene and preside over such meeting, 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 meeting on their own.

......"

12. Article 96 which originally reads as:

"Article 96 In the event that the Company convenes a class meeting, a written notice specifying the matters to be considered at, and the date and location for, the meeting shall be issued to the shareholders whose names appear on the register of shareholders of such class forty-five days before the time appointed for holding such meeting. Shareholders who intend to attend the meeting shall serve the written reply to the Company twenty days prior to the date of the meeting.

Where the number of shares carrying the rights to vote at the meeting held by the shareholders intending to attend the meeting reaches half or more of the total number of shares of such class carrying the rights to vote at the meeting, the Company may convene the class meeting based thereon, failing which the Company shall within five days notify the shareholders again, by way of a public announcement, of the matters to be considered at, and the place and date for, the meeting before it raised funds to convene the class meeting."

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LETTER FROM THE BOARD

be amended as follows:

"Article 96 In the event that the Company convenes a class meeting, it shall notify allshareholders whose names appear on the register of shareholders of such class, specifying the matters to be considered at, and the date and location for, the meeting by way of public announcement before the period stipulated in Article 65 of the Articles of Association. Shareholders who intend to attend the meeting shall serve the written reply to the Company within the period stipulated in the meeting notice."

13. Article 119 which originally reads as:

"Article 119 Independent directors of the Company shall meet the following conditions:

......

have passed the qualification test accepted by the CSRC;
......"
be amended as follows:

"Article 119 Independent directors of the Company shall meet the following conditions:

......

are familiar with the laws and administrative regulations of futures and the requirements of the CSRC, and possess professional expertise in futures;

......"

14. Article 153 which originally reads as:

"Article 153 In any of the following circumstances, a person shall not serve as director, supervisor, general manager or other senior management of the Company:

......

has served as the legal representative of a company or an enterprise whose Business License was revoked due to illegal activities and was personally liable for such punishment, and less than three years has elapsed since the date of revocation of the business license of the company or enterprise;

......"

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LETTER FROM THE BOARD

be amended as follows:

"Article 153 In any of the following circumstances, a person shall not serve as director, supervisor, general manager or other senior management of the Company:

......

has served as the legal representative of a company or an enterprise whose Business License was revoked due to illegal activities or was ordered to be wound-upand was personally liable for such punishment, and less than three years has elapsed since the date of revocation of the business license of the company or enterprise;

......"

15. Article 190 which originally reads as:

"Article 190 The Company's appointment, removal and non-reappointment of an accounting firm shall be decided by a shareholders' general meeting and filed with the competent securities authorities of the State Council.

......"

be amended as follows:

"Article 190 The Company's appointment, removal and non-reappointment of an accounting firm shall be decided by a shareholders' general meeting and report the relevant information to the local office of the CSRC as its place of domicile within five business days upon decision is made; for removal of an accounting firm, the Company shall explain the reason.

......"

The existing Articles of Association are written in Chinese without an official English version. Therefore, any English translation is for reference only. In case of inconsistency, the Chinese version shall prevail. After incorporating the proposed amendments to the existing Articles of Association as set out above, the numbering of and cross-referencing referred to in the articles will be re-numbered and updated accordingly.

IV. PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES OF THE BOARD

As disclosed in the announcements of the Company dated 26 March 2021, the Board resolved at a meeting of the Board on 26 March 2021 to make certain amendments to the existing Rules of Procedures of the Board. A special resolution will be proposed at the AGM to approve the amendments of the existing Rules of Procedures of the Board.

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LETTER FROM THE BOARD

Details of the amendments are set out as follows:

1. Rule 14 which originally reads as:

"Rule 14 Directors of the Company shall be natural persons. A natural person who falls into any of the following circumstances shall not serve as Director of the Company:

......

has served as the legal representative of a company or an enterprise whose Business License was revoked due to illegal activities and was personally liable for such punishment, and less than three years has elapsed since the date of revocation of the business license of the company or enterprise;

......"

be amended as follows:

"Rule 14 Directors of the Company shall be natural persons. A natural person who falls into any of the following circumstances shall not serve as Director of the Company:

......

has served as the legal representative of a company or an enterprise whose Business License was revoked due to illegal activities or was ordered to be wound-upand was personally liable for such punishment, and less than three years has elapsed since the date of revocation of the business license of the company or enterprise;

......"

2. Rule 40 which originally reads as:

"Rule 40 Independent directors of the Company shall meet the following conditions:

......

have passed the qualification test accepted by the CSRC;
......"
be amended as follows:

"Rule 40 Independent directors of the Company shall meet the following conditions:

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LETTER FROM THE BOARD

......

are familiar with the laws and administrative regulations of futures and the requirements of the CSRC, and possess professional expertise in futures;

......"

The existing Rules of Procedures of the Board are written in Chinese without an official English version. Therefore, any English translation is for reference only. In case of inconsistency, the Chinese version shall prevail. After incorporating the proposed amendments to the existing Rules of Procedures of the Board as set out above, the numbering of and cross-referencing referred to in the rules will be re-numbered and updated accordingly.

PROPOSED AMENDMENTS TO THE EXISTING RULES OF PROCEDURES OF THE GENERAL MEETING

As disclosed in the announcements of the Company dated 26 March 2021, the Board resolved at a meeting of the Board on 26 March 2021 to make certain amendments to the existing Rules of Procedures of the General Meeting. A special resolution will be proposed at the AGM to approve the amendments of the existing Rules of Procedures of the General Meeting.

Details of the amendments are set out as follows:

1. Rule 6 which originally reads as:

"Rule 6 The Shareholders' General Meeting is the organ of authority of the Company and shall exercise the following functions and powers in accordance with the law:

......

to consider any other matters to be resolved by Shareholders' General Meeting as required by the laws, administrative regulations, departmental rules and the Articles of Association."

be amended as follows:

"Rule 6 The Shareholders' General Meeting is the organ of authority of the Company and shall exercise the following functions and powers in accordance with the law:

......

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LETTER FROM THE BOARD

1. to consider any other matters to be resolved by shareholders' general meeting as required by the laws, administrative regulations, departmental rules, the listing rules of the place where the Company's shares are listedand the Articles of Association."
Rule 19 which originally reads as:
"Rule 19 Where the Company convenes a general meeting, a written notice shall be given 45 days prior to the date of the meeting to notify all the Shareholders in the Shareholders' register of the issues to be considered at the meeting, and the date and venue of the meeting. Any Shareholder who intends to attend the meeting shall deliver to the Company a written reply stating his or her intention to attend 20 days prior to the meeting.
......"
be amended as follows:
"Rule 19 Where the Company convenes an annualgeneral meeting, a written notice shall be given at least 20 working days prior to the date of the meeting to notify all the Shareholders; where the Company convenes an extraordinary general meeting, a public announcement shall be published at least 10 working days or 15 days (whichever is longer) prior to the date of the meeting to notify all the Shareholders.Any Shareholder who intends to attend the meeting shall deliver to the Company a written reply stating his or her intention to attend within the period stipulated in the meeting notice.
......"
Rule 20 which originally reads as:
"Rule 20 The Company shall, based on the written replies received twenty days before the date of convening the shareholders' general meeting, calculate the number of shares with voting right represented by the shareholders who intend to attend the meeting. If the number of shares with voting rights represented by the shareholders who intend to attend the meeting reaches one half or more of the Company's total shares with voting rights, the Company may convene the shareholders' general meeting. Otherwise, the Company shall within five days notify the shareholders again by way of an announcement of the matters to be considered at, and the date and place for, the meeting. After giving notice by announcement, the Company may convene the meeting.
An extraordinary general meeting shall not make decisions on matters not stated in the notice of meeting."
be amended as follows:

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LETTER FROM THE BOARD

"Rule 20 Proposals not set out in the notice of general meeting or not complying with the provision herein shall not be voted on or resolved at the general meeting."

Rule 22 which originally reads as:
"Rule 22 ......
The announcement referred to in the preceding paragraph shall be published in one or more newspapers designated by the competent securities authorities of the State Council within the interval between forty-five days and fifty days before the date of convening the meeting; after the publication of the announcement, all holders of domestic shares shall be taken to have received notice of the relevant shareholders' meeting.
......"
be amended as follows:
"Rule 22 ......
The announcement referred to in the preceding paragraph shall be published on the website of the stock exchange and the media that meet the requirements of the securities regulatory authority of the State Council within the period stipulated in Rule 19 of these Rules of Procedures;after the publication of the announcement, all holders of domestic shares shall be taken to have received notice of the relevant shareholders' meeting.
......"
Rule 25 which originally reads as:
"Rule 25 Where the Company intends to convene a Shareholders' general meeting, the Board or the convener of the Shareholders' general meeting shall fix a record date for the registration of the shareholdings, and Shareholders whose name appear on the register of Shareholders at the close of business of the record date shall be Shareholders of the Company.
No changes in the Shareholders' register due to the transfer of shares may be made within thirty (30) days before the date of a Shareholders' general meeting or within five (5) days before the record date for the Company's distribution of dividends."

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LETTER FROM THE BOARD

be amended as follows:

"Rule 25 Where the Company intends to convene a Shareholders' general meeting, the Board or the convener of the Shareholders' general meeting shall fix a record date for the registration of the shareholdings, and Shareholders whose name appear on the register of Shareholders at the close of business of the record date shall be Shareholders of the Company.

Any laws, regulations and listing rules of the place where the shares of the Company are listed concerning the book closure period prior to the holding of a general meeting to dividend distributions by the Company shall be observed."

6. Rule 43 which originally reads as:

"Rule 43 A general meeting convened by the Board, shall be presided over and chaired by the chairman of the Board. If the chairman is unable to attend the meeting for reasons, the Board may designate a director to convene and take the chair of the meeting in his stead. If no chairman of the meeting has been designated, shareholders present shall choose one (1) person to be the chairman of the meeting. Where the shareholders fail to elect a chairman for any reasons, the shareholder (including his proxy) presents in person or by proxy who holds the largest number of shares carrying the right to vote thereat shall be the chairman of the meeting.

......"

be amended as follows:

"Rule 43 A general meeting convened by the Board, shall be presided over and chaired by the chairman of the Board. If the chairman is unable or fails to perform his duties, the meetings shall be presided over by a director jointly recommended by more than half of the directors,and take the chair of the meeting in his stead. If no chairman of the meeting has been designated, shareholders present shall choose one (1) person to be the chairman of the meeting. Where the shareholders fail to elect a chairman for any reasons, the shareholder (including his proxy) presents in person or by proxy who holds the largest number of shares carrying the right to vote thereat shall be the chairman of the meeting.

If the Board is unable or fails to fulfil the obligation of convening the general meeting, the supervisory Committee shall convene and preside over such meeting. If the supervisory Committee does not convene and preside over such meeting, 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 meeting on their own.

......"

- 31 -

LETTER FROM THE BOARD

The existing Rules of Procedures of the General Meeting are written in Chinese without an official English version. Therefore, any English translation is for reference only. In case of inconsistency, the Chinese version shall prevail. After incorporating the proposed amendments to the existing Rules of Procedures of the General Meeting as set out above, the numbering of and cross-referencing referred to in the rules will be re-numbered and updated accordingly.

VI. PROFIT DISTRIBUTION PLAN FOR THE YEAR 2020

According to the annual results announcement of the Company for the year ended 31 December 2020 dated 26 March 2021, in view of the long-term development of the Company and the interests of the investors, the Company is expected to make the following profit distribution plan:

The Board proposed distribution of cash final dividend for the year ended 31 December 2020 of RMB0.05 per Share (tax inclusive) (the "2020 Final Dividend") to Shareholders whose names appeared on the register of members on the equity registration date (the "Equity Registration Date") of the distribution of the 2020 Final Dividend, namely Wednesday, 26 May 2021, and who are entitled to such distribution. Based on the total equity of the Company as of 31 December 2020, the aggregate amount to be distributed will be RMB45,350,000. The 2020 Final Dividend is subject to the approval by Shareholders at the AGM. The 2020 Final Dividend is intended to be paid on Friday, 25 June 2021. The dividend payable to holders of Domestic Shares will be in RMB while those payable to holders of H Shares will be in Hong Kong Dollars. The exchange rate shall be calculated on the basis of the average benchmark exchange rate between RMB and Hong Kong Dollars as announced by the People's Bank of China for the five working days prior to the date of the AGM.

The related resolution was considered and approved by the Board at the Board Meeting. It is hereby submitted to the AGM for consideration in accordance with the Articles of Association and the Rules of Procedures of the General Meeting.

Subject to the approval of the resolution regarding the declaration of the 2020 Final Dividend at the AGM, the 2020 Final Dividend will be paid to the Shareholders whose names appear on the register of members of the Company on Wednesday, 26 May 2021, and who are entitled to such distribution. The share registrar of the Company will be closed from Friday, 21 May 2021 to Wednesday, 26 May 2021 (both days inclusive), during which period no transfer of Shares will be registered. In order to qualify for receiving the 2020 Final Dividend, all completed share transfer documents accompanied by the relevant share certificates must be lodged with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong, and in any case no later than 4:30 p.m. on Thursday, 20 May 2021. The Company has no obligation and will not be responsible for confirming the identities of the Shareholders. The Company held no liability in respect of any claims arising from any delay in, or inaccurate determination of the identity of the Shareholders or any disputes over the mechanism of withholding.

- 32 -

LETTER FROM THE BOARD

VII. REMUNERATION PACKAGE FOR DIRECTORS AND SUPERVISORS FOR THE YEAR 2020

In accordance with the relevant PRC policies and requirements, the Company formulated the remuneration package for Directors and Supervisors for the year ended 31 December 2020. Such resolution has been considered and approved by the Board at the Board Meeting, and is hereby submitted to the AGM for consideration in accordance with the Articles of Association. Details of the remuneration package are as follows:

		Basic			Total
Name	Position	remuneration	Benefits	Bonus	(before tax)
		(RMB)	(RMB)	(RMB)	(RMB)
Zhou Yong	Chairman and	-	-	-	Not having
	executive				received any
	Director				remuneration
					from the
					Company
Zhou Jianqiu	executive	168,000.00	224,903.99	-	392,903.99
	Director
Xue Binghai	Non-executive	-	-	-	Not having
	Director				received any
					remuneration
					from the
					Company
Shan Bing	Non-executive	-	-	-	Not having
	Director				received any
					remuneration
					from the
					Company
Jiang Lin	Non-executive	-	-	-	Not having
	Director				received any
					remuneration
					from the
					Company
Wang Yuetang	Independent	120,697.36	-	-	120,697.36
	Non-executive
	Director
Lam Kai Yeung	Non-executive	130,751.00	-	-	130,751.00
	Director

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LETTER FROM THE BOARD

		Basic			Total
Name	Position	remuneration	Benefits	Bonus	(before tax)
		(RMB)	(RMB)	(RMB)	(RMB)
Huang Dechun	Independent	120,697.36	-	-	120,697.36
	Non-executive
	Director
Yu Hong	Chairlady of the	159,600.00	196,507.37	26,400.00	382,507.37
	Supervisory
	Committee
Yao Aili	Supervisor	97,800.00	113,806.43	37,020.00	248,626.43
Wang Jianying	Supervisor	-	-	-	Not having
					received any
					remuneration
					from the
					Company

VIII. PROPOSED CHANGE OF AUDITORS

Pursuant to the Administrative Measures for the Appointment of Accounting Firms by State-owned Financial Enterprises （《國有金融企業選聘會計師事務所管理辦法》） (Caijin No. [2020]6) issued by the Ministry of Finance of the People's Republic of China, the term of consecutive engagement of the same accounting firm by a financial enterprise shall in principle not exceed five years and the consecutive engagement shall not exceed eight years. KPMG has been engaged by the Company to provide audit services in relation to the domestic financial statements for approximately six consecutive years. In order to comply with above requirement, the Company has reached a mutual understanding with KPMG on the non-renewal of its appointment.

