China Digital Video Holdings Limited - AGM Information 2017

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in China Digital Video Holdings Limited, you should at once hand this circular, together with the enclosed form of proxy to the purchaser or other transferee or to the bank, stockbroker or other agent through whom the sale or transfer 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 responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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CHINA DIGITAL VIDEO HOLDINGS LIMITED 中國數字視頻控股有限公司

( Incorporated in Cayman Islands with limited liability )

(Stock Code: 8280)

(1) ADOPTION OF AWARD SCHEME

(2) PROPOSED ISSUE OF NEW SHARES UNDER THE AWARD SCHEME PURSUANT TO SPECIFIC MANDATE

(3) CONNECTED TRANSACTION - PROPOSED ISSUE OF NEW SHARES UNDER THE AWARD SCHEME TO CONNECTED PERSONS PURSUANT TO SPECIFIC MANDATE

(4) PROPOSED ADOPTION OF OPTION SCHEME (5) PROPOSED GRANTING OF GENERAL MANDATES TO ISSUE NEW SHARES AND TO REPURCHASE SHARES

(6) PROPOSED RE-ELECTION OF THE RETIRING DIRECTORS AND

(7) NOTICE OF THE ANNUAL GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

Vinco Capital Limited (A wholly-owned subsidiary of Vinco Financial Group Limited)

A letter from the Board is set out on pages 5 to 20 of this circular. A letter from the Independent Board Committee containing its recommendation is set out on pages 21 to 22 of this circular. A letter from the Independent Financial Adviser containing its advice and recommendation to the Independent Board Committee and the Independent Shareholders is set out on pages 23 to 33 of this circular.

A notice convening an annual general meeting of the Company to be held at Beijing Schonbrunn Hotel, Number 125, Xisihuanbei Road, Haidian District, Beijing, PRC at 10:30 a.m. on 18 May 2017 is set out on pages 56 to 60 of this circular. A form of proxy for use at the 2017 annual general meeting is enclosed with this circular. Such form of proxy is also published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.cdv.com).

Whether or not you are able to attend the 2017 annual general meeting, please complete and sign the enclosed form of proxy in accordance with the instructions printed thereon and return it to the office of the Hong Kong branch share registrar and transfer office of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the 2017 annual general meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the 2017 annual general meeting or any adjourned meeting thereof if they so wish.

This circular will remain on the GEM website at www.hkgem.com on the “Latest Company Announcements” page for at least 7 days from the date of its posting and on the website of the Company at www.cdv.com.

Hong Kong, 11 April 2017

CHARACTERISTICS OF THE GROWTH ENTERPRISES MARKET (“GEM”) OF THE STOCK EXCHANGE

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

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	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
Letter from Vinco Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23
Appendix I — Explanatory Statement of the Repurchase Mandate . . . . . . . . . . . . .	34
Appendix II — Details of The Retiring Directors Proposed to be Re-elected at the
2017 AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37
Appendix III — Principal Terms of The Option Scheme . . . . . . . . . . . . . . . . . . . . . . .	41
Appendix IV — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	51
Notice of the 2017 AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	56

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DEFINITIONS

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

“2017 AGM”

an annual general meeting of the Company to be held at Beijing Schonbrunn Hotel, Number 125, Xisihuanbei Road, Haidian District, Beijing, PRC on 18 May 2017 at 10:30 a.m. to consider and, if appropriate, to approve the resolutions contained in the notice of the meeting which is set out on pages 56 to 60 of this circular, or any adjournment thereof

“Administrator”

the authorized representative(s) appointed by the Company to administer the Award Scheme from time to time

“AGM Notice”
the notice convening the 2017 AGM set out on pages 56 to 60 of this circular
“Articles”
the memorandum and articles of association of the Company
“Auditors”
the auditors of the Company, as appointed from time to time
“Award”
an award of the Awarded Shares by the Board or Administrator (as the case may be) in accordance with the Award Scheme
“Awarded Shares”
in respect of a Selected Participant, such number of Shares determined by the Board or the Administrator (as the case may be) and purchased or subscribed by the Trustee out of cash to be paid by the Company out of the Company’s funds to the Trustee for the purpose of making the Award
“Award Scheme”
the share award scheme adopted by the Board on 20 March 2017
“Award Scheme Rules” rules of the Award Scheme
“Board” the board of Directors
“Business Day”
a day (other than a Saturday, Sunday or public holiday or day which a tropical cyclone warning signal no. 8 or above or a black rainstorm warning signal is hoisted) on which licensed banks in Hong Kong are generally open for normal banking business
“Company”
China Digital Video Holdings Limited (中國數字視頻控股有限公司), a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Growth Enterprise Market of the Stock Exchange

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DEFINITIONS

“Connected Awarded Shares”

“Connected Selected Participant”

an aggregate of 1,750,000 Awarded Shares which are proposed to be awarded to the Connected Selected Participant Gao Yunhao (高雲浩), who is a director of a subsidiary of the Company, being connected person of the Company

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

“Excluded Participant” any Participant who is resident in a place where the award of the Awarded Shares and/or the award of the Returned Shares and/or the vesting or transfer of Shares pursuant to the terms of the Scheme is not permitted under the laws and regulations of such place or where in the view of the Administrator or the Trustee (as the case may be) compliance with applicable laws and regulations in such place make it necessary or expedient to exclude such Participant.

“Extension Mandate” as defined on page 17 of the section headed “Letter from the Board” of this circular “GEM” the Growth Enterprise Market of the Stock Exchange

“GEM Listing Rules”

the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited

“Group”

the Company and its Subsidiaries

“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

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

“Independent Awarded Shares”

an aggregate of 10,250,000 Awarded Shares which are proposed to be awarded to Independent Selected Participants

“Independent Board Committee”

an independent committee of the Board comprising all independent non-executive Directors, established to advise the Independent Shareholders in respect of the issue and allotment of the Awarded Share to the Selected Participants

“Independent Financial Adviser”/ “Vinco Capital”

Vinco Capital Limited, a wholly-owned subsidiary of Vinco Financial Group Limited (stock code:8340), a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the issue and allotment of the Awarded Share to the Selected Participants

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DEFINITIONS

“Independent Selected Selected Participants who are not connected persons of the Participants” Company
“Independent Shareholders” the Shareholders who are independent of, and not connected with, the Connected Selected Participant and its respective associates and are not required to abstain from voting at the 2017 AGM
“Issuance Mandate” as defined on page 17 of the Letter from the Board
“Latest Practicable Date” 3 April 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular
“Listing Date” 27 June 2016, being the date on which the Shares first commenced dealings on the Stock Exchange
“Offer” an offer for the grant of option made in accordance with the terms of the Option Scheme
“Offer Date” the date on which an Offer is made to an eligible participant of the Option Scheme
“Option(s)” option(s) to subscribe for Shares that may be granted under the Option Scheme from time to time
“Option Period” in respect of an Option, the period to be determined and notified by the Directors to the grantee of the Option thereof at the time of making an offer, provided that such period shall not exceed the period of ten(10) years from the Offer Date but subject to the provisions for early termination thereof contained herein
“Option Scheme” the share option scheme to be adopted by the Company at 2017 AGM, the principal terms of which are summarized in Appendix III to this circular
“Option Scheme Rules” rules of the Option Scheme

“Participant” participants of the Award Scheme, including (i) any full time or part time employee (including any executive directors) of the Company or any Subsidiary; (ii) any non-executive director (including independent non-executive directors) of the Company or any Subsidiary; (iii) any supplier of goods or services of the Company or any Subsidiary; (iv) any customer of the Company or any Subsidiary; (v) any consultant, agent or adviser of the Company or any Subsidiary and (vi) any person who, in the sole discretion of the Board, has contributed or may contribute to the Group

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	DEFINITIONS
“Repurchase Mandate”	as defined on page 17 of the Letter from the Board
“Returned Shares”	such Awarded Shares and related income which are not vested
	in and/or forfeited in accordance with the terms of the Award
	Scheme Rules
“Selected Participant(s)”	the grantee(s) selected by the Board or the Administrator (as
	the case may be) from time to time to be awarded with
	Awarded Shares under the Award Scheme
“SFO”	the Securities and Future Ordinance, Chapter 571 of the Laws
	of Hong Kong
“Share(s)”	ordinary share(s) in the issued capital of the Company
“Shareholders”	holder(s) of Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subsidiary”	a company which is for the time being and from time to time
	a subsidiary (within the meaning of the Companies Ordinance
	(Chapter 622 of the Laws of Hong Kong, as amended from
	time to time) of the Company
“Subscription Price”	the price per Share (being not less than the nominal value of
	a Share) at which a grantee of the Option may subscribe for
	Shares on the exercise of an Option pursuant to paragraphs 6
	to 13 of Appendix III to this circular
“Takeover Code”	the Code on Takeovers and Mergers issued by the Securities
	and Futures Commission in Hong Kong
“Trust Deed”	the trust deed dated 24 March 2017 entered into between and
	among the Company as settlor and The Core Trust Company
	Limited (滙聚信託有限公司) as Trustee for governing among
	other matters, the duties and powers of the Trustee, as
	restated, supplemented and amended from time to time
“Trust Fund”	the funds and properties held under the Trust and managed by
	the Trustee for the benefit of the Participants (other than the
	Excluded Participants)in accordance with the Award Scheme
	Rules and the Trust Deed
“Trustee”	The Core Trust Company Limited (滙聚信託有限公司), the
	trustee appointed by the Company for the administration of
	the Award Scheme, an independent third party of the
	Company

