協盛協豐控股有限公司* (Incorporated in the Cayman Islands with Limited Liability) R13.51A (Stock Code: 707)

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 you should take, you should R14.63(2)(b) consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Co-Prosperity Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee, or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no R14.58(1) 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 on the whole or any part of the contents of this circular.

CO-PROSPERITY HOLDINGS LIMITED A1B1 協盛協豐控股有限公司* (Incorporated in the Cayman Islands with limited liability) R13.51A (Stock Code: 707)

(1) MAJOR TRANSACTION IN RELATION TO THE ACQUISITION OF SALE SHARES AND MAJOR DEBTS OF ASIA TELEVISION LIMITED; (2) PROPOSED REFRESHMENT OF THE EXISTING GENERAL MANDATE TO ALLOT AND ISSUE SHARES; AND (3) NOTICE OF EGM

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of the Existing General Mandate

A letter from the Independent Board Committee is set out on page 35 of this circular and a letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 36 to 46 of this circular.

A notice convening an extraordinary general meeting of the Company (the “EGM”) to be held at Rooms 2501-14, 25th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong on Friday, 6 January 2017 at 11:30 a.m. is set out on pages 71 to 73 of this circular.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

* For identification purpose only 19 December 2016 CONTENTS

Page

DEFINITIONS ...... 1

LETTER FROM THE BOARD ...... 7

LETTER FROM THE INDEPENDENT BOARD COMMITTEE ...... 35

LETTER FROM AKRON CORPORATE FINANCE ...... 36

APPENDIX I – FINANCIAL INFORMATION OF THE GROUP ...... 47

APPENDIX II – FINANCIAL INFORMATION OF THE ATV GROUP ...... 49

APPENDIX III – VALUATION REPORT ON PREMISES OF ATV ...... 59

APPENDIX IV – GENERAL INFORMATION ...... 64

NOTICE OF EGM ...... 71 DEFINITIONS

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

“Absolute Star” Absolute Star Limited, a company incorporated in the BVI with limited liability and an Independent Third Party

“Acquisition” the acquisition of the Major Debts and the Sale Shares pursuant to the terms and conditions of the Sale and Purchase Agreement

“AGM” the annual general meeting of the Company held on 15 June 2016 in which the Shareholders had approved, among other things, the Existing General Mandate

“Announcements” the Company’s announcements dated 13 December 2015, 1 February 2016, 30 April 2016, 29 July 2016 and 23 September 2016

“Antenna” Antenna Investment Limited, a company incorporated in Hong Kong with limited liability and an Independent Third Party

“associate(s)” has the meaning ascribed to it under the Listing Rules

“ATV” Asia Television Limited, a company incorporated in Hong Kong with limited liability

“ATV Group” ATV and its subsidiaries

“ATV Shareholders” collectively David Wong Ben Koon (黃炳均), Absolute Star, Panfair, Dragon Race, Dragon Viceroy, Power Hill and China Light

“ATV Shareholders Agreement” the shareholders’ agreement entered into between, among others, ATV, Panfair, Dragon Viceroy and China Light dated 15 June 2007 and the deed of adherence and assignment entered into between, among others, Antenna, ATV, Panfair, Dragon Viceroy and China Light dated 26 March 2009

“Balance Amount” HK$220,000,000, being the balance Consideration of the Acquisition

“Board” the board of Directors

“Borrower” or “Purchaser” or Star Platinum Enterprises Limited, a company incorporated in the “Investor” or “Star Platinum” BVI with limited liability and a wholly-owned subsidiary of the Company

“BVI” British Virgin Islands

1 DEFINITIONS

“China Culture Media” China Culture Media International Holdings Limited (中國文化傳媒國際控股有限公司), a company incorporated in the BVI with limited liability

“China Light” China Light Group Limited, a company incorporated in the BVI with limited liability and an Independent Third Party

“Circular” the Company’s circular dated 22 February 2016

“close associate(s)” has the meaning ascribed to it under the Listing Rules

“Company” Co-Prosperity Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the Main Board of the Stock Exchange

“Completion” completion of the Acquisition in accordance with the terms and conditions of the Sale and Purchase Agreement

“connected person(s)” has the meaning ascribed to it under the Listing Rules

“Consideration” the Major Debts Consideration and the Sale Shares Consideration

“Court” the High Court of Hong Kong

“Director(s)” the director(s) of the Company

“Dragon Race” Dragon Race Limited, a company incorporated in the BVI with limited liability and an Independent Third Party

“Dragon Viceroy” Dragon Viceroy Limited, a company incorporated in Hong Kong with limited liability and an Independent Third Party

“EGM” the extraordinary general meeting of the Company to be held at Rooms 2501-14, 25th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong on 6 January 2017 at 11:30 a.m. for the purpose of considering, and if thought fit, approving ordinary resolutions in respect of (i) proceeding to the Completion; and (ii) grant of the New Issue Mandate

“Existing General Mandate” the general mandate which was granted to the Directors pursuant to an ordinary resolution passed at the AGM for the allotment and issue of up to 642,380,800 new Shares, representing 20% of the aggregate nominal amount of the share capital of the Company in issue on the date of the AGM

“Group” the Company and its subsidiaries

2 DEFINITIONS

“Hero Luxury” Hero Luxury Limited, a company incorporated in the BVI with limited liability and a wholly-owned subsidiary of the Company

“HK$” Hong Kong dollars, the lawful currency of Hong Kong

“Hong Kong” Hong Kong Special Administrative Region of the People’s Republic of China

“Honghu Capital” Honghu Capital Company Limited, a company incorporated in the BVI with limited liability and a substantial shareholder of the Company

“Independent Board Committee” an independent committee of the Board comprising all the independent non-executive Directors to advise the Independent Shareholders as to the fairness and reasonableness of the Refreshment of the Existing General Mandate by the grant of the New Issue Mandate

“Independent Financial Adviser” Akron Corporate Finance Limited, the independent financial or “Akron Corporate Finance” adviser appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of the Existing General Mandate, and a corporation licensed to carry out Type 6 (advising on corporate finance) regulated activity under the SFO

“Independent Shareholder(s)” any Shareholder(s) other than controlling Shareholders and their associates or, if there is no controlling Shareholder, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates

“Independent Third Party(ies)” third party(ies) independent of and not connected with the Company and its connected persons

“Interim Transitioning Deed” the interim transitioning deed dated 28 October 2016 and entered into between, among others, the Investor and the Provisional Liquidators, in relation to, inter alia, the arrangement to allow the Investor to have access and right to use the assets, tangible and non-tangible, of ATV for production and broadcasting

“Latest Practicable Date” 16 December 2016, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular prior to its publication

“Lender” Rende Finance Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company

3 DEFINITIONS

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

“Major Debts” has the meaning ascribed to it on page 11 of this circular

“Major Debts Consideration” HK$490,000,000 payable by the Purchaser to the relevant Vendors pursuant to the terms and conditions of the Sale and Purchase Agreement

“Mr. Deng” Mr. Deng Jun Jie, a substantial shareholder of the Company

“New Issue Mandate” the new general mandate proposed to be granted to the Directors at the EGM to exercise the power of the Company to allot, issue and otherwise deal with new Shares not exceeding 20% of the issued share capital of the Company as at the date of the passing of the relevant resolutions

“Panfair” Panfair Holdings Limited, a company incorporated in the BVI with limited liability and an Independent Third Party

“Placing” the placing of 642,380,000 Shares under the Existing General Mandate pursuant to the conditional placing agreement entered into between the Company and Kingston Securities Limited (as placing agent) dated 28 September 2016

“Power Hill” Power Hill Limited, a company incorporated in the BVI with limited liability and an Independent Third Party

“Premises” all that piece or parcel of land situated at Tai Po, New Territories known and registered in the Land Registry of Hong Kong as Subsection 2 of Section L of Tai Po Town Lot No. 1 and extension thereto

“Provisional Liquidators” the joint and several provisional liquidators of ATV appointed by the Court by an order dated 24 February 2016

“Refreshment of the the proposed refreshment of the Existing General Mandate by the Existing General Mandate” grant of the New Issue Mandate

“Restructuring Agreement” the restructuring agreement dated 28 October 2016 and entered into between, among others, the Investor and the Provisional Liquidators, in relation to, inter alia, the framework of the Scheme of Arrangement to be proposed to the creditors of ATV by the Investor whereby all liabilities of ATV shall be assumed by the Investor

4 DEFINITIONS

“Restructuring Arrangement” a series of arrangements including the completion of the Acquisition, the Scheme of Arrangement, the completion of all ancillary incidental matters including the Court granting the order to sanction the withdrawal of the winding-up petition against ATV, the release of the Provisional Liquidators, the control over ATV returning from the Provisional Liquidators to the board of directors of ATV, the Investor having enough power and exposure or rights to control ATV, and ATV being able to resume to normal operation

“Revolving Loan” the revolving loan facility in the maximum amount of HK$2 million per month from the period commencing on 4 November 2016 and expiring on 31 March 2017 (which may be renewed or extend by written agreement between the parties to the said agreement), granted by the Investor to ATV

“Sale and Purchase Agreement” the sale and purchase agreement dated 30 April 2016 entered into between, among others, the Borrower (i.e. the Purchaser) and the Vendors (as supplemented by an agreement dated 30 July 2016 entered into between the Purchaser, Wong Ching (王征) and Treasure Ridge)

“Sale Shares” the aggregate of 689,934,950 issued shares in the share capital of ATV, representing approximately 52.42% of the entire issued share capital of ATV

“Sale Shares Consideration” HK$10,000,000 payable by the Purchaser to the relevant Vendors pursuant to the terms and conditions of the Sale and Purchase Agreement

20161128 “Scheme”or the scheme of arrangement to be proposed by the Investor to the Q8 “Scheme of Arrangement” creditors of ATV by which all liabilities of ATV shall be assumed by the Investor

“SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company

“Shareholder(s)” the holder(s) of the Share(s)

“Share Pledge” the pledge of 99 shares in the Borrower by Mr. Si Rongbin in favour of the Lender for all monies and obligations from time to time owing by the Borrower to the Lender, including the amounts under the loan agreements entered into between the Lender (as lender), the Borrower (as borrower) and Mr. Si Rongbin (as guarantor) dated 30 April 2016

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“substantial shareholder(s)” has the meaning ascribed to it under the Listing Rules

5 DEFINITIONS

“Treasure Ridge” Treasure Ridge Limited, a company incorporated in the BVI with limited liability and an Independent Third Party

“Vendors” collectively Wong Ching (王征), Treasure Ridge, David Wong Ben Koon (黃炳均), Panfair, Dragon Viceroy and China Light

“Working Capital Loan” the loan facility in an aggregate amount of HK$30 million granted by the Investor to ATV, which was pre-drawn by ATV in six equal drawdowns of HK$5 million during the period commencing 3 May 2016 and expiring on 3 November 2016

“Working Capital Loan Agreement” the working capital loan agreement dated 28 October 2016 entered into between, among others, the Investor and the Provisional Liquidators, in relation to, inter alia, the provision of the Working Capital Loan and Revolving Loan by the Investor to ATV

“%” per cent.

6 LETTER FROM THE BOARD

CO-PROSPERITY HOLDINGS LIMITED 協盛協豐控股有限公司* (Incorporated in the Cayman Islands with limited liability) (Stock Code: 707)

Executive Directors: Registered office: R2.14 Mr. Tang Hon Kwo (Chairman) Cricket Square Mr. Lam Chi Keung Hutchins Drive Mr. Ip Ka Po P.O. Box 2681 Mr. Sze Siu Bun Grand Cayman Mr. Ma Zhi KY1-1111 Cayman Islands Non-executive Director: Mr. Li Wenfeng (Deputy Chairman) Head office and principal place of business in Hong Kong: Independent non-executive Directors: Rooms 2501-14, 25th Floor Ms. Tao Feng Sun Hung Kai Centre Ms. Han Xingxing 30 Harbour Road Mr. Cheung Ngai Lam Wanchai, Hong Kong

19 December 2016

To the Shareholders

Dear Sir or Madam,

INTRODUCTION

Reference is made to the Announcements and the Circular. Reference is also made to Company’s announcement dated 23 September 2016 in relation to the Acquisition. The purpose of this circular is to provide you with further details regarding, among other things, (i) details of the Acquisition, the Sale and Purchase Agreement, the transactions contemplated thereunder and the Completion; (ii) the Restructuring Arrangement; (iii) information relating to the Refreshment of the Existing General Mandate; and (iv) notice of the EGM.

* For identification purpose only 7 LETTER FROM THE BOARD

For ease of reference for Shareholders, set out below is a schematic summary of the proposed Restructuring Arrangement.

Stage 1

Sale and Purchase Agreement

Star Platinum The Vendors

Acquisition of Sale Shares and Major Debts of ATV

Approval of the Acquisition by the Shareholders at the EGM

Proceed to Stage 2

Current Status:

(i) All the Sale Shares (i.e. 52.42% of the entire issued share capital of ATV) and a sum of HK$300 million of the Major Debts have been transferred to Star Platinum, however, the Completion and the settlement of the Balance Amount are subject to the approval of the Shareholders at the EGM.

8 LETTER FROM THE BOARD

Stage 2

Continue from Stage 1

Star Platinum proposes a Scheme of Arrangement

Approval by the creditors of ATV

Approval by the Court

Proceed to Stage 3

Proposal:

(i) Once the EGM has been convened and the Completion approved, Star Platinum together with the Provisional Liquidators will propose a Scheme of Arrangement to the creditors of ATV for consideration.

(ii) It is contemplated that the rate of return for creditors under the Scheme of Arrangement for creditors will be made by reference to those offered to the Vendors.

(iii) The Scheme of Arrangement is subject to the approval of 75% of the creditors of ATV in value and a majority in number.

9 LETTER FROM THE BOARD

Stage 3*

Continue from Stage 2

Application to the Court for the reorganisation of the board of directors composition of ATV and the release of the Provisional Liquidators

Release of the Provisional Liquidators

ATV resumes to normal operation under the management of its new board of directors

Stage 3 completed

*Note that Stage 2 and Stage 3 may proceed simultaneously such that upon sanctioning of the Scheme of Arrangement by the Court, the Investor may also ask for the simultaneous release of the Provisional Liquidators and reorganisation of the board of directors of ATV.

10 LETTER FROM THE BOARD

THE SALE AND PURCHASE AGREEMENT R14.60(1) R14.63(1), (2)(a) To the best of the Directors’ knowledge, information and belief after having made all reasonable R14.58(3) enquiries, save as otherwise disclosed in the Announcements and the Circular, each of the parties to the R14.58(3) Sale and Purchase Agreement and their ultimate beneficial owner(s)(if any) are Independent Third Parties R14.63(3) as at the date of the Sale and Purchase Agreement. The Purchaser/Borrower and Hero Luxury became wholly-owned subsidiaries of the Company on 29 July 2016 as a result of the Lender enforcing the Share Pledge.

The principal terms of the Sale and Purchase Agreement and relevant facts are summarised below:

Date: 30 April 2016

Parties: (1) Star Platinum Enterprises Limited (2) Hero Luxury Limited (3) China Culture Media International Holdings Limited (4) Si Rongbin (5) Wong Ching (王征) (6) Treasure Ridge Limited (7) David Wong Ben Koon (黃炳均) (8) Absolute Star Limited (9) Panfair Holdings Limited (10) Dragon Race Limited (11) Dragon Viceroy Limited (12) Power Hill Limited (13) China Light Group Limited

Assets/Debts being (i) the Sale Shares, being the aggregate of 689,934,950 issued shares R14.60(2) acquired: in the share capital of ATV, representing approximately 52.42% of the entire issued share capital of ATV;

(ii) the major debts, being the debts and its consequential interests as follows (the “Major Debts”):

• all forms of loans provided by Wong Ching (王征) to the ATV Group;

• Treasure Ridge’s loans to ATV in the principal amount of HK$290,000,000;

• China Light’s convertible notes issued by ATV with a total principal amount of HK$8,888,948;

• Dragon Viceroy’s convertible notes issued by ATV with a total principal amount of HK$206,111,052;

11 LETTER FROM THE BOARD

• Panfair’s convertible notes issued by ATV with a total principal amount of HK$26,208,333.33;

• all forms of loans provided by David Wong Ben Koon (黃炳均) to the ATV Group; and

• all forms of loans provided by Panfair, Dragon Viceroy and China Light to the ATV Group.

Consideration: HK$500,000,000 comprising the Sale Shares Consideration of R14.58(4),(5) HK$10,000,000 and the Major Debts Consideration of HK$490,000,000.

As at the Latest Practicable Date, an amount of HK$280,000,000 has already been paid to the relevant Vendors.

So far as the Company is aware, the Consideration was arrived at after arm’s length negotiations between the Vendors and the Purchaser on normal commercial terms with reference to (among other things), the financial conditions of ATV, the tangible assets of ATV as well as the intellectual properties of ATV. So far as the Company is aware, based on the draft audited financial statements of the ATV Group for the year ended 31 December 2014, the assets of the ATV Group then comprised tangible assets in the form of cash, account receivables, purchased and self- produced programmes, deposits paid, prepayments and other receivables in a sum of approximately HK$39 million and fixed assets such as property, plant and equipment and investment properties in a sum of approximately HK$520 million, and intangible assets such as intellectual properties, which include trademarks, and copyrights to television programmes, news, films etc. However, the Company is unable to say which if any of those assets still belong to the ATV Group or what the value of the assets held by the ATV Group is specifically, the value of the intellectual properties or their future economic benefits cannot be reasonably estimated at this stage.