KPMG has confirmed that there are no matters in connection with its retirement that should be brought to the attention of the Shareholders. The Board and the audit committee of the Company have also confirmed that there is no disagreement with KPMG and the Board has no unresolved issue regarding the proposed change of auditors. The Board confirms there are no circumstances in respect of the proposed change of auditors that needs to be brought to the attention of the Shareholders.

The Company would like to extend its sincere gratitude to KPMG for its quality services provided to the Group in previous years.

The Board proposed to appoint ShineWing Certified Public Accountants as the auditors of the Company, subject to the approval by the Shareholders at the AGM.

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LETTER FROM THE BOARD

IX. CLOSURE OF REGISTER OF MEMBERS

In order to determine the entitlement to attend and vote at the AGM and the Class Meetings, the register of members of the Company will be closed from Wednesday, 14 April 2021 to Friday, 14 May 2021 (both days inclusive), during which period no transfer of Shares will be effected. In order to be qualified to attend and vote at the AGM and the Class Meetings, all transfers 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 (in respect of H Shares), or to the head office in the PRC of the Company (in respect of Domestic Shares) no later than 4:30 p.m. on Tuesday, 13 April 2021.

NOTICES OF THE AGM AND CLASS MEETINGS

The AGM will be held at the Conference Room, 9/F, Holly Tower, No. 50 Zhonghua Road, Nanjing, the PRC at 2:00 p.m. on Friday, 14 May 2021. The Domestic Shareholders' Class Meeting will be held immediately after the conclusion of the AGM at the same place, and the H Shareholders' Class Meeting will be held immediately after the conclusion of the Domestic Shareholders' Class Meeting at the same place. Notices dated 26 March 2021 convening the AGM and the Class Meetings together with the relevant reply slips and forms of proxy have been despatched to the Shareholders in accordance with the Listing Rules.

XI. REPLY SLIPS AND FORMS OF PROXY

If you are eligible and intend to attend the AGM and/or the Class Meeting(s) (as the case may be), please complete and return the reply slip(s), in accordance with the instructions printed thereon as soon as possible and in any event no later than Saturday, 24 April 2021 or any adjournment thereof.

Shareholders who are entitled to attend and vote at the AGM and/or the Class Meeting(s) may appoint one or more proxies to attend and vote on their behalves. A proxy need not be a Shareholder. In order to be valid, the proxy form for the AGM and/or the Class Meeting(s) must be deposited by hand or post, for holders of H Shares, to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong and, for holders of Domestic Shares, to the headquarters in the PRC of the Company not less than 24 hours before the time for holding such meeting(s) (or any adjournment thereof) for taking the poll (i.e. Thursday, 13 May 2021 at 2:00 p.m.) (as the case may be). 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 AGM and/or the Class Meeting(s) or any adjourned meetings should they so wish.

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LETTER FROM THE BOARD

XII. VOTING BY POLL AT THE AGM AND THE CLASS MEETINGS

Pursuant to Rule 13.39(4) of the Listing Rules, all votes at the AGM and/or the Class Meeting(s) will be taken by poll and the Company will announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules. To the best knowledge of the Company, no Shareholders are required to abstain from voting in the AGM and the Class Meeting.

XIII. 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 misleading.

XIV. RECOMMENDATIONS

The Directors consider that all the proposed resolutions set out in the notice of the AGM and/or the Class Meeting(s) (as the case may be) are in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the relevant resolutions to be proposed at the AGM and/or the Class Meeting(s) (as the case may be).

XV. MISCELLANEOUS

Reference is made to the announcement of the Company dated 30 March 2021 in relation to the postponement of the AGM, Domestic Shareholders' Class Meeting and H Shareholders' Class Meeting and the change of book closure period. As disclosed in the announcement, as further time is required to give notice to the Shareholders concerning the closure period of the register of members of the Company, the AGM and the Class Meetings originally scheduled on Wednesday, 12 May 2021 has been postponed to Friday, 14 May 2021 for the purpose of considering and, if thought fit, passing the resolutions as set out in the notices convening the AGM, the Domestic Shareholders' Class Meeting and the H Shareholders' Class Meeting as set out on pages AGM-1 to AGM-5,DSCM-1 to DSCM-3 and HSCM-1 to HSCM-3 of this circular, respectively. The register of members of the Company was originally scheduled to be closed from Sunday, 11 April 2021 to Wednesday, 12 May 2021, both days inclusive. Due to the change of the date of the AGM and the Class Meetings, in order to determine the list of Shareholders who are entitled to attend and vote at the AGM and the Class Meetings, the closure period of the register of members of the Company has also been changed to the period from Wednesday, 14 April 2021 to Friday, 14 May 2021, both days inclusive, during which period no transfer of Shares will be effected.

- 36 -

LETTER FROM THE BOARD

Save for the change of the date of the AGM and the Class Meetings and the corresponding changes specified in the abovementioned announcement, all information and content set out in the notices dated 26 March 2021 convening the AGM and the Class Meetings (as set out in this circular) together with the relevant reply slips and forms of proxy will remain valid.

Save as otherwise indicated, the Chinese text of this circular shall prevail over the English text for the purpose of interpretation.

By order of the Board

Ms. Zhou Jianqiu

Executive Director

- 37 -

APPENDIX I THE AUTHORISATION TO THE BOARD TO DEAL WITH RELATED MATTERS IN CONNECTION WITH THE COMPANY'S APPLICATION FOR THE A SHARE OFFERING AND LISTING OF A SHARES AT ITS FULL DISCRETION

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

To facilitate the initial public offering and listing of A Share ("the Offering and Listing"), Holly Futures Co., Ltd. (hereinafter referred to as the "Company") hereby proposes that the general meeting shall authorise the Board and its delegates, individually or jointly, to handle all the matters relating to the Offering and Listing of the Company at its full discretion, including, but not limited to:

Formulating and implementing a specific implementation plan for the Offering and Listing of the Company within the scope of authority granted by the general meeting in accordance with the issuance plan considered and approved at the general meeting and the approval of the CSRC and based on the prevailing market conditions and the actual situation of the Company, including but not limited to the offer size, offer price (including price range and the final price), time and method of the offering, potential strategic placing (including placing ratio and target subscribers), proposed alternative of stock exchanges, the specific allocation percentages for the use of raised funds, and the determination and adjustment on the specific arrangement of the use of raised funds on the investment projects, significant undertakings of the Company, the listing of the existing unlisted shares of the Company and other matters relating to the offering and listing; making corresponding adjustments (including the suspension, cessation, termination and withdrawal of the implementation of the offering plan) to matters in relation to the specific plan for the Offering and Listing as a result of changes in laws, regulations or regulatory documents with respect to the A Share Offering, or changes in policies of regulatory authorities in connection with the A Share Offering, or changes in market conditions, save for those matters required to be voted on again at a general meeting under the requirements of the relevant laws, regulations, regulatory documents and the Articles of Association;
Determining and appointing the sponsor, underwriters, law firms, accounting firms, receiving banks, companies taking charge of financial public relations and other intermediaries in connection with the offering and listing, and determining and paying the expenses relating thereto;
Drafting, producing, amending, supplementing, signing, submitting, presenting, publishing, disclosing, implementing, suspending or terminating any agreements and documents, relevant announcements, circulars or other documents relating to the offering and listing (including but not limited to the letter of intent for offering, prospectus, listing documents, sponsorship agreements, underwriting agreements, listing agreements, intermediary service agreements, report on the use of raised funds from the previous offering, special assurance report on the use of raised funds from the previous offering and others), and dealing with the matters relating to information disclosure in connection with the offering and listing in accordance with domestic and overseas regulatory requirements;

- I-1 -

APPENDIX I THE AUTHORISATION TO THE BOARD TO DEAL WITH RELATED MATTERS IN CONNECTION WITH THE COMPANY'S APPLICATION FOR THE A SHARE OFFERING AND LISTING OF A SHARES AT ITS FULL DISCRETION

Handling the procedures for the review and examination, registration, filing, approval and consent with the regulatory authorities, governmental authorities, stock exchanges and securities registration and clearance authorities in, and out of, the PRC, in connection with matters relating to the offering and listing according to the plan for the offering and listing; signing, executing, amending and perfecting all the documents to be submitted to any governments, authorities, organisations and individuals in, and out of, the PRC, with respect to the offering and listing; designating an account specifically for the holding of any raised funds prior to this offering and listing, if required; issuing statements and undertakings relating to the offering and listing, and taking all the actions related to the offering and listing;
Adjusting, supplementing, amending and improving the Articles of Association and the attachments thereto and other corporate governance documents which have been considered and approved at Board meetings and general meetings and as amended by the Company for the offering and listing according to any changes in the relevant laws, regulations and other regulatory documents and based on the requirements and advice of the relevant government agencies, regulatory authorities and stock exchanges in, and out of, the PRC, and the actual situation of the offering and listing;
Making corresponding amendments to the Articles of Association with respect to the registered capital and shareholding structure of the Company, handling the procedures in relation to the approval, filing and change of registration in connection with any change of the registered capital or Articles of Association of the Company with such authorities as industrial and commercial administration authorities, securities regulation, registration authorities and other competent government authorities, as well as dealing with matters in relation to the application for the listing of A Shares on a securities exchange according to the actual situation of the A Share Offering;
Analysing, researching and verifying the influences of the offering and listing on the immediate financial index of the Company and the immediate return of the Shareholders in accordance with relevant laws and regulations and the requirements of the regulatory authorities in and out of the PRC; amending, improving and implementing the remedial measures and policies in accordance with the advice from regulatory authorities and the market situation; and handling all other matters related thereto at full discretion;
Adjusting the planned use of raised funds from the Offering and Listing according to the opinions and suggestions of regulatory authorities, including but not limited to adjusting the progress of investment in the projects to be invested in with the raised funds and the allocation among such projects;

- I-2 -

APPENDIX I THE AUTHORISATION TO THE BOARD TO DEAL WITH RELATED MATTERS IN CONNECTION WITH THE COMPANY'S APPLICATION FOR THE A SHARE OFFERING AND LISTING OF A SHARES AT ITS FULL DISCRETION

Handling all other matters in connection with the offering and listing to the extent permitted by the relevant laws, regulations and regulatory documents and the Articles of Association;
Delegating any one of the Executive Directors of the Company or other persons designated by the Executive Directors to deal with any matters relating to the offering and listing as and when needed;
The aforesaid authorization shall be valid within the 12 months after the date on which this proposal is approved at the general meeting of the Company.

- I-3 -

APPENDIX II	FEASIBILITY ANALYSIS REPORT ON THE INVESTMENT
	PROJECTS USING THE PROCEEDS FROM THE A SHARE OFFERING

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 Company intends to launch the initial public offering of A Share and get listed. According to the Measures for the Administration of Initial Public Offering and Listing of Stocks enacted by China Securities Regulatory Commission ("the CSRC"), the Company hereby carries out feasibility analysis on the purpose of fund-raising:

QUANTITY OF A SHARE FOR INITIAL PUBLIC OFFERING AND ITS PURPOSE

The Company intends to issue no more than 120 million shares of A shares. The raised funds from this initial public offering will be completely used to supplement the capital of the Company after deducting the offering expenses. The purposes include but are not limited to the following:

Supplementing the capital of the Company and domestic subsidiaries, optimizing the construction of multi-level outlet system, and enhancing the service capabilities of the Company's futures brokerage business and risk management business service capabilities;
Supplementing the capital of the Company's overseas subsidiaries and providing guarantees for the overseas subsidiaries' business development;
Increasing investment in the R&D and investment advisory businesses, and stimulating the development of innovative businesses;
Enhancing the development of wealth management business, and accelerating the transformation and upgrading of enterprise;
Reinforcing the establishment of information technology system, and strengthening the service of the mid- and back-office;
Seeking mergers and reorganizations, enhancing market competitiveness and integrated financial services capabilities of the Company, and realizing leapfrog development.

When the raised funds are available, the Company will develop reasonable fund use plan according to the business development status, approval progress and quota of the innovative business and the market conditions, in order to achieve good investment benefit.

NECESSITY ANALYSIS ON A SHARE INITIAL PUBLIC OFFERING

The futures market in China developed rapidly in recent years. The traditional development mode futures company, development based on internal accumulation and capital increase from shareholders, cannot meet the rapid development demand of the industry.

- II-1 -

APPENDIX II	FEASIBILITY ANALYSIS REPORT ON THE INVESTMENT
	PROJECTS USING THE PROCEEDS FROM THE A SHARE OFFERING

Through offering and listing, the Company can rapidly increase its capital strength in a short time, enhance its risk resistance capacity, and establish a long-term effective capital supplementation mechanism.

The raised funds from the offering will be used to supplement the capital of the Company, which is necessary for the Company to achieve its strategic objectives and increase the core competitiveness, integrate resources and drive the quick development of the businesses.

1. The need for further expanding the net capital, meeting the regulatory requirement on capital and facilitating the business development

Administrative Measures on Risk Regulation Index of Futures Company has stipulated specific requirements on the capital size of the futures company, linked the business scale of the futures company dynamically with the net capital level, and established a risk control index system based on net capital for the futures companies. In the future, the scale of all the businesses of a futures company will be closely related to its net capital size.

2. The need for expanding capital supplementation channels and improving the diversity and flexibility of fund-raising methods

According to Administrative Measures on Risk Regulation Index of Futures Company, the qualification for the futures company to expand its business scale and carry out various types of business is linked to its net capital size. Therefore, expanding net capital has become a top priority for the development of the futures company. Besides, the overall growth of the futures industry has made it possible for the futures company to expand its capital through offering and listing, capital increase and share expansion, and merger and acquisition and restructuring. If the Company succeeds in the A Share listing, it can achieve refinancing flexibly with the domestic capital vehicles, thus laying a solid foundation for the development and growth of the Company.

3. The need for improving the risk resistance capacity of the Company

As a capital intensive industry, the risk resistance capacity of the futures industry is directly linked to its capital size. Through offering and listing, the capital strength of the Company will be further enhanced, and its risk resistance capacity will be further improved. In this way, the Company can better prevent and mitigate all the risks incurred in the operation and development.

4. The need for increasing the brand value and enhancing the core competitiveness of the Company

With this offering, the Company can attract high-quality investors through the capital market, further improve its corporate government level, expand the business development space, improve the operation management level and core competitiveness, enhance the market position and regional influence of the Company, improve its brand image and reputation, and increase its comprehensive competitive strength.

- II-2 -

APPENDIX II	FEASIBILITY ANALYSIS REPORT ON THE INVESTMENT
	PROJECTS USING THE PROCEEDS FROM THE A SHARE OFFERING

In consideration of the development needs, regulatory requirements, and realization of shareholder value, this offering complies with the relevant laws, regulations and policies and meets the long-term development strategy of the Company. It can further enhance the capital strength and market competitiveness of the Company, and plays a great role in driving the sustainable and steady growth of the business and promoting the market influence of the Company.

FEASIBILITY ANALYSIS ON THE USE OF THE FUNDS RAISED THROUGH INITIAL PUBLIC OFFERING OF A SHARE

The futures industry shows diversified trends of development after years of development and growth, and the Company has eagerly deployed innovative businesses while shoring up its traditional brokerage business in the capital market with both opportunities and challenges. Therefore, it has not only achieved sustained development, but also accumulated valuable experience.

1. Supplementing the capital of the Company and domestic subsidiaries, optimizing the construction of multi-level outlet system, and enhancing the service capabilities of the Company's futures brokerage business and risk management business service capabilities

The development of financial companies requires continuous capital supplementation and support. Especially, with the quick business growth of the Company, on one hand, the Company needs the support of strong capital strength to improve the overall risk resistance capacity and to protect the interests of the investors; on the other hand, the Company also need to supplement the capital to meet the corresponding regulatory requirements and boost their business development. The Company and its domestic and overseas subsidiaries are enjoying continuous business growth. The supplementation of capital will help enhance the capital strength of the Company and its domestic and overseas subsidiaries, improve their risk resistance capacity and promote the sustainable development of the Company.