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LETTER FROM THE BOARD

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CHINA DIGITAL VIDEO HOLDINGS LIMITED 中國數字視頻控股有限公司

( Incorporated in Cayman Islands with limited liability )

(Stock Code: 8280)

Executive Directors: ZHENG Fushuang ( Chairman ) LIU Baodong GUO Langhua

Independent Non-executive Directors: Frank CHRISTIAENS ZHANG Yaqin CAO Qian

Principal place of business and headquarters in PRC China Digital Video Technical Plaza No. 49 Wukesong Road Haidian District Beijing PRC

Registered office: P.O. Box 309, Ugland House, Grand Cayman KY1-1104 Cayman Islands

To shareholders,

11 April 2017

Dear Sir or Madam,

(1) ADOPTION OF AWARD SCHEME

(2) PROPOSED ISSUE OF NEW SHARES UNDER THE AWARD SCHEME PURSUANT TO SPECIFIC MANDATE (3) CONNECTED TRANSACTION - PROPOSED ISSUE OF NEW SHARES UNDER THE AWARD SCHEME TO CONNECTED PERSONS PURSUANT TO SPECIFIC MANDATE

(4) PROPOSED ADOPTION OF OPTION SCHEME

(5) PROPOSED GRANTING OF GENERAL MANDATES TO ISSUE NEW SHARES AND TO REPURCHASE SHARES

(6) PROPOSED RE-ELECTION OF THE RETIRING DIRECTORS AND

(7) NOTICE OF THE ANNUAL GENERAL MEETING

INTRODUCTION

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with the notice of the 2017 AGM, and information on matters to be dealt with at the 2017 AGM, being:

(a) further details of the Awarded Shares and Option Scheme;
(b) details of granting of the Issuance Mandate to the Directors;
(c) details of granting of Repurchase Mandate to the Directors;
(d) details of granting of the Extension Mandate;
(e) details of the re-election of the retiring Directors; and
(f) the notice of the 2017 AGM.

The Independent Board Committee, comprising all the independent non-executive Directors, has been formed to advise the Independent Shareholders as to whether the award of the Connected Awarded Shares to the Connected Selected Participants is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the award of the Connected Awarded Shares to the Connected Selected Participants.

The Board adopted the Award Scheme and approved the proposed adoption of the Option Scheme, which will be subject to the approval by the Shareholders at a general meeting, to recognise the contributions by certain Participants and as an incentive to retain them for the Group’s continuing operation and development and to attract suitable personnel for further development of the Group.

The Board has also resolved to, subject to the approval of the Independent Shareholders/Shareholders (as the case may be), award an aggregate of 12,000,000 Awarded Shares to 30 Selected Participants, of which, (i) 1,750,000 Connected Awarded Shares will be awarded to the Connected Selected Participant by way of issue and allotment of new Awarded Shares and (ii) 10,250,000 Independent Awarded Shares will be awarded to 29 Independent Selected Participants by way of issue and allotment of new Shares pursuant to the specific mandate which may be granted by the Independent Shareholders/Shareholders (as the case may be) at the 2017 AGM.

The Directors strongly believe that the continued success of the Group is closely tied with the commitment and efforts of the Participants. The Awarded Shares and Options can serve as incentives to motivate the Participants to further contribute to the Group. The Awarded Shares and/or Options to be awarded or granted (as the case may be) will be with reference to the performance, operating and financial targets of the Group as well as other criteria to be determined by the Board (or the Administrator) from time to time, which aligns the personal interest of the Participants with the economic interest of the Group and the Shareholders.

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LETTER FROM THE BOARD

ADOPTION OF THE AWARD SCHEME

The Board approved the adoption of the Award Scheme on 20 March 2017, pursuant to which, Shares will be acquired by the Trustee by way of subscription of new Shares (whether pursuant to general mandate or specific mandate granted by the Shareholders or otherwise) and/or purchase of Shares from the market out of cash contributed by the Group and be held on trust for the Participants until such Awarded Shares are vested in the relevant Selected Participants in accordance with the provisions of the Award Scheme.

The Company has appointed The Core Trust Company Limited (滙聚信託有限公司) as the Trustee. The Trustee is an independent third party of the Company and is acting for a wide scope of participants under the Award Scheme. The aggregate interests of the Company’s connected persons (as defined in the GEM Listing Rules) in the Award Scheme are expected to be less than 30%.

The Award Scheme does not constitute a share option scheme or an arrangement analogous to a share option scheme for the purpose of Chapter 23 of the GEM Listing Rules and is a discretionary scheme of the Company. The Award Scheme will operate in parallel with the Option Scheme to be considered by the Shareholders at the general meeting to be convened for the purpose of considering and, if think fit, the approval of the adoption of the Option Scheme.

A summary of the principal terms of the Award Scheme is set out in the letter below.

Duration

Unless early terminated by the Board, the Award Scheme shall be valid and effective for a term of 10 years commencing on the adoption date of the Award Scheme provided that no contribution to the Trust Fund will be made by the Company on or after the 10th anniversary date of the adoption date of the Award Scheme.

Administration

The Award Scheme shall be subject to the administration of the Board or the Administrator together with the Trustee in accordance with the Award Scheme Rules and the terms of the Trust Deed. The Trustee shall hold the Trust Fund in accordance with the terms of the Trust Deed.

Mandate Limit of the Award Scheme

The Board shall not make any further award of Shares which will result in the number of Shares awarded by the Board under the Award Scheme to be in excess of 8.5% (i.e. 52,700,000 Shares) of the issued share capital of the Company as at the adoption date of the Award Scheme (i.e. 620,000,000 Shares) unless otherwise determined by the resolution of the Board.

The maximum number of Shares to be awarded under the Award Scheme in each financial year of the Company shall not exceed 3% (i.e. 18,600,000 shares) of the issued share capital of the Company as at the adoption date of the Award Scheme (i.e. 620,000,000 shares).

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LETTER FROM THE BOARD

Returned Shares shall not be counted in calculating the 8.5% limit.

The maximum number of Shares which may be allocated and awarded to a Selected Participant under the Award Scheme in any 12-month period shall not exceed 1% of the issued share capital of the Company immediately preceding such allocation and award.

Operation

The Administrator may, from time to time, at their absolute discretion, select any Participant (other than any Excluded Participant), for participation in the Award Scheme as a Selected Participant.

In order to satisfy any Award to be granted under the Award Scheme from time to time, the Board may from time to time instruct the Trustee to purchase Shares from the market and/or to subscribe for new Shares and to hold them on trust for the benefit of the Participant pursuant to the terms and conditions of the Award Scheme Rules and the Trust Deed.

On each occasion when the Board instructs the Trustee to purchase Shares from the market, it shall specify the maximum amount of funds to be used and the range of prices at which such Shares are to be purchased. The Trustee may not incur more than the maximum amount of funds or purchase any Shares at a price falling outside the range of prices so specified unless with the prior written consent of the Board.

Pursuant to the Award Scheme Rules, the Administrator shall select Selected participants and determine the number of Awarded Shares, provided that the making of an Award to any connected person (as defined under the GEM Listing Rules) or Administrator shall be (a) recommended by the Remuneration Committee; (b) approved by the Board comprising disinterested Directors at the relevant time at duly convened Board meetings in accordance with the articles of association of the Company (as amended from time to time) and (c) in compliance with the GEM Listing Rules.

Where any grant of Awarded Shares is proposed to be made to any person who is a connected person of the Company (within the meaning of the GEM Listing Rules), the Company shall comply with such provisions of the GEM Listing Rules as may be applicable, including any reporting, announcement and/or shareholders’ approval requirements, unless otherwise exempted under the GEM Listing Rules.

Restrictions

No Payment shall be made to the Trustee by the Board and no instructions to acquire or subscribe for any Shares shall be given to the Trustee under the Award Scheme where dealings in the Shares are prohibited under any code or requirement to the GEM Listing Rules and all applicable laws from time to time. Without limiting the generality of the foregoing, no instructions shall be given by the Board for acquiring or subscribing for Shares and no grant shall be made:

after an event involving inside information in relation to affairs or securities of the Company has occurred or a matter involving inside information in relation to the securities of the Company has been the subject of a decision until such inside information has been publicly announced in accordance with the application laws and the GEM Listing Rules; or

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LETTER FROM THE BOARD

during the period of 60 days immediately preceding the publication date of the annual results for any financial period of the Company or, if shorter, the period from the end of the relevant financial period up to the publication date of the results; or
during the period of 30 days immediately preceding the publication date of the quarterly and interim results for any financial period of the Company or, if shorter, the period from the end of the relevant quarterly or half-year period of the financial period up to the publication date of the results; or
in any circumstance which is prohibited under the GEM Listing Rules, the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)or any other law or regulation or where any requisite approval or waiver from any governmental or regulatory authority has not been granted.

Vesting

Awarded Shares and the related income derived therefrom are subject to vesting scales set out in the relevant grant letter at the time of grant. Vesting of the Shares will be conditional on the Selected Participant remains at all times after the relevant dates of the fullfilment of the performance targets (if any) specified by the Board and on the vesting date a Participant until and on each of the relevant vesting dates and his/her execution of the relevant documents to effect the transfer from the Trustee, unless otherwise determined by the Board.

Voting Rights

The Trustee shall not exercise the voting rights in respect of any Shares held under the Trust (including but not limited to the Awarded Shares, the Returned Shares and further Shares acquired out of the income derived therefrom).