20161114 The balance of the Consideration will be funded by debt financing Q3(i) or borrowings. In this regard, Mr. Deng has undertaken in favour of the Company by way of a deed of undertaking to provide unsecured facilities to the Group up to HK$500 million (the “Shareholder Facilities”) which can be drawn by the Group at any time during a 12-month period from the date of the said deed,

12 LETTER FROM THE BOARD

i.e. 22 November 2016 or the date of this circular, whichever is later. The amount drawn by the Group from the Shareholder Facilities shall bear an interest of 5% per annum and is payable not exceeding 12 months from the date of the drawdown. Save for the above, the Company currently has no negotiation, understanding, undertaking or arrangement regarding debt financing or borrowing. As at the Latest Practicable Date, the aforementioned Facility has not been drawn down.

Guarantee: Mr. Deng has entered into a deed of guarantee and indemnity in R14.58(9) favour of Wong Ching (王征) to guarantee, as a continuing obligation, the due and punctual payment and performance of all the obligations of the Purchaser which are or may become owing by the Purchaser to Wong Ching (王征) pursuant to the Sale and Purchase Agreement, limited to the aggregate amount of HK$150,000,000 (excluding, inter alia, the fees and expenses incurred in or incidental to the preservation or enforcement of the said deed).

Mr. Deng has entered into a deed of guarantee and indemnity in favour of Treasure Ridge to guarantee, as a continuing obligation, the due and punctual payment and performance of all the obligations of the Purchaser which are or may become owing by the Purchaser to Treasure Ridge pursuant to the Sale and Purchase Agreement, limited to the aggregate amount of HK$70,000,000 (excluding, inter alia, the fees and expenses incurred in or incidental to the preservation or enforcement of the said deed).

Conditions Precedent: (a) The ATV Shareholders’ warranties in the Sale and Purchase Agreement remaining true and accurate in all respects and are not misleading, and each of the ATV Shareholders not having been in breach of the Sale and Purchase Agreement in any respect, during the period from the date of the Sale and Purchase Agreement up to the date of Completion (both dates inclusive);

(b) Wong Ching (王征)’s warranties in the Sale and Purchase Agreement remaining true and accurate in all respects and are not misleading, and Wong Ching (王征) not having been in breach of the Sale and Purchase Agreement in any respect, during the period from the date of the Sale and Purchase Agreement up to the date of Completion (both dates inclusive);

13 LETTER FROM THE BOARD

(c) Treasure Ridge’s warranties in the Sale and Purchase Agreement remaining true and accurate in all respects and are not misleading, and Treasure Ridge not having been in breach of the Sale and Purchase Agreement in any respect, during the period from the date of the Sale and Purchase Agreement up to the date of Completion (both dates inclusive);

(d) the Purchaser’s warranties in the Sale and Purchase Agreement remaining true and accurate in all respects and are not misleading, and the Purchaser not having been in breach of the Sale and Purchase Agreement in any respect, during the period from the date of the Sale and Purchase Agreement up to the date of Completion (both dates inclusive);

(e) the ATV Shareholders informing Antenna pursuant to the ATV Shareholders’ Agreement of its pre-emptive right to acquire all the Sale Shares based on the terms under the Sale and Purchase Agreement, and Antenna giving up its pre-emptive right and tag along rights in writing; or Antenna failing to give a reply within the time prescribed by the ATV Shareholders’ Agreement, and Panfair, Dragon Viceroy and China Light informing the parties of the Sale and Purchase Agreement that no reply has been received from Antenna;

(f) obtaining the approval from the Court of Hong Kong in respect of the transfer of Sale Shares in accordance with section 182 of Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong); and

(g) no order has been made by the Court of Hong Kong to wind up ATV prior to the fulfilment of conditions precedent (e) and (f) above.

20161114 As at the Latest Practicable Date, all conditions precedent have Q4 been fulfilled.

Completion of the acquisition of the Sale Shares and Major Debts are interconditional.

14 LETTER FROM THE BOARD

20161114 Upon Completion, the Company will be interested in approximately 52.42% of the issued share R14.66(6)(a) Q1(i) capital of ATV. However, the financials of ATV will not be consolidated into that of the Company under the Hong Kong Financial Reporting Standards (“HKFRS”) (as the Provisional Liquidators will continue to be Provisional Liquidators upon Completion and the Company shall not have enough power and exposure or rights to control ATV). Accordingly, ATV will not be treated as a subsidiary of the Company. The remaining 47.58% of the issued share capital of ATV is wholly-owned by Antenna. The Company has not conducted any negotiation or discussion with Antenna regarding the future operation of ATV. It is noted that so long as Antenna has a 30% interest in ATV, it can appoint up to four directors to ATV. The maximum number of directors shall be not more than 10. Notwithstanding the above from an accounting perspective, the Purchaser will have a controlling shareholding interest in ATV as a result of its holding of 52.42% of the issued share capital of ATV. As such, following completion of the sanctioned Scheme, release of the Provisional Liquidators and the Purchaser taking effective control of the board of directors of ATV, the Company is of the view that there are no obstacles which may impede or affect the Purchaser’s control of the operations of ATV. Accordingly, the Company believes that it can ensure that ATV can be operated as planned. Although Antenna has the right to nominate the chief executive officer and the chief financial officer of ATV, such appointments are not exclusive. It also does not specify the scope of their duties nor does it prohibit other members or officers from being appointed to complement these roles.

INFORMATION ON ATV

ATV is a company incorporated in Hong Kong with limited liability on 6 April 1973. A petition to wind up ATV was filed at the Court on 5 February 2016 and the Provisional Liquidators have been appointed by order of the Court on 24 February 2016. ATV was engaged in television broadcasting and was the holder of the domestic free television programme service licence (which expired on 1 April 2016) and the non-domestic television programme service licence (which expired on 31 May 2016) in Hong Kong.

APPLICATION FOR WAIVER

Provisional Liquidators were appointed to ATV by the Court and ATV no longer has an effective board of directors nor any business operations. As such, without any material business operations, the Purchaser would in substance be acquiring the assets of ATV. The Company also does not have any control of or access to the books and records of ATV. In the circumstances, the Company is unable to R14.58(6) provide any accurate and complete financial statements of the ATV Group at this stage. It was roughly estimated that the ATV Group has, as at 31 October 2016, on a liquidation scenario, estimated assets 20161114Q5 (i),(iii) (excluding the value of the intangible assets such as trademarks, programmes and film right and self- produced programme) of between approximately HK$27 million and HK$40 million, and estimated liabilities of approximately HK$3.08 billion (including (i) approximately HK$0.73 billion payable to subsidiaries of ATV; (ii) the Major Debts in the approximate amount of HK$2 billion; and (iii) debts previously owed to the ex-employees and ex-independent contractors of ATV in the aggregate amount of approximately HK$30.0 million (excluding mandatory provident fund contributions and surcharge for ex- employees of ATV in Hong Kong) which have been assigned to the Investor as at 31 October 2016). However, as at the date hereof, the estimated assets of the ATV Group is very likely to be substantially less than its debts. Moreover, due to the reasons explained above, the above estimations of debts may not give an accurate financial position of the ATV Group as at the date of this circular.

20161114 The material tangible assets of ATV include the following: Q2(i) All 12 studios in the Premises, including the control rooms.

The post-production centre and the dubbing studio.

15 LETTER FROM THE BOARD

The main control room to maintain the operation of the broadcasting equipment.

All the shooting equipment (including video, audio and lighting equipment).

The equipment within the offices of the television house located within the Premises.

The stores of props, settings and costumes.

The video tape library, the news footage library and the music library.

All the video programmes belonging to ATV.

The promotion production centre.

14 private cars, a 28-seater shuttle bus, 4 light goods vehicles, and 7 special purpose vehicles of ATV.

All the office furniture and equipment and computers of ATV located on the Premises.

All other rooms, halls, offices, space, areas, equipment, fixtures, settings located on the Premises.

Please also refer to Appendix III – Valuation Report on Premises of ATV for further details.

As confirmed with Roma Appraisals Limited (the “Valuer”), the Directors understand that it is not feasible to obtain a full and detailed fixed assets list of ATV for the following major reasons:

• The Valuer cannot ensure the existence of all listed fixed assets as some of the descriptions and model numbers as stated in the fixed assets list are omitted; and

• The Valuer cannot ensure the completeness of the fixed assets list obtained as no full count of the fixed assets can be performed.

20161128 In addition, as confirmed with the Valuer, the Directors understand that it is not possible to Q2(ii) provide a meaningful valuation on the intangible assets of ATV for the following reasons:

• The full list of intellectual properties with copies of corresponding official documents cannot be obtained;

• Some of the intellectual properties (such as brands and trademarks) are substantially reliant on the television broadcasting status of ATV, which has already been terminated. It would be difficult to assess the impact on these intellectual properties after the termination;

• One of the major intellectual properties of ATV is its archive, drama and non-drama programmes. However, many of them are not countable. For example, ATV has tens of thousands of hours of news archives but many of them are raw films which are unedited or unprocessed, and even damaged. Therefore, it is extremely difficult, if not impossible, to assess their value. In addition, there are thousands of hours of non-drama programmes in the ATV archives, however, their status cannot be ascertained as the key persons in charge of the archives have left ATV earlier this year;

16 LETTER FROM THE BOARD

• Some of the intellectual properties’ (such as trademarks on singing contests, beauty pageant) values may depend on future plan to use if they are acquired, which in this stage would be difficult to estimate; and

• The Valuer has looked for but was unable to find any comparable transaction on similar intellectual properties publicly announced in the market that can provide sufficient information when performing market approach.

Furthermore, the value of such intangible assets would depend on the amount of money to be injected into ATV to derive the intrinsic value from such intangible assets.

Due to the following reasons, the Company is unable to include all the financial information of ATV ordinarily required to be disclosed in this circular under Rules 14.58(7), 14.67(4) (insofar as it requires the disclosure of information required under paragraph 31(1) of Appendix 1, Part B to the Listing Rules), 14.67(6)(a)(i), 14.67(6)(a)(ii) and 14.67(7) of the Listing Rules:

(1) ATV is a private company incorporated in Hong Kong with no publicly available financial information of the type required by the Company for the purpose of complying with disclosure requirements under Rules 14.66 and 14.67;

(2) the Company does not have control over and has no access to the books and records of ATV which, as mentioned above, are non-public information; the Company is thus subject to legal or regulatory restrictions in obtaining the non-public information;

(3) Provisional Liquidators were appointed to ATV by the Court. There has been a lack of cooperation by the directors of ATV. Indeed on appointment of the Provisional Liquidators, the control of all assets of ATV, and the conduct of its business and affairs have been transferred by law to the Provisional Liquidators and ATV’s directors ceased to have any authority. It does not have an effective board of directors;

(4) as there is no board of directors with authority, or relevant accounting staff (the Company understands that ATV’s financial controller and all senior accounting staff had resigned before the appointment of the Provisional Liquidators on 24 February 2016), the Company is given to understand that no management accounts have been prepared after 28 February 2015 on a consolidated basis and 31 October 2015 on an individual basis, and no audited accounts have been prepared after 31 December 2013; and

(5) in the absence of assistance from accounting staff with sufficient seniority, the Provisional Liquidators are unable to check the completeness of accounting books and records secured at the ATV premises and there are thus practicable difficulties for the Provisional Liquidators to facilitate the Company to prepare an audit for the ATV Group for the financial years ended 31 December 2014 and 2015 for the time being even if access to books and records were granted.

17 LETTER FROM THE BOARD

Notwithstanding the above, the Company has included the following information herein for Shareholders’ reference and which is so far as reasonably practicable for the Company to be included in order to enable Shareholders to make an informed decision at the EGM as to whether or not to vote in favour of the relevant resolutions:

(i) the draft statement of financial position of ATV (on an individual basis) as at 31 October 2015;

(ii) the audited financial statements of ATV Group for the year ended 31 December 2013; and

(iii) the draft audited financial statements of ATV Group for the year ended 31 December 2014.

Shareholders should note that the above information are provided for reference only and will not give an accurate financial position of ATV following its placement into the hands of the Provisionals Liquidators since their appointment on 24 February 2016.

Please also refer to the paragraph headed “Warning Statement” in this section below regarding the risks of voting on the subject matter in the absence of the financial information of ATV ordinarily required to be disclosed under the Listing Rules, and the implications and consequences of the Acquisition proceeding to Completion or not.

Accordingly, the Company has applied for, and the Stock Exchange has granted, a waiver from strict compliance with the disclosure requirements under Rules 14.58(7), 14.67(4) (insofar as it requires the disclosure of information required under paragraph 31(1) of Appendix 1, Part B to the Listing Rules), 14.67(6)(a)(i), 14.67(6)(a)(ii) and 14.67(7) of the Listing Rules, insofar as they explicitly or implicitly require the disclosure of financial information of ATV in this circular and allowed the Company to defer in complying with such disclosure requirements in a supplemental circular until after Completion. This circular will and does comply with Rule 2.13 of the Listing Rules. The supplemental circular shall contain: (i) all the prescribed information under the aforementioned Listing Rules which has not been previously disclosed in this circular; and (ii) any material changes to the information previously disclosed in this circular, and shall be despatched to the Shareholders as soon as reasonably practicable after the Company has gained access to the books and records of ATV.

REASONS FOR PROCEEDING WITH COMPLETION R14.58(8)

Reference is made to the Announcements and the Circular, as well as the Company’s announcement dated 23 September 2016.

As disclosed in the Company’s announcement dated 29 July 2016, the Lender has exercised its rights under the relevant security documents by, inter alia, enforcing the Share Pledge. Accordingly, on 29 July 2016, the Lender became the legal and beneficial owner of the entire issued share capital of the Borrower. As a result of enforcing the Share Pledge, the Lender has stepped into the shoes of the Borrower with respect to, inter alia, the Acquisition. The total amount of loan advanced by the Lender to 20161114 the Borrower is HK$337,000,000 as at the Latest Practicable Date. Q5(iv)

18 LETTER FROM THE BOARD

Before becoming a subsidiary of the Company, the Borrower has provided certain undertakings to the Court in respect of the rescue of ATV, including (i) acquiring the debts of ATV’s ex-employees; (ii) providing working capital to ATV in the aggregate amount of HK$30,000,000 which has been fully paid as at the Latest Practicable Date (such amount represents the pre-drawn amounts of the Working Capital Loan in full of HK$30 million under the Working Capital Loan Agreement); and (iii) paying for the fees of the Provisional Liquidators. If the Borrower failed to fulfil those undertakings, it may be deemed to be in breach of certain obligations under the Sale and Purchase Agreement as well as in contempt of court, resulting in serious legal consequences. In addition, the Borrower has almost no assets except 52.42% shareholding in ATV and loans and accounts receivables from ATV. The Board is of the view that if the Borrower failed to complete the Acquisition, its investment in ATV could become a total loss. As a result, the Group would be unable to recover the loan of HK$337,000,000 previously granted to the Borrower as at the Latest Practicable Date and the interest incurred thereof.

Information reviewed/factors considered by the Board in deciding to whether or not to proceed with the Acquisition include:

(i) the total cash outlay to be paid at the Completion;

(ii) the total amount lent by the Lender to the Borrower;

(iii) the financial condition of the Borrower, a BVI company which has almost no assets except 52.42% shareholding in ATV and loans and accounts receivables from ATV;

(iv) the financial capability of the former majority shareholder of the Borrower, Mr. Si Rongbin, whom the Board understands to be currently of insufficient means;

(v) the financial statements and information of ATV Group which include: the audited financial statements of ATV Group for the year ended 31 December 2013; the draft audited financial statements of ATV Group for the year ended 31 December 2014; consolidated management accounts of ATV Group for the 2 months ended 28 February 2015; an accounts payable aging report of ATV as at 28 February 2015;

(vi) the intrinsic value of ATV’s assets, comprising tangible assets in the form of, among others, account receivables, purchased and self-produced programmes, prepayments and other receivables, fixed assets in the form of property, plant and equipment and intangible assets including trademarks, and copyrights to television programmes such as Miss Asia’s Pageant, news, and films, etc.;

(vii) the restructuring-related documents including the Interim Transitioning Deed, which sets out the interim arrangement for the Investor to manage and utilise the assets of ATV, including its plants, equipment and machinery and intellectual properties etc. for operation in order to generate revenue;

(viii) ATV’s 50,000 square metre production facility situated in the Premises, and its continued right to use such parcel of land; and

19 LETTER FROM THE BOARD

(ix) ATV’s brand name, as it is Hong Kong’s first television broadcasting company with nearly 60 years of history, having produced many successful TV programmes, dramas, news programmes as well as entertainment shows over the years. ATV indeed has been a part of the collective memory of Hong Kong and its legendary history has played a significant role in the development of Cantonese pop-culture. It is embedded and enlightened in the classical TV programmes produced by ATV, which have been extended to the Chinese society globally.

The Directors aim to mitigate the Group’s loss arising from granting of the loan to the Borrower by proceeding with the Acquisition. The actual assets of ATV and their respective values are not the major factor considered by the Board given the lack of information about them. Rather, the Board has taken a continuously holistic view when deciding whether or not to proceed with the Acquisition. Based on the above factors, the Board believes that on balance, in proceeding with the Acquisition, it is more probable for the Company to recover the amounts lent to the Borrower, and to preserve and realise the value of the Borrower’s investment in ATV. If the Board does not proceed with the Acquisition, the total amounts lent to the Borrower will likely become a total loss to the Group, and it is unlikely that the Group will be able to recover the same from Mr. Si Rongbin, given his current impecunious financial condition.