Branches are important channels for the futures companies to serve the customers and explore the market. After supplementing the capital, the Company will, based on the industry development trend and the actual situation of the Company, explore the construction of multi-level outlet system of "headquarters - branches - sales offices" to achieve light investment, innovative operation and differentiated management, gradually determine the development orientation of the branches, and drive the branches to achieve profit.

The Company develops its risk management businesses through Holly Capital, which mainly include variation basis trading, cooperative hedging, OTC derivatives business, market making business and warehouse receipt services. Currently, the risk management business has become a multi-layer service system with "business division-variety service- Holly Capital" as the basis. With the continuous expansion of the business scale and scope of the risk management business, Holly Capital extremely needs supplementary funds for further business development, so as to optimize the business structure and broaden the source of income, further improve its profitability and strengthen the Company's overall core competitiveness.

- II-3 -

APPENDIX II	FEASIBILITY ANALYSIS REPORT ON THE INVESTMENT
	PROJECTS USING THE PROCEEDS FROM THE A SHARE OFFERING

2. Supplementing the capital of the Company's overseas subsidiaries, and providing guarantees guarantee for the overseas subsidiaries' business development

It is clearly stated in the Opinion on Further Promoting the Innovative Development of Futures Business Institutions issued by the CSRC on September 16, 2014 that qualified futures companies are encouraged to carry out collectivized operation, with an aim to build a batch of derivative service groups with international competitiveness. In 2015, the Company acquired Holly Su Futures (Hongkong) Co., Limited (renamed as Holly International Financial Holdings Limited in November 2019), which is licensed to carry on Type 1 (dealing in securities) and Type 2 (dealing in futures contracts) regulated activities under the SFO.

Going forward, the Company intends to establish domestic and overseas subsidiaries engaged in other derivative services, such as funds, banks and asset management companies, and actively carry out various financial services and businesses to promote the synergy of various businesses, and facilitate the collectivized development of the Company.

3. Increasing investment in the R&D and investment advisory businesses, and stimulating the development of innovative businesses

Traditional brokerage will shift from extensive to intensive, and from providing intermediary services to value added services. The Company turns cooperative innovation into cohesive innovation. It will put much more effort into the R&D and investment advisory businesses. On one hand, it supports the informationalization of the investment and research department and expand the R&D team to enhance its overall ability in R&D, and on the other hand, it optimizes the business and operation process of the investment advisory department and strengthens the specialized training to booster the development of innovative businesses.

Raising funds through the issuance of A Shares to supplement capital, the Company provides adequate capital protection for creating three major innovative business systems including asset management, risk management and international business, and comprehensively strengthening the pillar construction such as talent, risk control, technology and research and development.

4. Enhancing the development of wealth management business, and accelerating the transformation and upgrading of enterprise

Through the issuance and listing of A shares, the Company strengthens its management wealth business, stimulates the transformation from traditional channel business to an all-rounded wealth management model. The Company gives full play to its advantages in derivatives, establishes a professional investment team, further expands the scope of investment, and improves the ability of comprehensive wealth management.

- II-4 -

APPENDIX II	FEASIBILITY ANALYSIS REPORT ON THE INVESTMENT
	PROJECTS USING THE PROCEEDS FROM THE A SHARE OFFERING

The Company promotes the scale transformation of asset management business, accelerates the creation of an active management team, and focuses on launching characteristic active management products in the futures, options and other derivatives markets. At the same time, the Company continues to explore and develop products including FOF, MOM, QDII, quantitative arbitrage and FICC.

We speed up the establishment of fund companies, utilize various financial derivatives to create investment portfolios at different levels, and realize integrated services in the market for hedging products of bonds, equity and derivatives.

5. Reinforcing the establishment of information technology system, and strengthening the service of the mid- and back-office

Since financial company requires highly stable and advanced information system, the Company needs to increase the investment in information system construction, so as to meet the requirements of relevant laws and regulations, and technically enhance the support system and ensure the robust development of the Company.

On one hand, as the business infrastructure of the Company, the information system is in need of constant investment to ensure the system stability, in order to provide safe and reliable basic information services for the customers; on the other hand, with the development of science and technology, the information system becomes more and more important to the Company, especially in offering differentiated services to the investors. Therefore, the Company need to continue the construction and investment of information system, in order to meet the personalized demands of the investors.

6. Seeking mergers and reorganizations, enhancing market competitiveness and integrated financial services capabilities of the Company, and realizing leapfrog development

Merger and acquisition can further improve the market competitiveness of the Company and help the Company create an integrated a comprehensive financial service platform. In the future, the Company will further expand its market scale and increase its market share through capital market operation and merger and acquisition of suitable enterprises, in order to promote the leapfrog development of the Company.

IV. INFLUENCE OF THE OFFERING ON THE OPERATION MANAGEMENT AND FINANCIAL STATUS OF THE COMPANY

When the raised funds from the offering are available, the following direct influence will be rendered to the financial status and operation results of the Company:

1. When the raised funds are available, the size of the capital and net assets of the Company will be greatly increased. The A Share listing can provide more options and facilities for the refinancing of the Company in the capital market of China.

- II-5 -

APPENDIX II	FEASIBILITY ANALYSIS REPORT ON THE INVESTMENT
	PROJECTS USING THE PROCEEDS FROM THE A SHARE OFFERING

With sufficient capital, the Company will have more initiatives and flexibilities in the operation management, which is good for the business development of the Company.

When the raised funds are available, the net capital of the Company will be greatly increased, the risk control indexes of the Company will be optimized, its risk resistance capacity will be enhanced significantly, and the development space of the businesses linked to the net capital size will be expanded.
Because it takes time to increase the business size, the direct benefit of the offering may not be reflected in a short time. However, in the long run, the raised funds from the offering will be completely used to increase the capital of the Company, which helps to enhance the capital strength of the Company, facilitate the long-term development of its businesses, optimize its strategic development layout, improve its continuous profitability and accelerate the achievement of its strategic development targets.

To sum up, the raised funds from the offering net of the offering expenses will be completely used to supplement the capital of the Company. It complies with the relevant laws, regulations and the national industry policies; the offering can improve the operation management of the Company, promote its long-term healthy development, improve its brand awareness and influence, and provide capital support to the achievement of its strategic targets. It meets the interests of the Company and all the shareholders, and it is necessary and feasible.

- II-6 -

APPENDIX III IMPACTS AND REMEDIAL MEASURES ON DILUTION OF IMMEDIATE RETURN FROM THE A SHARE OFFERING

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

According to Opinion on Further Strengthening the Protection of Minority Investors' Legitimate Rights and Interests in Capital Market (Guo Ban Fa [2013] No. 110) and Instructions on Issues Related to Immediate Return Dilution Arising from Initial Public Offering, Refinancing and Major Asset Restructuring (the CSRC Announcement [2015] No. 31), the Company has made analysis on the influence of the offering of Renminbi common shares (A Share) over the immediate return dilution, and proposed mitigation and remediation measures.

INFLUENCE OF THE OFFERING OF RENMINBI COMMON SHARES (A SHARE) OVER THE IMMEDIATE RETURN DILUTION

The Company intends to publicly issue no more than 120 million A shares this time. In the year when the public offering of A Share ("the Public Offering") is completed, the weighted average shares will increase significantly compared with that of the end of the previous year. Besides, the raised funds from the offering may not fully generate benefit in the offering year. Based on the prudent consideration of the industry development, the Public Offering may subject the Company to the risk of immediate return dilution. The earnings per share of the Company in the year when the Public Offering is completed may be lower than that of last year. The Company has developed and will strictly implement the corresponding countermeasures for the immediate return dilution that may be caused by the Public Offering.

NECESSITY AND RATIONALITY OF THE OFFERING OF RENMINBI COMMON SHARES (A SHARE)

When the raised funds from the offering are available, the capital strength of the Company will be enhanced, which facilitates the implementation of the subsequent development strategies. The Company will achieve reasonable capital return by efficiently allocate the capital and promptly and effectively using the raised funds from the offering. The Company will use the raised funds from the offering to supplement the capital of the Company and its domestic and overseas subsidiaries, optimize the construction of multi-level outlet system, enhance the Company's futures brokerage business and risk management business in terms of service capability, supplement the funds of overseas subsidiaries, provide overseas subsidiaries with guarantee for business development, put much more efforts in the R&D and investment advisory businesses, promote the development and enhancement of innovative business, strengthen the development of wealth management, speed up the transformation and upgrading of enterprise, reinforce the establishment of information technology system, enhance the service of the mid-andback-office, seek mergers and reorganization, enhance the Company's market competitiveness and comprehensive financial service capabilities and achieve huge development, so as to increase the Company's comprehensive competitiveness, improve its competitiveness and achieve sustainable development.

- III-1 -

APPENDIX III IMPACTS AND REMEDIAL MEASURES ON DILUTION OF IMMEDIATE RETURN FROM THE A SHARE OFFERING

The Company has achieved good accumulation in HR, technology and marketing through the existing businesses. It can ensure the reasonable and efficient use of the raised funds from the offering, and drive the sustainable and healthy development of its businesses.

MITIGATION AND REMEDIATION MEASURES FOR THE IMMEDIATE RETURN DILUTION RESULTING FROM THE OFFERING OF RENMINBI COMMON SHARES (A SHARE)

To reduce the immediate return dilution impact of the Public Offering, protect the interests of minority shareholders of the Company, and optimize the investment return mechanism of the Company, the Company will reasonably use the raised funds from the Public Offering, enhance the sustainable development capacity through the following measures, with an aim to increase the shareholder value in medium and long run and mitigate and remedy the dilution influence of the Public Offering on the immediate return to the shareholders.

1. To continuously drive the comprehensive development of the businesses, expand and diversify the revenue streams

The Company will, while trying to drive the steady growth of the existing businesses, explore the business innovation opportunities, pay close attention to the development trend of financial industry, drive the comprehensive development of businesses and provide integrated services for the customers, in order to expand the business areas, explore new profit growth points and gain the winning advantage in the increasingly competitive market.

2. To standardize the management and use of the funds raised

To standardize the management and use of the funds raised, and protect the interests of the investors, the Company has developed the Management System for the Raised Funds of Holly Futures Co., Ltd. pursuant to relevant laws and regulations, which provides detailed provisions on the deposit, use, change of use of the raised funds and the supervision on the use of the raised funds. The Company will enhance the management of the raised funds, reasonably and efficiently use the funds, and prevent the risks in connection with the use of funds.

3. To enhance the operation management and internal control, and improve the operation efficiency and profitability

The Company will further improve its operation and management level and the overall profitability in the coming years. The Company will strive to increase the use efficiency of the funds, improve and enhance the investment decision-making procedures. The Company will also enhance the internal control and improve corporate governance. It will drive the overall budget management, optimize the budget management process, enhance cost management, strengthen budget execution supervision, in order to fully and effectively control the operation and management control risks.

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APPENDIX III IMPACTS AND REMEDIAL MEASURES ON DILUTION OF IMMEDIATE RETURN FROM THE A SHARE OFFERING

4. To enhance the risk management measures

The Company will continue to enhance the construction of comprehensive risk management system, constantly improve the risk management capacity for credit risk, market risk, operation risk and liquidity risk, enhance the risk prevention and control in key fields, ensure proper risk identification, measurement, monitoring, handling and report in key fields, in order to improve the overall risk management capacity of the Company.

5. To maintain stable shareholder return policy

The Company has specified in the Articles of Association (applicable after A Share listing) the cash dividend policy and cash dividend distribution proportions as well as the minimum proportion of profit distribution in cash in normal situation, in order to render a stable return expectation for the investors. The Company pays great attention to the protection of the shareholders' interests. It will maintain the continuity and stability of the profit distribution policy, with an aim to create long-term value for the shareholders.

IV. PROMISES OF ALL THE DIRECTORS AND SENIOR EXECUTIVES TO ENSURE THE IMPLEMENTATION OF THE MITIGATION AND REMEDIATION MEASURES

The directors and senior executives of the Company undertake to diligently and honestly perform their duties and maintain the legal rights and interests of the Company and all the shareholders. To ensure the implementation of the mitigation and remediation measures, they have made the following (but not limited to) promises:

that they will not transfer profit to other entities or individuals free of charge or with unfair conditions or otherwise damage the interests of the Company;
that they will impose constraints on the position-related consumption of the directors and senior executives;
that they will not use the assets of the Company in any investment or consumption activity unrelated to their performance of obligations;
that the remuneration system developed by the Board is linked to the implementation status of the mitigation and remediation measures;
that the exercise condition of the stock option incentive of the Company (if any) is linked to the implementation status of the mitigation and remediation measures.

- III-3 -

APPENDIX IV	PRICE STABILISING PLAN FOR THE A SHARES WITHIN
	THREE YEARS AFTER THE A SHARE OFFERING

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

Pursuant to the requirements of the laws and regulations including the Company Law of the People's Republic of China, Securities Law of the People's Republic of China and Opinions on Further Promoting the Reform of the Initial Public Offering System issued by China Securities Regulatory Commission (the "CSRC"), the Price Stabilising Plan for the A Shares of the Company within Three Years after the A Share Offering (the "Plan") has been formulated by Holly Futures Co., Ltd. ("the Company") in order to strengthen the fiduciary obligation of the controlling shareholder, directors and senior management of the Company, and safeguard the interest of minority shareholders.

CONDITIONS FOR ACTIVATING PRICE STABILISING MEASURES

Within three years from the initial public offering and listing (the "Offering and Listing") of the RMB ordinary shares (A Shares) of the Company, if the closing prices of A Shares of the Company are lower than the latest audited net assets per share of the Company for 20 consecutive trading days (after the latest auditing date, if any dividend distribution, bonus issue, profit distribution, conversion of capital reserve into share capital, share split, issuance of new shares, placement of shares or reduction of share capital has resulted in changes to the net assets or the total number of shares of the Company, the net assets per share shall be adjusted accordingly (same hereinafter)) due to other factors excluding force majeure, subject to the relevant laws, regulations and normative documents, the Company, its controlling shareholder, directors (excluding independent directors and the directors who do not receive any salary from the Company, same hereinafter) and senior management and other relevant parties will adopt measures to stabilise the share price of the Company.

SPECIFIC PRICE STABILISING MEASURES

Price stabilising measures for the Company
1. If the closing prices of the A Shares of the Company are lower than the latest audited net assets per share of the Company for 20 consecutive trading days, the obligation of the Company for implementing price stabilising measures will be triggered. The Board shall formulate and announce the price stabilising proposal and submit the proposal to the general meeting of the Company for consideration and approval within 15 trading days after the trigger of the above obligation. The price stabilising proposal of the Company shall include, but not limited to, the proposal of repurchasing the A Shares by the Company or other proposals in compliance with the requirements of the relevant laws, regulations and other regulatory documents (including the listing rules of the place where the shares of the Company are listed). The specific proposal shall be implemented after the execution of the internal approval procedures of the Company and the applicable external approval procedures in accordance with the applicable laws, regulations, regulatory documents and the Articles of Association of the Company.