Lapse of Award

The Award granted to a Selected Participant shall automatically lapse immediately if any of the following events occurs on or before the relevant vesting date:

(a) a Selected Participant ceases to be an Participant;
(b) a Selected Participant dies (other than during the course of performing his work duties),loses his working capability or retires at his normal retirement date or an earlier retirement date (by agreement with the Company or the Subsidiary);
(c) a Selected Participant is reassigned to, or designated with, a lower job position (unless the Board otherwise determines that the Award to such Selected Participant shall be vested on him);
(d) a Selected Participant commits any serious or persistent non-observance of the law or the rules, code of conduct or registration requirements of any applicable regulatory body or disclose the confidential information of the Group which is detrimental to the interest or reputation of the Company (or of a member of the Group);

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LETTER FROM THE BOARD

(e) a Subsidiary by which a Selected Participant is employed ceases to be a Subsidiary (or of a member of the Group);
(f) a Selected Participant commits an act of bankruptcy or becomes insolvent or makes any arrangement or composition with his creditors generally; or
(g) an order for the winding-up of the Company is made or a resolution is passed for the voluntary winding-up of the Company (otherwise than for the purposes of, and followed by, an amalgamation or reconstruction in such circumstances that substantially the whole of the undertaking, assets and liabilities of the Company pass to a successor company).

Upon lapse of the Award, the relevant Awarded Shares shall not vest on the relevant vesting date but shall become Returned Shares for the purpose of the Award Scheme.

Termination

The Award Scheme shall terminate on the earlier of:

(a) the 10th anniversary date of the adoption date of the Award Scheme; or
(b) the date when an order for the winding-up of the Company is made or a resolution is passed for the voluntary winding-up of the Company (otherwise than for the purposes of, and followed by, an amalgamation or reconstruction in such circumstances that substantially the whole of the undertaking, assets and liabilities of the Company pass to a successor company); or
(c) the Auditors issue a qualified opinion or are unable to express an opinion in respect of the financial statements of the Company in its audited financial statements for the most recent financial year; or
(d) the Company is subject to sanctions of the Stock Exchange in the most recent year due to material breach of laws and regulations; or
(e) other circumstances as the Stock Exchange may determine; or
(f) such date of early termination as determined by the Board provided that such termination shall not affect any subsisting rights of any Selected Participant hereunder.

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LETTER FROM THE BOARD

Shares has not been suspended) of receiving notice of such termination of the Award Scheme (or such longer period as the Administrator may otherwise determine). Residual cash, net proceeds of sale referred to in above and such other funds remaining in the Trust (after making appropriate deductions in respect of all disposal costs, liabilities and expenses in accordance with the Trust Deed) shall be remitted to the Company forthwith after the sale.

PROPOSED ISSUE OF AWARDED SHARES PURSUANT TO THE AWARD SCHEME

On 20 March 2017, following the adoption of the Award Scheme, the Board has resolved to, subject to the approval of the Independent Shareholders/Shareholders (as the case may be), award an aggregate of 12,000,000 Awarded Shares to 30 Selected Participants under the Award Scheme by way of issue and allotment of new Shares pursuant to the specific mandate which may be granted by the Independent Shareholders/Shareholders (as the case may be) at the 2017 AGM. Upon issuance and allotment of the new Shares, the Trustee will hold the new Shares in trust for the Selected Participants and such new Awarded Shares shall be transferred to the Selected Participant upon satisfaction of the vesting conditions.

Among the 12,000,000 Awarded Shares:

(i) the Connected Awarded Shares will be awarded to the Connected Selected Participant; and
(ii) the Independent Awarded Shares will be awarded to 29 Independent Selected Participants.

Award to the Connected Selected Participant

As Gao Yunhao (高雲浩) is the connected person (as defined in Chapter 20 of the GEM Listing Rules) of the Company, the issue and allotment of the Connected Awarded Shares to the Connected Selected Participant under the Award Scheme shall constitute connected transactions of the Company under Chapter 20 of the GEM Listing Rules. The issue and allotment of the Connected Awarded Shares shall be subject to, among others, the approval by the Independent Shareholders at the 2017 AGM.

The Connected Awarded Shares are proposed to be granted to the following connected person of the Company:

Name of Connected Selected	Relationship with	Number of Connected
Participant	the Group	Awarded Shares
Gao Yunhao	Director of a Subsidiary	1,750,000

Award to the Independent Selected Participants

10,250,000 Independent Awarded Shares are proposed to be granted to the Independent Selected Participants, who are employees of the Group but not Directors nor chief executive of the Group.

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LETTER FROM THE BOARD

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Independent Selected Participants are third parties independent of the Company and connected persons of the Company.

Conditions

The issue and allotment of the Connected Awarded Shares to the Connected Selected Participant shall be subject to:

(i) the grant of the listing approval by the Stock Exchange in respect of the Connected Awarded Shares; and
(ii) the approval by the Independent Shareholders at the 2017 AGM in respect of the specific mandate for the issue and allotment of the Connected Awarded Shares.

The issue and allotment of the Independent Awarded Shares to the Independent Selected Participants shall be subject to:

(i) the grant of the listing approval by the Stock Exchange in respect of the Independent Awarded Shares; and
(ii) the approval by the Shareholders at the 2017 AGM in respect of the specific mandate for the issue and allotment of the Independent Awarded Shares.

Reasons and Basis for the Award of the Awarded Shares

The Award Scheme forms part of the incentive schemes of the Group. The Board considers that the award of the Awarded Shares to the Selected Participants, which were determined with reference to, inter alia, the contribution of the relevant Selected Participant to the Group and (if applicable) the remuneration package of the relevant Selected Participant, provides incentives to the Selected Participants and will allow the Group to attract and retain talents for the continual operation and development of the Group. The award of the Awarded Shares to the Selected Participants recognizes their continual support to the Group and their effort will promote the Group’s future development.

Furthermore, there will not be any actual cash outflow by the Group under the award of the Award Shares to provide incentives to the Selected Participants.

— 12 —

LETTER FROM THE BOARD

Further Details of the Awarded Shares

The information in relation to the issue and allotment of the 12,000,000 new Awarded Shares to the Selected Participants is set out below:

Securities to be issued:

An aggregate of 12,000,000 new Shares, comprising (i) 1,750,000 Connected Awarded Shares to be issued and allotted to the Connected Selected Participant and (ii) 10,250,000 Independent Awarded Shares to be issued and allotted to the Independent Selected Participants.

Percentage of Awarded Shares in the share capital of the Company:

The aggregate of 12,000,000 new Awarded Shares to be issued and allotted by the Company to the Selected Participants represent approximately 1.94% of the total number of Shares in issue as at the date of the Latest Practicable Date and approximately 1.89% of the total number of Shares in issue as enlarged by the issue and allotment of the Awarded Shares.

Market value of Awarded Shares:

Based on the closing price of HK$1.49 per Share as quoted on the Stock Exchange as at the date of 20 March 2017, the market values of 1,750,000 Connected Awarded Shares and 10,250,000 Independent Awarded Shares are approximately HK$2,607,500 and HK$15,272,500, respectively.

Status of Awarded Shares:

The Awarded Shares, when issued and fully paid, shall rank pari passu among themselves and with those Shares in issue, with the right to receive all dividends and other distributions declared, made or paid on or after the date of allotment.

Funds to be raised:

The Selected Participants are not required to pay any consideration for the grant of Awarded Shares. No fund will be raised by the Company as a result of the issue and allotment of the Awarded Shares.

Identity of the allottee(s):

The Trustee, which will hold the Awarded Shares in trust in accordance with the Trust Deed for the 30 Selected Participants, who are members of senior management of the core affiliated enterprises of the Group.

Market price of the Shares:

The closing price of the Shares on 20 March 2017 as quoted on the Stock Exchange is HK$1.49 per Share.

The average closing price of the Shares for the five consecutive trading days immediately preceding 20 March 2017 as quoted on the Stock Exchange was HK$1.43 per Share.

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LETTER FROM THE BOARD

Fund Raising Activities in the Past Twelve Months

Date of Approximate Intended use of net announcement Event net proceeds proceeds

Actual use of Proceeds as at the date of the Latest Practicable Date

15 June 2016 Global offering HK$234.4 • Business expansion and Use as intended of 155,000,000 million development Shares
Potential strategic investment and acquisition to increase the Group’s portfolio of solutions, service and products
Further enhancing the Group’s R&D capabilities and upgrading the information technology system of the Group
Repay certain of the existing bank borrowing of the Group
Promotion and marketing
Working capital and other general corporate purpose

PROPOSED ADOPTION OF THE OPTION SCHEME

On 20 March 2017, the Board proposes to adopt the Option Scheme pursuant to Chapter 23 of the GEM Listing Rules, which is subject to the approval of the Shareholders in a general meeting to be convened for the purpose of considering and, if think fit, the approval of the adoption of the Option Scheme. A summary of the principal terms of the Option Scheme is set out in Appendix III to this circular.

Summary of the Option Scheme Rules

Condition Precedent of the Option Scheme

The adoption of the Option Scheme is conditional upon:

(a) the passing of the ordinary resolution by the Shareholders at the 2017 AGM to approve and adopt the Option Scheme; and

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LETTER FROM THE BOARD

(b) the Listing Committee of the Stock Exchange granting the approval for the listing of and permission to deal in any Shares which may fall to be issued by the Company pursuant to the exercise of the Options in accordance with the terms and conditions of the Option Scheme.