After the completion of the Acquisition, the Investor shall propose the Scheme of Arrangement to the creditors of ATV by which all liabilities of ATV shall be assumed by the Investor and a debt-equity swap could be executed. As a result, after completion of the Scheme of Arrangement, save for the debts it owes to the Investor, ATV shall be debt-free and given a fresh start. In addition, according to the Interim Transitioning Deed, certain transitional arrangements relating to ATV be vested in the Borrower and that after completion of the Scheme of Arrangement when the Provisional Liquidators have been released, management of ATV will vest in the Borrower.

As explained above, the potential intrinsic value of ATV is one of the factors considered by the Directors in deciding to proceed with the Acquisition. The Directors believe that the potential intrinsic value of ATV can be realised if the plan to rescue ATV can proceed as planned. The Borrower has been in discussion and negotiation with various vendors in the industry of advertisement, media, culture and entertainment such as, but not limited to, content providers, programme producers, distributors, cable TV operators, and satellite transmission operators for future cooperation with ATV and further business development.

The Investor and, among others, the Provisional Liquidators have entered into (i) Interim Transitioning Deed; (ii) Working Capital Loan Agreement; and (iii) Restructuring Agreement on 28 October 2016, all of which were approved by the Court on 10 November 2016. Under the Interim Transitioning Deed, the Investor shall have access and right to use the assets, tangible and non-tangible, for production and broadcasting. ATV shall continue to operate and broadcast under the management of the Investor through satellite and the Internet, and act as a production power house in Hong Kong taking advantage of its 50,000 square-meter production facility at the Premises, its film library and archives, and its profound experience in broadcasting, entertainment programme, drama production and pageant hosting, etc. Through cooperation with other production frontiers and leaders in Hong Kong, China and the overseas, the Investor shall have access to many industrial resources and know-hows, attract talents of vendors and artists; all of which will expedite the Company’s development and diversification into the advertising, cultural, media and entertainment market.

20 LETTER FROM THE BOARD

It is expected that through the co-operation with different vendors and cross media, ATV will be able to produce brand-new and market-oriented television drama series and films, reality shows, entertainment events, pageants, concerts and other productions at its production facility in the Premises, make use of its library and archive for production of documentaries, licensing out its intellectual property rights such as for the Miss Asia Pageant in Hong Kong, China and overseas for royalty fees and sponsorship arrangement. The net profit derived from the abovementioned operations shall be vested in the Borrower as recovery of loans and investments to the Borrower. If the plan to rescue ATV can proceed as planned, the Directors believe that the Borrower will be able to recover its investment in ATV and the Company can also recover the loan granted to the Borrower.

More particularly, the Investor has entered into a strategic cooperation deed (the “Strategic Cooperation Deed”) with Star Gaze Group Ltd. (“Star Gaze”). Star Gaze is a comprehensive film and entertainment group with rich expertise in entertainment program investment, planning, production, distribution, and promotion pertaining to film and micro-film, drama, micro and television drama series, music, concert, animation, and copyright project related businesses. Pursuant to the Interim Transitioning Deed and the Strategic Cooperation Deed, the Investor shall, in cooperation with Star Gaze, develop and produce films, microfilms, television dramas, Internet films, Internet television dramas, music programs, singing contests, pop music awards, beauty pageants, variety shows, talk shows, travel programs, food and beverage programmes, game programmes, and live reality programmes, etc. Profits from these programmes may be derived from, among other things (1) box-office incomes; (2) licensing fees from other broadcasters worldwide, such as IQIYI, Letv, and TencentVideo; (3) title sponsor fees; (4) production fees; (5) advertisement incomes; (6) artist managements; (7) concerts and exhibitions; and (8) entertainment industry academy, etc., which will be shared between the Investor and Star Gaze in accordance with supplemental agreements and based on, among other things, capital investment fund injected by the parties. The Investor shall adopt a similar cooperation business model with other vendors for mining the intrinsic value of ATV.

20161114 Under the Working Capital Loan Agreement, in addition to the HK$30 million which has been Q5(iv),(v) already advanced to and drawn down in full by ATV as at the Latest Practicable Date, the Investor shall provide the Revolving Loan to ATV as working capital in the maximum amount of HK$2 million per month from the period commencing on 4 November 2016 and expiring on 31 March 2017, which may be renewed or extended by written agreement between the parties to the said agreement. The first advancement of HK$2 million was already drawn down by ATV. Accordingly, the maximum exposure of the Investor under the Working Capital Loan Agreement up to 31 March 2017 shall be HK$40 million. As at the Latest Practicable Date, the Investor has granted a total of HK$32.7 million to ATV. The Restructuring Agreement sets out the framework of the Scheme of Arrangement to be proposed to the creditors of ATV by the Investor whereby all liabilities of ATV shall be assumed by the Investor.

In addition, the Directors believe that the Acquisition complements the Group’s intention to expand into the media and entertainment related industry as any entry barrier for the Group would be lowered with ATV’s well-established brand name. As a result, not only would the Group be able to recover the loan granted to the Borrower, it would also gain a higher profile within the media and entertainment industry. If ATV is able to get back on track after the proposed rescue, it is possible that it can re-apply for the domestic free television programme service licence and the non-domestic television programme service licence in Hong Kong in the future. Furthermore, if ATV is successfully rescued, the social image of the Group will be greatly promoted and enhanced as the rescuer of a legendary television station in the Chinese community.

21 LETTER FROM THE BOARD

20161128 Pursuant to the Restructuring Agreement, the Investor, the Provisional Liquidators and ATV have Q4 set out the principal terms of which they will implement a restructuring of the indebtedness of ATV by way of Scheme of Arrangement.

Completion of the restructuring of ATV as contemplated in the Restructuring Agreement will be conditional upon:

a) completion of the transactions envisaged in the Sale and Purchase Agreement;

b) obtaining the sanction of the Court with respect to the Scheme of Arrangement pursuant to section 673 of the Companies Ordinance (Cap. 622);

c) the Investor paying the total investment amount of not less than HK$100 million (Note) in accordance with the terms of the Restructuring Agreement;

d) no winding up order is made against ATV;

e) where a petition to wind up ATV has been filed by a party, such petitioner has given an undertaking to withdraw the winding up petition against ATV within 14 days after final sanction of the Scheme of Arrangement from the Court has been obtained or the winding up petition is dismissed within 30 days from such final sanction; and

f) the Investor has successfully obtained approval from the Stock Exchange and the shareholders of the Investor respectively for the completion of the transactions envisaged in the Sale and Purchase Agreement and any fund raising activities in connection with the restructuring of ATV if such approval is required by the Stock Exchange.

Note: The estimated total liabilities of ATV are approximately HK$3.08 billion, out of which approximately HK$2 billion and HK$31 million were acquired from the relevant Vendors and ex- employees/independent contractors of ATV by the Purchaser respectively, HK$30 million were loan advanced by the Purchaser to ATV, and approximately HK$730 million are intercompany debts leaving an outstanding amount of approximately HK$289 million. The outstanding amount of HK$289 million comprises both preferential creditors and unsecured creditors (approximately HK$19 million and HK$270 million respectively). Preferential creditors have a priority to unsecured creditors. The haircut rate given to the relevant Vendors for their approximate HK$2 billion debts is approximately 75.5%. Based on this benchmark ratio for unsecured creditors and an anticipated higher ratio for preferential creditors, it is estimated that approximately not more than HK$100 million will be the Purchaser’s exposure i.e. HK$289,000,000 x 24.5% = HK$70,805,000 plus any additional sum for the payment to the preferential creditors. Therefore, it is estimated that the total exposure of the Purchaser shall not be more than HK$100 million.

22 LETTER FROM THE BOARD

The amount of the consideration and working capital required at each stage until the completion of the Restructuring Arrangement are as follows:

Paid at the Latest Practicable Date To be paid Total HK$’000 HK$’000 HK$’000 Stage 1: Completion of Acquisition

Sale Shares Consideration 10,000 – 10,000 Major Debts Consideration and settlement of Balance Amount 270,000 220,000 490,000 Acquiring debts of ATV’s ex- employees and related mandatory provident fund contributions 34,700 – 34,700 Working Capital Loan 30,000 – 30,000 Revolving Loan 2,700 1,300 4,000 Legal and professional fee 8,800 – 8,800 Completion of Acquisition (Stage 1) 356,200 221,300 577,500

Stage 2 and 3: Completion of Scheme of Arrangement and Restructuring Arrangement

Estimation of payment to creditors of ATV – 100,000 100,000 Revolving Loan – 6,000 6,000 Estimation of legal and professional fee – 2,000 2,000 Estimation of further fee to Provisional Liquidators – 5,000 5,000 Completion of Scheme of Arrangement and Restructuring Arrangement (Stages 2 and 3) – 113,000 113,000 Total 356,200 334,300 690,500

20161114 ACCOUNTING TREATMENT OF COMPLETION OF ACQUISITION, SCHEME OF Q8(iii) ARRANGEMENT AND RESTRUCTURING ARRANGEMENT

20161128 The accounting treatment of the ATV Group after completion of the Acquisition, the Scheme of Q6 Arrangement, and the Restructuring Arrangement respectively are as follows:

(a) Acquisition

After completion of Acquisition, the ATV Group shall be recognised as other investment of the Company.

23 LETTER FROM THE BOARD

Under HKFRS 10, Consolidated Financial Statements, issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), an investor controlling an investee must have the power over the investee, a subsidiary is an investee over which the company is able to exercise control. The company controls an investee if all three of the following elements are present: (i) power over the investee; (ii) exposure, or rights, to variable returns from the investee; and (iii) the ability to use its power to affect those variable returns.

Since the Provisional Liquidators instead of the board of directors of ATV will continue to have overall and master control over ATV, the Company shall not have enough power and exposure or rights to control ATV upon the Completion. Accordingly, no consolidation is required on the Group’s financial statements until the circumstances stated in HKFRS 10.6 and 10.7 have been fulfilled. As such, ATV will not be treated as a subsidiary of the Company and its financials will not be consolidated into that of the Group.

Under HKFRS 11, Joint Arrangements, issued by HKICPA, joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

Under Hong Kong Accounting Standard (“HKAS”) 28, Investments in Associates and Joint Ventures, issued by HKICPA, an associate is an entity over which the investor has significant influence. The existence of significant influence by an entity is usually evidenced in one or more of the following ways:

(a) representation on the board of directors or equivalent governing body of the investee;

(b) participation in policy-making processes, including participation in decisions about dividends or other distributions;

(d) interchange of managerial personnel; or

(e) provision of essential technical information.

Following the assessment of the aforementioned definitions of joint arrangement and associates, ATV shall not be classified as joint arrangement or associate under the relevant accounting standards upon the Completion.

As a result, the Company considered that its equity interest in ATV should be regarded as other investment which is measured in accordance with HKAS 39, Financial Instruments: Recognition and Measurement, issued by HKICPA.

24 LETTER FROM THE BOARD

(b) Scheme of Arrangement

After completion of Scheme of Arrangement, the Group would have assumed all liabilities of ATV and save for the debts owed to the Group, ATV shall be debt-free. However, the Provisional Liquidators instead of the board of directors of ATV will continue to have overall and master control over ATV, accordingly, the Company shall not have enough power and exposure or rights to control ATV, and no consolidation is required on the Group’s financial statements until the circumstances stated in HKFRS 10.6 and 10.7 have been fulfilled. As such, ATV will not be treated as a subsidiary of the Company and its financials will not be consolidated into that of the Group.

Following the assessment over the classification of the Company’s equity interest in ATV after completion of the Scheme of Arrangement, ATV cannot be classified as a subsidiary, a joint arrangement or associate under the relevant accounting standards.

As a result, the Company considered its equity interest in ATV should be regarded as other investment which is measured in accordance with HKAS 39, Financial Instruments: Recognition and Measurement, issued by HKICPA.

After the completion of Restructuring Arrangement, the Provisional Liquidators will be released. Thereafter, through the board of directors of ATV, the Group shall have enough power and control over ATV, and HKFRS 10.6 and 10.7 would have been fulfilled. Thereafter, ATV will be recognised as a subsidiary of the Company and as such, its financials will be consolidated into that of the Group.

ESTIMATED FINANCIAL EFFECT ON THE ASSETS AND LIABILITIES OF THE GROUP

With reference to the published interim report of the Group for period ended 30 June 2016, the estimated financial effect of the completion of the Acquisition, Scheme of Arrangement and Restructuring Arrangement on the assets and liabilities of the Group shall be as follows:

– total assets of the Group shall be increased from RMB818 million to RMB1,257 million

– total liabilities of the Group shall be increased from RMB322 million to RMB758 million

The above estimated financial effect is for illustrative purposes only and is based on certain estimations, assumptions, judgements, uncertainties and other currently available information. Accordingly, because of the uncertainties of information, the estimated financial effect cannot give a true picture and does not purport to predict the financial position of the Group.

25 LETTER FROM THE BOARD

RISKS AND MITIGATION MEASURES ASSOCIATED WITH THE RESTRUCTURING ARRANGEMENT

There are various risks associated with each stage of the Restructuring Arrangement, the material ones of which are as follows:

(i) The Acquisition fails to be approved by Shareholders at the EGM. This risk is inherent for all general meetings whereby there is no controlling shareholder voting in favour of such resolutions. However, the Company will disclose all relevant and available information to the Shareholders to enable them to make an informed decision and to explain why such resolutions are in the interest of the Shareholders and the Company as a whole.

(ii) The Vendors have not received the balance of the Consideration which is due on 31 August 2016. In the affirmation made by the legal representative of the Vendors on 2 December 2016, the Vendors as the petitioner for the winding-up of ATV threatened that if the Vendors are not fully paid within 2-weeks time, the Vendors will proceed to wind-up ATV. In the circumstance, if the Vendors are not paid and the Court determines not to grant further adjournments, ATV will be wound-up.

(iii) Some creditors of ATV do not agree to the terms of the Scheme and such number is sufficient enough to vote down the Scheme. In the circumstance, further negotiation concerning the terms of the Scheme with those creditors may be necessary. If a final and acceptable compromise cannot be reached between the parties, the Scheme shall be deemed failed. However, upon Completion, Star Platinum shall have acquired all of the debts owed by ATV to Mr. Wong Ching and his associates totalling approximately HK$2 billion representing approximately 87% of the ATV debts entitled to vote for the Scheme (excluding intercompany debts). In addition, Star Platinum has acquired the debts from over 600 ex-employees and independent contractors of ATV. So far as the Company is aware, such numbers represent more than one-half of the number of creditors of ATV. As Star Platinum alone controls or is entitled to more than 75% of the debts owed by ATV and more than one-half of the voting rights of the ATV creditors, the Company is confident that the Scheme will be approved.

(iv) The Court does not sanction the Scheme even following approval by the creditors of ATV. Such approval is at the absolute discretion of the Court and such cannot be mitigated by ATV save for presenting the fairest and most reasonable terms of the Scheme to the Court for consideration.

(v) The business plan for ATV in the long term to recommence operations is preliminary and there is no certainty that the Purchaser may recuperate the HK$334 million to be paid as consideration and working capital of ATV.

As such, notwithstanding the risks as mentioned, the Company believes that it is in the interest of the Company and the Shareholders to proceed with the Acquisition and the Restructuring Arrangement.

26 LETTER FROM THE BOARD

PROPOSED REFRESHMENT OF THE EXISTING GENERAL MANDATE TO ALLOT AND ISSUE SHARES

At the AGM, the Shareholders approved, among other things, the Existing General Mandate which authorised the Directors to allot, issue and otherwise deal with a maximum of up to 642,380,800 Shares, which is equivalent to 20% of the then issued share capital of the Company. As at the Latest Practicable Date, the Existing General Mandate has been utilised as to approximately 99.99% as a result of the Placing, which involves the issue of 642,380,000 new Shares under the Existing General Mandate with net proceeds of approximately HK$137,790,000. The net proceeds under the Placing is intended to be utilised for (i) approximately HK$60 million for the acquisition of Century Galaxy International Limited as disclosed in the Company’s announcements dated 27 June 2016 and 28 September 2016; (ii) approximately HK$20 million for the production of film, drama, television programmes and the development of media and entertainment business; (iii) approximately HK$51 million for the money lending and securities trading business; and (iv) approximately HK$6 million for general working capital of the Group and/or for financing any investment opportunities when they arise.

As at the Latest Practicable Date, the Company had an aggregate of 3,985,920,000 Shares in issue. Subject to the passing of the ordinary resolution for the approval of the grant of the New Issue Mandate and assuming that no Shares will be issued or repurchased by the Company between the Latest Practicable Date and the date of the EGM, the Company would be allowed under the New Issue Mandate to allot and issue up to 797,184,000 Shares, representing 20% of the issued share capital of the Company as at the Latest Practicable Date and the date of the EGM.

The New Issue Mandate will, if granted at the EGM, remain effective until the earliest of:

(a) the conclusion of the next annual general meeting of the Company;

(b) the expiration of the period within which the next annual general meeting of the Company is required by its articles of association or any applicable laws to be held; or

Reasons for the grant of the New Issue Mandate

As stated above, the Existing General Mandate has almost been fully utilised since the date of the AGM.