- IV-1 -

APPENDIX IV	PRICE STABILISING PLAN FOR THE A SHARES WITHIN
	THREE YEARS AFTER THE A SHARE OFFERING

1. If the Company adopts the share repurchase proposal, the share repurchase proposal shall include, but not limited to: the number of shares to be repurchased, the price range of repurchase, the source of capital for repurchase, and the impact of the repurchase on the share price and the operation of the Company. The Company shall implement the share repurchase proposal after completing the internal approval procedures of the Company and external approval procedures as applicable in accordance with the applicable laws, regulations, regulatory documents and the Articles of Association of the Company.
2. The Company shall repurchase its shares through stock exchanges by way of central bidding, offer or other legitimate approaches to stabilise the share price. The total capital to be used by the Company for share repurchase shall be no less than 10% of the net profit attributable to the shareholders of the Company as recoded in the audited combined financial statements of the Company for the prior year, and shall not exceed the net raised funds from the initial public offering of A Shares of the Company.
3. If the Company adopts other price stabilising proposals in compliance with the requirements of the applicable laws, regulations and regulatory documents, such proposals shall be implemented subject to the internal approval procedures of the Company and the applicable external approval procedures in accordance with the applicable laws, regulations, regulatory documents and the Articles of Association of the Company.
4. In the course of implementing the price stabilising proposal, the Company may discontinue the implementation of such proposal if the closing prices of the A Shares of the Company remained higher than the latest audited net assets per share of the Company for 10 consecutive trading days. After the implementation is discontinued, if the closing prices of the A Shares of the Company become once again and remain less than the latest audited net assets of the Company for 20 consecutive trading days within 6 months subsequent to the trigger of the aforesaid obligation for increasing shareholding, the Company shall continue to implement such price stabilising proposal.
Price stabilising measures for the controlling shareholder
1. If the closing prices of the A Shares of the Company are lower than the latest audited net assets per share of the Company for 20 consecutive trading days, and the Board of the Company fails to announce the aforesaid price stabilising proposal, or the price stabilising proposal so announced by the Company is not approved by the competent regulatory authority, the obligation of the controlling shareholder of the Company for increasing their shareholding in the Company will be triggered. Subject to compliance with the applicable laws, regulations, and regulatory documents (including the listing rules of the place where the shares of the Company are listed), the controlling shareholder shall deliver to the Company and announce the scheme for increasing shareholding in the Company, including but not limited to such information as the number and price of additional shares

- IV-2 -

APPENDIX IV	PRICE STABILISING PLAN FOR THE A SHARES WITHIN
	THREE YEARS AFTER THE A SHARE OFFERING

to be acquired, the deadline for completion of increase in shareholding and the objects thereof, within 15 trading days after their obligation for increasing shareholding is triggered.

1. The controlling shareholder of the Company will acquire the A Shares of the Company in an accumulative amount of no less than RMB10 million (the "Price Stabilisation Fund").
2. In the course of implementing the scheme for increasing shareholding, the controlling shareholder may discontinue the implementation of such scheme if the closing prices of the A Shares of the Company remained higher than the latest audited net assets per share of the Company for 10 consecutive trading days. After the implementation is discontinued, if the closing prices of the A Shares of the Company become once again and remain less than the latest audited net assets of the Company for 20 consecutive trading days within 6 months subsequent to the trigger of the aforesaid obligation for increasing shareholding, the controlling shareholder shall continue to implement such scheme for increasing shareholding.
3. The controlling shareholder will not sell the shares so acquired within 6 months after the scheme for increasing shareholding is completed, the equity structure of the Company after such increase in shareholding shall meet the conditions for listing, and such increase in shareholding shall be in compliance with the requirements of relevant laws, regulations and regulatory documents.
Price stabilising measures for the directors and senior management
1. If the closing prices of the A Shares of the Company are lower than the latest audited net assets per share of the Company for 20 consecutive trading days, and the price stabilising schemes for the Company and the controlling shareholder set forth in (I) and (II) above are not announced in due time, or the plans so announced are not approved by the competent regulatory authority, the obligation of the directors and senior management of the Company for increasing their shareholding in the Company will be triggered. Subject to compliance with the applicable laws, regulations, and regulatory documents (including the listing rules of the place where the shares of the Company are listed), the directors and senior management of the Company shall deliver to the Company and announce the scheme for increasing the shareholding in the Company, including but not limited to such information as the number and price of additional shares to be acquired, the deadline for completion of increase in shareholding and the objects thereof within 15 trading days after their obligation for increasing shareholding is triggered.
2. The monetary fund to be used by the directors and senior management of the Company for acquiring the additional shares of the Company shall be not less than 10% of the total remuneration (after tax) received by each of them from the Company for the prior year.

- IV-3 -

APPENDIX IV	PRICE STABILISING PLAN FOR THE A SHARES WITHIN
	THREE YEARS AFTER THE A SHARE OFFERING

In the course of implementing the scheme for increasing shareholding, the directors and senior management may discontinue the implementation of such scheme if the closing prices of the A Shares of the Company remained higher than the latest audited net assets per share of the Company for 10 consecutive trading days. After the implementation is discontinued, if the closing prices of the A Shares of the Company become once again and remain less than the latest audited net assets per share of the Company for 20 consecutive trading days within 6 months subsequent to the trigger of the aforesaid obligation for increasing shareholding, the directors and senior management shall continue to implement such scheme for increasing shareholding.
The directors and senior management will not sell the shares so acquired within 6 months after the scheme for increasing shareholding is completed, the equity structure of the Company after such increase in shareholding shall meet the conditions for listing, and such increase in shareholding shall be in compliance with the requirements of relevant laws, regulations and regulatory documents.

(IV) Other price stabilising measures

In accordance with the requirements of the laws, regulations, regulatory documents and the Articles of Association of the Company prevailing by then, the Company and the relevant parties may adopt other price stabilising measures stipulated in laws, administrative regulations and regulatory documents, as well as other price stabilising measures approved by the CSRC after fulfilling the relevant legal procedures.

III. RESTRAINT MEASURES

If the Company fails to formulate and announce the price stabilising proposal by the required deadline, or fails to implement such proposal as disclosed in the announcement, then the Company shall disclose specific reasons on the information disclosure media designated by the CSRC.

If the controlling shareholder of the Company fails to present a scheme for increasing shareholding by the required deadline, or fails to implement such scheme as disclosed, then the Company shall disclose specific reasons on the information disclosure media designated by the CSRC.

If the directors and senior management of the Company fail to present a scheme for increasing shareholding by the required deadline, or fail to implement such scheme as disclosed, then the Company shall disclose specific reasons on the information disclosure media designated by the CSRC.

- IV-4 -

APPENDIX IV	PRICE STABILISING PLAN FOR THE A SHARES WITHIN
	THREE YEARS AFTER THE A SHARE OFFERING

IV. OTHERS

The controlling shareholder, the Company and its directors and senior management shall, when performing their respective obligation for price stabilisation, comply with the requirements of the relevant laws and regulations and the listing rules of the place where the shares of the Company are listed, take full consideration of and strive to protect the legitimate interests of domestic and overseas shareholders, and perform the corresponding obligation for information disclosure.

The Plan shall be submitted to the general meeting of the Company for consideration and approval, and will take effect after the Offering and Listing and remain effective for three years thereafter.

The Plan will automatically apply to any new director or senior management of the Company during the term of validity, who shall agree in writing to perform the aforesaid undertakings and obligation before he/she is nominated.

(IV) If relevant laws, regulations and regulatory documents (including the listing rules of the place where the shares of the Company are listed) provide otherwise when the Plan is implemented, the Company shall abide by such provisions.

During the validity of the Plan, the general meeting of the Company shall authorize the Board to amend the Plan accordingly if amendments have to be made to the Plan as a result of any new relevant rule promulgated by regulatory authorities such as the CSRC and relevant stock exchanges.

- IV-5 -

APPENDIX V	DIVIDEND RETURN PLAN FOR SHAREHOLDERS
	WITHIN THREE YEARS AFTER THE A SHARE OFFERING

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

In accordance with the relevant requirements of the Notice on Further Implementing Matters Relevant to Cash Dividend Distribution by Listed Companies and the Guideline No. 3 on Supervision and Administration of Listed Companies - Cash Dividends of Listed Companies issued by the CSRC, and other cash dividend distribution guidelines issued by relevant stock exchanges, and in order to further increase the return of shareholders, improve and implement the cash dividend policy, define the plan of the Company for providing shareholders with reasonable investment returns, enhance the transparency and operability of decision-making on profit distribution and to facilitate supervision by shareholders of the operations of and profit distribution of the Company, Holly Futures Co., Ltd. (hereinafter referred to as the "Company") has formulated the Dividend Return Plan for Shareholders within Three Years after the A Share Offering of Holly Futures Co., Ltd. (hereinafter referred to as the "Plan"), the detail of which are set out below:

PRINCIPLES FOR FORMULATION OF THE PLAN

In accordance with the provisions of the Company Law and the Articles of Association, the Company will fully take into account the returns for its investors and will implement an on-going and stable dividend distribution policy, while considering the long-term interests of the Company, the overall interests of all shareholders as a whole and the sustainable development of the Company.

FACTORS CONSIDERED IN FORMULATING THE PROFIT DISTRIBUTION PLAN

In formulating the dividend distribution policy, the Company focuses on its operations at the current stage and sustainable development, and the Company gives consideration to performing its social and legal responsibilities, safeguarding the legitimate interests of shareholders in a practical manner and providing investors with reasonable investment returns.

The Company is currently growing with good momentum, and needs sufficient capital to finance its future development. When determining its dividend distribution policy, the Company will take into full consideration the impact of various factors so that it can meet the requirements for its normal operation and sustainable development.

Meanwhile, the dividend distribution policy of the Company, which attaches high importance to providing investors with reasonable investment returns and takes into account the expectation of investors for the sustained rapid development of the Company, will fully take into consideration the demands and wishes of shareholders. The specific dividend distribution plan (including the proportion of cash dividends and whether distributing dividends in the form of shares) will be determined, considered and approved at the general meeting according to the actual operations of the Company in the year and the requirements for future development of its normal operation.

- V-1 -

APPENDIX V	DIVIDEND RETURN PLAN FOR SHAREHOLDERS
	WITHIN THREE YEARS AFTER THE A SHARE OFFERING

SPECIFIC PROPOSAL ON THE DIVIDEND RETURN PLAN
1. The Company may distribute dividends in the form of cash, shares or a combination of both; where the Company satisfies the conditions for cash dividend distribution, it shall accord priority to profit distribution by way of cash dividends.
2. Save that the Company has any plan for substantial capital expenditure or other exceptions approved by the general meeting, according to applicable laws and regulations, where there are distributable profits from the profits achieved for the year and positive accumulated undistributed profits after making full allocation to the statutory common reserve fund and discretionary common reserve fund, the profits distributed in cash by the Company annually shall not be less than 10% of the distributable profits achieved for the year.
3. The Board of the Company shall distinguish the following different circumstances, taking into account the Company' industry features, development stages, operation model and profitability as well as whether it has any substantial capital expenditure arrangement, and stipulate differentiated cash dividend policy in accordance with the procedures set out in the Articles of Association:
4. 1. If the Company's development is in mature stage and there is no substantial capital expenditure, for profit distribution, cash dividend distribution shall take up at least 80% in the profit distribution.
  2. If the Company's development is in mature stage and there is any substantial capital expenditure, for profit distribution, cash dividend distribution shall take up at least 40% in the profit distribution.
  3. If the Company's development is in growing stage and there is any substantial capital expenditure, for profit distribution, cash dividend distribution shall take up at least 20% in the profit distribution.

If the Company's development stage is not easily identified but there is any substantial capital expenditure, it can be dealt with according to the preceding provision. Substantial capital expenditures include significant investments and other major capital expenditures.

4. Where the Company is operating well, and the Board considers that the share price of the Company does not reflect the share capital size of the Company as well as distribution of share dividends is in the interests of all shareholders as a whole, the Company may conduct profit distribution by issuing share dividend based on the Company's cash flow position, business growth potential, net assets per Share and other real and reasonable factors.

- V-2 -

APPENDIX V	DIVIDEND RETURN PLAN FOR SHAREHOLDERS
	WITHIN THREE YEARS AFTER THE A SHARE OFFERING

IV. DECISION-MAKING AND SUPERVISION MECHANISMS OF THE RETURN PLAN

1. When formulating the profit distribution plan, the Board shall carefully study and discuss matters including the timing, conditions and minimum proportion, conditions for adjustments and the requirements of the decision-making procedures of the cash dividends, and the independent directors shall express an unequivocal opinion. Independent directors may put forward a dividend proposal through soliciting opinions from minority shareholders, and directly submit it to the Board for consideration. Before consideration by general meeting of the specific proposal for cash dividends, the Company shall communicate and engage with shareholders, especially minority shareholders, through various channels, fully listen to the views and requisitions of minority shareholders, and respond to concerns from minority shareholders in a timely manner. The Board of Supervisors of the Company shall supervise the circumstances and decision-making procedures regarding the formulation of the profit distribution proposal by the Board.
2. If the Company has distributable profits for the year but does not put forward any cash dividend proposals, the Board shall provide a special explanation for matters including the specific reasons for not making cash dividends, the exact use of the retained earnings of the Company and the expected return on investment. The said explanation shall be submitted to the general meeting for consideration after the independent directors have expressed their opinions, the approval of which shall require no less than two-thirds of the voting rights held by the shareholders attending the general meeting and shall be disclosed in the designated information disclosure media of the Company. The Company shall provide shareholders with the Internet voting platform for voting.
3. The Company shall disclose the profit distribution plan for the year in the annual report: where there are distributable profits during the reporting period but the Board of the Company does not put forward any plan for profit distribution in cash, the reasons shall be disclosed in the periodic report to provide a detailed explanation for not making profit distribution and the use of capital that may otherwise be used as dividends but has been retained by the Company. Independent directors should express their own opinions on the matters.
4. The Board of Supervisors of the Company shall supervise the circumstances and decision-making procedures regarding the implementation of the Company's profit distribution policy and dividend return plan by the Board and the management.
IMPLEMENTATION OF PROFIT DISTRIBUTION PLAN
After the general meeting of the Company has passed a resolution on the profit

distribution plan, the Board of the Company must complete the distribution of dividends (or shares) within two months after the convening of the general meeting.

- V-3 -

APPENDIX V	DIVIDEND RETURN PLAN FOR SHAREHOLDERS
	WITHIN THREE YEARS AFTER THE A SHARE OFFERING

VI. FORMULATION CYCLE AND ADJUSTMENT MECHANISM OF THE RETURN PLAN

The Company shall formulate the return plan for shareholders according to the profit distribution policies determined in the Articles of Association, and ensure to prepare the plan every three years as well as to formulate the profit distribution policies for next three years. When formulating the return plan for shareholders, the Board of the Company shall fully listen to and heed the views and suggestions of shareholders (especially minority shareholders), independent directors and external supervisor through various channels. The profit distribution policies and three-year return plan for shareholders formulated by the Board shall be implemented after being submitted to and approved by the general meeting.
In the event of force majeure including war and natural disasters, or changes in the external operating environment of the Company resulting in a material impact on the production and operation of the Company, or significant changes in the internal operating condition of the Company, the Company may make adjustments to its profit distribution policies. When the Company makes adjustments to its profit distribution policies, the Board shall carry out specific explanation to discuss in detail the reasons for the adjustments, prepare a written discussion report and submit it to the general meeting after consideration by independent directors, the approval of which shall require no less than two-thirds of the voting rights held by the shareholders attending the general meeting. The Company shall provide shareholders with the Internet voting platform for voting. When considering changes to the policies on profit distribution proposals, the general meeting shall fully consider the views of minority shareholders.

VII. MISCELLANEOUS

Matters not covered in the Plan shall be implemented in accordance with relevant laws and regulations, regulatory documents and the Articles of Association.
The Plan shall be interpreted by the Board, and it shall come into force after approval by the general meeting and from the date of the initial public offering and listing of A Shares of the Company.

- V-4 -

APPENDIX VI	REPORT OF THE USE OF RAISED FUNDS
	FROM THE PREVIOUS OFFERING

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

In accordance with the Provisions on the Report on Use of the Capital Raised in the Previous Time enacted by China Securities Regulatory Commission (Zheng Jian Fa Xing Zi [2007] No. 500), Holly Futures Co., Ltd. ("the Company") hereby reports on the use of raised funds from the previous offering for the period ended 31 December 2020 as follows:

AMOUNT AND PAID-IN TIME OF RAISED FUNDS FROM THE PREVIOUS OFFERING OF THE COMPANY

Upon approval by China Securities Regulatory Commission (the "CSRC") in its Reply on Approving Holly Futures Co., Ltd.'s Offering of Overseas Listed Foreign Shares (Zheng Jian Xu Ke [2015] No. 1963)（《關於核準弘業期貨股份有限公司發行境外上市外資股的批覆》（證監許可[2015]1963號））, the Company became listed on the main board of the Stock Exchange of Hong Kong Limited by way of initial public offering of 249,700,000 overseas listed foreign shares (the "H Shares") (including 227,000,000 H Shares offered by the Company and 22,700,000 sale shares offered by Selling Shareholders) at an offering price of HK$2.43 per share on 30 December 2015. The aggregated subscription money of HK$606,771,000 has been paid up in Hong Kong dollars in cash. After deduction of underwriting and sponsoring expenses as well as issuance expenses advanced by the sponsor from the total subscription money, the actual funds raised amounted to HK$591,305,030.59, equivalent to RMB495,117,441.26 according to the central parity rate of Hong Kong dollars against Renminbi on the date when such amount was received by the Company. After deducting the contribution payable to the National Council for Social Security Fund from the actual funds raised, the net funds amounted to HK$536,148,277.99, equivalent to RMB448,933,037.60 ("Raised Funds from the Previous Offering"). The amounts above were remitted into the Company's account (bank account number: 012-875-1-248258-6)opened with the Bank of China (Hong Kong) Limited respectively on 30 December 2015 and 5 January 2016. Such funds were verified by KPMG Huazhen LLP（畢馬威華振會計師事務所（特殊普通合夥））which accordingly issued its capital verification report (KPMG Huazhen Yan Zi No. 1600244).