Mandate Limit of the Option Scheme

Subject to the fulfilment of the conditions precedents listed above, the total number of new Shares in respect of which Options may be granted under the Option Scheme shall not exceed 10% of the Company’s issued share capital as at the date of approval of the Option Scheme by the Shareholders, which is 62,000,000 Shares (the “ Option Scheme Mandate Limit ”) assuming there is no change to the Company’s issued share capital from the date of the Latest Practicable Date to the date of the 2017 AGM to approve the Option Scheme.

The Company may at any time as the Board thinks fit seek approval from the shareholders to refresh the Option Scheme Mandate Limit save that the total number of new Shares in respect of which Options may be granted under the Option Scheme and any other schemes shall not exceed 10% of the Shares in issue as at the date on which the shareholders of the Company approve the refreshment of the Option Scheme Mandate Limit and the maximum number of new Shares in respect of which Options may be granted and yet to be exercised under the Option Scheme and any other schemes shall not exceed 30% of the Shares in issue from time to time.

Further details of the Option Scheme

In order to attract and motivate high calibre eligible participants and afford flexibility to the Board in granting Options to achieve the purpose of the Option Scheme, the Option Scheme provides that the Board may specify the eligible participants to whom the Options shall be granted, the number of Shares subject to each Option and the date on which the Options shall be granted. In determining the basis of eligibility of each eligible participant, the Board would take into account such factors as it may at its discretion consider appropriate including the experience and length of service in the Group of each eligible participant, the contribution or potential contribution made or is likely to be made by each eligible participant to the Group. The Board shall also determine the subscription price in respect of any Option in accordance with the terms of the Option Scheme, which cannot in any event fall below the price stipulated in the GEM Listing Rules. The Board may impose any such terms, conditions, restrictions or limitations in relation to any Option at the time of grant, in particular the vesting period (if any) for each Option to be granted pursuant to Option Scheme may be specified by the Board in the relevant offer letter at the time of grant, and the Board may also specify minimum performance targets (if any) which must be achieved and the minimum period (if any) for an Option to be held before any of the Options can be exercised in the relevant offer letter at the time of grant. The Directors consider that the aforesaid criteria and rules will serve to preserve the value of the Company and encourage the eligible participants of the Option Scheme to acquire proprietary interests in the Company.

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LETTER FROM THE BOARD

None of the Directors is a trustee of the Option Scheme nor has a direct or indirect interest in the trustee.

Value of Options

The Directors consider that it is not appropriate to state the value of all Options that can be granted pursuant to the Option Scheme as if they had been granted on the Latest Practicable Date. The Directors believe that any statement regarding the value of the Options as at the Latest Practicable Date will be based on a large number of speculative assumptions and would therefore not be meaningful to the Shareholders, taking into account the number of variables which are crucial for the calculation of the value of the Options which have not been determined. Such variables include the subscription price of the Option, the period of Option, any lock-up period, interest rate, expected stock price volatility and other relevant variables.

GEM LISTING RULES IMPLICATIONS

Since the Connected Selected Participant is a connected person of the Company by virtue of being a director of a member of the Group, the proposed issue and allotment of Connected Awarded Shares to the Connected Selected Participant constitute connected transactions of the Company under the Chapter 20 of the GEM Listing Rules which are subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules. Specific mandate will also be obtained for issue and allotment of the Independent Awarded Shares to the Independent Selected Participant.

Pursuant to Chapter 20 of the GEM Listing Rules, each of the Connected Selected Participant and their associates are required to abstain from voting on the resolutions at the 2017 AGM to approve the proposed issue and allotment of Connected Awarded Shares to the Connected Selected Participant. To the best of the Directors’ knowledge, information and belief, as at the date of this circular, each of the Connected Selected Participant and their associates is not interested in any Share, and there are no Shareholders having any material interest in the proposed issue and allotment of Connected Awarded Shares to the Connected Selected Participant. Accordingly, no Shareholders are required to abstain from voting at the 2017 AGM on the resolutions approving the proposed issue and allotment of Connected Awarded Shares to the Connected Selected Participant under the GEM Listing Rules.

None of the Director is considered to be interested in the Awarded Shares and therefore none of them abstained from voting on the relevant Board resolution.

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LETTER FROM THE BOARD

Establishment of Independent Board Committee and Appointment of Independent Financial Adviser

The Independent Board Committee of the Company, comprising all the independent non-executive Directors, has been formed to advise the Independent Shareholders as to whether the award of the Connected Awarded Shares to the Connected Selected Participants is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Vinco Capital has been appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the award of the Connected Awarded Shares to the Connected Selected Participants.

Information about the Company

The Company is an investment holding company. The Group is a leading digital video technology solution and service company in the TV broadcasting industry in China.

PROPOSED GRANTING OF THE ISSUANCE MANDATE AND REPURCHASE MANDATE

On 23 May 2016, written resolutions were passed by the then shareholders of the Company for, among other matters, granting general mandates to the Directors to exercise the powers of the Company to issue new Shares (not exceeding 124,000,000 Shares) and to repurchase Shares (not exceeding 62,000,000 Shares). Up to the Latest Practicable Date, such mandates have not been used and, if not used by the 2017 AGM, will lapse at the conclusion of the 2017 AGM.

Ordinary resolutions will be proposed at the 2017 AGM to approve the granting of the new general mandates to the Directors:

(c) to allot, issue or deal with new Shares not exceeding 20% of the total number of issued Shares as at the date of passing such resolution at the 2017 AGM (the “ Issuance Mandate ”);
(d) to repurchase Shares, on the Stock Exchange or on any other stock exchange recognized by the Securities and Futures Commission of Hong Kong and the Stock Exchange, not exceeding 10% of the total number of issued Shares as at the date of passing such resolution at the 2017 AGM (the “ Repurchase Mandate ”); and
(e) to extend the Issuance Mandate by an amount representing the total number of Shares repurchased by the Company pursuant to and in accordance with the Repurchase Mandate referred to in paragraph (b) above (the “ Extension Mandate ”).

In accordance with the requirements of the GEM Listing Rules, the Company is required to send to the Shareholders an explanatory statement containing all the information reasonably necessary to enable them to make an informed decision on whether to vote for or against the granting of the Repurchase Mandate. The explanatory statement as required by the GEM Listing Rules in connection with the Repurchase Mandate is set out in Appendix I to this circular.

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LETTER FROM THE BOARD

The Issuance Mandate, the Repurchase Mandate and the Extension Mandate would expire at the earliest of: (a) the conclusion of the next annual general meeting of the Company; or (b) the expiration of the period which the next annual general meeting of the Company is required by the Articles or the applicable laws of Cayman Islands to be held; or (c) revocation or variation by an ordinary resolution of the Shareholders in a general meeting prior to the next annual general meeting of the Company.

The Directors have no present immediate plan to exercise the Issuance Mandate or the Repurchase Mandate (if granted to the Directors at the 2017 AGM).

PROPOSED RE-ELECTION OF THE RETIRING DIRECTORS

Pursuant to article 16.3 of the Article, any Director appointed by the ordinary resolution shall hold office only until the next following general meeting of the Company and shall then be eligible for the re-election. As such, Ms. CAO Qian will retire at the 2017 AGM and, being eligible, offer herself for re-election at the 2017 AGM.

Pursuant to Article 16.18, at every annual general meeting of the Company one-third of the Directors for the time being (or, if their number is not three or a multiple of three, then the number nearest to, but not less than, one-third) shall retire from office by rotation provided that every Director (including those appointed for a specific term) shall be subject to retirement by rotation at least once every three years. Any Director appointed pursuant to Article 16.2 or Article 16.3 shall not be taken into account in determining which Directors are to retire by rotation. A retiring Director shall retain office until the close of the meeting at which he retires and shall be eligible for re-election thereat. As such, Mr. LIU Baodong and Mr. Frank CHRISTIAENS shall retire at the 2017 AGM and, being eligible, offer themselves for re-election at the 2017 AGM.

The requisite details of the above three Directors proposed to be re-elected at the 2017 AGM are set out in Appendix II to this circular.

2017 AGM AND PROXY ARRANGEMENT

A notice convening the 2017 AGM to be held on 18 May 2017 at 10:30 a.m. at Beijing Schonbrunn Hotel, Number 125, Xisihuanbei Road, Haidian District, Beijing, PRC on pages 56 to 60 of this circular for the purpose of considering and, if thought fit, passing the resolutions set out therein.

Pursuant to Rule 17.47(4) of the GEM Listing Rules, any vote of shareholders at a general meeting must be taken by poll. Accordingly, all the proposed resolutions will be put to vote by way of poll at the 2017 AGM. An announcement on the poll vote results will be published by the Company after the 2017 AGM in the manner prescribed under Rule 17.47(5) of the GEM Listing Rules.

The 2016 annual report incorporating the audited consolidated financial statement of the Group for the year ended 31 December 2016 and the reports of the Directors and the auditors thereon were dispatched to the Shareholders on 31 March 2017.

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LETTER FROM THE BOARD

You will find enclosed with this circular a form of proxy for use at the 2017 AGM and such form of proxy is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.cdv.com). Whether or not you are able to attend the 2017 AGM, please complete and sign the enclosed form of proxy in accordance with the instructions printed thereon and return it, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority, to the office of the Hong Kong branch share registrar and transfer office of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time scheduled for holding the 2017 AGM or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the 2017 AGM, your proxy form shall be deemed to be revoked.

RECOMMENDATION

The Directors (including the independent non-executive Directors) consider that the award of the Connected Awarded Shares to the Connected Selected Participants is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that the Independent Shareholders to vote in favour of the resolutions to be proposed at the 2017 AGM to approve the grant of the specific mandate for the allotment and issue of the Connected Awarded Shares to the Connected Selected Participants.