The main reasons for the Refreshment of the Existing General Mandate are (1) for exploring new opportunities in (a) advertising, culture, media and entertainment industry; and (b) securities brokerage, securities advisory and asset management; (2) expanding the money lending and the securities trading businesses; (3) for general working capital of the Group; (4) to finance any investment opportunities when they arise and/or as the general working capital of the Group.

The Board considers that the New Issue Mandate will provide the Company with flexibility and ability to capture any appropriate capital raising. Furthermore, the Board considers that the New Issue Mandate will empower the Directors to issue new Shares under the refreshed limit speedily as and when necessary, and without the need to seek further approval from the Shareholders.

27 LETTER FROM THE BOARD

Any Shares issued under the New Issue Mandate will be allotted to persons other than connected persons of the Company.

Although (i) the proposed Refreshment of the Existing General Mandate; and (ii) other fund raising activities conducted by the Company in the past twelve-month period as listed on page 31 in this circular will cause/have caused dilution to the shareholding interests of existing Shareholders, the Directors (including the independent non-executive Directors) have considered the following factors in determining that the Refreshment of the Existing General Mandate, which includes the grant of the New Issue Mandate, is fair and reasonable as far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole:

(a) the Company may need additional funds to satisfy its business expansions, working capital needs, and other financial requirements and the Company will not convene the next annual general meeting until May/June next year;

(b) the financial position of the Company will be strengthened as the gearing ratio will be reduced;

(c) the issuance of new Shares under the New Issue Mandate will broaden the shareholders base and at the same time increasing the liquidity of the Company at a relatively lower cost of funding;

(d) the issuance of new Shares does not incur any interest expenses on the Group as compared with debt financing;

20161114 (e) although there is no current intention/plan for utilising the New Issue Mandate as at the Q11(ii) Latest Practicable Date, the Directors do not rule out the possibility that the Company will raise further funds by equity issue to finance business and/or investment opportunities if such opportunities arise or there is change in prevailing circumstances, which may utilise the New Issue Mandate. Thus, the Company expects to have flexibility and available readiness to raise fund via shares issue or issue shares for potential investment opportunities under the New Issue Mandate. Prior to the grant of the Existing General Mandate, the Group had come across a number of investment opportunities, such as in film and micro-film investment and production, trading of securities, and granting of new loans. However, in the absence of sufficient and readily-available financial resources at that time, the Group lost those investment opportunities. In this connection, shortage of readily available financial resources will hinder the Group’s development and could have an adverse impact on the Group;

(f) the unutilised proceeds from the placing of new shares under the Existing General Mandate as announced on 28 September 2016 is approximately HK$71.79 million. However, such proceeds have already been earmarked for specific usage as more particularised in the Company’s announcement dated 28 September 2016. As such, the unutilised proceeds shall not be used for the Company’s future funding needs; and

28 LETTER FROM THE BOARD

(g) although rights issue or open offer can be offered to the Shareholders on a pro rata entitlement basis as an alternative fund raising activity, those qualifying shareholders who choose not to take up their assured entitlements in full would have dilution to their shareholding interests in the Company. The Board is of the view that the grant of the New Issue Mandate is fair and reasonable, and is more cost-effective, efficient, has more certainty and is less time consuming than alternative equity financing methods and will enhance the Company’s financial flexibility (without restricting its ability to conduct rights issue, open offer or issue of shares under specific mandate) that would be in the interest of the Company and its Shareholders as a whole. Moreover, the grant of the New Issue Mandate will also enable the Company to have additional alternative and flexibility in raising capital for the funding requirements or appropriate investment opportunities of the Group which may arise.

20161114 Up to 31 October 2016, the existing cash position of the Group is approximately HK$73 million. Q10(i) The expected working capital requirements/funding needs for the next twelve months are approximately HK$445 million in relation to the Acquisition, Revolving Loan and possible business projects which are not related to ATV. In this regard, Mr. Deng has undertaken to provide the Shareholder Facilities as mentioned on page 12 of this circular. Based on the above, the Board’s assessment is that the Company has sufficient working capital for its present requirement for at least twelve months from the date of this circular.

At the EGM, ordinary resolutions will be proposed to the Independent Shareholders that, among others, the Directors be granted the New Issue Mandate to allot and issue Shares up to an aggregate number of Shares not exceeding 20% of the Shares in issue as at the date of passing of the resolution approving the Refreshment of the Existing General Mandate.

As at the Latest Practicable Date, the Company had 3,985,920,000 Shares in issue. Subject to the passing of the resolutions for the approval of the Refreshment of the Existing General Mandate and on the basis that no further Shares are issued between the Latest Practicable Date and the date of the EGM, the Company would be allowed under the New Issue Mandate to allot, issue and deal with up to a maximum of 797,184,000 Shares.

29 LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE OF THE COMPANY

Set out below is the shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) immediately upon the issue of Shares under the New General Mandate (assuming the New General Mandate is utilised in full and no further Shares are issued or repurchased by the Company):

Shareholding interest in the Company upon full utilisation of Shareholding interest in the the New Issue Mandate (assuming Company as at the Latest no other Shares are issued and/or Shareholders Practicable Date repurchased by the Company) Number of Approximate Number of Approximate Shares ’000 % Shares ’000 % (Note 2) (Note 2)

Honghu Capital (Note 1) 645,100 16.18 645,100 13.49

Other public Shareholders 3,340,820 83.82 3,340,820 69.84

Shares to be issued under the New Issue Manadate – – 797,184 16.67

Total 3,985,920 100.00 4,783,104 100.00

Notes:

1. Honghu Capital is beneficially and wholly-owned by Mr. Deng.

2. The percentages are subject to round figures.

20161114 Upon full utilisation of the New Issue Mandate, 797,184,000 Shares will be issued, representing Q11(i) 20% of the issued share capital of the Company as at the Latest Practicable Date and approximately 16.67% of the issued share capital of the Company as enlarged by the Shares issued under the New Issue Mandate. Assuming that the Company does not issue or repurchase any Shares from the Latest Practicable Date up to and including the date of the EGM, the aggregate shareholding of the public Shareholders will decrease from approximately 83.82% as at the Latest Practicable Date to approximately 69.84% upon full utilisation of the New Issue Mandate, representing a potential maximum dilution in public shareholding by approximately 16.67% and potential cumulative dilution impact of approximately 57.4% in the shareholding of the Shareholders as enlarged by the issue of new Shares under the New Issue Mandate and the fund raising activities conducted by the Company in the past 12 months immediately preceding the Latest Practicable Date.

30 LETTER FROM THE BOARD

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

Apart from the fund raising activities mentioned below, the Company had not conducted any equity fund raising activities in the past twelve months immediately preceding the date of this circular:

Net proceeds raised Actual use of Date of announcement Completion date Fund raising activity (approximately) Intended use of proceeds proceeds

13 December 2015 1 April 2016 (i) Placing of new HK$117.60 million Grant of the secured term Used as intended shares under loan in the amount of specific mandate HK$300 million by the Lender (as lender) to China Culture Media (as borrower) pursuant to a loan agreement dated 23 October 2015 (as supplemented by a supplemental agreement dated 13 December 2015) (the “Loan”)

13 December 2015 5 April 2016 (ii) Subscription of HK$59.29 million Grant of the Loan Used as intended new shares under specific mandate

13 December 2015 15 April 2016 (iii) Placing of HK$118.04 million Grant of the Loan Used as intended convertible bonds under specific mandate

20161128 28 September 2016 20 October 2016 (iv) Placing of new HK$137.79 million (i) HK$60 million for Approximately Q9 shares under acquisition of Century (i) HK$50 million was general mandate Galaxy International utilised for money Limited; (ii) HK$20 million lending and securities for production of film, trading business; (ii) drama, TV programmes, HK$10 million was development of media and utilised for entertainment business; (iii) development of media HK$51 million for the and entertainment money lending and business; (iii) HK$6 securities trading business; million was utilised (iv) HK$6 million for for general working general working capital of capital; and the Group and/or for (iv) HK$71.79 million financing any investment is maintained at bank opportunities when they arise

GENERAL R14.58(2)

The Group is principally engaged in the businesses of (i) the processing, printing and sales of finished fabrics; (ii) the trading of fabric and clothing; (iii) money lending; (iv) securities investment; and (v) media, cultural, entertainment and advertising.

31 LETTER FROM THE BOARD

IMPLICATIONS UNDER THE LISTING RULES

As the Sale and Purchase Agreement was entered into between the parties thereto at the time when the Purchaser was not a subsidiary of the Company, the entering of the Sale and Purchase Agreement did not require Shareholders’ approval. However, after the Borrower (i.e. the Purchaser) became a subsidiary of the Company when the Lender enforced the Share Pledge, proceeding with the Completion and making payment of the Balance Amount would constitute a major transaction for the Company under Chapter 14 of the Listing Rules.

As the Board’s decision to proceed with the Completion and to make the payment of the Balance Amount constitute a major transaction under Chapter 14 of the Listing Rules, and the applicable percentage ratio(s) in respect of the Acquisition are more than 25% but all percentage ratios are less than 100%, such constitutes a major transaction for the Company under the Listing Rules and is subject to notification, announcement and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

The Completion is subject to the Shareholders’ approval. The EGM will be convened for the purpose of, among other things, considering, and if thought fit, approving, among others, making payment of the Balance Amount and proceeding to the Completion.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be conducted by way of poll. The chairman of the meeting will therefore demand a poll for every resolution put to the vote of the EGM in accordance with the articles of association of the Company. The results of the poll shall be deemed to be the resolution of the general meeting in which the poll was demanded or required and the poll results will be published on the websites of the Stock Exchange and the Company after the EGM.

The voting in relation at the EGM will be conducted by poll whereby any Shareholders and their close associates who have a material interest in the Completion shall abstain from voting on the resolutions to approve (i) making payment of the Balance Amount; and (ii) proceeding to the Completion. Further, as the proposed Refreshment of the Existing General Mandate is being made prior to the Company’s next annual general meeting, pursuant to Rule 13.36(4) of the Listing Rules, the grant of the New Issue Mandate shall be subject to the Independent Shareholders’ approval by way of poll at the EGM, where any controlling Shareholders and their associates or, where there is no controlling Shareholder, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the grant of the New Issue Mandate.

Mr. Deng has a material interest in the Completion as he has executed guarantees in favour of the R2.17 R14.63(2)(d) relevant Vendors to guarantee the Purchaser’s payment of the Balance Amount. Mr. Deng, through Honghu Capital, is interested in 645,100,000 Shares, representing approximately 16.18% of the total issued share capital of the Company as at the Latest Practicable Date. As such, Mr. Deng, Honghu Capital and their respective close associates are required to abstain from voting on the resolutions at the EGM with respect to (i) making payment of the Balance Amount; and (ii) proceeding to the Completion.

As at the Latest Practicable Date, the Company has no controlling Shareholder as defined under the Listing Rules, and no Director or his associates has interest in the Shares of the Company. To the best knowledge, information and belief of the Directors having made all reasonable enquiries, as at the Latest Practicable Date, no Shareholder other than Mr. Deng, Honghu Capital and their respective close associates is required to abstain from voting on the relevant resolutions at the EGM.

32 LETTER FROM THE BOARD

EGM

The Directors have resolved to convene the EGM to consider and, if thought fit, to approve (i) making payment of the Balance Amount; (ii) proceeding to the Completion by the Shareholders; and (iii) grant of the New Issue Mandate.

The EGM will be held for considering and, if thought fit, passing the ordinary resolution to approve (i) making payment of the Balance Amount; (ii) proceeding to the Completion; and (iii) grant of the New Issue Mandate. A notice convening the EGM of the Company to be held at Rooms 2501-14, 25th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong on Friday, 6 January 2017 at 11:30 a.m. is set out on pages 71 to 73 of this circular. A form of proxy for the EGM is enclosed with this circular.

Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

WARNING STATEMENT

Shareholders’ attention is drawn of the fact that full and up-to-date financial information on the ATV Group is not available. Shareholders are also reminded that ATV’s domestic free television programme service licence and non-domestic television programme service licence have expired, Provisional Liquidators have been appointed, and ATV’s financial condition is unknown, but is likely to be poor. The Company has endeavoured to set out all material information of ATV that is available to it in this circular but is still unable to set out certain financial information of the ATV Group ordinarily required by the Listing Rules. Shareholders shall be aware of the risks in making a voting decision in the absence of such information. If the Acquisition proceeds to Completion, the plan to rescue ATV can proceed as planned. In this regard, the Directors believe that the Borrower will be able to recover its investment in ATV and the Company can also recover the loan granted to the Borrower. Please refer to pages 20 to 21 of this section above for further details on the Directors’ belief on the foregoing.

On the other hand, if the Acquisition cannot proceed, the Company will not be able to realise the intrinsic value of ATV and will have to try to resort to other means in recovering the loan and interest payments from the Borrower, including but not limited to pursuing relevant legal actions against the former majority shareholder of the Borrower. Shareholders are very strongly advised to exercise caution in deciding whether to vote for or against the resolutions to be proposed at the EGM. If the Acquisition proceeds to Completion, the Directors will take all reasonable steps to procure that the relevant information of the ATV Group is made available to Shareholders as soon as reasonably practicable.

33 LETTER FROM THE BOARD

RECOMMENDATION R14.58(8) R14.63(2)(c)

Major Transaction in relation to the Acquisition of Sale Shares and Major Debts of ATV

The Directors (including the independent non-executive Directors) are of the opinion that notwithstanding the limited information available to them, it is fair and reasonable and in the interest of the Company and the Shareholders to continue to provide financial support to the Borrower and to make payment of the Balance Amount as well as proceed with the Completion, with a view to realising the value of ATV. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant ordinary resolutions to be proposed at the EGM.

Proposed Refreshment of the Existing General Mandate to allot and issue Shares

The Company has appointed Akron Corporate Finance as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of the Existing General Mandate. The text of the letter of advice from Akron Corporate Finance to the Independent Board Committee and the Independent Shareholders is set out on pages 36 to 46 of this circular.

The Independent Board Committee comprising all the independent non-executive Directors, namely Ms. Tao Feng, Ms. Han Xingxing and Mr. Cheung Ngai Lam, has been established to give advice to the Independent Shareholders in respect of the Refreshment of the Existing General Mandate. The letter from the Independent Board Committee, which contains its recommendation to the Independent Shareholders in respect of the transactions, is set out on page 35 of this circular.

The Independent Board Committee, having taken into account the advice of the Independent Financial Adviser, considers the Refreshment of the Existing General Mandate, including the grant of the New Issue Mandate, is fair and reasonable as far as the Independent Shareholders are concerned and is in the interest of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolution in relation to the grant of the New Issue Mandate to be proposed at the EGM.

In the light of the above, the Directors believe that the proposals at the EGM are in the best interest of the Company and its Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the resolution in relation to the grant of the New Issue Mandate to be proposed at the EGM.

FURTHER INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

Yours faithfully, By order of the Board Co-Prosperity Holdings Limited Tang Hon Kwo Chairman

34 LETTER FROM THE INDEPENDENT BOARD COMMITTEE

CO-PROSPERITY HOLDINGS LIMITED 協盛協豐控股有限公司* (Incorporated in the Cayman Islands with limited liability) (Stock Code: 707)

19 December 2016

To the Independent Shareholders

Dear Sir/Madam,

REFRESHMENT OF THE EXISTING GENERAL MANDATE

We refer to the circular of the Company dated 19 December 2016 (the “Circular”), of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

We have been appointed by the Board as the Independent Board Committee to advise the Independent Shareholders on whether the Refreshment of the Existing General Mandate, including the grant of the New Issue Mandate, is fair and reasonable so far as the Independent Shareholders are concerned and is in the interest of the Company and the Shareholders as a whole.

We wish to draw your attention to the letter of advice from the Independent Financial Adviser as set out on pages 36 to 46 of the Circular and the letter from the Board as set out on pages 7 to 34 of the Circular.

Having considered, among other things, the factors and reasons considered by, and the opinion of Akron Corporate Finance as stated in its letter of advice, we consider that the Refreshment of the Existing General Mandate, including the grant of the New Issue Mandate, is fair and reasonable so far as the Independent Shareholders are concerned and is in the interest of the Company and the Shareholders as a whole.

Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution in relation to the grant of the New Issue Mandate to be proposed at the EGM.

Yours faithfully, For and on behalf of Independent Board Committee

Han Xingxing Tao Feng Cheung Ngai Lam Independent Independent Independent Non-Executive Director Non-Executive Director Non-Executive Director

* For identification purpose only

35 LETTER FROM AKRON CORPORATE FINANCE

The following is the text of a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of the Existing General Mandate, and is prepared for inclusion in this circular.

19 December 2016

The Independent Board Committee and the Independent Shareholders

Dear Sirs,

PROPOSED REFRESHMENT OF THE EXISTING GENERAL MANDATE

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of the Existing General Mandate, details of which are set out in the letter from the Board (the “Letter from the Board”) contained in the circular issued by the Company to its Shareholders dated 19 December 2016 (the “Circular”), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

Pursuant to Rule 13.36(4)(a) and 13.39(4) of the Listing Rules, the Refreshment of the Existing General Mandate requires the approval of the Independent Shareholders at the EGM by way of poll. Any controlling Shareholders and their associates, or where there is no controlling Shareholder, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates, shall abstain from voting in favour of the relevant resolution to approve the Refreshment of the Existing General Mandate.