ACTUAL USE OF RAISED FUNDS FROM THE PREVIOUS OFFERING OF THE COMPANY

The funds from the previous issuance of H shares by the Company, after deducting the issuance expenses and amounts payable to National Council for Social Security Fund, were all used in accordance with the intended purposes set out in the H-share prospectus and put into operation together with other capital of the Company.

The Company held the 2018 annual general meeting on 6 June 2019 and passed to transfer the remaining fund of HK$50 million which originally intended to be used for "developing and strengthening the existing futures brokerage business" to "developing the Hong Kong and global futures business". The change is subject to the approval of the State Administration of Foreign Exchange and the National Development and Reform Commission and other relevant regulatory authorities.

- VI-1 -

APPENDIX VI	REPORT OF THE USE OF RAISED FUNDS
	FROM THE PREVIOUS OFFERING

As at 31 December 2020, the Company has not obtained approval from the relevant regulatory authorities for the above application for changing the use of proceeds. The use of proceeds did not change as compared to that as of 31 December 2018.

As at 31 December 2020, the accumulated proceeds used amounted to HK$ 453,399,912.95 and the remaining balance of the proceeds amounted to HK$82,748,365.04.

The following table sets forth its actual use of Raised Funds from the Previous Offering.

- VI-2 -

- 3-VI -

Breakdown of the Use of Raised Funds from the Previous Offering of

Holly Futures Co., Ltd.

Unit: HK$

Total net funds:	536,148,277.99	Accumulated amount of funds used:			453,399,912.95
Total amount of funds with altered use:	-	Total amount of funds used in each year:		-
			2015:				-
			2016:				338,113,228.14
			2017:				90,120,000.00
			2018:				6,701,885.04
			2019:				2,160,806.26
			2020:				16,303,993.51
			Total funds for investment and cumulative investment of funds as
	Investment project		at the cut-off date
						Difference
						between actual
						investment
						amount and
			Committed	Committed		committed	Project
			investment	investment	Actual	investment	progress as
		Actual	amount before	amount after	investment	amount after	at the cut-off
No.	Committed investment project	investment project	fund raising	fund raising	amount	fund raising	date
1	Developing the Hong Kong and global	Developing the Hong Kong and global	171,567,448.95	171,567,448.95	165,000,000.00	6,567,448.95	N/A
	futures business	futures business
2	Developing asset management business	Developing asset management business	134,037,069.50	134,037,069.50	121,355,818.08	12,681,251.42	N/A
3	Developing the commodity trading and risk	Developing the commodity trading and risk 107,229,655.60	107,229,655.60	97,838,074.22	9,391,581.38	N/A
	management business	management business

VI APPENDIX

FUNDS RAISED OF USE THE OF REPORT OFFERING PREVIOUS THE FROM

- 4-VI -

			Total funds for investment and cumulative investment of funds as
	Investment project			at the cut-off date
									Difference
									between actual
									investment
									amount and
			Committed	Committed			committed	Project
			investment	investment	Actual	investment	progress as
		Actual	amount before	amount after	investment	amount after	at the cut-off
No.	Committed investment project	investment project	fund raising	fund raising	amount	fund raising	date
4	Developing and strengthening the existing	Developing and strengthening the existing	53,614,827.80		53,614,827.80	519,947.38	53,094,880.42	N/A
	futures brokerage business	futures brokerage business
5	Purchasing IT equipment and software	Purchasing IT equipment and software	26,807,413.90	26,807,413.90	25,800,452.97	1,006,960.93	N/A
6	Replenishing general working capital	Replenishing general working capital	42,891,862.24	42,891,862.24	42,885,620.30	6,241.94	N/A

	Total		536,148,277.99		536,148,277.99	453,399,912.95	82,748,365.04	N/A

VI APPENDIX

FUNDS RAISED OF USE THE OF REPORT OFFERING PREVIOUS THE FROM

APPENDIX VI	REPORT OF THE USE OF RAISED FUNDS
	FROM THE PREVIOUS OFFERING

III. CONCLUSION

This report is prepared according to the Provisions on the Report on Use of the Capital Raised in the Previous Time enacted by the China Securities Regulatory Commission. The Company has compared the actual use of the aforesaid capital with the relevant contents in the relevant periodic reports and other information disclosure documents published by the Company since 2015 item by item. The actual use is consistent with the relevant contents disclosed.

- VI-5 -

APPENDIX VII	PUBLIC UNDERTAKINGS IN DOCUMENTS
	IN CONNECTION WITH THE A SHARE OFFERING

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

Letter of Commitment

(Authenticity, Correctness and Completeness of Information Disclosure)

Holly Futures Co., Ltd. ("the Company") intends to apply for the initial public offering of domestically listed Renminbi common shares (A Share) and the listing on the domestic stock exchanges ("the Offering and Listing"). The Company hereby makes the following commitments:

The prospectus published for the Offering and Listing ("the Prospectus") does not contain any false statement, misleading statement or significant omission. The Company will assume individual and joint legal liability for the authenticity, correctness and completeness of the Prospectus.
If the Prospectus contains any false statement, misleading statement or significant omission which has material and substantial influence on judging whether the Company meets the offering conditions stipulated by the relevant laws, the Board of the Company will develop the scheme to repurchase all the new shares issued this time and submit to the general meeting for consideration in 5 business days after the date when China Securities Regulatory Commission ("the CSRC") or the judicial authority makes final judgment on the facts above or the date when the relevant judgment takes effect.
The Company will repurchase all the new A Share issued this time according to the relevant laws at the price equal to the offering price of the A Share of the Company plus the interest on current account of the bank for the same period. If the Company has any ex dividend and ex right matters during this period, such as dividend distribution, stock distribution, increase of share capital from capital reserve or rights issue, the repurchased shares shall include all the new A Share issued this time and the relevant derivative shares, and the offering price shall be subject to the corresponding ex dividend and ex right adjustment. The specific share repurchase scheme shall be developed according to the applicable laws, regulations, regulatory documents and the Articles of Association and subject to the relevant internal and external review and approval procedures. The repurchase shall be made according to the repurchase scheme published by the Company at that time.
If the Prospectus contains any false statement, misleading statement or significant omission and as a result, the investors of the Company suffer loss in the securities transactions, the Company will legally, fully and promptly compensate the investors for the loss according to the final decision or effective judgment of the CSRC or the judicial authority.

- VII-1 -

APPENDIX VII	PUBLIC UNDERTAKINGS IN DOCUMENTS
	IN CONNECTION WITH THE A SHARE OFFERING

4. If the Company fails to perform the above obligations, it shall assume the relevant liabilities according to the relevant laws, regulations and the orders of the regulatory authority. When the Company perform the above obligations, if there are provisions as otherwise specified in the applicable laws, regulations, regulatory documents and the listing rules of the place where the Company's shares are listed, the relevant provisions shall prevail.

- VII-2 -

APPENDIX VII	PUBLIC UNDERTAKINGS IN DOCUMENTS
	IN CONNECTION WITH THE A SHARE OFFERING

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

Letter of Commitment

(Stabilisation of Stock Price in 3 Years after the Listing of A Share)

The Company will strictly comply with the Price Stabilisation Plan for A Share within 3 Years after A Share Offering of Holly Futures Co., Ltd., and perform the obligation of stabilising the stock price of the Company according to the plan.

- VII-3 -

APPENDIX VII	PUBLIC UNDERTAKINGS IN DOCUMENTS
	IN CONNECTION WITH THE A SHARE OFFERING

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

Letter of Commitment

(Restraint on Performance of Public Undertakings)

The Company will strictly perform its obligations and duties according to the undertakings made during the Offering and Listing.
If the Company fails to perform the obligations and duties publicly undertaken by it, the Company will take the following restraint measures:
1. To explain in detail the reasons for not performing the obligations on the information disclosure media designated by China Securities Regulatory Commission ("the CSRC").
2. If the investors of the Company suffer loss in the securities transactions because they rely on the undertakings of the Company, the Company will legally, fully and promptly compensate the investors for the loss according to the final decision or effective judgment of the CSRC or the judicial authority.
If the Company has proposed specific restraints in the relevant undertakings, the Company shall perform according to the relevant restraints as promised.

- VII-4 -

APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE 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.

Chapter I General Provisions

Article 1 To improve the governance structure of Holly Futures Co., Ltd. (the "Company"), regulate related (connected) transactions and guard against operational risks, these Rules were formulated in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Regulation on the Administration of Futures Trading, the Measures for the Supervision and Administration of Futures Companies, the Measures Governing Information Disclosures by Listed Companies, the relevant rules of the domestic stock exchange governing the listing of shares (the "Domestic Listing Rules"), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Hong Kong Listing Rules") and other relevant regulations.

Article 2 Related (connected) transactions shall be in compliance with the Domestic Listing Rules and other relevant domestic laws and regulations as well as the Hong Kong Listing Rules. The related (connected) transactions of the Company shall be subject to fair pricing, legal decision-making procedures and standardized information disclosure system.

Written agreements shall be signed for related (connected) transactions between the Company and related parties or connected persons.

Article 3 In these Rules, related persons, related parties and related transactions shall refer to those as defined under the Domestic Listing Rules; while connected persons, associates and connected transactions shall refer to those as defined under the Hong Kong Listing Rules.

Chapter II Scope and Classification of Related (Connected) Parties

Article 4 In accordance with the Domestic Listing Rules, the related parties of the Company shall include related legal persons and related natural persons.

Article 5 In accordance with the Domestic Listing Rules, a legal person shall be a related legal person of the Company if:

the legal person or other organization directly or indirectly controls the Company;
the legal person or other organization other than the Company and its controlled subsidiaries is controlled directly or indirectly by the legal person or other organization in (1) above;

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

the legal person or other organization other than the Company and its controlled subsidiaries is controlled directly or indirectly by a related natural person set out in Article 7 hereof, or is a legal person or other organization in which the related natural person serves as director or senior management;
the legal person or other organization and its Act in Concert holds 5% or more of the shares of the Company;
the legal person or other organization is any other legal person or other organization having a special relationship with the Company which may cause the Company to be inclined to the interests of that legal person or organization, as determined by the China Securities Regulatory Commission, the relevant domestic stock exchange or the Company in accordance with the principle that essence is more important than form.

Article 6 In accordance with the Domestic Listing Rules, if the Company and the legal person set out in (2) of Article 5 hereof are merely controlled by the same state-owned asset administration organ, no related relationship shall be created as a result thereof, unless chairman, general manager or half or more of the directors of the legal person belong to (2) Article 7 hereof.

Article 7 In accordance with the Domestic Listing Rules, a natural person shall be a related natural person of the Company if:

the natural person directly or indirectly holds 5% or more of the shares of the Company;
the natural person is a director, supervisor or senior management of the Company;
the natural person is a director, supervisor or senior management of a legal person or other organization which directly or indirectly controls the Company;
the natural person is a close family member of the persons referred to in (1) and
1. of this Article, including spouses, children aged 18 or above and their spouses, parents and parents-in-law, siblings and their spouses, siblings of spouses and parents-in-law of children;
the natural person is any other natural person having a special relationship with the Company which may cause the Company to be inclined to the interests of that natural person, as determined by the China Securities Regulatory Commission, the relevant domestic stock exchange or the Company in accordance with the principle that essence is more important than form.

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Article 8 In accordance with the Domestic Listing Rules, a legal person or other organisation or a natural person shall be deemed as a related person of the Company if:

the person meets the requirements in the above Article 5 or Article 7 after an agreement entered into or an arrangement made by the Company or its related person(s) comes into force or within the next twelve months;
the person once met the requirements in the above Article 5 or Article 7 within the past 12 months.

Article 9 Under the Hong Kong Listing Rules, a connected person of the Company shall mean:

the directors, chief executive or substantial shareholders of the Company or its subsidiary;
any person who was the director of the Company or its subsidiary within 12 months;
the supervisors of the Company or any of its subsidiaries;
shareholders with 10% or more of the voting right of the Company or any of its subsidiaries;
the associates of the persons referred above;
connected subsidiaries; or
any persons deemed by The Stock Exchange of Hong Kong Limited (the Hong Kong Stock Exchange) as connected persons.

In case of the following circumstances, a subsidiary of the Company shall not be a connected person:

a subsidiary directly or indirectly wholly-owned by the Company; or
a subsidiary which is a connected person only because it is:
1. a substantial shareholder of another subsidiary of the Company; or
2. an associate of the director (or a person who served as a director in the past 12 months), chief executive, substantial shareholder or supervisor of any subsidiary of the Company.

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Article 10 In accordance with the Hong Kong Listing Rules, (1) to (3) in Article 9 hereof exclude directors, chief executives, substantial shareholders or supervisors of any "insignificant subsidiary" of the Company. In this regard:

An "insignificant subsidiary" is a "subsidiary" whose total assets, profits and revenue compared to that of the Company are less than:
1. 10% under the percentage ratios for each of the latest three financial years (or counting from the date of registration or establishment of the subsidiary in case of less than three financial years); or
2. 5% under the percentage ratios for the latest financial year.
If the person is connected with two or more subsidiaries of the Company, the subsidiaries' total assets, profits and revenue shall be aggregated by the Hong Kong Stock Exchange to determine whether they are together "insignificant subsidiaries" of the Company; and
In calculating the relevant percentage ratios, 100% of the subsidiaries' total assets, profits and revenue will be used as the calculation basis. In case of abnormality with the percentage ratio calculated, the Hong Kong Stock Exchange may disregard the relevant calculation and consider the substitute test provided by the Company.

Article 11 Pursuant to the Hong Kong Listing Rules, the Hong Kong Stock Exchange generally does not treat a PRC governmental body as a connected person. However, it may request the Company to explain its relationship with a PRC governmental body and why it is not treated as a connected person. If the Hong Kong Stock Exchange determines that the PRC governmental body shall be treated as a connected person, the Company must comply with any additional provisions of the Hong Kong Stock Exchange.

Chapter III Scope and Classification of Related (Connected) Transactions

Article 12 Under the Domestic Listing Rules, a related transaction means a matter which takes place between the Company or any of its controlled subsidiary and a related person of the Company, and which may result in the transfer of resources or obligations, including the following transactions:

purchase or sale of assets;
external investment (including entrusted wealth management and entrusted loans, investment in subsidiaries, etc.);
provision of financial assistance;
provision of guarantees;

- VIII-4 -

APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

renting or renting out assets;
entering into contracts related to management (including entrusted operation and being entrusted operation, etc.);
donating or accepting donated of assets;
restructuring of creditor's rights or debts;
entering into a licensing agreement;
transferring or acquiring research and development projects;
purchase of raw materials, fuel and power;
sale of products or goods;
provision or acceptance of labour services;
entrusting or being entrusted with sales;
making an investment jointly with a related party;
other matters which may result in the transfer of resources or obligations by means of an agreement.

The above purchase or sale of assets do not include purchase of raw materials, fuel and power and sale of products and goods related to ordinary operation, but the purchase or sale of assets involved in the assets transfer are still included.