The Directors (including the independent non-executive Directors) consider that the award of the Independent Awarded Shares to the Independent Selected Participants is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that the Shareholders to vote in favour of the resolutions to be proposed at the 2017 AGM to approve the grant of the specific mandate for the allotment and issue of the Independent Awarded Shares to the Independent Selected Participants.

In addition, The Board considers that (i) the granting of the Issuance Mandate to the Directors; (ii) the granting of Repurchase Mandate to the Directors; (iii) the granting of the Extension Mandate; and (iv) the re-election of the retiring Directors are all in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors recommend that the Shareholders to vote in favour of all such resolutions as set out in the AGM Notice to be proposed at the 2017 AGM.

CLOSURE OF REGISTER OF MEMBERS

For the purpose of determining shareholders’ entitlements to attend and vote at the 2017 AGM, the transfer books and the register of members of the Company will be closed from 15 May 2017 to 18 May 2017 (both days inclusive), during which period no transfer of shares will be effected. In order to establish the right to attend and vote at the 2017 AGM, all transfers, accompanied by the relevant share certificates, must be lodged with the Company’s Hong Kong share registrar at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong no later than 4:30 p.m. on 12 May 2017.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

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

Yours faithfully, For and on behalf of the Board China Digital Video Holdings Limited ZHENG Fushuang

Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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CHINA DIGITAL VIDEO HOLDINGS LIMITED 中國數字視頻控股有限公司

( Incorporated in Cayman Islands with limited liability ) (Stock Code: 8280)

11 April 2017

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION IN RELATION TO THE PROPOSED ISSUE OF NEW SHARES UNDER THE AWARD SCHEME TO CONNECTED SELECTED PARTICIPANT PURSUANT TO SPECIFIC MANDATE

We refer to the circular dated 11 April 2017 issued by the Company to the Shareholders (the “ Circular ”) of which this letter forms part. Terms defined in the Circular shall have the same meaning when used in this letter, unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to advise the Independent Shareholders as to whether the award of the Connected Awarded Shares to the Connected Selected Participant is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Vinco Capital has been appointed as Independent Financial Adviser to advise us and the Independent Shareholders in this respect.

Your attention is drawn to the letter from the Independent Financial Adviser in the Circular containing the advice of the Independent Financial Adviser in respect of the award of the Connected Awarded Shares to the Connected Selected Participant.

RECOMMENDATION

We have considered the principal factors taken into account by the Independent Financial Adviser in arriving at its opinion in respect of the award of the Connected Awarded Shares to the Connected Selected Participant. We concur with the views of the Independent Financial Adviser that the award of the Connected Awarded Shares to the Connected Selected Participant is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend that the Independent Shareholders vote in favour of the resolutions in respect of the award of the Connected Awarded Shares to the Connected Selected Participant.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Yours faithfully, For and on behalf of

the Independent Board Committee of China Digital Video Holdings Limited

Frank CHRISTIAENS

Independent Non-executive Director

ZHANG Yaqin

Independent Non-executive Director

CAO Qian

Independent Non-executive Director

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LETTER FROM VINCO CAPITAL

The following is the text of a letter of advice from Vinco Capital to the Independent Board Committee and the Independent Shareholders in relation to the issue and allotment of the Awarded Share to the Selected Participants, which has been prepared for the purpose of incorporation in this circular:

Vinco Capital Limited

Units 4909-4910, 49/F., The Center 99 Queen’s Road Central, Hong Kong

11 April 2017

To the Independent Board Committee and the Independent Shareholders of China Digital Video Holdings Limited

Dear Sirs,

CONNECTED TRANSACTION PROPOSED ISSUE OF NEW SHARES UNDER THE AWARD SCHEME TO CONNECTED PERSONS PURSUANT TO SPECIFIC MANDATE

INTRODUCTION

We refer to our engagement as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the issue and allotment of the Awarded Share to the Selected Participants, details of which are set out in the letter from the Board (the “Letter from the Board”) contained in the circular dated 11 April 2017 issued by the Company to the Shareholders (the “Circular”), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings ascribed to them in the Circular unless the context otherwise requires.

Reference is made to the announcement of the Company dated 20 March 2017 in relation to the adoption of the Award Scheme, proposed issue and award of an aggregate of 12,000,000 Awarded Shares to 30 Selected Participants under the Award Scheme and the proposed adoption of the Option Scheme. On 20 March 2017, the Board has resolved to award an aggregate of 12,000,000 Awarded Shares to 30 Selected Participants, of which, (i) 1,750,000 Connected Awarded Shares will be awarded to one Connected Selected Participants by way of issue and allotment of new Shares and (ii) 10,250,000 Independent Awarded Shares will be awarded to 29 Independent Selected Participants by way of issue and allotment of new Shares.

Since the Connected Selected Participants is a connected person of the Company by virtue of being a director of member(s) of the Group, the proposed issue and allotment of Connected Awarded Shares to the Connected Selected Participant constitute connected transactions of the Company under the Chapter 20 of the GEM Listing Rules which are subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules.

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LETTER FROM VINCO CAPITAL

The proposed issue and allotment of Connected Awarded Shares to the Connected Selected Participant is subject to, among other things, the approval by the Independent Shareholders at the 2017 AGM to be taken by way of a poll. Pursuant to Chapter 20 of the GEM Listing Rules, each of the Connected Selected Participant and their associates are required to abstain from voting on the resolutions at the 2017 AGM to approve the proposed issue and allotment of Connected Awarded Shares to the Connected Selected Participant. To the best of the Directors’ knowledge, information and belief, as at the date of this circular, each of the Connected Selected Participant and their associates is not interested in any Share, and there are no Shareholders having any material interest in the proposed issue and allotment of Connected Awarded Shares to the Connected Selected Participant. Accordingly, no Shareholders are required to abstain from voting at the 2017 AGM on the resolutions approving the proposed issue and allotment of Connected Awarded Shares to the Connected Selected Participant under the GEM Listing Rules.

None of the Director is considered to be interested in the Awarded Shares and therefore none of them abstained from voting on the relevant Board resolution.

The Independent Board Committee, comprising Mr. Frank Christiaens, Mr. Zhang Yaqin and Ms. Cao Qian from the Board, has been established to advise the Independent Shareholders as to whether the award of the Connected Awarded Shares to the Connected Selected Participants is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

We have been appointed, and approved by the Independent Board Committee, as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the award of the Connected Award Shares to the Connected Selected Participant. In our capacity as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders for the purposes of the GEM Listing Rules, our role is to give an independent opinion to the Independent Board Committee and the Independent Shareholders as to whether the terms of the award of the Connected Award Shares to the Connected Selected Participant, are fair and reasonable, on normal commercial terms and in the interests of the Company and the Independent Shareholders as a whole, and whether the Independent Shareholders should vote in favour of the resolution to proposed at the 2017 AGM for approving the award of the Connected Award Shares to the Connected Selected Participant. We are not connected with the directors, chief executive and substantial shareholders of the Company and the Connected Selected Participant or any of their respective subsidiaries or their respective associates and, as at the Latest Practicable Date, did not have any shareholding, directly or indirectly, in any of their respective subsidiaries or their respective associates and, did not have any shareholding, directly or indirectly, in any member of the Company and/or its subsidiary 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. Therefore, we are considered suitable to give independent advice to the Independent Board Committee and the Independent Shareholders. We have not acted as the independent financial adviser for the Company’s other transactions in the past two years. We are not aware of the existence of or change in any circumstances that would affect our independence. Accordingly, we consider that we are considered eligible to give independent advice in relation to the award of the Connected Award Shares to the Connected Selected Participant.

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LETTER FROM VINCO CAPITAL

BASIS OF OUR OPINION AND RECOMMENDATION

In formulating our opinion and recommendation, we have relied on the information, facts and representations contained or referred to in the Circular and the information, facts and representations provided by, and the opinions expressed by the Directors, management of the Group. We have assumed that all information, facts, opinions and representations made or referred to in the Circular were true, accurate and complete at the time they were made and continued to be true, accurate and complete as at the date of the Circular and that all expectations and intentions of the Directors, management of the Group, will be met or carried out as the case may be. We have no reason to doubt the truth, accuracy and completeness of the information, facts, opinions and representations provided to us by the Directors, management of the Group. The Directors have confirmed to us that no material facts have been omitted from the information supplied and opinions expressed. We have no reason to doubt that any relevant material facts have been withheld or omitted from the information provided and referred to in the Circular or the reasonableness of the opinions and representations provided to us by the Directors, management of the Group.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading.

We have relied on such information and opinions and have not, however, conducted any independent verification of the information provided, nor have we carried out any independent investigation into the business, financial conditions and affairs of the Group or its future prospect.

Based on the foregoing, we confirm that we have taken all reasonable steps, which are applicable to terms of the award of the Connected Award Shares to the Connected Selected Participant, as referred to in Rule 17.92 of the GEM Listing Rules (including the notes thereto).

This letter is issued for the information for the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the terms of the award of the Connected Award Shares to the Connected Selected Participant, and, except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

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LETTER FROM VINCO CAPITAL

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion and recommendation to the Independent Board Committee and the Independent Shareholders in relation to the award of the Connected Award Shares to the Connected Selected Participant, we have taken into consideration the following principal factors and reasons:

I. Background of and reasons for the Award

Information of the Company

The Company is an investment holding company. The Group is a leading digital video technology solution and service company in the TV broadcasting industry in China.