As at the Latest Practicable Date, (i) there is no controlling Shareholder; and (ii) none of the Directors and the chief executive of the Company and their respective associates hold any Shares and to the extent that any of the Directors and their respective associates controlled or were entitled to exercise control over the voting rights in respect of his/her/their Shares at the date of EGM, they are required to abstain from voting in favour of the ordinary resolution to approve the Refreshment of the Existing General Mandate at the EGM.

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee, comprising Ms. Tao Feng, Ms. Han Xingxing and Mr. Cheung Ngai Lam, all being independent non-executive Directors, has been established to advise the Independent Shareholders on the Refreshment of the Existing General Mandate. We, Akron Corporate Finance Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard. 36 LETTER FROM AKRON CORPORATE FINANCE

OUR INDEPENDENCE

As at the Latest Practicable Date, we did not have any relationship with or interest in the Company or any other parties that could reasonably be regarded as relevant to our independence. In the last two years, we have not acted as the independent financial adviser to the independent board committee and the independent Shareholders of the Company for any transaction.

Apart from normal professional fees paid or payable to us in connection with this appointment as the Independent Financial Adviser, no arrangements exist whereby we had received or will receive any fees or benefits from the Company or any other parties that could reasonably be regarded as relevant to our independence. Accordingly, we consider that we are independent pursuant to the Listing Rules.

BASIS OF OUR ADVICE

In formulating our advice and recommendation to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinion and representations contained or referred to in the Circular and the statements, information, opinion and representations provided to us by the management of the Company and the Directors. We have assumed that all information and representations contained or referred to in the Circular and all information and representations which have been provided by the management of the Company and the Directors, for which they are solely and wholly responsible, were true, accurate and complete at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors as set out in the Circular were reasonably made after due and careful inquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and representations contained in the Circular.

The Directors have collectively and individually accepted full responsibility for the accuracy of the information contained in the Circular and have confirmed, having made all reasonable enquiries, which to the best of their knowledge and belief, that the information contained in the 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 in the Circular or the Circular as a whole misleading.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, or its subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Refreshment of the Existing General Mandate. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition, nothing constructed in this letter should be constructed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

37 LETTER FROM AKRON CORPORATE FINANCE

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

PRINCIPAL FACTORS CONSIDERED

In giving our recommendation to the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of the Existing General Mandate, we have taken into consideration the following factors and reasons:

1. Background of the Refreshment of the Existing General Mandate

Pursuant to an ordinary resolution passed by the Shareholders at the AGM, the Directors were granted the Existing General Mandate to allot and issue up to 642,380,800 Shares, representing 20% of the total number of issued Shares as at the date of passing the relevant resolution approving the Existing General Mandate until the revocation, variation or expiration of the Existing General Mandate. There had not been any refreshment of the Existing General Mandate since the AGM up to the Latest Practicable Date.

On 28 September 2016, the Company entered into a placing agreement in relation to the placing of 642,380,000 new Shares. The Placing was completed on 20 October 2016. Accordingly, 642,380,000 new Shares were successfully placed and the net proceeds from the Placing amounting to approximately HK$137.79 million was received by the Company. The net proceeds of the Placing is intended to be utilized for (i) as to approximately HK$60 million for the acquisition of Century Galaxy International Limited (the “Century Galaxy Acquisition”) as disclosed in the Company’s announcement dated 27 June 2016 and 28 September 2016; (ii) approximately HK$20 million for the production of film, drama, television programmes and the development of media and entertainment business (the “Media & Entertainment Purposes”) of which approximately HK$10 million has been utilized for Media & Entertainment Purposes as at the Latest Practicable Date; (iii) approximately HK$51 million for money lending and securities trading business of which approximately HK$50 million has been utilized as at the Latest Practicable Date; and (iv) approximately HK$6 million for general working capital of the Group and/or for financing any investment opportunities when they arise of which approximately HK$6 million has been utilized as general working capital of the Group as at the Latest Practicable Date. The remaining portion of net proceeds from the Placing of approximately HK$71.79 million has been earmarked for specific purpose in relation to the Century Galaxy Acquisition, the Media & Entertainment Purposes, money lending and securities trading business and general working capital of the Group and/or for financing any investment opportunities. As at the Latest Practicable Date, as a result of completion of the Placing, the Existing General Mandate has almost been fully utilised to the extent that only 800 Shares remain issuable under the Existing General Mandate. Such number represents a negligible percentage of the total number of 3,985,920,000 Shares in issue as at the Latest Practicable Date.

38 LETTER FROM AKRON CORPORATE FINANCE

Given that the Existing General Mandate has almost been fully utilised, the Board proposed to seek approval from the Independent Shareholders for the grant of the New Issue Mandate at the EGM so as to allow the Directors to issue new Shares not exceeding 20% of the total number of issued Shares as at the date of the EGM. Based on an aggregate of 3,985,920,000 Shares in issue as at the Latest Practicable Date and assuming that the Company does not issue or repurchase any Shares from the Latest Practicable Date up to and including the date of the EGM, the New Issue Mandate, if granted, will allow the Directors to allot and issue up to 797,184,000 Shares.

2. Reasons for the Refreshment of the Existing General Mandate

The Group is principally engaged in the businesses of (i) the processing, printing and sales of finished fabrics; (ii) the trading of fabric and clothing; (iii) money lending; (iv) securities investment and (v) media, cultural, entertainment and advertising.

According to the interim report of the Group for the six months ended 30 June 2016 (the “2016 Interim Report”), the Group recorded negative net cash flows from operating activities of approximately RMB321.2 million for the six months ended 30 June 2016. Cash and bank balance of the Group was approximately RMB23.9 million as at 30 June 2016.

As stated in the 2016 Interim Report, the Group strived to maintain a healthy liquidity position by adopting a conservative approach in its financial management. The current ratio (being a ratio of total current assets to total current liabilities) of the Group maintained at approximately 1.8 times as at each of 30 June 2016 and 31 December 2015. The Group has also strived to strengthen its financial position and to lower its gearing ratio. The gearing ratio of the Group (being a ratio of borrowings (comprising obligations under finance leases, bond payables, short- term bank loans, short-term loans from other financial institution and convertible bonds) to shareholders’ equity) improved from approximately 68.8% as at 31 December 2015 to approximately 48.7% as at 30 June 2016.

As stated in the 2016 Interim Report, since the commencement of the Group’s money lending business in October 2015, the loan portfolio of the Group surged from approximately RMB149.9 million as at 31 December 2015 to approximately RMB421.1 million as at 30 June 2016. Money lending business generated segment revenue of approximately RMB15.3 million for the six months ended 30 June 2016, represented approximately 15% of the Group’s total revenue. Among the business segments of the Group, money lending business recorded segment profit of approximately RMB10.4 million, which contributed most to the Group’s segment profit.

Apart from pursuing development of the Group’s money lending business given its promising returns, as further stated in 2016 Interim Report, the Group also intends to explore new opportunities in (1) the advertising, cultural, media and entertainment industry (the “Media Sector”); and (2) securities brokerage, securities advisory, and asset management (the “Financial Services Sector”).

39 LETTER FROM AKRON CORPORATE FINANCE

In line with the Group’s strategy in exploring new opportunities in the Media Sector, the Group is currently in preliminary discussion with a target company in regard to possible cooperation and/or acquisition of the intellectual property rights held by the target company (the “Preliminary Discussion”). The target company is principally engaged in the business of animation realization. Up to the Latest Practicable Date, the Preliminary Discussion is still in preliminary stage. No concrete terms of the consideration and settlement schedule have been determined and no definitive agreements have been signed for the Preliminary Discussion. Notwithstanding the fact that the Preliminary Discussion is still in the preliminary stage, it may materialize at any time. If the Company does not have sufficient cash or financing resources on hand, the Company may not able to capture possible business opportunities for its future development.

Taking into account, (i) the Group’s intention to lower its gearing ratio, (ii) the nature of money lending business which requires readily available fund for its business development; and (iii) the Group’s business strategy to explore opportunities in both Media Sector and Financial Services Sector, it will be a merit of the Group to be provided with the necessary financial flexibility and ability to obtain funding through equity financing to fulfill any possible funding needs for its general working capital requirement, business development and/or investment decisions which may arise at any time.

As stated in the Letter from the Board, the Board considers that the New Issue Mandate will provide the Company with flexibility and ability to capture any appropriate capital raising opportunity. In addition, the New Issue Mandate will empower the Directors to issue new Shares under the refreshed limit speedily as and when necessary, and without the need to seek further approval from the Shareholders.

As advised by the Company, although there is no current intention/plan for utilising the New Issue Mandate as at the Latest Practicable Date, the Directors do not rule out the possibility that the Company will raise further funds by equity issue to finance business and/or investment opportunities if such opportunities arise or there is change in prevailing circumstances, which may utilise the New Issue Mandate. The Directors consider that grant of New Issue Mandate would provide the Group with the necessary flexibility to (i) fulfill any possible funding needs for future business development and/or investment decisions which may arise at any time; (ii) strengthen the capital base of the Company to have additional working capital for its existing business operation and for coping with any business challenges; and (iii) have an option to consider issue of consideration shares as one of the settlement means in an acquisition as and when the Directors consider to be appropriate should suitable opportunities arise in the future. In addition, the Directors regarded equity financing as an important avenue of resources to the Group since it does not create any interest paying obligations on the Group.

In addition, as discussed with the Company, although the Company does not have any current concrete plans for equity fund raising activities, given the current volatile market conditions, we consider that it is important for the Group to maintain a necessary flexible fund raising capability not only to fulfil the Group’s potential working capital requirements, but also enable the Company to make prompt decisions and to solicit funding and/or capture possible

40 LETTER FROM AKRON CORPORATE FINANCE investment opportunities in a relatively short period of time as the interests of the Company and the Shareholders may be adversely impacted if (i) the Company does not have a readily-available flexibility to utilise the New Issue Mandate to allot and issue new Shares for possible investment opportunities where the Shares can be used as a form of payment as to raise cash via Shares issue; and (ii) the Company may not be able to capture any prospective investment opportunities in a timely manner as the decision-making process of the Company will be prolonged which will also reduce the bargain power of the Company if the Company does not have flexibility and available readiness to raise fund via Shares issue or issue shares for such investment opportunities under the New Issue Mandate. We are advised by the Company that prior to the grant of the Existing General Mandate, the Group had come across, among others, a number of investment opportunities, such as in film and micro-film investment and production, trading of securities, and granting of new loans. However, in the absence of sufficient and readily-available financial resources at that time, the Group lost those investment opportunities. In this connection, shortage of readily available financial resources will hinder the Group’s development and could have adverse impact to the Group.

Up to 31 October 2016, the existing cash position of the Group is approximately HK$73 million. Based on projection of the Company, the expected working capital requirements/funding needs for the next twelve months of the Group will be approximately HK$445 million in relation to the Acquisition, the Revolving Loan and possible business projects which are not related to ATV (collectively, the “Possible Needs”). The Possible Needs include, among others, (i) settlement of the balance of the Consideration of HK$220 million (the “Consideration Requirement”); (ii) provision of working capital to ATV; (iii) settlement of legal and professional fees, costs of the Provisional Liquidators of ATV and purchase of the remaining debts of ATV from its other creditors after Completion; and (iv) possible funding needs for business projects other than those related to ATV. In this regard, Mr. Deng has undertaken to provide the Shareholder Facilities of up to HK$500 million to the Group as mentioned on page 12 of the Letter from the Board. As at the Latest Practicable Date, the Shareholder Facilities have not been drawn down. Save for the Possible Needs which aggregated to approximately HK$445 million, there were no imminent fund raising needs for the Group as at the Latest Practicable Date. Despite the foregoing, the Board would like to provide flexibility for the Company to raise funds through equity financing for its future business development/investment opportunities which the Company has been seeking from time to time.

As at the Latest Practicable Date, save for the Consideration Requirement which will be funded by the Group by debt financing or borrowings, the Group has not yet ascertained the means of financing the Possible Needs (excluding the Consideration Requirement) and the Company may finance the Possible Needs (excluding the Consideration Requirement) by internal resources, debt financing (including the Shareholder Facilities) and/or equity financing or by a combination of the aforesaid subject to the then financing options available to the Group.

As at the Latest Practicable Date, save as discussed above in relation to the Possible Needs, the Company does not have any plan, arrangement, understanding, intention, negotiation (either concluded or in process) on any potential transaction or fund raising exercise which would involve issue of equity securities of the Company.

41 LETTER FROM AKRON CORPORATE FINANCE

Taking into account that (i) the Existing General Mandate has almost been fully utilized; (ii) the New Issue Mandate allows the Group to have cash buffer for funding any future business development and investment opportunities in a timely and effective manner. In particular, given the Group’s present endeavor in its money lending business development, exploration of new opportunities in Media Sector and Financial Services Sector, it will be a merit of the Group to have immediate access to financing means which will provide readily available fund for the Group’s business operations and development; (iii) allotting and issuing new Shares under a specific mandate requires a relatively longer time which may take at least several weeks or a month or more than under the general mandate in which the Company may not be able to capture any prospective investment opportunities in a timely manner; and (iv) issuing new Shares under rights issue and open offer usually takes three months or more. In addition, apart from incurring underwriting commission, rights issue and open offer involve extra administrative work and cost for the trading arrangements. Although, rights issue and open offer would be offered to the Shareholders on a pro rata entitlement basis, those qualifying shareholders who choose not to take up their assured entitlements in full would have dilution to their shareholding interests in the Company. We are of the view and concur with Directors’ view that the grant of the New Issue Mandate is fair and reasonable, and is more cost-effective, efficient and less time consuming than alternative equity financing methods and will enhance the Company’s financial flexibility (without restricting its ability to conduct rights issue, open offer or issue of shares under specific mandate) that would be in the interest of the Company and its Shareholders as a whole. Moreover, the grant of the New Issue Mandate will also enable the Company to have additional alternative and flexibility in raising capital for the funding requirements or appropriate investment opportunities of the Group which may arise at any time prior to the next annual general meeting which is expected to be held in around May/June 2017 (the “Next AGM”) which is approximately five to six months away from the Latest Practicable Date.

42 LETTER FROM AKRON CORPORATE FINANCE

3. Equity fund raising activities of the Company in the past 12 months

The following table summarizes the fund raising activities carried out by the Company in the past 12 months immediately prior to the Latest Practicable Date:

Date of Fund raising Net proceeds Intended use of net Actual use of net announcement activity (approximately) proceeds proceeds

28 September 2016 Placing of new HK$137.79 Approximately (i) HK$60 Approximately (i) shares under general million million for acquisition of HK$50 million was mandate Century Galaxy utilized for money International Limited; (ii) lending and HK$20 million for securities trading production of film, business; (ii) drama, TV programmes, HK$10 million was development of media utilized for and entertainment development of business; (iii) HK$51 media and million for money lending entertainment and securities trading business; (iii) HK$6 business; and (iv) HK$6 million was utilized million for general for general working working capital of the capital; and (iv) Group and/or for HK$71.79 million financing any investment is maintained at opportunities when they bank and will be arise used as intended

13 December 2015 Placing of new HK$117.60 Grant of the secured term Used as intended shares under specific million loan in the amount of mandate HK$300 million by the Lender (as lender) to China Culture Media (as borrower) pursuant to a loan agreement dated 23 October 2015 (as supplemented by a supplemental agreement dated 13 December 2015) (the “Loan”)

43 LETTER FROM AKRON CORPORATE FINANCE

Date of Fund raising Net proceeds Intended use of net Actual use of net announcement activity (approximately) proceeds proceeds

13 December 2015 Subscription of new HK$59.29 million Grant of Loan Used as intended shares under specific mandate

13 December 2015 Placing of HK$118.04 Grant of Loan Used as intended convertible bonds million under specific mandate

4. Other financing alternatives

We are advised by the Company that apart from equity financing, the Directors may also consider other financing methods such as rights issue, open offer and debt financing, if appropriate, so as to meet its financing requirements arising from any future development of the Group. We understand that it usually takes more than three months to raise funds by rights issue or open offer and it may not allow the Company to grasp potential opportunities in a timely manner. In addition, apart from incurring underwriting commission, rights issue and open offer will involve extra administrative work and cost for the trading arrangements. Although rights issue and open offer would be offered to the Shareholders on a pro rata entitlement basis, those qualifying shareholders who choose not to take up their assured entitlements in full would have dilution to their shareholding interests in the Company. Debt financing will usually incur interest burden on the Group and may be subject to, including but not limited to, lengthy due diligence and negotiations with the banks which involve providing documents for credit evaluation procedures by the banks before entering into any debt financing agreement. Based on the aforementioned reasons, we are of the view and concur with the Directors’ view that the grant of the New Issue Mandate is more cost-effective, efficient and less time consuming and will enhance the Company’s financial flexibility to expand and develop the business of the Company.