Article 13 The Shareholders, de facto controllers and other related persons (connected persons) of the Company shall not abuse their rights, shall not occupy the assets of the Company or misappropriate the assets of its customers, and shall not prejudice the legitimate rights and interests of the Company and its customers.

Article 14 The Company shall not provide financing for Shareholders, de facto controllers or any other related persons (connected persons), and shall not provide any external guarantees.

Article 15 In accordance with the Hong Kong Listing Rules, connected transactions are transactions with connected persons, and specified categories of transactions with third parties that may confer benefits on connected persons through their interests in the entities involved in the transactions. They may be one-off transactions or continuing transactions.

- VIII-5 -

APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Article 16 Any transactions between the Company and a connected person are connected transactions.

Transactions include both capital and revenue nature transactions, whether or not conducted in the ordinary and usual course of business of the Company. These include the following types of transactions:
1. any acquisition or disposal of assets by the Company, including a deemed disposal;
2. (a) the Company granting, accepting, exercising, transferring or terminating an option to acquire or dispose of assets or to subscribe for securities (terminating an option is not a transaction if it is made under the terms of the original agreement and the Company has no discretion over the termination);
3. 1. the Company deciding not to exercise an option to acquire or dispose of assets or to subscribe for securities;
4. entering into or terminating finance leases or operating leases or sub-leases;
5. granting an indemnity or providing or receiving financial assistance (including granting credit, lending money, or providing an indemnity against obligations under a loan, or guaranteeing or providing security for a loan;
6. entering into an agreement or arrangement to set up a joint venture in any form (e.g. a partnership or a company), or any other form of joint arrangement;
7. issuing new securities of the Company or its subsidiaries;
8. providing, receiving or sharing services; or
9. acquiring or providing raw materials, intermediate products and/or finished goods.
Financial assistance provided by the Company to, or received by the Company from, a commonly held entity is a connected transaction.
The Company acquiring an interest in a company (the "target company") from a person who is not a connected person is a connected transaction if the target company's substantial shareholder:
1. is, or is proposed to be, a controller. A"controller" is a director, chief executive or controlling shareholder of the Company; or

- VIII-6 -

APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

is, or will, as a result of the transaction, become, an associate of a controller or proposed controller.

Acquiring the target company's assets is also a connected transaction if these assets account for 90% or more of the target company's net assets or total assets.

Article 17 Under the Hong Kong Listing Rules, exemptions from the connected transaction requirements are available for the following types of transactions, the detailed definitions and requirements of which are referred to in the appendix hereto:

"de minimis transactions"
"financial assistance"
"issues of new securities"
"dealings on stock exchanges"
"repurchase of own securities"
"directors' service contracts and insurance"
"consumer goods or services"
"sharing of administrative services"
"transactions with associates of passive investors"
"transactions with connected persons at the subsidiary level"

Article 18 In case of the following circumstances, the financial assistance provided by the Company to a connected person or commonly held entity will be fully exempt:

relevant assistance is conducted on normal commercial terms or better; and
the financial assistance provided by the Company is in proportion to the equity interest directly held by the Company or its "subsidiary" in the connected person or the "commonly held entity". Any guarantee given by the Company must be on a several (and not a joint and several) basis.

- VIII-7 -

APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Article 19 In case of the following circumstances, the financial assistance received by a listed issuer's group from a connected person or commonly held entity will be fully exempt:

relevant assistance is conducted on normal commercial terms or better; and
relevant assistance is not secured by the assets of the listed issuer's group.

Article 20 Under the Hong Kong Listing Rules, connected transactions subject to the reporting, announcement or shareholders' approval procedures are divided into connected transactions which are fully exempt, partially exempt and not exempt. Exemption is broadly divided into two categories: (1) fully exempt from shareholders' approval, annual review and all disclosure requirements; and (2) exempt from shareholders' approval requirement.

Chapter IV Consideration of Related (Connected) Transactions

Article 21 The general manager of the Company is entitled to determine the related transactions failing to meet the standards on consideration by the Board.

Article 22 A related transaction which requires consideration by the Board and timely disclosure by the Company is one that meets any of the following conditions:

the transaction amount of a related transaction between the Company and its related natural person exceeds RMB300,000 (The Company shall not directly or indirectly provide loans to the Directors, supervisors or senior management);
the transaction amount of a related transaction between the Company and its related legal person exceeds RMB3 million and accounts for 0.5% or more of the absolute value of the Company's latest audited net assets;
the related transaction which falls into the scope of authority of the general manager but is regarded by the Board, independent Directors or Board of Supervisors to be subject to approval by the Board.

Article 23 For the related transaction between the Company and its related person (except for the Company's being endowed with cash assets and reduction of debt obligations) with the amount of more than RMB30 million, which accounts for over 5% of the absolute value of the Company's latest audited net assets, in addition to disclosure in a timely manner, the Company shall engage a securities service provider with the related qualification for the business of securities and futures to issue an audit report or valuation report on the subject matter of transaction, and table the transaction at the general meeting for consideration. However, the subject matter of a transaction involved in a related transaction conducted between the Company and a related person under (11) to (14) of Article 12 hereof in relation to daily operation may be exempt from the audit or appraisal.

- VIII-8 -

APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Article 24 When conducting the day-to-day related transactions under (11) to (14) of Article 12 hereof with related persons, the Company shall disclose these transactions and carry out the appropriate procedures for consideration in accordance with the following provisions:

for agreements on day-to-day related transactions which have been already considered and approved at a general meeting or the Board and are being executed, if, during the execution, there is no significant change in the principal terms thereof, the Company shall disclose the actual performance of each of these agreements in the annual reports and interim reports as required, and indicate whether the performance is in compliance with the provisions of these agreements. If, during the execution, there are significant changes in the principal terms thereof, or the agreements are required to be renewed upon expiry, the Company shall submit the newly revised or renewed agreements on the day-to-day related transactions to the Board or a general meeting for consideration based on the total transaction amount involved in these agreements. Those agreements involving no specific total transaction amount shall be submitted to a general meeting for consideration;
for day-to-day related transactions which take place for the first time, the Company shall enter into a written agreement with a related person and timely disclose these transactions, and submit them to the Board or a general meeting for consideration based on the total transaction amount involved in these agreements. Those agreements involving no specific total transaction amount shall be submitted to a general meeting for consideration. After these agreements are considered, approved and disclosed, they shall be handled in the way same as day-to-day related transactions in accordance with the preceding paragraph;
if various kinds of new day-to-day related transactions take place in larger quantities annually, and it often needs to enter into new agreements for these related transactions, and if it is difficult for each of these agreements to be submitted to the Board or a general meeting for consideration in accordance with the preceding paragraph, the Company may, before disclosing an annual report for the previous year, make a reasonable estimate, by category, of the total transaction amount of the day-today related transactions of the Company to take place during that year for submission to the Board or a general meeting for consideration based on the estimated findings, and make relevant disclosure. For those day-to-day related transactions within the scope of the estimate, the Company shall disclose them in the annual reports and interim reports by aggregate category. If the total transaction amount exceeds the estimated total amount during Company's actual execution of these transactions, the Company shall, based on the amount of excess, make a re-submission to the Board or a general meeting for consideration and make relevant disclosure.

- VIII-9 -

APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Article 25 When the board of directors of the Company reviews matters on related transactions, the related director shall abstain from voting and shall not exercise the voting rights on behalf of other directors. The board meeting can be validly convened where the number of the non-related directors present exceeds half of the attendees and resolutions of the board meeting require approval of more than half of the non-related directors. Where the number of non-related directors present at the board meeting is less than three, the related transactions shall be submitted to the shareholders' meeting for consideration.

Related directors as referred to in preceding paragraph include the following directors or directors with one of the following circumstances:

a counterparty of the transaction;
the direct or indirect controller of the counterparty of the transaction;
an employee of the counterparty, or an employee of the legal person or other organizations that may directly or indirectly control the counterparty, or an employee of the legal person or other organizations directly or indirectly controlled by the counterparty;
closely related family members (including spouse, children aged 18 or above and their spouses, parents and parents of spouses, brothers and sisters and their spouses, brothers and sisters of spouses, parents of the children's spouses) of the counterparty or its direct or indirect controller;
closely related family members (including spouse, children aged 18 or above and their spouses, parents and parents of spouses, brothers and sisters and their spouses, brothers and sisters of spouses, parents of the children's spouses) of the directors, supervisors or senior management members of the counterparty or its direct or indirect controller;
Directors considered by the CSRC, domestic stock exchanges, or considered by the Company based on the principles of substance rather than form that their independent commercial judgment may be affected.

Article 26 When matters regarding related transactions are reviewed at the general meeting of the Company, related shareholders shall abstain from voting.

The related shareholders as referred to in the preceding paragraph include the following shareholders or the shareholders in any of the following circumstances:

a counterparty of the transaction;
the direct or indirect controller of the counterparty of the transaction;
directly or indirectly controlled by the counterparty of the transaction;

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

together with the counterparty of the transaction, directly or indirectly controlled by the same legal person or other organization or natural person;
employed by the counterparty, or employed by a legal person that can directly or indirectly control or be controlled by the counterparty (applicable to a shareholder who is a natural person);
a shareholder whose voting right is restricted and affected because of incomplete performance of equity transfer agreement or other agreement with the counterparty of the transaction or related person thereof;
shareholders which are likely to enjoy more interests of the Company as considered by CSRC or domestic stock exchange.

Article 27 Pursuant to the Listing Rules, connected transactions shall be subject to approving at the general meeting of the Company (except for waiver from the Hong Kong Listing Rules, such as the examples stipulated in Article 18 and Article 19 under this requirement). Any shareholder who has a material interest in the transaction must abstain from voting on the resolution.

Chapter V Disclosure of Information about Related (Connected) Transactions

Article 28 Under the requirements of domestic Listing Rules, the following documents shall be submitted to relevant domestic stock exchange when the Company makes disclosure of related transactions:

the draft of an announcement;
the agreement or letter of intent relating to the transaction;
the resolution of the Board of Directors, the draft of an announcement on the resolution and the opinions of independent directors (if applicable);
government approvals (if applicable) involved in the transaction;
a professional report (if applicable) issued by a securities service agency;
the written documents of the independent directors previously approving the transaction;
other documents as may be required by relevant domestic stock exchange.

- VIII-11 -

APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Article 29 In accordance with the Domestic Listing Rules, an announcement on a related transaction disclosed by the Company shall include the following particulars:

a summary of the transaction and general information about the counterparties and subject matter of the transaction, including name, carrying amount, value, operations of the subject matter; if there exists mortgage or pledge or other third party rights over the assets, material disputes, proceedings or arbitrations involved in the assets or judicial measures such as seal up or freeze; in case of a transaction which reaches the criteria for disclosure based on the principle of cumulative calculations, each individual transaction and details of cumulative calculations shall be described briefly;
Where the subject matter is equity, it shall also indicate the basic status of the company and the total assets, total liabilities, net assets, operating income and net profit and other financial information in the latest year;
Where there is a change in scope of combined statements arising from disposal of equity interests in a subsidiary, it shall also describe whether there exists guarantee for the subsidiary, commission the subsidiary to manage wealth, and occupation of company capitals; if exists, the amount involved, the impact on the Company and measure taken shall be disclosed.
the delivery status as well as the date of delivery and transfer of ownership of the subject matter of the transaction;
details about the prior approval and independent opinions expressed by the independent directors;
details about voting by the Board of Directors (if applicable);
related relationships of the parties to the transaction and the general information about the related persons;
pricing policy for the transaction and the basis for pricing, transaction price and the book value or assessed value of the subject matter of the transaction and the relationship between clear, fair market prices as well as other matters which need to be explained because of the special nature of the subject matter of the transaction in relation to pricing. In case of a big difference between the transaction price and the book value, the assessed value or the market price, the reasons therefor shall be explained. In case of unfair transactions, the direction of the transfer of the interests arising from this related transaction shall be disclosed as well;

- VIII-12 -

APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Major contents in other aspects of the transaction agreement, including the transacted amount, way of payment (in cash, equity or asset swap), period of payment or arrangement for installment, terms of agreement and effective time as well as term of validity; any kind of additional or retained terms shall be specified in particular;
If the transaction is subject to approval by the general meeting or the competent authority, the legal procedures and progress to be performed shall also be stated;
The purpose of transaction and impacts of transaction to the Company, including the real purpose and necessity of this related transaction, impacts on the financial status of the Company in the current period and future as well as operating result, etc;
total amount of various related transaction that have occurred with such related person on cumulative basis from the beginning of that year to the date of disclosure;
basis for pricing the transaction and the source of expenditure;
estimated revenue obtained from the transaction (including potential interests), and impacts of the transaction on the financial status and operating results of the Company in the current period and future;
an analysis of the capability of the counterparty to perform the agreement;
particulars on personnel placement, land lease, debt restructuring, etc. in relation to the transaction;
description of possible competition in the same business upon completion of the transaction, and relevant response measures therefor;
securities service institutions and their opinions;
other particulars required by the CSRC and relevant domestic stock exchange which help explain the real situation of the transaction.

Article 30 Pursuant to requirements of domestic Listing Rules, for a related transaction as a result of either the Company or a related person participating in an open tender or public auction and other acts, the Company may apply to the relevant domestic stock exchange for exemption from consideration and disclosure procedures required for a related transaction.

Article 31 Pursuant to requirements under Hong Kong Listing Rules, the Company must announce the connected transaction as soon as practicable after its terms have been agreed. If the connected transaction is subsequently terminated or there is any material

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

variation of its terms or material delay in the completion, the Company must announce this fact as soon as practicable. The Company must also comply with all other applicable provisions under the Listing Rules.

Article 32 Pursuant to requirements under Hong Kong Listing Rules, announcement on connected transactions shall at least include following information:

the information set out in Rule 14.58 to 14.60 of Hong Kong Listing Rules (contents of announcements on transactions to be disclosed);
correlation between counterparties and connected persons' interests in relevant transaction;
if the transaction is not required to be approved by shareholders, the advice of the independent non-executive directors on the matters mentioned in Rules 14A.40(1) to (3) of the Hong Kong Listing Rules;
if it is a continuing connected transaction, set out the calculation basis of the amount payable and cap amount of the transaction. If no circular is required to be published, the Company also need to disclose the way to determine and calculate the cap, including relevant assumptions and the amount of previous transaction as a benchmark;
if the transaction involves acquiring assets from connected person, set out the initial cost for acquiring relevant assets by the connected person;
if the transaction involves in sale of assets held by the Company for less than 12 months, the Company shall include the initial cost for acquiring the assets;
if the announcement sets out profit forecast in relation to the Company, or of a company belongs to (or will be) the Company's subsidiary, it should provide information as described in Rule 14.62 of the Hong Kong Listing Rules (must be promulgated trading statement about the regulation of the profit forecast);
if no circular is required to be published, it is necessary to state whether any Company directors have a significant interest in the transaction; If yes, whether they have abstain from voting at the board meeting;
(if applicable) explain the transaction shall be approved by shareholders.

Chapter VI Execution of Related (Connected) Transactions

Article 33 For all related (connected) transactions which may be executed only after approval by shareholders' general meetings, the Board of Directors and the Company's management shall arrange the execution thereof based on the decisions made at the shareholders' general meetings.

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Article 34 The relevant departments of the Company shall work together for management of the related (connected) transaction.

Article 35 In case the term of a daily related (connected) transaction agreement exceeds three years, the Company shall re-perform the relevant decision making procedures and disclosure obligations every three years according to this guideline.

Chapter VII Penalties

Article 36 If a related (connected) person of the Company conducts a related (connected) transaction in violation of the provisions hereof which causes losses to the Company, the Company and the shareholders may file a lawsuit to the people's court in accordance with the law.

Article 37 The Company shall impose penalties accordingly in accordance with relevant laws and regulations as well as the Company's rules and regulations on any directors, senior management, other persons directly in charge and persons responsible who have violated the relevant provisions hereof.

Chapter VIII Supplementary Provisions

Article 38 "above" in this mechanism include the number itself; "below" does not include the number itself.