Information of Zhengqi

In 2013, the Group acquired Zhengqi (Beijing) Video Technology Co. Ltd (the “Zhengqi”) and the digital broadcast automation solutions business from Founder Electronics.

The digital broadcast automation solutions which is coordinating and controlling the news and program production systems and the digital broadcast automation system to facilitate digital content delivery. After the acquisition, the Group has successfully combined the strengths in software development of digital broadcast automation solutions business with the system integration capabilities of the Group’s existing business to an industry-leading business. Zhengqi created the enhanced synergy to the Group which it contributed approximately RMB91.7 million revenue in digital broadcast automation solutions in 2015, as compared to the RMB56.0 million revenue contribution in 2014.

Information on Gao Yunhao ( 高雲浩 ) (“Mr. Gao”)

With reference to the information provided by the Company, Mr. Gao has been the general manager of Zhengqi, a wholly owned subsidiary of the Company, since 2013.

Mr. Gao graduated from the Tsinghua University with a bachelor’s degree in Electrical and Information Technology in 1990. After he graduated from Tsinghua University, he joined a company in the electrical and telecom industry. Mr. Gao has over 20 years of experience in electrical and

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LETTER FROM VINCO CAPITAL

information technology area. A list of experience of Mr. Gao as provided by the Company is set out below:

Company name	Position	Term
*Zhengqi (Beijing) Video*	General Manager	2013 to present
*Technology Co. Ltd*
*Beijing Founder Electronics*	General Manager	2012 to 2013
*Co., Ltd*	(broadcast business
	department)
中國網通寬帶網絡有限責任公司	Deputy General Manager	2009 to 2012
*China Netcom broadband*
*network Co., Ltd*
北京萬維聯訊科技有限公司	General Manager	2007 to 2008
*Beijing Wanwei Lianxun*
*Technology Co., Ltd*
中國網通寬帶網絡有限責任公司	General Manager (Internet	2004 to 2006
*China Netcom broadband*	business department)
*network Co., Ltd*
*中璞青創科技有限公司Beijing***	Deputy General Manager	2002 to 2003
*Zhongpu Qingchuang Co., Ltd*
*Tsinghua Tongfang Co,, Ltd*	Chief Operation Officer	1999 to 2002
天津辰星自動化工程有限公司	General Manager	1995 to 1999
中璞青創科技有限公司
*Tianjing Chenxing Automation*
*Enginering Co., Ltd & Beijing*
*Zhongpu Qingchuang Co., Ltd*
*TOEC Technology Co., Ltd*	Engineer	1990 to 1995

Upon our enquiry, the Directors advised us that Mr. Gao’s involvement and responsibilities in the business and operation of the Group include:

(i) monitoring the wholly owned subsidiary of the Company, Zhengqi;
(ii) responsible for marketing of Zhengqi to expand the business;
(iii) overseeing the day-to-day operations of Zhengqi and ensuring the good order of the budgeting, financial resources and enhancing revenue to the Company;

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LETTER FROM VINCO CAPITAL

(iv) improving business structure of the Group;
(v) researching and developing new products and services;
(vi) setting up an effective and efficient management team; and
(vii) exploring new distribution channels and new market opportunities.

With regard to the foregoing, the Company considers Mr. Gao to be a key personnel for the business and operation of Zhengqi and expects Mr. Gao to make valuable contributions to the Group. As stated in the prospectus of the Company dated 15 June 2016 (the “Prospectus”), under the management of Mr.Gao, Zhengqi obtained the “High and New Technology Enterprise” qualification in 2014 and enjoyed a preferential income tax rate of 15% in 2014 and 2015.

Reasons for and benefits of the Award

As stated in the Letter from the Board, the Award Scheme forms part of the incentive schemes of the Group. The Board considers that the award of the Awarded Shares to Mr. Gao which were determined with reference to, inter alia, the contribution of Mr. Gao to the Group and (if applicable) the remuneration package of Mr. Gao, provides incentives to Mr. Gao and will allow the Group to encourage and retain talents to work with the Group in achieving the objectives of increasing the value of the Company and aligning the interests of Mr. Gao directly with those of the Shareholders through ownership of Shares. The award of the Award Shares to Mr. Gao recognises his expertise which will support the Group’s business expansion and his continual support and commitment to the Group and their effort will promote the Group’s future development.

The principal business and the business expansion plan

The principal business of the Group is providing full range of digital video technology solutions, services and products to TV broadcasters and other digital video content providers in China. As disclosed in the Prospectus, the Company plans to expand its business to gain market share and maintain the leading position in the industry.

The Group expect that the next phase of system expansions and upgrades in the post-production market will be driven by (i) transition to a cloud computing platform for digital video content delivery; (ii) omnimedia convergence; (iii) continuing upgrades to high definition standard; and (iv) upgrades to a 4K ultra-high definition standard. In order to capture the opportunities presented by the above industry trends, the Group plans to (a) develop new functions to their customised solutions to meet the diverse and growing business requirements and technological sophistication of their customer base; (b) assist their existing customers in system expansions and upgrades; and (c) leverage existing customer relationships and cross-selling to departments within existing customers who do not currently use their products.

Furthermore, the Group plans to develop and invest in innovative products and businesses by leveraging the Group’s core digital video technology.

— 28 —

LETTER FROM VINCO CAPITAL

In view of the reasons for and benefits of the Award, in particular, that (i) Mr. Gao is expected to make valuable contributions to the Group, in particular, the development of the digital broadcast automation solution business; (ii) the prospect of digital broadcast automation solution business is generally positive; and (iii) there will not be any actual cash outflow by the Group under the award of the Award Shares, we are of the opinion that the Award, which can provide sufficient incentives to attract, retain and motivate Mr. Gao to participate in the continuing operation and long-term development of the Company and to recognise Mr. Gao’s contributions to the growth of the Company, is justifiable. Accordingly, we concur with the Directors that the Award is faire and reasonable, in the interests of the Company and the Shareholders as a whole.

II. Principal terms of the Award

The Award

On 20 March 2017, The Board has also resolved to, subject to the approval of the Independent Shareholders/Shareholders(as the case may be), award an aggregate of 12,000,000 Awarded Shares to 30 Selected Participants, of which, 1,750,000 Connected Awarded Shares will be awarded to one Connected Selected Participants by way of issue and allotment of new Awarded Shares pursuant to the specific mandate which may be granted by the Independent Shareholders/Shareholders (as the case may be) at the 2017 AGM. Upon issuance and allotment of the new Award Shares, the Trustee will hold the new Shares in trust for Mr. Gao and such Connected Award Shares shall be transferred to Mr. Gao upon satisfaction of the vesting conditions. The number of Award Shares granted to Mr. Gao is in accordance with his contributions to the Group.

The aggregate of 1,750,000 new Connected Award Shares to be issued and allotted by the Company to Mr. Gao represent 0.28% of the total number of Shares in issue as at 20 March 2017 and approximately 14.58% of the total number of Shares in issue as enlarged by the issue and allotment of the Connected Award Shares.

Based on the closing price of HK$1.49 per Share as quoted on the Stock Exchange as at the date of 20 March 2017, the market values of 1,750,000 Connected Awarded Shares will be HK$2,607,500.

Conditions

The issue and allotment of the Connected Awarded Shares to the Connected Selected Participants shall be subject to:

(i) the grant of the listing approval by the Stock Exchange in respect of the Connected Awarded Shares;
(ii) the approval by the Independent Shareholders at the 2017 AGM in respect of the specific mandate for the issue and allotment of the Connected Awarded Shares; and

— 29 —

LETTER FROM VINCO CAPITAL

Vesting

Subject to the satisfaction of the vesting criteria and conditions of the Award, the Award Shares will be issued to the Trustee and the Award Shares shall be transferred to Mr. Gao upon expiry of the following vesting period:

(i) 40% shall vest on the first anniversary of the date of the grant letter;
(ii) 30% shall vest on the second anniversary of the date of the grant letter; and
(iii) 30% shall vest on the third anniversary of the date of the grant letter.

Lapse of Award

The Award granted to a Selected Participant shall automatically lapse immediately if any of the following events occurs on or before the relevant vesting date:

(a) a Selected Participant ceases to be an Participant;
(b) a Selected Participant dies (other than during the course of performing his work duties),loses his working capability or retires at his normal retirement date or an earlier retirement date (by agreement with the Company or the subsidiary);
(c) a Selected Participant is reassigned to, or designated with, a lower job position (unless the Board otherwise determines that the Award to such Selected Participant shall be vested on him);
(d) a Selected Participant commits any serious or persistent non-observance of the law or the rules, code of conduct or registration requirements of any applicable regulatory body or disclose the confidential information of the Group which is detrimental to the interest or reputation of the Company (or of a member of the Group);
(e) a subsidiary by which a Selected Participant is employed ceases to be a subsidiary of the Company (or of a member of the Group);
(f) a Selected Participant commits an act of bankruptcy or becomes insolvent or makes any arrangement or composition with his creditors generally; or
(g) an order for the winding-up of the Company is made or a resolution is passed for the voluntary winding-up of the Company (otherwise than for the purposes of, and followed by, an amalgamation or reconstruction in such circumstances that substantially the whole of the undertaking, assets and liabilities of the Company pass to a successor company).

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LETTER FROM VINCO CAPITAL

Upon lapse of the Award, the relevant Awarded Shares shall not vest on the relevant vesting date but shall become Returned Shares for the purpose of the Award Scheme.