44 LETTER FROM AKRON CORPORATE FINANCE

5. Potential dilution on shareholdings

The table below sets out the shareholding structure of the Company (i) as at the Latest Practicable Date and (ii) immediately upon the issue of Shares under the New Issue Mandate (assuming that the New Issue Mandate is utilised in full and no further Shares are issued or repurchased by the Company), for illustrative and reference purpose:

Upon full utilization of the New Issue Mandate (assuming no other Shares are issued and/or Shareholders As at the Latest Practicable Date repurchased by the Company) No. of Shares Approximate % No. of Shares Approximate % (’000) (Note 2) (’000) (Note 2)

Honghu Capital (Note 1) 645,100 16.18 645,100 13.49

Other Public Shareholders 3,340,820 83.82 3,340,820 69.84

Shares to be issued under the New Issue Mandate – – 797,184 16.67

Total 3,985,920 100.00 4,783,104 100.00

Notes:

1. Honghu Capital is beneficially and wholly-owned by Mr. Deng.

2. The percentages are subject to round figures.

Upon full utilisation of the New Issue Mandate, 797,184,000 Shares will be issued, representing 20% of the issued share capital of the Company as at the Latest Practicable Date and approximately 16.67% of the issued share capital of the Company as enlarged by the Shares issued under the New Issue Mandate. Assuming that the Company does not issue or repurchase any Shares from the Latest Practicable Date up to and including the date of the EGM, the aggregate shareholding of the public Shareholders will decrease from approximately 83.82% as at the Latest Practicable Date to approximately 69.84% upon full utilisation of the New Issue Mandate, representing a potential maximum dilution in public shareholding by approximately 16.67% and potential cumulative dilution impact of approximately 57.4% in the shareholding of the Shareholders as enlarged by the issue of new Shares under the New Issue Mandate and the fund raising activities conducted by the Company in the past 12 months immediately preceding the Latest Practicable Date.

45 LETTER FROM AKRON CORPORATE FINANCE

Taking into account that the grant of the New Issue Mandate (i) will allow the Company to raise funds to satisfy its working capital or other financing requirements by allotment and issuance of new Shares before the Next AGM which is expected to be held in around five to six months from the Latest Practicable Date; (ii) will provide more flexibility and options of financing to the Group for its operation and for further business development as well as for other potential future investments and/or acquisitions as and when such opportunities arise; (iii) the above flexibility outweigh the dilution effect of the existing Shareholders as the Company is able to respond in a timely and effective manner to take advantages of any material investment opportunities for the benefit of the Company and its Shareholders as a whole; and (iv) the shareholding interests of all the Shareholders will be diluted in proportion to their respective shareholdings upon any utilisation of the New Issue Mandate, we consider such potential dilution to shareholdings of the public Shareholders to be acceptable.

RECOMMENDATION

Having considered the factors and reasons as stated above, we are of the opinion that the Refreshment of the Existing General Mandate is fair and reasonable so far as the Company and the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Refreshment of the Existing General Mandate.

Yours faithfully, For and on behalf of Akron Corporate Finance Limited Ross Cheung Managing Director

46 APPENDIX I FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION OF THE GROUP A1B31(3)(a) App16(32) Details of the published financial information of the Group for each of the three financial years ended 31 December 2013, 2014 and 2015 and for the six months ended 30 June 2016 are disclosed in the Company’s annual reports for the financial years ended 31 December 2013 (from pages 33 to 111), 2014 (from pages 35 to 115) and 2015 (from pages 44 to 159) respectively, and the Company’s interim report for the six months ended 30 June 2016 (from pages 18 to 49). Details of the management discussion and analysis of the results of operations of the Group for each of the three financial years ended 31 December 2013, 2014 and 2015 and for the six months ended 30 June 2016 are disclosed in the Company’s annual reports for the financial years ended 31 December 2013 (from pages 5 to 9), 2014 (from pages 6 to 8) and 2015 (from pages 7 to 13) respectively, and the Company’s interim report for the six months ended 30 June 2016 (from pages 2 to 12). All of the above information have been published on the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.capitalfp.com.hk/eng/index. jsp?co=707).

20161114 2. INDEBTEDNESS STATEMENT Q8(ii) Borrowings

At the close of business on 31 October 2016, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had outstanding borrowings of approximately RMB243.3 million comprising (i) secured bank loans of approximately RMB119.6 million, which were secured by charges over its assets, including bank deposits, property, plant and equipment, and prepaid lease payments; (ii) secured and unsecured other loans of approximately RMB2.2 million and RMB32.0 million respectively; (iii) secured bond of approximately RMB61.3 million, which were secured by share charges over the issued share capital of a subsidiary of the Group; (iv) carrying amount of convertible bonds of approximately RMB25.9 million; and (v) finance lease payables of approximately RMB2.3 million, which are secured by the leased assets.

Contingent liabilities

As at 31 October 2016, the Group provided corporate guarantees to a bank in respect of short-term bank borrowings granted to Shasing-Shapheng (Quanzhou) Textile Industrial Co., Ltd, amounting to RMB150,000,000, a former indirect wholly-owned subsidiary of the Company, with maturity on 1 January 2017. In addition, a counter-indemnity in favour of the Group is executed by the buyer of Shasing-Shapheng (Quanzhou) Textile Industrial Co., Ltd, (the “Buyer”), pursuant to which the Buyer undertakes to indemnify the Group the liabilities arising from the above loan facilities.

3. WORKING CAPITAL

The Directors are of the opinion that, after taking into account of the Group’s internal resources, cash flow from operations, banking facilities and facility granted by a shareholder available to the Group,

20161128 the Group will have sufficient working capital to satisfy its present requirements and the ATV Q7(i) Acquisition, that is, for at least the next twelve months from the date of this circular in the absence of unforeseen circumstances.

4. MATERIAL ADVERSE CHANGE A1B32

The Directors have confirmed that they were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2015, being the date to which the latest published audited accounts of the Company were made up to.

47 APPENDIX I FINANCIAL INFORMATION OF THE GROUP

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP A1B29(1)(b)

In light of the global economic trend and fierce competition in the market, the Group has taken appropriate streamlining measures including consolidation of existing businesses and exploring new opportunities in securities brokerage, securities advisory, and asset management.

The growth of gross domestic product in the PRC has been moderate with market forecast down to 6.3% for the year 2016 coupled with economic deleveraging, destocking and rebalancing. Under such economic circumstance, the operating environment of the textile industry faced by the Group is expected to remain very challenging. Nevertheless, the Group will continue to adhere to its proactive operating style to improve its competitive advantage, enhance profit margin and create value to its customers.

On the other hand, the continuous globalisation of the PRC financial market and its integration with the Hong Kong financial market, for example, the upcoming launch of Shenzhen-Hong Kong Stock Connect program in December 2016, will offer ample opportunities for the Group to expand in the securities brokerage, securities advisory and asset management business along with the expected completion of the acquisition of Sincere Securities Limited.

Regarding the money lending business, it has grown rapidly since its commencement in the second half of 2015 and has contributed approximately RMB15.3 million revenue to the Group for the six months ended 30 June 2016. The Group will continue to adhere to its stringent credit policies and monitor the loan portfolio in order to mitigate credit risk.

In addition, the Group has noticed remarkable growth in the advertising, cultural, media and entertainment related industry, particularly in the PRC market. In order to actualise the potential opportunities in these markets and to enhance the interests of the Shareholders, the Group has started exploring new business opportunities in the advertising, cultural, media and entertainment industry. It is expected that upon Completion, the Group shall proceed with the restructuring of ATV. ATV is the first television broadcasting company in Hong Kong with nearly 60 years of history. It has produced many successful TV programmes, dramas, news programmes as well as entertainment shows over the years. In addition, it also holds a number of valuable intellectual properties such as the Miss Asia Pageant. Although ATV’s broadcaster license for over-the-air transmission has ceased, it shall continue to operate and broadcast through other media, such as satellite and the Internet, and act as a production power house in Hong Kong taking advantage of its 50,000 square-meter production facility in the Premises, its film library and archive, and its profound experience in broadcasting, entertainment programme and drama production and pageant hosting, etc. Upon Completion and through cooperation with other production frontiers and leaders in Hong Kong, China and the overseas, the Company shall have access to many industrial resources and know-hows, attract the talents of vendors and the attentions of viewers, all of which will expedite the Company’s development and diversification into the advertising, cultural, media and entertainment market.

With the concerted efforts of the management and staff of the Group, the Group is confident and optimistic about the Group’s prospect.

48 APPENDIX II FINANCIAL INFORMATION OF THE ATV GROUP

Set out below are information extracted from the draft audited financial statements of the ATV Group for the year ended 31 December 2014 and the audited financial statements of the ATV Group for the year ended 31 December 2013, together with the unaudited statement of financial position of ATV as at 31 October 2015. The financial information of the ATV Group for the year ended 31 December 2014 and the notes thereto are for reference only as they have not been approved by the then board of directors of ATV nor signed off by the then auditors as the board of directors of ATV was allegedly in dispute on a number of financial and operational matters at the relevant time. The draft audited financial statements of the ATV Group for the year ended 31 December 2014, the audited financial statements of the ATV Group for the year ended 31 December 2013 and the unaudited statement of financial position of ATV as at 31 October 2015 do not represent an accurate and up-to-date financial position of the ATV Group as at the Latest Practicable Date and are provided for the Shareholders’ reference only.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (ATV GROUP)

Year ended 31 December 2014 2013 Notes HK$ HK$

Revenue 1 170,518,935 168,091,717 Other income 13,705,625 2,296 Other net gain 897,460 2,519,217 Costs of production and programs (72,629,461) (84,694,486) Selling, general and administrative expenses (303,819,608) (342,552,137) Other operating expenses (10,969,692) (16,664,642)

Loss from operations (202,296,741) (273,298,035) Finance costs (110,412,718) (108,101,821)

Loss before tax (312,709,459) (381,399,856) Income tax (expenses)/credit (37,115,923) 2,977,174

Loss for the year (349,825,382) (378,422,682)

Other comprehensive income after tax: Items that will not be reclassified to profit or loss: Revaluation surplus on leasehold land and buildings, net of deferred tax 33,886,043 15,066,306

Other comprehensive income for the year, net of tax 33,886,043 15,066,306

Total comprehensive loss for the year (315,939,339) (363,356,376)

49 APPENDIX II FINANCIAL INFORMATION OF THE ATV GROUP

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (ATV GROUP)

At 31 December 2014 2013 Notes HK$ HK$

Non-current assets Property, plant and equipment 2 511,707,271 510,851,226 Investment properties 3 8,581,275 8,581,275 Deposits paid for acquisition of property, plant and equipment 6 429,254 435,893

520,717,800 519,868,394

Current assets Purchased programs and film rights 4 5,295,089 1,677,636 Self-produced programs 4 3,012,470 2,621,062 Trade receivables 5 9,190,679 12,158,969 Prepayments, deposits and other receivables 6 16,610,250 31,064,835 Bank and cash balances 4,755,082 15,530,990

38,863,570 63,053,492

Current liabilities Trade, accruals and other payables 312,162,081 205,557,673 Deferred income 26,509,824 36,644,212 Other loans 1,219,658,569 799,322,061 Amounts due to shareholders 368,625,950 350,995,949 Obligations under finance leases 433,254 460,901 Convertible notes – 285,188,773

1,927,389,678 1,678,169,569

Net current liabilities (1,888,526,108) (1,615,116,077)

Total assets less current liabilities (1,367,808,308) (1,095,247,683)

Non-current liabilities Obligations under finance leases 61,950 495,204 Deferred tax liabilities 43,811,968 –

43,873,918 495,204

NET LIABILITIES (1,411,682,226) (1,095,742,887)

Capital and reserves Share capital 329,062,774 329,062,774 Reserves (1,740,745,000) (1,424,805,661)

TOTAL DEFICIT (1,411,682,226) (1,095,742,887)

50 APPENDIX II FINANCIAL INFORMATION OF THE ATV GROUP

UNAUDITED STATEMENT OF FINANCIAL POSITION OF ATV AS AT 31 OCTOBER 2015

2015 HK$

Non-current assets Property, plant and equipment 448,759,549 Investments in subsidiaries (646,533,279)

(197,773,730)

Current assets Purchased programs and film rights 12,342,796 Self-produced programs 1,975,232 Trade receivables 13,222,298 Prepayments, deposits and other receivables 40,245,322 Bank and cash balances 808,873

68,594,521

Current liabilities Trade, accruals and other payables 829,172,312

829,172,312

Net current liabilities (760,577,791)

Total assets less current liabilities (958,351,521)

Non-current liabilities Long-term loan 1,264,222,492

1,264,222,492

NET LIABILITIES (2,222,574,013) \

Capital and reserves Share capital 329,062,774 Reserves (2,551,636,787)

TOTAL DEFICIT (2,222,574,013)

51 APPENDIX II FINANCIAL INFORMATION OF THE ATV GROUP

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Property Share revaluation Capital Accumulated Share capital premium reserve reserves losses Total HK$ HK$ HK$ HK$ HK$ HK$

At 1 January 2013 329,062,774 1,199,704,254 172,762,757 44,014,312 (2,477,930,608) (732,386,511) Total comprehensive income/(loss) for the year – – 15,066,306 – (378,422,682) (363,356,376) Transfer upon expiry of conversion rights of convertible notes – – – (44,014,312) 44,014,312 –

At 31 December 2013 329,062,774 1,199,704,254 187,829,063 – (2,812,338,978) (1,095,742,887)

At 1 January 2014 329,062,774 1,199,704,254 187,829,063 – (2,812,338,978) (1,095,742,887) Total comprehensive income/(loss) for the year – – 33,886,043 – (349,825,382) (315,939,339)

At 31 December 2014 329,062,774 1,199,704,254 221,715,106 – (3,162,164,360) (1,411,682,226)

52 APPENDIX II FINANCIAL INFORMATION OF THE ATV GROUP

CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended 31 December 2014 2013 HK$ HK$

Cash flows from operating activities Loss before tax (312,709,459) (381,399,856) Adjustments for: Interest income (11,625) (2,296) Interest expenses 110,412,718 108,101,821 Depreciation 39,656,315 40,985,465 Impairment loss on property, plant and equipment 4,345,070 16,664,642 Impairment loss on trade receivables 6,624,622 – Impairment loss on other receivables – 4,319,453 Reversal of impairment loss on other receivables – (164,440) Amortisation of purchased programs and film rights 6,441,797 5,087,633 Amortisation of self-produced programs 60,592,091 66,976,118 Loss/(gain) on disposal of property, plant and equipment 12,742 (21,000)

Operating loss before working capital changes (84,635,729) (139,452,460) Change in purchased programs and film rights (10,059,250) (3,901,807) Change in self-produced programs (60,983,499) (66,299,694) Change in trade receivables (3,656,332) 309,203 Change in prepayments, deposits and other receivables 14,461,224 (9,178,617) Change in deferred income (10,134,388) 19,758,817 Change in trade and other payables 23,772,203 983,749 Change in amounts due to related companies – (191,880)

Cash used in operations (131,235,771) (197,972,689) Interest received 11,625 2,296 Interest paid – (265,400) Interest paid on finance lease obligations (52,711) (62,755)

Net cash used in operating activities (131,276,857) (198,298,548)

Cash flows from investing activities Purchase of property, plant and equipment (4,288,084) (21,444,224) Proceeds from disposal of property, plant and equipment – 21,000

Net cash used in investing activities (4,288,084) (21,423,224)

Cash flows from financing activities Proceeds from new other loans 398,086,475 253,501,646 Repayments of other loans (272,836,541) (26,158,145) Repayment of finance lease obligations (460,901) (454,517)

Net cash generated from financing activities 124,789,033 226,888,984

Net (decrease)/increase in cash and cash equivalents (10,775,908) 7,167,212 Cash and cash equivalents at beginning of year 15,530,990 8,363,778

Cash and cash equivalents at end of year 4,755,082 15,530,990

Analysis of cash and cash equivalents Bank and cash balances 4,755,082 15,530,990

53 APPENDIX II FINANCIAL INFORMATION OF THE ATV GROUP

NOTES TO THE FINANCIAL INFORMATION

1. REVENUE

The ATV Group’s revenue which represents advertising airtime provided to customers, sales of program licenses and program production and other related income are as follows:

2014 2013 HK$ HK$

Advertising sales revenue 125,642,591 120,845,249 Program license fee income 8,310,765 8,407,838 Program production and other related income 36,565,579 38,838,630

170,518,935 168,091,717

54 APPENDIX II FINANCIAL INFORMATION OF THE ATV GROUP

2. PROPERTY, PLANT AND EQUIPMENT

Broadcasting, Leasehold transmitting Furniture land and Leasehold and production Motor and office Construction buildings improvements equipment vehicles equipment in progress Total HK$ HK$ HK$ HK$ HK$ HK$ HK$

Cost or valuation At 1 January 2013 381,276,000 200,998,676 454,105,449 12,331,084 63,918,480 40,436,290 1,153,065,979 Additions – 304,000 6,631,172 – 875,933 15,468,844 23,279,949 Disposals – – – (211,080) – – (211,080) Surplus on revaluation 18,043,480 – – – – – 18,043,480 Elimination on revaluation (11,043,480) – – – – – (11,043,480)

At 31 December 2013 and 1 January 2014 388,276,000 201,302,676 460,736,621 12,120,004 64,794,413 55,905,134 1,183,134,848 Additions – 25,807 1,463,292 – 299,475 2,499,510 4,288,084 Disposals – (650,775) (565,615) – (321,963) – (1,538,353) Surplus on revaluation 40,582,088 – – – – – 40,582,088 Elimination on revaluation (11,582,088) – – – – – (11,582,088)

At 31 December 2014 417,276,000 200,677,708 461,634,298 12,120,004 64,771,925 58,404,644 1,214,884,579

Accumulated depreciation and impairment At 1 January 2013 42,000 200,226,901 352,356,367 11,038,775 62,224,032 – 625,888,075 Charge for the year 11,049,480 498,413 28,390,307 485,652 561,613 – 40,985,465 Impairment loss – – 11,180,508 – – 5,484,134 16,664,642 Written back on disposals – – – (211,080) – – (211,080) Elimination on revaluation (11,043,480) – – – – – (11,043,480)

At 31 December 2013 and 1 January 2014 48,000 200,725,314 391,927,182 11,313,347 62,785,645 5,484,134 672,283,622 Charge for the year 11,588,088 190,150 26,564,155 485,783 828,139 – 39,656,315 Impairment loss – – 3,541,759 – – 803,311 4,345,070 Written back on disposals – (650,775) (553,548) – (321,288) – (1,525,611) Elimination on revaluation (11,582,088) – – – – – (11,582,088)

At 31 December 2014 54,000 200,264,689 421,479,548 11,799,130 63,292,496 6,287,445 703,177,308

Carrying amount At 31 December 2014 417,222,000 413,019 40,154,750 320,874 1,479,429 52,117,199 511,707,271

At 31 December 2013 388,228,000 577,362 68,809,439 806,657 2,008,768 50,421,000 510,851,226

The analysis of the cost or valuation at 31 December 2014 of the above assets is as follows:

At cost 276,000 200,677,708 461,634,298 12,120,004 64,771,925 58,404,644 797,884,579 At valuation 417,000,000 – – – – – 417,000,000

417,276,000 200,677,708 461,634,298 12,120,004 64,771,925 58,404,644 1,214,884,579

The analysis of the cost or valuation at 31 December 2013 of the above assets is as follows:

At cost 276,000 201,302,676 460,736,621 12,120,004 64,794,413 55,905,134 795,134,848 At valuation 388,000,000 – – – – – 388,000,000

388,276,000 201,302,676 460,736,621 12,120,004 64,794,413 55,905,134 1,183,134,848

55 APPENDIX II FINANCIAL INFORMATION OF THE ATV GROUP

Notes:

(a) The ATV Group’s leasehold land and buildings were revalued at 31 December 2014 and 2013 on the open market value basis by reference to market evidence of recent transactions for similar properties by an independent firm of chartered surveyors, Vigers Appraisal and Consulting Limited.