Article 39 Matters not covered herein shall be handled in accordance with relevant national laws, regulations and rules, normative documents, applicable laws of Hong Kong, Hong Kong Listing Rules and the Articles of Association. If the matters are inconsistent with the national laws, regulations, rules and normative documents to be promulgated in future, applicable laws of Hong Kong, Hong Kong Listing Rules, or the Articles of Association amended according to lawful procedures, such national laws, regulations, rules, normative documents, applicable laws of Hong Kong, Hong Kong Listing Rules and the Articles of Association shall prevail.

Article 40 These Rules, as considered and approved at the shareholders' general meeting, shall become effective from the date when the A Shares issued in the Company's initial public offering are listed on the relevant domestic stock exchange.

Article 41 The right to interpret these Measures shall be vested in the Board of Directors of the Company.

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Appendix

Definitions related to the Hong Kong Listing Rules

Note: In these definitions, "listed issuer" and "issuer" both refer to the Company.

"30%-controlled company": Hong Kong Listing Rules 14A.06(1)

Means a company held by a person who can:

exercise or control the exercise of 30% (or an amount for triggering a mandatory general offer or establishing legal or management control over a business enterprise under the PRC law) or more of the voting power at general meetings; or
control the composition of a majority of the board of directors.

"Connected person at the subsidiary level": Hong Kong Listing Rules 14A.06(9)

Means a person who is a connected person only because of the person's connection with the listed issuer's subsidiary or subsidiaries;

"Majority-controlled company": Hong Kong Listing Rules 14A.06(23)

Means a company held by a person who can exercise or control the exercise of more than 50% of the voting power at general meetings, or control the composition of a majority of the board of directors.

"Material Interests" in a transaction: Hong Kong Listing Rules 2.15 and 2.16

The Listing Rules require that, where a transaction or arrangement of an issuer is subject to shareholders' approval under the provisions of the Listing Rules, any shareholder that has a material interest in the transaction or arrangement shall abstain from voting on the resolution(s) approving the transaction or arrangement in a general meeting.

In determining if a shareholder has material interests, following factors shall be considered:

if the shareholder is a party of the transaction or the arrangement or a close associate of a party of the transaction or the arrangement; and
whether the transaction or arrangement has grant its shareholder or close associate interests that other shareholders are not entitled (whether economic interest or other interest).

Whether an interest is significant or not is not measured based on the monetary or financial terms, but depending on the specific circumstances of the transaction.

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

"Connected subsidiary": Hong Kong Listing Rules 14A.16

Means: (1) a non wholly-owned subsidiary of the listed issuer where any connected person(s) at the issuer level, individually or together, can exercise or control the exercise of 10% or more of the voting power at the "subsidiary's" general meeting. This 10% excludes any indirect interest in the "subsidiary" which is held by the connected person(s) through the listed issuer; or (2) any "subsidiary" of a non wholly-owned subsidiary referred to in (1) above.

"Subsidiary": Hong Kong Listing Rules 1.01

According to the meaning defined in Schedule 1 of the Companies Ordinance (Chapter 622 of the Laws of Hong Kong);
any entity which is accounted for and consolidated in the audited consolidated accounts of another entity as a subsidiary pursuant to applicable Hong Kong Financial Reporting Standards or International Financial Reporting Standards; and
any entity which will, as a result of acquisition of its equity interest by another entity, be accounted for and consolidated in the next audited consolidated accounts of such other entity as a subsidiary pursuant to applicable Hong Kong Financial Reporting Standards or International Financial Reporting Standards.

"Associate": Hong Kong Listing Rules 14A.12, 14A.13, 14A.14, 14A.15

1. For any individuals, an "associate" means:

his spouse; his (or his spouse's) child/step-child, natural or adopted, under the age of 18 years (each an "immediate family member");
the trustees, acting in their capacity as trustees of any trust of which the individual or his "immediate family member" is a beneficiary or, in the case of a discretionary trust, is (to his knowledge) a discretionary object (other than a trust which is an employees' share scheme or occupational pension scheme established for a wide scope of participants and the connected persons' aggregate interests in the scheme are less than 30%) (the "trustees");
a "30%-controlled company" held, directly or indirectly, by the individual, his "immediate family members" and/or the "trustees" (individually or together), or any of its "subsidiaries";
a person cohabiting with him as a spouse, or his child, step-child, parent, stepparent, brother, step-brother, sister or step-sister (each a "family member");

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

a "majority-controlled company" held, directly or indirectly, by the "family members" (individually or together), or held by the "family members" together with the individual, his "immediate family members" and/or the "trustees", or any of its "subsidiaries"; or
any joint venture partner of a cooperative or contractual joint venture (whether or not it is a separate legal entity) where the person, his "immediate family members" and/or the "trustees" together directly or indirectly hold 30% (or an amount that would trigger a mandatory general offer or establish legal or management control over a business enterprise under the PRC law) or more in the joint venture's capital or assets contributions, or the contractual share of its profits or other income;

2. For any companies, an "associate" means:

its "subsidiary" or holding company, or a fellow "subsidiary" of the holding company;
the trustees, acting in their capacity as trustees of any trust of which the company is a beneficiary or, in the case of a discretionary trust, is (to its knowledge) a discretionary object (the "trustees");
a "30%-controlled company" held, directly or indirectly, by the company, the companies referred to in 2(i) above, and/or the "trustees" (individually or together), or any of its "subsidiaries"; or

Note: A "30%-controlled company" held by a person will not be regarded as his or its associate if the person's and his or its associates' interests in the company, other than those indirectly held through the listed issuer's group, are together less than 10%.

any joint venture partner of a cooperative or contractual joint venture (whether or not it is a separate legal entity) where the company, any company which is its "subsidiary" or holding company or a fellow "subsidiary" of the holding company, and/or the "trustees", together directly or indirectly hold 30% (or an amount that would trigger a mandatory general offer or establish legal or management control over a business enterprise under the PRC law) or more in the joint venture's capital or assets contributions, or the contractual share of its profits or other income.

"Substantial shareholder": Hong Kong Listing Rules 1.01, 14A.29

Means a person who is entitled to exercise, or control the exercise of, 10% or more of the voting power at any general meeting of the company. The Hong Kong Stock Exchange may aggregate the interests of any individual and his or its "associates" to decide whether they together are any company's "substantial shareholder".

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

"Closely allied group of shareholders": Hong Kong Listing Rules 14.45

To determine whether a group of shareholders constitutes a "closely allied group of shareholders", the Hong Kong Stock Exchange will take into account the following factors:

the number of persons in the group;
the nature of their relationship including any past or present business association between two or more of them;
the length of time each of them has been a shareholder;
whether they would together be regarded as "acting in concert" for the purposes of the Takeovers Code; and
the way in which they have voted in the past on shareholders' resolutions other than routine resolutions at an annual general meeting.

It is the listed issuer's responsibility to provide sufficient information to the Hong Kong Stock Exchange to demonstrate that the group of shareholders is a "closely allied group" of shareholders.

"Acquiring an interest in a target company": Hong Kong Listing Rules 14A.28, 14A.29, 14A.30

1. A listed issuer's group acquiring an interest in a target company from a person who is not a connected person and the company's "substantial shareholder" is, or is proposed to be, a "controller" or is, or will, as a result of the transaction, become, an "associate" of a "controller".

Note: (1) Acquiring the company's assets is also a connected transaction if these assets account for 90% or more of the company's net assets or total assets. (2) The Hong Kong Stock Exchange may aggregate the interests of the "controller" and his or its "associates" in the target company to decide whether they together are the company's "substantial shareholder". (3) This requirement does not apply to the following circumstance: if the "controller" or his or its "associate(s)" is or are together the target company's "substantial shareholders" only because of their indirect shareholdings in the target company held through the listed issuer's group.

"Financial assistance to or from commonly held entities": Hong Kong Listing Rules 14A.26

Financial assistance provided by a listed issuer's group to, or received by a listed issuer's group from, a "commonly held entity".

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

"Commonly held entity": Hong Kong Listing Rules 14A.27

Means a company whose shareholders include: (1) a member of the listed issuer's group; and (2) any connected person(s) at the issuer level who, individually or together, can exercise or control the exercise of 10% or more of the voting power at the company's general meeting. This 10% excludes any indirect interest held by the person(s) through the listed issuer.

"Controller": Hong Kong Listing Rules 14A.28(1)

Means a director, chief executive or controlling shareholder of the listed issuer.

"Continuing connected transaction": Hong Kong Listing Rules 14A.31

Connected transactions involving the provision of goods or services or financial assistance, which are carried out on a continuing or recurring basis and are expected to extend over a period of time. They are usually transactions in the "ordinary and usual course of business" of the listed issuer's group.

"Options": Hong Kong Listing Rules 14A.61

If the listed issuer's group grants an option to a connected person and the listed issuer's group does not have discretion to exercise the option, the transaction is classified as if the option has been exercised (see rule 14A.79(1) of the Hong Kong Listing Rules). In addition, the listed issuer must announce the following subsequent events as soon as practicable:

any exercise or transfer of the option by the option holder; and/or
(if the option is not, or is not to be, exercised in full), the option holder notifying the listed issuer's group that it will not exercise the option, or the expiry of the option, whichever is earlier.

"normal commercial terms or better": Hong Kong Listing Rules 14A.06(26)

Terms which a party could obtain if the transaction were on an arm's length basis or terms no less favourable to the listed issuer than terms available to or from independent third parties.

"De minimis transactions": Hong Kong Listing Rules 14A.76(1)

Connected transaction conducted on "normal commercial terms or better" and all the percentage ratios (other than the profits ratio) are:

less than 0.1%;

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

less than 1% and the transaction is a connected transaction only because it involves connected person(s) at the "subsidiary" level; or
less than 5% and the total consideration is less than HK$3,000,000.

Note: This exemption does not apply to an "issue of new securities" by the listed issuer to a connected person.

The "percentage ratios" are the figures, expressed as percentages resulting from each of the following calculations:

1. "Assets ratio" 14.07(1)

The total assets which are the subject of the transaction divided by the total assets of the listed issuer (see in particular Rules 14.09 to 14.12, 14.16, 14.18 and 14.19 of the Hong Kong Listing Rules).

2. "Profits ratio" 14.07(2)

The profits attributable to the assets which are the subject of the transaction divided by the profits of the listed issuer (see in particular rules 14.13 and 14.17 of the Hong Kong Listing Rules).

3. "Revenue ratio" 14.07(3)

The revenue attributable to the assets which are the subject of the transaction divided by the revenue of the listed issuer (see in particular rules 14.14 and 14.17 of the Hong Kong Listing Rules).

4. "Consideration ratio" 14.07(4)

The consideration divided by the total market capitalisation of the listed issuer. The total market capitalisation is the average closing price of the listed issuer's securities as stated in the Hong Kong Stock Exchange's daily quotations sheets for the five business days immediately preceding the date of the transaction (see in particular rule 14.15 of the Hong Kong Listing Rules).

5. "Equity capital ratio" 14.07(5)

The nominal value of the share capital to be issued by the listed issuer as consideration divided by the nominal value of the listed issuer's issued share capital immediately before the transaction. Fraction of shares includes any convertible securities issued or granted as consideration by the listing issuers or shares that may be generated when the subscription rights are converted or exercised. When calculating the equity ratio, it shall not include the value of the listing issuer's debt capital (if any); debt capital includes any preferred stock.

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

Note: Listed issuers must consider all the percentage ratios to the extent applicable for classifying a transaction. In the case of an acquisition where the target entity uses accounting standards different from those of the listed issuer, the listed issuer must, where applicable, perform an appropriate and meaningful reconciliation of the relevant figures for the purpose of calculating the percentage ratios.

"Issues of new securities": Hong Kong Listing Rules 14A.92

An "issue of new securities" by a listed issuer or its "subsidiary" to a connected person, and under the following circumstances:

the connected person receives a pro rata entitlement to the issue as a shareholder;
the connected person subscribes for the securities in a rights issue or open offer
1. through excess application; or (b) in his or its capacity as an underwriter or subunderwriter of the rights issue or open offer;
the securities are issued to the connected person under: (a) a share option scheme that complies with Chapter 17 of the Hong Kong Listing Rules; or (b) a share option scheme adopted by the listed issuer before its securities first start dealing on the Hong Kong Stock Exchange, and has been approved by the Hong Kong Stock Exchange; or
the securities are issued under a top-up placing and subscription that meets the following conditions: (a)time of the new securities issued to the connected person will be as follows: (i) after it has reduced its holding in the same class of securities by placing them to third parties who are not its "associates" under a placing agreement; and (ii) within 14 days from the date of the placing agreement; (b) the number of new securities issued to the connected person does not exceed the number of securities placed by it; and (c) the new securities are issued at a price not less than the placing price. The placing price may be adjusted for the expenses of the placing.

Note: Pursuant to rule 13.28 of the Hong Kong Listing Rules, the listed issuer shall publish an announcement containing the relevant details of the placing and subscription of shares in respect of the connected persons.

"Dealings on stock exchanges": Hong Kong Listing Rules 14A.93

Dealing which meets the following conditions, (1) the dealing in the securities is conducted as part of the "ordinary and usual course of business" of the listed issuer's group;

the securities are listed on the Hong Kong Stock Exchange or a recognised stock exchange; (3) the dealing is carried out on the Hong Kong Stock Exchange or a recognised stock exchange (or if not, no consideration passes to or from a connected person); and (4) the transaction is not made for the purpose of conferring a direct or indirect benefit upon any connected person who is a "substantial shareholder" of the target company.

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

"Repurchases of own securities": Hong Kong Listing Rules 14A.94

Repurchases of own securities by a listed issuer or its "subsidiary" from a connected person and (1) on the Hong Kong Stock Exchange or a recognised stock exchange, except where the connected person knowingly sells the securities to the listed issuer's group; or (2) in a general offer made under the Code on Share Buy-backs.

"Directors' service contracts and insurance": Hong Kong Listing Rules 14A.95, 14A.96

A director entering into a service contract with the listed issuer or its "subsidiary";

Purchase and maintenance of insurance for a director of the listed issuer or its "subsidiaries" against liabilities to third parties that may be incurred in the course of performing his duties if it is in the form permitted under the laws of Hong Kong and where the company purchasing the insurance is incorporated outside Hong Kong, the laws of the company's place of incorporation.

Note: All directors' service contracts to which rule 13.68 of the Hong Kong Listing Rules is applicable shall comply with the shareholders' approval requirement described in that rule.

"Consumer goods or services": Hong Kong Listing Rules 14A.97

A listed issuer's group buying consumer goods or services as a customer from, or selling consumer goods or services to, a connected person on "normal commercial terms or better" in its "ordinary and usual course of business". Such consumer goods or services:

must be of a type ordinarily supplied for private use or consumption;
must be for the buyer's own use, and not be:
1. processed into the buyer's products, or for resale; or
2. used by the buyer for any of its own businesses or contemplated businesses. This condition does not apply if the listed issuer's group is the buyer and there is an open market and transparency in the pricing of the goods or services;

Note: Examples include (1) meals consumed by a director at a restaurant owned by the listed issuer's group; (2) a director buying groceries for his own use at a retail store operated by the listed issuer's group; (3) utilities provided by the listed issuer's group to a director's apartment; (4) utilities provided by a connected person to the listed issuer's group where the prices of the utilities provided are openly announced or publicly quoted and apply to other independent consumers.

3. they must be consumed or used by the buyer in the same state as when they were bought; and

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

4. the transaction must be made on no more favourable terms to the connected person, or no less favourable terms to the listed issuer's group, than those available from independent third parties; and note: When determining whether this rule is applicable to a transaction, the listed issuer should consult the Hong Kong Stock Exchange at an early stage.

"Sharing of administrative services": Hong Kong Listing Rules 14A.98

Administrative services shared between the listed issuer's group and a connected person on a cost basis. The costs of the services must be identifiable and are allocated to the parties involved on a fair and equitable basis. Examples include shared secretarial, legal and staff training services.

