2020 One of the Annual General Meeting documents

2020 Annual Work Report of the Company’s Board of Directors

Dear Shareholders:

2020 Over the past year, the Company’s Board of Directors has conscientiously fulfilled the duties prescribed by the Company Law and other relevant laws and regulations, as well as by the Company Charter, thereby fully exercising the Board’s due functions. Each director has demonstrated diligence and accountability, rigorously performing their duties to ensure sound decision-making and compliant operations. The following is a report on the relevant work:

I. Board of Directors’ Work in 2020

1 , Meeting Proceedings and Resolutions of the Board of Directors During the Reporting Period

During the reporting period, the Company’s Board of Directors held seven meetings.

(1) Eighth Session of the Eighth Board of Directors

The Company’s Eighth Board of Directors, on March 23, 2020, adopted Communication-based voting method The eighth meeting was convened. At this meeting, the following resolutions were reviewed and adopted: Report on the Change of the Securities Abbreviation. The announcement of the resolutions passed at this board meeting was published on March 24, 2020, in the China Securities Journal, the Hong Kong Commercial Daily, and the Cninfo website.

(2) Ninth Meeting of the Eighth Board of Directors

    The Company’s Eighth Board of Directors on April 16, 2020 By combining on-site observation with video footage The ninth meeting was convened. At this meeting, the following resolutions were reviewed and adopted: the 2019 Work Report of the Company’s General Manager; the 2019 Work Report of the Company’s Board of Directors; the Company’s 2019 Financial Final Accounts Report; the Company’s Proposed 2019 Profit Distribution Plan; the Company’s 2019 Annual Report; and the Company’s First Quarter Report for 2020. 2019 Annual Internal Control Evaluation Report of the Company ； 2019 Corporate Social Responsibility Report ； 2019 Annual Report on the Performance of Duties by the Company’s Independent Directors ； Report on the Provision for Impairment of Assets; Report on Authorizing the Chairman of the Board and the Management Team to Apply for Bank Credit Lines and Loan Facilities for the Year 2020 ； Report on the Company’s Estimated Routine Related-Party Transactions for the Year 2020; Report on the Appointment of the Company’s Auditor for the Year 2020; Report on the Leasing of Land and Buildings; Report on the Sale of a Portion of the Company’s Shares in Guotai Junan Securities Co., Ltd.; Report on Changes in Accounting Policies; Report on the Basic Matters Pertaining to the Convening of the 2019 Annual General Meeting of Shareholders. The announcement of the resolutions passed at this board meeting was published on April 18, 2020, in the China Securities Journal, the Hong Kong Commercial Daily, and the Cninfo website.

   (3) The 10th Meeting of the 8th Board of Directors

    The Company’s Eighth Board of Directors, on May 19, 2020, adopted Communication-based voting method The tenth meeting was convened. At this meeting, the following resolutions were reviewed and adopted: Report on Capital Increase for Wholly Owned Subsidiary The announcement of the resolutions passed at this board meeting was published on May 20, 2020, in the China Securities Journal, the Hong Kong Commercial Daily, and the Cninfo website.

(4) The 11th Meeting of the 8th Board of Directors

    On August 21, 2020, the Eighth Board of Directors of the Company held its eleventh meeting by way of written resolution. At this meeting, the following resolutions were reviewed and adopted: the Company’s 2020 Semi-Annual Report and its Summary; Report on the Provision for Impairment of Assets The announcement of the resolutions passed at this board meeting was published in the China Securities Journal, the Hong Kong Commercial Daily, and the Cninfo website on August 22, 2020.

(5) The 12th Meeting of the 8th Board of Directors

On October 27, 2020, the Eighth Board of Directors of the Company held its twelfth meeting by way of written resolution. At this meeting, the following were reviewed and approved: Company 2020 Third-quarter report for the year.

(6) The 13th Meeting of the 8th Board of Directors

    On November 27, 2020, the Eighth Board of Directors of the Company convened its 13th meeting by way of written resolution. At this meeting, the following resolution was reviewed and adopted: a report on the transfer of equity in Dalian Bingshan Group Management Consulting Co., Ltd. The announcement regarding the resolutions passed at this board meeting was published on November 28, 2020, in China Securities Journal, Hong Kong Commercial Daily, and the Cninfo website.