Except for the leasehold land and buildings of the ATV Group of HK$222,000 (2013: HK$228,000) held outside Hong Kong under long leases, all other leasehold land and buildings of the ATV Group are held in Hong Kong under medium-term leases. In the opinion of the Directors, the carrying amount of the leasehold land and buildings held outside Hong Kong as at 31 December 2014 approximate its fair value.

The carrying amount of the ATV Group’s leasehold land and buildings would have been HK$170,970,515 (2013: HK$176,231,398) had they been stated at cost less accumulated depreciation and impairment losses.

(b) At 31 December 2014, the carrying amount of broadcasting, transmitting and production equipment, motor vehicles and furniture and office equipment held by the ATV Group under finance leases in total amounted to HK$437,181 (2013: HK$943,378).

(c) The ATV Group carried out reviews of the recoverable amount of its broadcasting, transmitting and production equipment and construction in progress in 2013 and 2014 as the ATV Group has reported continuing losses and its future profitability remains uncertain. The reviews led to the recognition of aggregate impairment loss of nil (2013: HK$16,664,642), that has been recognised in profit or loss. The recoverable amount of these assets of the ATV Group of HK$96,464,154 (2013: HK$119,073,952) were based on the respective assets’ fair values less costs of disposal. The fair values less costs of disposal were determined according to the valuation performed by an independent firm of surveyors, CBRE Limited, using both market approach and cost approach (level 2 fair value measurements). The market approach has taken into account recent sales price of similar assets within the same industry, adjusting for differences such as timing of transaction, while the cost approach has taken into account recent purchase price of similar assets, adjusting for differences such as condition, utility and age.

3. INVESTMENT PROPERTIES

2014 2013 HK$ HK$

At 1 January and at 31 December 8,581,275 8,581,275

The ATV Group’s investment properties comprised residential units held in the PRC and agricultural land held in Hong Kong.

Investment properties were revalued at 31 December 2014 and 2013 using direct comparison method and the valuation of the PRC residential units were carried out by an independent firm of surveyors, Vigers Appraisal and Consulting Limited, who have among their staff Fellows of Hong Kong Institute of Surveyors with recent experiences in location and category of property being valued. The valuation techniques used in the determination of fair values as well as the key inputs used in the valuation models.

On 16 February 2015, the ATV Group has disposed of the agricultural land held in Hong Kong at a cash consideration of HK$8,500,000 to an independent third party.

56 APPENDIX II FINANCIAL INFORMATION OF THE ATV GROUP

The carrying amounts of investment properties are analysed as follows:

2014 2013 HK$ HK$

Held outside Hong Kong under long leases 1,081,275 1,081,275 Held in Hong Kong under medium-term leases 7,500,000 7,500,000

8,581,275 8,581,275

4. PURCHASED PROGRAMS AND FILM RIGHTS, AND SELF-PRODUCED PROGRAMS

Purchased programs and Self-produced film rights programs HK$ HK$

At 1 January 2013 2,863,462 3,297,486 Additions 3,901,807 66,299,694 Amortisation (5,087,633) (66,976,118)

At 31 December 2013 and 1 January 2014 1,677,636 2,621,062 Additions 10,059,250 60,983,499 Amortisation (6,441,797) (60,592,091)

At 31 December 2014 5,295,089 3,012,470

5. TRADE RECEIVABLES

2014 2013 HK$ HK$

Trade receivables 23,435,891 19,779,559 Less: allowances for doubtful debts (14,245,212) (7,620,590)

9,190,679 12,158,969

As at 31 December 2014, an allowance was made for estimated irrecoverable trade receivables of approximately HK$6,624,622 (2013: nil).

Reconciliation of allowance for trade receivables:

2014 2013 HK$ HK$

At 1 January 7,620,590 7,620,590 Allowance for the year 6,624,622 –

At 31 December 14,245,212 7,620,590

At 31 December 2014, the ATV Group’s accounts receivable of HK$14,245,212 (2013: HK$7,620,590) were individually determined to be impaired. The individually impaired receivable related to customers’ breaching of relevant sales contracts and management assessed that all related receivables are expected to be irrecoverable. Consequently, specific allowances for doubtful debts were recognised.

57 APPENDIX II FINANCIAL INFORMATION OF THE ATV GROUP

The ageing analysis of trade receivables that are neither individually or collectively considered to be impaired are as follows:

2014 2013 HK$ HK$

Neither past due nor impaired 4,382,534 7,686,950

1 to 3 months past due 3,095,212 3,238,428 Over 3 months past due 1,712,933 1,233,591

4,808,145 4,472,019

9,190,679 12,158,969

6. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

2014 2013 HK$ HK$

Prepayments 5,221,347 17,666,099 Deposits and other receivables 11,818,157 13,834,629

17,039,504 31,500,728 Less: Current portion (16,610,250) (31,064,835)

Non-current portion 429,254 435,893

58 APPENDIX III VALUATION REPORT ON PREMISES OF ATV

The following is the text of a report prepared for the purpose of incorporation in this circular received from Roma Appraisals Limited, an independent valuer, in connection with their opinion of the value of the Property as at 31 October 2016.

Unit 3806, 38/F, China Resources Building, 26 Harbour Road, Wan Chai, Hong Kong Tel (852) 2529 6878 Fax (852) 2529 6806 E-mail [email protected] http://www.romagroup.com

19 December 2016

Co-Prosperity Holdings Limited 5.02B(a)(b) (i)(d) Rooms 2501-14, 25th Floor Sun Hung Kai Centre 30 Harbour Road, Wan Chai Hong Kong

Dear Sir/Madam,

Re: Property Valuation of an Industrial Complex situated at Nos.25-37 Dai Shing Street, Tai Po Industrial Estate, New Territories, Hong Kong

In accordance with the instructions from Co-Prosperity Holdings Limited (the “Company”) and/or 5.06(8) 5.07 its subsidiaries (together with the Company referred to as the “Group”) for us to value the property in Hong Kong, we confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the property as at 31 October 2016 for the purpose of incorporation in the circular of the Company dated 19 December 2016.

1. BASIS OF VALUATION 5.06(i)(l)

Our valuation of the property is our opinion of the market value of the concerned property which we would define as intended to mean “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s- length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

Market value is understood as the value of an asset or liability estimated without regard to costs of sale or purchase (or transaction) and without offset for any associated taxes or potential taxes.

59 APPENDIX III VALUATION REPORT ON PREMISES OF ATV

2. VALUATION METHODOLOGY

As stipulated in the circular titled “Surrender and Assignment of Lease” issued by Hong Kong Science & Technology Parks Corporation (“HKSTPC”), the lessor of the property, dated 13 March 2008, in the event that the lessee is desirous to assign the property during the lease term, either offer to surrender or assignment of lease was applicable upon the approval of HKSTPC.

Whereas, according to the circular titled “Moratorium of 2008 Assignment Arrangement” issued by HKSTPC dated 19 June 2014, the assignment of lease becomes moratorium. In the event that the lessee is desirous to assign the property during the lease term, the property can only be assigned by offer to surrender to HKSTPC. In this regard, the property is subject to assignment/ sale restriction imposed by HKSTPC and cannot be assigned/transferred in the open market. Hence, we have attributed no commercial value to the property.

3. TITLE INVESTIGATION 5.06(1)(n)

For the property in Hong Kong, we have carried out land search at the Land Registry. However, we have not scrutinized all the original documents to verify ownership or to ascertain the existence of any lease amendments which may not appear on the copies handed to us.

4. VALUATION ASSUMPTIONS AND SOURCE OF INFORMATION 5.06(1)(o)

In the course of our valuation, we have relied to a very considerable extent on the information provided by the Group and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, identification of property, particulars of occupation, floor areas, age of building and all other relevant matters which can affect the value of the property. All documents have been used for reference only.

We have no reason to doubt the truth and accuracy of the information provided to us. We have also been advised that no material facts have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view, and have no reason to suspect that any material information has been withheld.

5. VALUATION CONSIDERATION

We have inspected the exterior and, where possible, the interior of certain property. No structural survey has been made in respect of the property. However, in the course of our inspection, we did not note any serious defects. We are not, however, able to report that the property is free from rot, infestation or any other structural defects. No tests were carried out on any of the building services.

We have not carried out on-site measurement to verify the site/floor areas of the property under consideration but we have assumed that the site/floor areas shown on the documents handed to us are correct. Except as otherwise stated, all dimensions, measurements and areas included in the valuation certificate are based on information contained in the documents provided to us by the Group and are therefore approximations.

60 APPENDIX III VALUATION REPORT ON PREMISES OF ATV

No allowance has been made in our valuation for any charges, mortgages or amounts owing on the property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value.

Our valuation is prepared in compliance with the requirements set out in Chapter 5 and 5.05 Practice Note 12 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and in accordance with the HKIS Valuation Standards (2012 Edition) published by The Hong Kong Institute of Surveyors.

6. REMARKS

Unless otherwise stated, all monetary amounts stated in our valuation are in Hong Kong Dollars (HK$).

Our Valuation Certificate is attached.

Yours faithfully, For and on behalf of Roma Appraisals Limited

Dr. Alan W K Lee 5.06(7) BCom(Property) MFin PhD(BA) MHKIS RPS(GP) AAPI CPV CPV(Business) Director

Note: Dr. Alan W K Lee is a Registered Professional Surveyor (General Practice), a member of Hong Kong Institute of Surveyors and an Associate of Australian Property Institute. He has over 12 years’ valuation experience in Hong Kong, Macau, the PRC, the Asia Pacific Region and European countries.

61 APPENDIX III VALUATION REPORT ON PREMISES OF ATV

VALUATION CERTIFICATE

Property occupied by Asia Television Limited in Hong Kong 5.06(1)(a)(b) (c)(e)(f)(g)(i) (p)(q)(r) Market value in Particulars of Existing State as at Property Description and Tenure Occupancy 31 October 2016

An Industrial The subject development As advised by the Group, No commercial value. Complex situated at comprises a 6-storey industrial the property was vacant (For details, please Nos.25-37 complex erected on a parcel as at the date of valuation. refer to Note.7) Dai Shing Street, of land with a site area of Tai Po Industrial approximately 20,668.9 sq.m. Estate, (or about 222,480 sq.ft.) which New Territories, was completed in 1989. Hong Kong According to approved bulding 5.06(5)(c)

Subsection 2 of plans, the property has a total 5.10(a)(b) Section L of Tai gross floor area of (d)(e) Po Town Lot No.1 48,256.72 sq.m. (or about 519,435 sq.ft.). and The Extension Thereto The property is held under New Grant No.TP11250 for a term of 99 years commencing on 1 July 1898 and has been extended upon expiry until 30 June 2047.

Notes:

1. The registered owner of the property is Hong Kong Science and Technology Parks Corporation (“HKSTPC”) (formerly known as The Hong Kong Industrial Estates Corporation) vide Memorial No.TP663440 dated 15 May 2001. (Remarks: Memorandum for Registration of a Government Printer’s Copy of the Hong Kong Science and Technology Parks Corporation Ordinance (Ordinance No.5 of 2001)).

2. The property is subject to Lease (RE: S.S.2) in favour of Dragon Asia Property Limited vide Memorial No.TP664353 dated 5 May 2001 (the “Lease”) (Remarks: For Rent see Memorial).

3. The property is subject to Agreement for Sale and Purchase in favour of Asia Television Limited (“ATV”) vide Memorial No.05090302120011 dated 20 August 2005, for a consideration of HK$180,000,000 (Remarks: By Dragon Asia Property Limited) (RE: Subsection 2).

4. The property is subject to Assignment of Lease in favour of ATV vide Memorial No.05093002560083 dated 22 September 2005, for a consideration of HK$180,000,000 (Remarks: By Dragon Asia Property Limited) (RE: Subsection 2).

5. The property is subject to Deed of Variation of Lease of Memorial No.TP664353 RE SS.2 in favour of ATV vide Memorial No.05101801170266 dated 22 September 2005 (the “Deed of Variation of Lease”).

62 APPENDIX III VALUATION REPORT ON PREMISES OF ATV

6. Subject to the Lease entered into between The Hong Kong Industrial Estates Corporation and Dragon Asia Property Limited dated 5 May 2001, and the Deed of Variation of Lease entered into between Hong Kong Science and Technology Parks Corporation dated 22 September 2005, the subject development is held by ATV for a term expiring on 27 June 2047 leased by HKSTPC.

7. According to the current policy, the property interests leased by ATV in Tai Po Industry Estate are not transferrable. However, ATV could be acquired and the use of the land and building would not be changed. HKSTPC should be informed about the acquisition and confirm there is no change in use of the property.

We attribute no commercial value to the property interests due to the non-transferrable policy. However, ATV can use the property regardless of the change in ownership upon confirmation of the HKSTPC.

We understand that ATV has paid the building cost. For the client’s own reference purpose, our estimation of reference value is based on the assumption that the property can be used under the same purpose as before. Thus the buildings and structures of the property have been valued on the basis of its depreciated replacement costs instead of direct comparison method. The depreciated replacement cost approach is based on an estimate of the value for the existing use of the land, plus the current cost of replacement of the existing structures less deductions for physical deterioration and all relevant forms of obsolescence and optimization. Our estimation does not necessarily represent the amount that might be realized from the disposition of the land and buildings. The reference value of land and building is HK$249,000,000. Please be noted that this reference value is solely for the client’s own internal reference purpose.

8. Our inspection was performed by Jeffrey Wong, B.Eng in November 2016. 5.06(1)(m)(s)

63 APPENDIX IV GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT A1B2

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

Directors’ interests and short positions in the securities of the Company and its associated R14.66(3) A1B34 corporations A1B38 (1), (1A) As at the Latest Practicable Date, none of the Directors or chief executives of the Company and their associates had any interests or short positions in any shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required pursuant to Section 352 of the SFO to be entered in the register maintained by the Company referred to therein, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by the Directors of Listed Issuers.

As at the Latest Practicable Date, none of the Directors or any proposed director of the Company was a director or employee of a company which had an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO.

3. COMPETING INTEREST R14.66(8)

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors or their respective close associates had any interest in a business which competes or may compete, either directly or indirectly, with the business of the Group, or have or may have any other conflicts of interest with the Group.

4. DIRECTORS’ SERVICE CONTRACTS R14.66(7)

None of the Directors had entered or been proposed to enter into any service contract with the Company or any other member of the Group which is not determinable by the Group within one year without payment of compensation (other than statutory compensation) as at the Latest Practicable Date.