"Ordinary and usual course of business": Hong Kong Listing Rules 14.04(8)

Means the existing principal activities of the entity or an activity wholly necessary for the principal activities of the entity. In the context of financial assistance provided in the ordinary and usual course of business, this means financial assistance provided by a banking company only; in the context of financial assistance not provided in the ordinary and usual course of business, it means financial assistance not provided by a banking company.

"Transactions with associates of passive investors": Hong Kong Listing Rules 14A.99

A connected transaction conducted between the listed issuer's group and an "associate" of a "passive investor", and it meets the following conditions:

the "passive investor" is a connected person only because it is a "substantial shareholder" of the listed issuer and/or any of its "subsidiaries"; and
the "passive investor":
1. is not a controlling shareholder of the listed issuer or its "subsidiaries";
2. does not have any representative on the board of directors of the listed issuer or its "subsidiaries", and is not involved in the management of the listed issuer's group (including having any influence over the management of the listed issuer's group through negative control (e.g. its veto rights) on material matters of the listed issuer's group);
3. is independent of the directors, chief executive, controlling shareholder(s) and any other "substantial shareholder(s)" of the listed issuer or its "subsidiaries"; and
the transaction is of a revenue nature in the "ordinary and usual course of business" of the listed issuer's group, and conducted on normal commercial terms or better.

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APPENDIX VIII RELATED PARTY TRANSACTIONS MANAGEMENT SYSTEM TO BE EFFECTIVE UPON THE A SHARE OFFERING AND THE LISTING OF THE A SHARES

"Passive investor": Hong Kong Listing Rules 14A.100

Means a "substantial shareholder" of the listed issuer and/or any of its "subsidiaries" that: (1) is a sovereign fund, or a unit trust or mutual fund authorised by the Securities and Futures Commission or an appropriate overseas authority; and (2) has a wide spread of investments other than the securities of the listed issuer's group and the "associate" that enters into the transaction with the listed issuer's group.

"Transactions with connected persons at the subsidiary level": Hong Kong Listing Rules 14A.101

A connected transaction between the listed issuer's group and a connected person at the subsidiary level on normal commercial terms or better is exempt from the circular, independent financial advice and shareholders' approval requirements if:

the listed issuer's board of directors have approved the transactions; and
the independent non-executive directors have confirmed that the terms of the transaction are fair and reasonable; the transaction is on normal commercial terms or better and in the interests of the listed issuer and its shareholders as a whole.

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APPENDIX IX	SYSTEM CONCERNING THE
	INDEPENDENT DIRECTORS TO BE EFFECTIVE UPON THE
	A SHARE OFFERING AND THE LISTING OF THE 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.

CHAPTER 1 GENERAL PROVISIONS

Article 1 To further improve the corporate governance structure of Holly Futures Co., Ltd. (hereinafter referred to as the "Company") and create sound working environment for independent directors as well as enhance the standard operation of the Company, these rules are hereby formulated in accordance with Company Law of the People's Republic of China, the Guidance for Listed Companies on Establishment of Independent Directors System (hereinafter referred to as the "Guidance"), Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited and the Articles of Association of the Company (the "Articles of Association").

Article 2 Independent directors of the Company are Directors holding no positions other than that of Director in the Company, and having no relationship with the Company and its substantial shareholders and affiliates as to hinder their independent and objective judgments.

Article 3 Independent directors owe a duty of good faith and diligence to the Company and all of its shareholders. Independent directors shall, in accordance with the requirements of related laws and regulations, regulatory requirements and the Articles of Association, earnestly perform their duties and responsibilities and safeguard the overall interests of the Company and all the shareholders with particular attention to ensure that the legitimate rights and interests of minority shareholders are not compromised.

Article 4 Independent directors shall perform their duties and responsibilities independently without being subject to the influence of the Company's major shareholders and de facto controllers or other entities or individuals who have a vested interest in the Company.

Article 5 The Board shall have at least one-third of its members as independent directors (and no less than 3 independent directors), at least one of whom is an accounting professional (an accounting professional shall meet the requirements of Article 9 of this system).

Article 6 Where an independent director fails to meet the conditions for independence or is not fit to perform the duties and responsibilities of an independent director for other reasons and, as a result, the number of independent directors fails to reach the specified in the Guidance, the Company shall fill the vacancy according to provisions.

Article 7 Independent directors shall participate in trainings organized by China's Securities and Regulatory Commission and its authorized institutions as required by China's Securities and Regulatory Commission.

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APPENDIX IX	SYSTEM CONCERNING THE
	INDEPENDENT DIRECTORS TO BE EFFECTIVE UPON THE
	A SHARE OFFERING AND THE LISTING OF THE A SHARES

CHAPTER 2 QUALIFICATIONS OF INDEPENDENT DIRECTORS

Article 8 Independent directors shall meet the following qualifications appropriate to the exercise of their functions and powers:

having more than 5 years of experiences in financial business (including futures and securities) or legal or accounting businesses or the senior title in the education and research of the relevant disciplines;
having educational background of graduate of college or university or above in relevant field and holding a bachelor degree or above;
familiar with futures law, administrative regulations and the provisions of CSRC, and possess the professional capabilities of futures;
having the time and effort necessary for performing the relevant obligations;
other qualifications specified in laws, regulations, normative documents and the securities regulatory authority located where the company shares are listed.

The independent directors of the Company can serve as the independent directors in up to 2 futures companies at the same time.

Article 9 Anyone who is nominated as an independent Director candidate as an accounting professional shall possess relatively rich accounting professional knowledge and experience and meet at least one of the following conditions:

having the qualifications of certified public accountants;
having a senior professional title, associate professor title or doctorate degree in accounting, auditing or financial management;
having a senior professional title in economic management and more than 5 years of full-time working experience in accounting, auditing or financial management and other professional positions.

CHAPTER 3 INDEPENDENCE OF INDEPENDENT DIRECTORS

Article 10 Independent directors must meet the requirements for independence and the following persons disqualified in this regard shall not act as independent director:

a person who holds a position in the Company or its affiliates and such person's close relatives and major social relations;

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APPENDIX IX	SYSTEM CONCERNING THE
	INDEPENDENT DIRECTORS TO BE EFFECTIVE UPON THE
	A SHARE OFFERING AND THE LISTING OF THE A SHARES

a person who directly or indirectly holds more than 1% of the issued shares of the Company, or any of the ten largest natural person shareholders of the Company, or such person's close relatives;
a person who directly or indirectly holds more than 5% of the issued shares of the Company or in any of the five largest shareholders of the Company, and who works in the entity having business relation or interest relation with the Company and such person's close relatives and major social relations;
a person who provides financial, legal and consultation services to the Company and its affiliates and such person's close relatives;
a person who has met any of the four conditions above in the most recent year;
a person who works in other futures company other than as independent director;
a person identified by the laws, regulations or the CSRC as not suitable for serving as the independent director of a futures company.

CHAPTER 4 NOMINATION, ELECTION AND CHANGE OF

INDEPENDENT DIRECTORS

Article 11 The Board, the Board of Supervisors or shareholders individually or collectively holding more than 1% of the issued shares of the Company may nominate candidates for independent directors to be elected at the shareholders' meeting.

Article 12 The consent to the nomination for independent directors shall be obtained from the nominee before the nomination. The nominator shall have full knowledge of the nominee's general information such as profession, educational background, professional title, detailed working experience and all other posts he or she concurrently holds, and give opinion on the nominee's qualifications and the independence required as an independent director. The nominee shall make a statement that he/she has no relationships with the Company that may affect his/her independent and objective judgment.

The Board of the Company shall announce the above details as required before the convening of a general meeting to elect independent directors.

Article 13 Before a general meeting of shareholders is held to elect independent directors, the Company shall simultaneously submit relevant materials regarding all nominees to the CSRC, the local residence office of the CSRC at the place where the Company is located, and the domestic stock exchanges on which the Company's shares are listed. If the Board of Directors objects to the qualifications of the nominees, a written opinion of the Board of Directors in connection therewith shall also be submitted at the same time.

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APPENDIX IX	SYSTEM CONCERNING THE
	INDEPENDENT DIRECTORS TO BE EFFECTIVE UPON THE
	A SHARE OFFERING AND THE LISTING OF THE A SHARES

If the CSRC has an objection to a nominee, such nominee may be a candidate for election as a director of the Company, but not a candidate for election as an independent director. When convening a general meeting of shareholders to elect independent directors, the Board of the Company shall explain whether the CSRC had any objection to any of the candidates being elected as independent directors.

Article 14 The term of office of an independent director shall be the same as that of other directors of the Company. Upon the expiry of his/her term, he or she may serve another term if re-elected. However, his/her consecutive term shall not exceed 6 years.

Article 15 The Independent directors shall attend Board meeting as scheduled, in order to understand the operation of the Company, actively investigate and obtain necessary information for making decision.

Article 16 Independent directors shall not appoint a non-independent director by proxy to attend the Board meeting on his/her behalf. If an independent director fails to attend a Board meeting for three consecutive times, the Board shall submit to the shareholders' general meeting that the independent director be dismissed. Except for the circumstances mentioned above and such other circumstances as prescribed in the Company Law in which a person shall not act as a director, an independent director shall not be dismissed without reason before the expiry of his term of office. If an independent director is dismissed prematurely, the Company shall disclose the dismissal as a matter requiring special disclosure. A dismissed independent director who considers his dismissal unjustified may make a public statement.

Article 17 An independent director may resign before the term of his/her office expires. He/she shall submit a written resignation report to the Board and spell out the circumstances related to the resignation or those that need to be brought to the attention of shareholders and creditors of the Company.

If the resignation of the independent director causes the number of independent directors in the Board to become less than the minimum number required by the Guidance, the resignation report of the independent director shall take effect after the subsequently appointed independent director fills the vacancy.

CHAPTER 5 RESPONSIBILITIES OF INDEPENDENT DIRECTORS

Article 18 Independent directors shall have the following special functions and powers other than those of a director conferred by the Company Law and other relevant laws and regulations:

major connected transactions shall be approved by independent directors before submission to the Board for discussion; before an independent director makes his or her judgment, an intermediary agency may be employed to produce an independent financial advisory report which will serve as the basis for his or her judgment;

- IX-4 -

APPENDIX IX	SYSTEM CONCERNING THE
	INDEPENDENT DIRECTORS TO BE EFFECTIVE UPON THE
	A SHARE OFFERING AND THE LISTING OF THE A SHARES

put forward the proposal to the Board relating to the appointment or dismissal of accounting firms;
propose to the Board to call an extraordinary general meeting;
propose to call a Board meeting;
appoint external auditing and consulting organizations independently;
may openly solicit proxies before a shareholders' meeting is convened.

Consent from more than one-half of all the independent directors shall be obtained if an independent director desires to exercise the above-mentioned functions and powers.

In case that the above proposal is not adopted or the functions and powers specified cannot be properly exercised, the Company shall disclose the related situation.

The connected transactions above are determined with reference to relevant requirements of CSRC, the domestic stock exchanges and the Hong Kong Stock Exchange.

Article 19 For the audit committee, nomination committee as well as remuneration committee under the Board, independent directors shall account for more than half of the composition.

Article 20 Independent directors shall give independent opinion on the following matters to the Board or the shareholders' meeting:

nomination, appointment and replacement of directors;
appointment and dismissal of senior management personnel;
remuneration for directors and senior management personnel of the Company;
any existing or new loans borrowed by the Company or other funds transfer that exceeds RMB3 million or 5% of the Company's recently audited net assets made by the company's shareholders, de facto controllers or connected enterprises, and whether or not the Company has taken effective measures to collect the amount due;
matters that are deemed by independent directors to be detrimental to the interests of minority shareholders;
other matters specified by the Articles of Association.

Article 21 With respect to the matters mentioned in Article 20, independent directors shall provide one of the following kinds of opinions:

- IX-5 -

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Holly Futures Co. Ltd. published this content on 23 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 April 2021 09:01:02 UTC.

Market Closed - Hong Kong S.E. Other stock markets 04:09:00 2024-05-03 am EDT			5-day change	1st Jan Change
1.33 ^HKD	-0.75%		-0.75%	-10.74%

Apr. 26	Holly Futures Co., Ltd. Reports Earnings Results for the First Quarter Ended March 31, 2024	CI
Mar. 28	Holly Futures Co., Ltd. Proposes Final Ordinary Cash Dividend for the Year Ended 31 December 2023	CI

Holly Futures Co., Ltd. Reports Earnings Results for the First Quarter Ended March 31, 2024	Apr. 26	CI
Holly Futures Co., Ltd. Proposes Final Ordinary Cash Dividend for the Year Ended 31 December 2023	Mar. 28	CI
Holly Futures Co., Ltd. Reports Earnings Results for the Full Year Ended December 31, 2023	Mar. 28	CI
Holly Futures Names Acting Chairman	Jan. 09	MT
Holly Futures Co., Ltd. Elects Chu Kairong as Chairman of the Board and the Authorised Representative	Jan. 08	CI
Holly Futures Reports Six Million Yuan Profit for Q3	23-10-27	MT
Holly Futures Co., Ltd. Reports Earnings Results for the Nine Months Ended September 30, 2023	23-10-27	CI
Holly Futures’ Chairlady Steps Down	23-10-09	MT
Holly Futures Co., Ltd. Announces Resignation of Zhou Jianqiu as Chairlady of Board, Executive Director, Chairlady of Nomination Committee and Strategic Committee, Legal Representative and Authorised Representative	23-10-09	CI
Holly Futures Records 80% Drop in H1 Profit	23-08-30	MT
Holly Futures Co., Ltd. Announces Not to Recommend Interim Dividend for the Six Months Ended 30 June 2023	23-08-29	CI
Holly Futures Co., Ltd. Reports Earnings Results for the Half Year Ended June 30, 2023	23-08-29	CI
Certain A Shares of Holly Futures Co., Ltd. are subject to a Lock-Up Agreement Ending on 6-AUG-2023.	23-08-05	CI
Holly Futures Co., Ltd. Appoints Zhang Hongfa as Independent Non-Executive Director	23-07-21	CI
Holly Futures’ H1 Profit to Plunge Up to 82%	23-07-17	MT
EMEA Morning Briefing : Shares Look Poised to Extend Gains	23-07-03	DJ
China Court Uplifts Freezing of Holly Futures’ A Shares; Freezes Further Shares	23-06-26	MT
Holly Futures Co., Ltd. Announces Resignation of Wang Yuetang as Independent Non-Executive Director	23-05-22	CI
Chinese Court Freezes Nearly 144 Million Shanghai-listed Shares of Holly Futures	23-05-12	MT
Holly Futures Co., Ltd. Reports Earnings Results for the First Quarter Ended March 31, 2023	23-04-28	CI
Holly Futures Co., Ltd. Reports Earnings Results for the Full Year Ended December 31, 2022	23-03-29	CI
Holly Futures Co., Ltd. Announces Employee Representative Supervisor Changes	23-03-20	CI
Holly Futures Co., Ltd. Approves the Change of Registered Address in China	23-02-15	CI
Holly Futures' 2022 Profit Seen to Slump Up to 85%; Hong Kong Shares Down 3%	23-01-26	MT
Holly Futures Expects Up To 85% Slump in 2022 Net Profit	23-01-19	MT

	1st Jan change	Capi.
HOLLY FUTURES CO., LTD.	-10.74%	1.04B
EAST MONEY INFORMATION CO.,LTD.	-7.05%	28.47B
GUOTAI JUNAN SECURITIES CO., LTD.	-7.53%	15.66B
CHINA GALAXY SECURITIES CO., LTD.	+3.15%	14.47B
INTERACTIVE BROKERS GROUP, INC.	+44.90%	12.86B
ORIENT SECURITIES COMPANY LIMITED	-4.02%	9.02B
CINDA SECURITIES CO., LTD.	-12.62%	7.04B
ZHESHANG SECURITIES CO., LTD.	+8.34%	5.99B
SDIC CAPITAL CO.,LTD	-5.04%	5.68B
WESTERN SECURITIES CO.,LTD.	+16.17%	4.57B

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