Termination

The Award Scheme shall terminate on the earlier of:

(a) the 10th anniversary date of the adoption date of the Award Scheme; or
(b) the date when an order for the winding-up of the Company is made or a resolution is passed for the voluntary winding-up of the Company (otherwise than for the purposes of, and followed by, an amalgamation or reconstruction in such circumstances that substantially the whole of the undertaking, assets and liabilities of the Company pass to a successor company); or
(c) the auditors of the Company issue a qualified opinion or are unable to express an opinion in respect of the financial statements of the Company in its audited financial statements for the most recent financial year; or
(d) the Company is subject to sanctions of the Stock Exchange in the most recent year due to material breach of laws and regulations; or
(e) other circumstances as the Stock Exchange may determine; or
(f) such date of early termination as determined by the Board provided that such termination shall not affect any subsisting rights of any Selected Participant hereunder.

Upon termination, all the Awarded Shares to which a Selected Participant is entitled shall, subject to the fulfilment of the performance targets by the Selected Participant, if any, and the determination by the Board, become vested on the Selected Participant so referable on such date of termination save in respect of the total lapse, subject to the receipt by the Trustee of the confirmation from the Board on the number of Awarded Shares to be vested on the Selected Participant and the transfer documents prescribed by the Trustee and duly executed by the Selected Participant within the period stipulated by the Trustee. Returned Shares and such non-cash income remaining in the trust fund of the Trust shall be sold by the Trustee, within 20 Business Days (on which the trading of the Shares has not been suspended) of receiving notice of such termination of the Award Scheme (or such longer period as the Administration Committee may otherwise determine). Residual cash, net proceeds of sale referred to in above and such other funds remaining in the Trust (after making appropriate deductions in respect of all disposal costs, liabilities and expenses in accordance with the Trust Deed) shall be remitted to the Company forthwith after the sale.

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LETTER FROM VINCO CAPITAL

III. Fund Raising Activities in the Past Twelve Months

					Actual use of
					Proceeds as at
					the date of the
					Latest
Date of		Approximate	Intended use of net		Practicable
announcement	Event	net proceeds	proceeds		Date
15 June 2016	Global offering	HK$234.4	•	Business expansion	Use as intended
	of 155,000,000	million		and development
	Shares
			•	Potential strategic
				investment and
				acquisition to
				increase the Group’s
				portfolio of
				solutions, service
				and products
			•	Further enhancing
				the Group’s R&D
				capabilities and
				upgrading the
				information
				technology system
				of the Group
			•	Repay certain of the
				existing bank
				borrowing of the
				Group
			•	Promotion and
				marketing
			•	Working capital and
				other general
				corporate purpose

— 32 —

LETTER FROM VINCO CAPITAL

IV. Potential dilution of the shareholding interests of the existing public Shareholders

Upon issue and allotment of the 1,750,000 Connected Award Shares to Mr. Gao in full (assuming that there is no other change in the issued share capital of the Company), the shareholding interests of the existing public Shareholders will be diluted from approximately 45.42% to approximately 45.29%.

As indicated above, the change in shareholding interests of the existing public Shareholders would not be significant as a result of the Award. Moreover, taking into account (i) the reasons for and possible benefits of the Award; (ii) the terms of the Award being fair and reasonable; and (iii) there will not be any actual cash outflow by the Group under the Award, we are of the view that the dilution to the shareholding interests of the existing public Shareholders as a result of the Award if acceptable.

RECOMMENDATIONS

Having taken into consideration of the factors and reasons as stated above, we are of the view that (i) the terms of the Award are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; and (ii) the Award is in the interest of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the 2017 AGM to approve the Award and the transactions contemplated thereunder and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully, For and on behalf of Vinco Capital Limited Alister Chung Managing Director

Note: Mr. Alister Chung is a licensed person registered with the Securities and Future Commission of Hong Kong and a responsible officer of Vinco Capital Limited to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the Securities and Future Ordinance and has participated in the provision of independent financial advisory services for various transactions involving companies listed in Hong Kong for over 10 years.

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APPENDIX I EXPLANATORY STATEMENT OF THE REPURCHASE MANDATE

The following is an explanatory statement required by the GEM Listing Rules to be sent to Shareholders to enable them to make an informed decision on whether to vote for or against the ordinary resolution to be proposed at the 2017 AGM in relation to the granting of the Repurchase Mandate.

REASON FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and the Shareholders to have a general authority from the Shareholders to enable the Directors to repurchase Shares on the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share and/or earnings per Share and will only be made when the Directors believe that such repurchases will benefit the Company and the Shareholders.

The Directors are seeking the granting of the Repurchase Mandate to give the Company the flexibility to do so if and when appropriate. The number of Shares to be repurchased on any occasion and the price and other terms upon which the same are repurchased will be decided by the Directors at the relevant time, having regard to the circumstances then pertaining.

SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 620,000,000 Shares.

Subject to the passing of the ordinary resolution set out in item 10 of the notice of the 2017 AGM in respect of the granting of the Repurchase Mandate and on the basis that the issued ordinary share capital of the Company remains unchanged as at the date of the 2017 AGM, i.e. being 620,000,000 Shares, the Directors would be authorised to exercise the Repurchase Mandate to repurchase, during the period in which the Repurchase Mandate remains in force, a maximum of 62,000,000 Shares, being 10% of the issued share capital of the Company as at the date of 2017 AGM.

FUNDING AND IMPACT OF REPURCHASES

Any repurchase will be funded from the Company’s internal resources, which shall be funds legally available for such purpose in accordance with the Memorandum and Articles of the Company, the GEM Listing Rules, the applicable laws of the Cayman Islands and/or any other applicable laws, as the case may be.

Under the Cayman Islands law, any repurchases by the Company may only be made out of profits of the company or out of the proceeds of a fresh issue of shares made for the purpose or, if authorised by the Articles and subject to the Companies Law, out of capital. Any premium payable on a redemption or purchase over the par value of the shares to be repurchased must be provided for out of profits or the share premium account of the Company or, if authorised by the Articles and subject to the Companies Law, out of capital. In accordance with the laws of the Cayman Islands, the shares so repurchased would be treated as cancelled.

— 34 —

APPENDIX I EXPLANATORY STATEMENT OF THE REPURCHASE MANDATE

As compared with the financial position of the Company as at 31 December 2016 (being the date to which the latest audited accounts of the Company have been made up), the Directors consider that there might be a material adverse impact on the working capital and on the gearing position of the Company in the event that the proposed repurchases were to be carried out in full during the proposed repurchase period.

The Directors do not intend to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital of the Company or the gearing position which in the opinion of the Directors are from time to time appropriate for the Company.

EFFECT OF THE TAKEOVER CODE

If as a result of a repurchase of Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of the Takeovers Code.

Accordingly, a Shareholder or a group of Shareholders acting in concert (as that term is defined in the Takeovers Code), depending on the level of increase of the Shareholder’s interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 and Rule 32 of the Takeovers Code for all the Shares not already owned by such Shareholder or group of Shareholders.

As at the Latest Practicable Date, the only controlling Shareholder is Wing Success Holdings Limited (“ Wing Success ”), a company wholly owned by Mr. ZHENG Fushuang. Wing Success owned 210,278,278 Shares (approximately 33.92% of the issued share capital of the Company). In the event that the Repurchase Mandate was exercised in full, the interest of Wing Success would be increased from approximately 33.92% to approximately 37.68%. Such increase will give rise to an obligation to make a mandatory offer under Rule 26 and Rule 32 of the Takeovers code. Moreover, the Directors do not intend to exercise the power to repurchase Shares to an extent which would render any Shareholder or group of Shareholders obliged to make a mandatory offer under Rule 26 and Rule 32 of the Takeovers Code.

The Directors have no intention to exercise the Repurchase Mandate to such an extent that results in a public shareholding of less than 25% (or such other prescribed minimum percentage as determined by the Stock Exchange) of the Company’s Shares in public hands.

GEM LISTING RULES RELATING TO REPURCHASE OF SHARES

The GEM Listing Rules permit companies with a primary listing on the Stock Exchange to repurchase their shares on the Stock Exchange and any other stock exchange on which the securities of the Company are listed and such exchange is recognized by the Securities and Futures Commission of Hong Kong and the Stock Exchange subject to certain restrictions.

— 35 —

APPENDIX I EXPLANATORY STATEMENT OF THE REPURCHASE MANDATE

The GEM Listing Rules provide that all proposed repurchases of shares must be approved by shareholders in advance by an ordinary resolution at a general meeting, either by way of a general repurchase mandate or by a specific approval of a particular transaction and that the shares to be repurchased must be fully paid up.

UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the GEM Listing Rules, the applicable laws of the Cayman Islands and in accordance with the memorandum and Articles of the Company.

DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

None of the Directors or, to the best knowledge and belief of the Directors having made all reasonable enquiries, any of their respective associates (as defined in the GEM Listing Rules) have any present intention, in the event that the proposed Repurchase Mandate is granted, to sell Shares to the Company. No connected person (as defined in the GEM Listing Rules) of the Company has notified the Company that they have a present intention to sell Shares to the Company, or that they have undertaken not to sell any of the Shares held by them to the Company in the event that the granting of the Repurchase Mandate is approved by the Shareholders.

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make repurchases of Shares pursuant to the Repurchase Mandate in accordance with the GEM Listing Rules and the applicable laws of the Cayman Islands.

SHARE REPURCHASE MADE BY THE COMPANY

The Company had not purchased any of the Shares (whether on the Stock Exchange or otherwise) during the period from the Listing Date up to the Latest Practicable Date.