(7) The 14th Meeting of the 8th Board of Directors

On December 15, 2020, the Eighth Board of Directors of the Company convened its 14th meeting by way of written resolution. At this meeting, the following resolution was reviewed and adopted: a report on the dismissal and appointment of the Company’s General Manager. The announcement regarding the resolutions passed at this Board meeting was published in the December 16, 2020 issues of China Securities Journal, Hong Kong Commercial Daily, and the Cninfo website.

2 , The Board of Directors’ Implementation of Resolutions Passed by the Shareholders’ Meeting

The Company’s Board of Directors has effectively implemented all resolutions passed at the 2019 Annual General Meeting.

The Company’s 2019 dividend distribution plan was fully implemented by the Board of Directors in July 2020.

3 , Performance of the Board of Directors’ Audit Committee

The Audit Committee under the Company’s Board of Directors performs its duties in accordance with the Company’s “Detailed Rules for the Implementation of the Board of Directors’ Audit Committee” and the “Annual Report Working Procedures of the Audit Committee,” overseeing the Company’s internal audit system and its implementation, reviewing the Company’s financial information and related disclosures, and evaluating the work of external auditing firms.

In the course of the company’s internal control evaluation, the Audit Committee has actively fulfilled its organizational, leadership, and oversight responsibilities. In accordance with the company’s criteria for identifying internal control deficiencies, the Committee reviewed the 2020 Internal Control Evaluation Report and engaged ShinWing Certified Public Accountants to conduct an internal control audit. The audit concluded that the company’s current internal control system is in compliance with applicable requirements and has been effectively implemented; moreover, the 2020 Internal Control Evaluation Report accurately reflects these findings.

During the Company’s 2020 audit engagement, the Audit Committee maintained active communication and effective coordination with the auditing firm, Shinewing Zhonghe Certified Public Accountants. Prior to and throughout the audit, the Committee repeatedly urged the auditor to advance the audit work in a timely and high-quality manner, in accordance with the audit plan and progress. Following completion of the audit, the Committee conducted a thorough review of the Company’s annual financial statements and annual report, concluding that the financial statements are comprehensive and accurate, and that all externally disclosed financial reports and related information are objective, truthful, and faithfully reflect the Company’s annual financial condition.

The Audit Committee is of the view that, in providing audit services for the Company for the year 2020, Shinewing Zhonghe Certified Public Accountants has adhered to the professional standards of independence, objectivity, and impartiality; conducted the audit in strict accordance with the new accounting standards; proactively communicated with the Audit Committee and the independent directors; exercised due diligence and responsibility; and thereby successfully completed the Company’s 2020 audit engagement. The Committee therefore proposes that the Company re-engage Shinewing Zhonghe Certified Public Accountants as its auditor for the year 2021.

4 , Performance of the Board’s Compensation and Assessment Committee

The Compensation and Assessment Committee under the Company’s Board of Directors has performed its duties in accordance with the Company’s Implementing Rules for the Board of Directors’ Compensation and Assessment Committee, reviewing the annual compensation of the Company’s directors, supervisors, and senior management. The Committee concludes that the decision-making procedures and remuneration standards for the aforementioned individuals are in compliance with applicable laws and regulations as well as the Company’s internal policies, and that the compensation information disclosed in the Company’s 2020 Annual Report is true and accurate.

II. 2021 Board of Directors Work Plan

2021 This year, the Company’s Board of Directors will focus on initiatives to enhance the quality of listed companies and strengthen corporate governance, aligning these efforts with the Company’s specific circumstances. The Board will concentrate on the core cold-and-hot business segments and on improving the performance of the Company’s principal operations, faithfully fulfilling the duties prescribed by the Company Law, other relevant laws and regulations, and the Company Charter. By effectively leveraging the Board’s mandated role, the Company aims to further elevate the level of evidence-based decision-making and standardized operations, thereby fostering sustainable, high-quality development.

Please review the above report.

May 14, 2021