Both the CSI 300 Index and the SSE Composite Index are major indices on China’s securities market. The constituents of CSI 300 Stock Index Futures, launched on April 8, 2005, are 300 A shares selected from the Shanghai and Shenzhen securities markets. The constituents of SSE Composite Index, originated on July 15, 1991, consist of all the listed A and B shares to reflect the fluctuation of prices of all shares listed on the Shanghai Stock Exchange. The compilation methodology of them differs remarkably, with the details as follows:

I. Base day and base point

The base day of CSI 300 Index is December 31, 2004, with the base point of 1,000 points and the base period of the adjusted market capitalization of all 300 constituents on the base day.

The base day of SSE Composite Index is December 19, 1990, with the base point of 100 points.

II. Number of constituents

CSI 300 Index has 300 constituents.

The constituents of SSE Composite Index are all listed shares on the SSE.

III. Selection of constituents

The constituent universe of CSI 300 Index is made up of A shares that satisfy all the following conditions: having been listed for over a quarter, otherwise the daily average market capitalization of the A share must be ranked top 30 among all A shares listed on Shanghai and Shenzhen markets since its listing day; non-ST or *ST stock, and not under listing suspension; in sound operational condition without serious violations against laws and regulations in the most recent year, and having no significant issue in financial reports; no obvious fluctuation or market manipulation of stock prices; excluding other shares that are recognized by the expert committee as those that should be excluded.

The constituent selection method is as follows: calculate the daily average trading volume and daily average total market capitalization of A shares within the constituent universe in the most recent year (or since its listing if it is a new stock); rank the A stocks within the constituent universe according to their daily average trading volume in the most recent year, and exclude the last 50% stocks; rank the remaining A stocks according to their daily average market capitalization in the most recent year, and select the top 300 stocks as the constituents.

The constituents of SSE Composite Index are all shares listed on the SSE.

IV. Index calculation

The CSI 300 Index is calculated according to the Paasche weighted composite price index formula, as listed below:

Index in the reporting period = (total adjusted market capitalization of the constituents in the reporting period／base period) × 1000

Total adjusted market capitalization =　 ∑ (market value × adjusted issued shares of constituents)

The adjusted issued shares in the index calculation are obtained by adjusting the issued shares of constituents by way of classification. Two factors, namely free-floating volume and classification, should be fixed before calculation of adjusted issued shares.

The SSE Composite Index is calculated according to the Paasche weighted composite price index formula, as listed below:

Index in the reporting period = (total market capitalization of the constituents in the reporting period / total market value of the constituents on the base day) × 100

Total market value = ∑ (market value × issued shares)

V. Index modification

The CSI 300 Index is modified according to the “divisor modification method”, as listed below:

Adjusted market capitalization before modification / original divisor = adjusted market capitalization after modification / new divisor

Adjusted market capitalization after modification = adjusted market capitalization before modification + newly increased (decreased) adjusted market capitalization.

The new divisor (i.e. the modified divisor, or the new base period) is calculated from the above formula. Then the index in future is calculated accordingly.

Conditions requiring modification are as follows:

(1) Ex-dividend: if a constituent is going to exclude dividend (dividend distribution), no modification will be made on the CSI 300 Index, which will undergo a natural decline, while the CSI 300 Total Return Index will be modified according to the reference ex-dividend price before the ex-dividend day of the constituent;

(2) Ex-right: if a constituent is going to distribute bonus shares or allot shares, the index will be modified before the ex-right base day of the constituent. The adjusted market capitalization of the constituent will be calculated according to the new issued shares and market capitalization.

Adjusted market capitalization after modification = ex-right quote × adjusted issued shares after ex-right + adjusted market capitalization before modification (excluding ex-right stocks).

(3) Trading suspension: if a constituent is under trading suspension, the real-time index will be calculated according to the constituent’s closing price before trading suspension till its trading resumption;

(4) Change of total issued shares: if there is a change (change in total issued shares due to additional shares issuance, listing of allotted shares, listing of employee shares, etc.) in the total issued shares of a constituent, the index will be modified before the day of change.

Adjusted market capitalization after modification = closing price × adjusted issued shares after the change + adjusted market capitalization before modification (excluding changed stocks).

(5) Adjustment to constituents: if the regular or temporary adjustment to the constituents takes place, the index will be modified before the effective day of adjustment.

The SSE Composite Index will be modified according to the “divisor modification method”. If a change in the list of constituents, a change in the shares structure of a constituent, or a change in the market capitalization of a constituent due to a non-trading reason takes place, the original fixed divisor will be modified according to the “divisor modification method” to ensure the consistency of the index. The modification formula is as follows:

Market capitalization before modification / original divisor = market capitalization after modification / new divisor

Market capitalization after modification = market capitalization before modification + newly increased (decreased) market capitalization;

The new divisor (i.e. divisor after modification, or new base period) will come from the above formula. The index in future will be calculated according to the new divisor. Total market value of constituents before modification / original divisor = total market value of constituents after modification / new divisor

The conditions requiring modification include listing of new shares, delisting of stocks, change in total issued shares (due to bonus shares, right issue or capital decrease), ex-right deletion, re-entrance, change in exchange rate, etc.

VI. Adjustment to constituents

The constituents of CSI 300 Index are reviewed on a semi-annual basis in the principle of constituent stability and dynamic tracking and adjusted according to the review result. The proportion of the adjusted constituents is generally not higher than 10%.

If a special event happens to a constituent and may affect the representativeness and investment availability of the index, China Securities Index Co., Ltd. can make necessary adjustment to the constituents of CSI 300 Index. Such events include but are not limited to bankruptcy, delisting, listing suspension, additional issuance, reorganization, purchase, merger and split-up.

As to the SSE Composite Index, the newly listed constituent will be included in the index on the 11th trading day after listing.

VII. Comparison of top 10 heavyweight stocks

The comparison of top 10 heavyweight stocks in CSI 300 Index and SSE Composite Index is as follows:

(As of January 28, 2010)