64 APPENDIX IV GENERAL INFORMATION

5. DIRECTORS’ INTERESTS IN CONTRACTS AND ASSETS A1B40(1),(2)

As at the Latest Practicable Date, none of the Directors were materially interested in any contract or arrangement entered into by any member of the Group which was subsisting as at the Latest Practicable Date and which was significant in relation to the business of the Group. As at the Latest Practicable Date, none of the Directors had any interest, directly or indirectly, in any assets which have been, since 31 December 2015 (being the date to which the latest published audited consolidated accounts of the Company were made up), acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

6. MATERIAL CONTRACTS A1B42

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the members of the Group within the two years immediately preceding the date of this circular and are or may be material:

(i) the conditional placing agreement entered into between the Company and Kingston Securities Limited as the placing agent dated 28 October 2014 in relation to the placing of up to 279,700,000 new Shares on a best effort basis at the placing price of HK$0.16 per placing Share;

(ii) the conditional sale and purchase agreement dated 17 March 2015 (as supplemented by a supplemental agreement dated 25 June 2015) entered into between Jianyi Limited and Widerlink Group Limited (“Widerlink”), a direct wholly-owned subsidiary of the Company, for the sale and purchase of the entire issued share capital of Top Vast Holdings Limited (拓浩集團有限公司), a former subsidiary of the Company at the cash consideration of HK$43.8 million;

(iii) the subscription agreement dated 15 October 2015 (as supplemented by a supplemental agreement dated 14 October 2016) entered into between the Company and Harvest Bloom Limited (“Harvest Bloom”), as the subscriber, pursuant to which the Company issued to Harvest Bloom one-year 15% coupon secured bonds in the principal amount of HK$70,000,000 to be secured by the share charge executed by Widerlink (a direct wholly- owned subsidiary of the Company) in favour of Harvest Bloom over the entire issued share capital of Co-Prosperity Limited (an indirect wholly-owned subsidiary of the Company and an investment holding company);

(iv) the conditional placing agreement entered into between the Company and Haitong International Securities Company Limited dated 23 October 2015 (as supplemented by the supplemental agreement dated 13 December 2015 and the second supplemental agreement dated 1 February 2016) in relation to the placing of up to 600,000,000 new Shares on a best effort basis at the placing price of not less than HK$0.20 per placing Share;

65 APPENDIX IV GENERAL INFORMATION

(v) the conditional placing agreement entered into between the Company and China Everbright Securities (HK) Limited dated 23 October 2015 (as supplemented by the supplemental agreement dated 13 December 2015 and the second supplemental agreement dated 1 February 2016) in relation to the placing of the convertible bonds on a best effort basis in the aggregate principal amount of up to HK$120,450,000 with a conversion price of not less than HK$0.22 per conversion Share;

(vi) the subscription agreement entered into between Honghu Capital and the Company dated 23 October 2015 (as supplemented by the supplemental agreement dated 13 December 2015 and the second supplemental agreement dated 1 February 2016) in relation to the subscription of 300,000,000 new Shares at the subscription price of HK$0.20 per subscription Share;

(vii) the loan agreement dated 23 October 2015 (as supplemented by the supplemental agreement dated 13 December 2015) entered into among the Lender (as lender), China Culture Media (as the borrower) and Mr. Si Rongbin (as the guarantor) in relation to the grant of the secured term loan in the amount of HK$300 million to China Culture Media (the “2015 Loan Agreement”);

(viii) the programme cooperation agreement entered into among the Company, China Culture Media and ATV on 23 October 2015 (as supplemented by the supplemental agreement dated 13 December 2015) in relation to, among others, the detailed terms of cooperation on remaking of a total of 3,001.75 hours of television programmes (the “Programme Cooperation Agreement”);

(ix) the conditional sale and purchase agreement dated 25 January 2016 and entered into between Widerlink (as vendor) and Smart Right Global Investment Limited (as purchaser) in relation to the sale and purchase of the entire issued share capital of Competent Faith Limited (“Competent Faith”) as well as all obligations, liabilities and debts owing or incurred by Competent Faith to Widerlink and/or the Company up to completion, at the cash consideration of HK$30,000,000;

(x) the loan agreement dated 18 February 2016 entered into among the Lender (as lender), China Culture Media (as the borrower) and Mr. Si Rongbin (as the guarantor) in relation of the grant of the secured term loan in the amount of HK$15,000,000 to China Culture Media (the “First 2016 Loan Agreement”);

(xi) the loan agreement dated 18 February 2016 entered into among the Lender (as lender), China Culture Media (as the borrower) and Mr. Si Rongbin (as the guarantor) in relation of the grant of the secured term loan in the amount of HK$5,000,000 to China Culture Media (the “Second 2016 Loan Agreement”);

(xii) the deed of novation and variation dated 30 April 2016 and entered into between China Culture Media (as transferor), the Lender, the Borrower (as transferee) and Mr. Si Rongbin in relation to, among others, the novation of all rights and obligations of China Culture Media under the 2015 Loan Agreement, First 2016 Loan Agreement and Second 2016 Loan Agreement to the Borrower;

66 APPENDIX IV GENERAL INFORMATION

(xiii) the deed of assignment dated 30 April 2016 and entered into between China Culture Media (as assignor) and the Borrower (as assignee) in relation to the assignment of all rights, titles, benefits and interests under the Programme Cooperation Agreement by China Culture Media to the Borrower;

(xiv) the sale and purchase agreement dated 30 April 2016 and entered into between China Culture Media (as vendor) and the Borrower (as purchaser) in relation to the acquisition of 49% of the entire issued share capital of Hero Luxury;

(xv) the sale and purchase agreement dated 30 April 2016 and entered into between Asia TV Media Group Limited (as vendor) and the Borrower (as purchaser) in relation to the acquisition of 51% of the entire issued share capital of Hero Luxury;

(xvi) the loan agreement dated 30 April 2016 and entered into between the Borrower (as borrower), the Lender (as lender) and Mr. Si Rongbin (as guarantor) in relation of the grant of the secured term loan in the amount of HK$220,000,000 to the Borrower;

(xvii) the loan agreement dated 30 April 2016 and entered into between the Borrower (as borrower), the Lender (as lender) and Mr. Si Rongbin (as guarantor) in relation of the grant of the secured term loan in the amount of HK$280,000,000 to the Borrower;

(xviii) the share charge dated 30 April 2016 and entered into between the Lender (as chargee) and Mr. Si Rongbin (as chargor) in relation to the charge of 99% of the entire issued share capital of the Borrower by Mr. Si Rongbin to the Lender as continuing security for, among others, the payment and discharge of all and any sums due or owing by the Borrower to the Lender;

(xix) the share charge dated 30 April 2016 and entered into between the Lender (as chargee) and Mr. Si Rongbin (as chargor) in relation to the charge of the entire issued share capital of China Culture Media by Mr. Si Rongbin to the Lender as continuing security for, among others, the payment and discharge of all and any sums due or owing by the Borrower to the Lender;

(xx) the deed of assignment dated 30 April 2016 and entered into between China Culture Media (as assignor) and the Borrower (as assignee) in relation to the assignment of all rights, titles, benefits and interests in the debt of HK$200,000,000 (plus interest) by China Culture Media to the Borrower;

(xxi) the deed of assignment dated 30 April 2016 and entered into between China Culture Media (as assignor) and the Borrower (as assignee) in relation to the assignment of all rights, titles, benefits and interests in the debt of HK$40,000,000 by China Culture Media to the Borrower;

(xxii) the deed of assignment dated 30 April 2016 and entered into between Hero Luxury (as assignor) and the Borrower (as assignee) in relation to the assignment of all rights, titles, benefits and interests in the debt of HK$10,000,000 by Hero Luxury to the Borrower;

67 APPENDIX IV GENERAL INFORMATION

(xxiii) the Sale and Purchase Agreement;

(xxiv) the loan agreement dated 3 May 2016 and entered into between the Borrower (as borrower), the Lender (as lender) and Mr. Si Rongbin (as guarantor) in relation to the grant of secured term loan in the amount of HK$5,000,000 to the Borrower;

(xxv) the conditional sale and purchase agreement dated 23 May 2016 and entered into between Sincere Finance Holding Limited (as vendor) and Co-Prosperity Investment (International) Limited (formerly known as “Top Vast Investment Group Limited”) (an indirect wholly- owned subsidiary of the Company) (as purchaser) in relation to the sale and purchase of 60% of the entire issued share capital of Million Federal International Limited at the total consideration of HK$90,000,000;

(xxvi) the deed of partial assignment of debt dated 16 August 2016 and entered into between Treasure Ridge (as assignor) and the Purchaser (as assignee) in relation to the assignment of the debt of HK$150,000,000 and all rights and interests thereunder by Treasure Ridge to the Purchaser at the consideration of HK$230,000,000;

(xxvii) the deed of partial assignment of debt dated 19 August 2016 and entered into between Dragon Viceroy (as assignor) and the Purchaser (as assignee) in relation to the assignment of the debt of HK$150,000,000 and all rights and interests thereunder by Dragon Viceroy to the Purchaser;

(xxviii) the share charge dated 31 August 2016 and entered into between the Purchaser (as chargor), Panfair (as chargee), Dragon Viceroy (as chargee) and China Light (as chargee) in relation to the pledge of 141,496,993 shares in the share capital of ATV (the “ATV Shares”), 353,463,495 ATV Shares and 195,001,462 ATV Shares to Panfair, Dragon Viceroy and China Light, respectively, as continuing security for, among others, payment of the Balance Amount;

(xxix) the conditional placing agreement entered into between the Company and Kingston Securities Limited dated 28 September 2016 in relation to the placing of up to 642,380,000 new Shares on a best effort basis at the placing price of HK$0.22 per placing Share;

(xxx) the conditional sale and purchase agreement dated 28 September 2016 entered into between Gu Capital Ltd (as vendor), Co-Prosperity Investment (International) Limited (as purchaser), Century Galaxy International Ltd (“Century Galaxy”)(as target company) and Gu Shangcong (as guarantor)(谷尚聰) in relation to the sale and purchase of 10,759,858 ordinary shares in the share capital of Century Galaxy and the subscription of 5,379,929 ordinary shares in the share capital of Century Galaxy at the total cash consideration of HK$60,000,000;

68 APPENDIX IV GENERAL INFORMATION

(xxxi) the conditional sale and purchase agreement dated 4 November 2016 entered into between Star Raise Holdings Limited (as vendor), Eastern Culture International Limited (“Eastern Culture”) (as purchaser) (an indirect wholly-owned subsidiary of the Company), Star Gaze Entertainment Group Limited (“Star Gaze Entertainment”) (as target company) and Mr. Choi Lok Yin Kingston (as guarantor) in relation to the sale and purchase of 10% of the entire issued share capital of Star Gaze Entertainment at the total cash consideration of HK30,000,000, together with a call option granted by the vendor to acquire additional 20% of the issued share capital of Star Gaze Entertainment at Eastern Culture’s discretion;

(xxxii) the Interim Transitioning Deed;

(xxxiii) the Restructuring Agreement; and

(xxxiv) the Working Capital Loan Agreement.

7. EXPERT AND CONSENT

The following is the qualification of the expert who has given its opinions and advice which are included in this circular:

Name Qualification

Akron Corporate Finance Limited Licensed to carry out Type 6 (advising on corporate finance) regulated activity under the SFO

Roma Appraisals Limited Independent professional valuer

(1) As at the Latest Practicable Date, each of Akron Corporate Finance and Roma Appraisals Limited does not have any shareholding, directly or indirectly, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

(2) Each of Akron Corporate Finance and Roma Appraisals Limited has given and has not withdrawn their respective written consent to the issue of this circular, with the inclusion of the references to their respective names and/or their respective advice or opinions or reports in the form and context in which they are respectively included.

(3) As at the Latest Practicable Date, each of Akron Corporate Finance and Roma Appraisals Limited did not have any direct or indirect interest in any asset which had been acquired, or disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group since 31 December 2015, the date to which the latest published audited consolidated financial statements of the Group were made up.

8. LITIGATION A1B33

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries were engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance was known to the Directors to be pending or threatened by or against the Company or any of its subsidiaries. 69 APPENDIX IV GENERAL INFORMATION

9. GENERAL

(a) The company secretary of the Company is Wong Sze Wing, who is a fellow member of the A1B35 Association of Chartered Certified Accountants and a member of the Hong Kong Institute of Certified Public Accountants.

(b) The registered office of the Company is situated at Cricket Square, Hutchins Drive, P.O. A1B36 Box 2681, Grand Cayman, KY1-1111, Cayman Islands. The headquarter and principal place of business of the Company in Hong Kong is situated at Rooms 2501-14, 25th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong.

(c) The branch share registrar and transfer office of the Company in Hong Kong is Tricor Investor Services Limited located at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

(d) The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at Rooms 2501-14, 25th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong, during normal business hours on any weekday (except public holidays) from the date of this circular up to and including the date of the EGM:

(a) the memorandum of association and article of association of the Company; A1B43(1)

(b) the material contracts referred to in the paragraph headed “Material contracts” in this A1B43(2)(b) Appendix;

(c) the letter from Akron Corporate Finance, the text of which is set out in the section headed “Letter from Akron Corporate Finance” in this circular;

(d) the letters of consent from each of the experts referred to in the section headed “EXPERT AND CONSENT” in this Appendix;

(e) the annual reports of the Company and its subsidiaries for the two financial years ended 31 A1B43(5) December 2014 and 2015 respectively;

(f) the valuation report on premises of ATV from Roma Appraisals Limited, the text of which is set out in Appendix III to this circular; and A1B43(6)

(g) this circular.

70 NOTICE OF EGM

CO-PROSPERITY HOLDINGS LIMITED 協盛協豐控股有限公司* (Incorporated in the Cayman Islands with limited liability) (Stock Code: 707)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “EGM”) of Co-Prosperity Holdings Limited (the “Company”) will be held at Rooms 2501-14, 25th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wan Chai, Hong Kong on Friday, 6 January 2017 at 11:30 a.m. to consider and, if thought fit, pass with or without amendment, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

“THAT:

(a) Star Platinum Enterprises Limited (“Star Platinum”) be and is hereby approved to proceed to completion of the acquisition of the Sales Shares and Major Debts (both of which are defined in the circular of the Company dated 19 December 2016) pursuant to the terms and conditions of the sale and purchase agreement entered into between, among others, Star Platinum (as purchaser) and Wong Ching (王征), Treasure Ridge Limited, David Wong Ben Koon (黃炳均), Panfair Holdings Limited, Dragon Viceroy Limited and China Light Group Limited (as vendors)(collectively, the “Vendors”) and dated 30 April 2016 (as supplemented by an agreement dated 30 July 2016 entered into between Star Platinum, Wong Ching (王征) and Treasure Ridge Limited) and to make payment of the balance consideration of HK$220,000,000 to the relevant Vendors;

(b) subject to paragraph (d) below, the exercise by the directors of the Company (the “Directors”) during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and otherwise deal with additional shares (the “Shares”) in the capital of the Company or securities convertible into Shares, or options, warrants or similar rights to subscribe for any Shares, and to make, grant, sign or execute offers, agreements or options, deeds and other documents which would or might require the exercise of such powers, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

(c) the mandate in paragraph (b) above shall authorise the Directors during the Relevant Period (as defined below) to make, grant, sign or execute offers, agreements or options, deeds and other documents which would or might require the exercise of such powers after the end of the Relevant Period (as defined below);

* For identification purpose only 71 NOTICE OF EGM

(d) the aggregate nominal amount of share capital of the Company allotted or agreed conditionally or unconditionally to be allotted or issued (whether pursuant to options or otherwise) by the Directors pursuant to the approval in paragraph (b) above, otherwise than pursuant to (i) a Rights Issue (as defined below); or (ii) the exercise of any options granted under the existing share option scheme of the Company; or (iii) any scrip dividend or similar arrangements providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the articles of association of the Company in force from time to time; or (iv) any issue of Shares upon the exercise of rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into Shares, shall not exceed twenty percent of the aggregate number of issued Shares as at the date of the passing of this resolution; and the authority pursuant to paragraph (b) of this resolution shall be limited accordingly; and

(e) for the purpose of this resolution:

“Relevant Period” means the period from the passing of this resolution until whichever is the earlier of:

(i) the conclusion of the next annual general meeting of the Company;

(ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or the applicable laws of the Cayman Islands to be held; and

(iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting.

“Rights Issue” means an offer of Shares or issue of options, warrants, or other securities giving the right to subscribe for shares of the Company, open for a period fixed by the Directors to holders of Shares whose names appear on the register of members of the Company (and, where appropriate, to holders of other securities entitled to the offer) on a fixed record date in proportion to their then holdings of such shares of the Company (or, where appropriate, such other securities), (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory outside Hong Kong).”

By order of the Board Co-Prosperity Holdings Limited Tang Hon Kwo Chairman

Hong Kong, 19 December 2016

72 NOTICE OF EGM

Registered office: Head office and principal place of business Cricket Square in Hong Kong: Hutchins Drive Rooms 2501-14, 25th Floor P.O. Box 2681 Sun Hung Kai Centre Grand Cayman 30 Harbour Road KY1-1111 Wanchai, Hong Kong Cayman Islands

Notes:

1. A member of the Company entitled to attend, speak and vote at the extraordinary general meeting (the “EGM”) convened by the above notice is entitled to appoint one or more proxies to attend, speak and, on a poll, vote in his stead in accordance with the Company’s articles of association. A proxy need not be a member of the Company but must be present in person at the EGM to represent the member. If more than one proxy is so appointed, the appointment shall specify the number of shares of the Company in respect of which each such proxy is so appointed.

2. A form of proxy for use at the EGM is enclosed herewith. To be valid, the form of proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof must be deposited at the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 48 hours before the time appointed for holding the EGM or any adjournment thereof, as the case may be. Completion and return of a form of proxy will not preclude a member from attending in person and voting at the EGM or any adjournment thereof, should he so wish.

3. Where there are joint registered holders of any share of the Company (the “Share”), any one of such persons may vote at the EGM, either in person or by proxy, in respect of such Share as if he was solely entitled thereto; but if more than one of such joint holders are present at the EGM in person or by proxy, that one of the said persons so present whose name stands first on the register of member of the Company in respect of such Share shall alone be entitled to vote in respect thereof.

4. The voting on the resolution at the EGM will be conducted by way of a poll.

# English translation of the Chinese name is included in this notice for information purpose only, and should not be regarded as the official English translation of such name.