China Literature : SUPPLEMENTAL ANNOUNCEMENT IN RELATION TO THE ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2019

About this update from China Literature Ltd.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement. CHINA LITERATURE LIMITED 閱 文 集 團 (incorporated in the Cayman Islands with limited liability) (Stock Code: 772) SUPPLEMENTAL ANNOUNCEMENT IN RELATION TO THE ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2019 Reference is made to the annual report of the Company for the year ended December 31, 2019 (the " 2019 Annual Report ") published on April 27, 2020. Unless the context otherwise requires, capitalized terms used herein shall have the same meanings as those defined in the 2019 Annual Report. In addition to the information provided in the 2019 Annual Report, the Board would like to provide further information in relation to the use of net proceeds during the year ended December 31, 2019 as follows: Amount of net Amount Balance proceeds of net of net Intended utilized proceeds proceeds timetable during the utilized unutilized for use Allocation year ended up to as at of the of net December December December unutilized Intended use of net proceeds proceeds 31, 2019 31, 2019 31, 2019 net proceeds (RMB in millions) (i) Expanding the Group's online 1,843.4 669.7 1,015.1 828.3 By/before reading business and sales and December 31, marketing activities 2020 (ii) Expanding the Group's 1,843.4 1,150.6 1,351.5 491.9 By/before involvement in the development of December 31, derivative entertainment products 2020 adapted from its online literary titles (iii) Funding our potential investments, 1,843.4 109.4 1,843.4 - Not acquisitions applicable and strategic alliances 1 Amount of net Amount Balance proceeds of net of net Intended utilized proceeds proceeds timetable during the utilized unutilized for use Allocation year ended up to as at of the of net December December December unutilized Intended use of net proceeds proceeds 31, 2019 31, 2019 31, 2019 net proceeds (RMB in millions) (iv) Working capital and general 614.5 614.5 614.5 - Not corporate purposes applicable Total 6,144.7 2,544.2 4,824.5 1,320.2 By order of the Board CHINA LITERATURE LIMITED Mr. James Gordon Mitchell Chairman of the Board and Non-executive Director Hong Kong, August 31, 2020 As at the date of this announcement, the Board comprises Mr. Cheng Wu and Mr. Hou Xiaonan as executive Directors; Mr. James Gordon Mitchell, Mr. Wu Wenhui, Mr. Cao Huayi and Mr. Cheng Yun Ming Matthew as non-executive Directors; Ms. Yu Chor Woon Carol, Ms. Leung Sau Ting Miranda and Mr. Liu Junmin as independent non-executive Directors. 2

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