SHARE PRICES

The highest and lowest prices of the Shares since the Listing Date up to the Latest Practicable Date were as follows:

Month	Share Price (Per Share)	Share Price (Per Share)
	Highest	Lowest
	HK$	HK$
2016
June (from Listing Date)	1.70	1.50
July	1.53	1.29
August	1.56	1.38
September	1.44	1.34
October	1.36	1.28
November	1.37	1.19
December	1.24	1.13
2017
January	1.30	1.10
February	1.28	1.16
March	1.52	1.20
April (up to the Latest Practicable Date)	1.47	1.47

— 36 —

APPENDIX II

DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE 2017 AGM

The biographical details of the Directors proposed to be retired at the conclusion of the 2017 AGM and be proposed to be re-elected at the 2017 AGM are set out as follows:

CAO Qian (曹茜)

Ms. CAO Qian (曹茜), aged 54, is an independent non-executive Director of our Company. She was appointed to our Board 23 May 2016. Ms. CAO is also the chairlady of the audit committee and a member of nomination committee of our Company. Ms. CAO has extensive experience in auditing, accounting and financial management. Ms. CAO has been appointed as the vice general manager of the supervision and examination department of China Travel Service Ltd (中國旅行社總社監察審計部) which is principally engaged in tourism development, since February 2015. From April 2014 to February 2015, Ms. CAO was the general manager of China Travel Services Meetings, Incentives, Conferences & Exhibitions Services Co., Ltd (中旅國際會議展覽有限公司), a company specialized in providing professional services to business travelers, meeting planners and exhibition organizations. Ms. CAO also served as the vice president of the China Travel Service Head Office Co., Ltd (中國旅行社總社 (北京) 有限公司) from December 2009 to April 2014. In additional to these positions, Ms. CAO was the certified public accountant of Jingdu Public Accounting Firm (京都會計事務所) (an accounting firm in China) from early 1994 to April 1998. Ms. CAO graduated from the Central University of Finance & Economics (中央財經大學) with a bachelor’s degree in finance and revenue in July 1986, and received an executive master’ degree of business administration (EMBA) from Peking University Guanghua School of Management (北京大學光華管理學院) in January 2005. Ms. CAO is a certified public accountant in the PRC. Ms. CAO was an independent non-executive director of Peking University Resources (Holdings) Company Limited (北大資源 (控股) 有限公司), a company listed on the Stock Exchange (stock code: 0618), from March 2005 to June 2016.

Save as disclosed above, Ms. CAO did not hold directorships in any public listed companies in the last three years.

As far as the Directors are aware, Ms. CAO does not have any relationships with other Directors, senior management, substantial Shareholders or controlling Shareholders.

As far as the Directors are aware, as at the Latest Practicable Date, Ms. CAO was not interested or deemed to be interested in any Shares or underlying Shares pursuant to Part XV of the SFO.

Pursuant to the appointment letter entered into between the Company and Ms. CAO, her initial current term of office is for a period of three years commenced from the Listing Date, unless terminated by either party giving to the other not less than one month’s prior notice in writing. Ms. CAO is also subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles.

— 37 —

DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE 2017 AGM

APPENDIX II

Pursuant to the appointment letter, Ms. CAO is entitled to a fixed director fee. The emoluments paid to Ms. CAO for the year ended 31 December 2016 is RMB101,000. The emoluments of Ms. CAO have been determined with reference to her duties, responsibilities as well as the prevailing market conditions and are subject to revision in future by the decision of the Board based on the recommendation of the Company’s remuneration committee.

As far as the Directors are aware, there is no information of Ms. CAO to be disclosed pursuant to Rule 17.50(2) of the GEM Listing Rules; and there are no other matters concerning Ms. CAO that need to be brought to the attention of the Shareholders.

LIU Baodong (劉保東)

Mr. LIU Baodong ( 劉保東 ), aged 52, is the chief executive officer of our Group and an executive Director. He is primarily responsible for the overall management and operation of our Group. Mr. LIU was appointed to our Board on February 16, 2007. He has served as the chief executive officer of CDV WFOE, our principal operating PRC subsidiary, since 2008. From 2004 to 2008, Mr. LIU was the general manager of Xin’aote Video, a predecessor company of our Group, where he was responsible for the overall management and operation of the company.

Mr. LIU worked at Sanycom Technology Co., Ltd. (三一通訊技術有限公司) (principally engaged in the communication equipment manufacturing) as the deputy general manager and later the general manager from 2001 to 2004. During the period from 1999 to 2001, Mr. LIU was the project manager and product manager of Nortel Networks Holdings (Canada) (北電網路集團 (加拿大)), a multinational telecommunications and data networking equipment manufacturer. Prior to that, Mr. LIU spent two years serving as a senior engineer and project manager for Motorola (Canada) (principally engaged in inventing, building and delivering mobile devices) from 1997 to 1999.

Mr. LIU graduated from Northwestern Polytechnic University (西北工業大學) with a bachelor’s degree in automation control in July 1983 and was awarded a master’s degree and a Ph.D. degree in applied computer science from University of Brussels (Vrije Universiteit Brussel) (比利時布魯塞爾大學) in September 1996. He also received a master’s degree of business administration from China Europe International Business School (中歐國際工商學院) in September 2007 .

Save as disclosed above, Mr. LIU did not hold directorship in any public listed companies in the last three years.

As far as the Directors are aware, Mr. LIU does not have any relationship with other Directors, senior management, substantial Shareholders or controlling Shareholders.

As far as the Directors are aware, as at the Latest Practicable Date, Mr. LIU was interested in 28,237,338 Shares or underlying Shares (include 14,118,669 Shares and 14,118,669 underlying Shares as interests in options granted pursuant to the pre-IPO share option scheme) pursuant to Part XV of the SFO.

— 38 —

APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE 2017 AGM

Pursuant to the service contract entered into between the Company and Mr. LIU, his initial current term of office is for a period of three years commenced from the Listing Date, unless terminated by either party giving to the other not less than three month’s prior notice in writing. Mr. LIU is also subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles

Pursuant to the service contract, Mr. LIU is entitled to a fixed director fee and bonus. The emoluments paid to Mr. LIU for the year ended 31 December 2016 is RMB1,364,000. The emoluments of Mr. LIU have been determined with reference to his duties, responsibilities as well as the prevailing market conditions and are subject to revision in future by the decisions of the Board based on the recommendation of the Company’s remuneration committee.

As far as the Directors are aware, there is no information of Mr. LIU to be disclosed pursuant to Rule 17.50(2) of the GEM Listing Rules; and there are no other matters concerning Mr. LIU that need to be brought to the attention of the Shareholders.

Frank CHRISTIAENS

Mr. Frank CHRISTIAENS , aged 50, is an independent non-executive Director of our Company. He was appointed to our Board on 28 January 2011. He is the chairman of remuneration committee, and a member of the audit committee.

Mr. CHRISTIAENS is currently the CEO, chairman and a member of the board of CLEARink Display Corporation (USA) which is principally engaged in developing reflective display technology. He is also the chairman and a member of the board of ELIX Wireless Charging Systems Inc. (Canada) whose principal business is to develop wireless charging technology. In addition, Mr. Christiaens is a managing partner (overseeing the company’s overall administrative operation and coordination) of XPCP Management Corporation (Canada), a company which is principally engaged in investing in technology with relevance to Asia. Mr. CHRISTIAENS was the president for Greater China for Barco N.V. (NYSE Euronext Brussels: BAR), which is a provider of professional display products, from May 2002 to December 2009. From March 1996 to August 2000, Mr. CHRISTIAENS worked as regional vice-president, marketing, sales & customer services for Alcatel-Lucent Bell (Euronext ALU) (the “Alcatel”), a telecommunications equipment manufacturer, where he was responsible for Alcatel’s internet division for Asia Pacific.

Mr. CHRISTIAENS graduated from the University of Leuven (Belgium) with bachelor’s and master’s degrees in electronics engineering in July 1990, and wrote his thesis on digital signal processing and artificial intelligence at the Imperial College of London. Mr. CHRISTIAENS obtained a master’s degree in business administration from Vlerick School of Business, Belgium which was previously part of the University of Leuven (Belgium) in July 1992.

Mr. CHRISTIAENS did not hold directorship in any listed public company in the last three years

As far as the Directors are aware, Mr. CHRISTIAENS does not have any relationship with other Directors, senior management, substantial Shareholders or controlling Shareholders.

— 39 —

APPENDIX II

DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE 2017 AGM

As far as the Directors are aware, as at the Latest Practicable Date, Mr. CHRISTIAENS was interested in 450,596 underlying Shares (interests in options granted pursuant to the pre-IPO share option scheme) pursuant to Part XV of the SFO.

Pursuant to the appointment letter entered into between the Company and Mr. CHRISTIAENS, his initial current term of office is for a period of three years commenced from the Listing Date, unless terminated by either party giving to the other not less than three month’s prior notice in writing. Mr. CHRISTIAENS is also subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles

Pursuant to the appointment letter, Mr. CHRISTIAENS is entitled to a fixed director fee. The emoluments paid to Mr. CHRISTIAENS for the year ended 31 December 2016 is RMB202,000. The emoluments of Mr. CHRISTIAENS have been determined with reference to his duties, responsibilities as well as the prevailing market conditions and are subject to revision in future by the decisions of the Board based on the recommendation of the Company’s remuneration committee.

As far as the Directors are aware, there is no information of Mr. CHRISTIAENS to be disclosed pursuant to Rule 17.50(2) of the GEM Listing Rules; and there are no other matters concerning Mr. CHRISTIAENS that need to be brought to the attention of the Shareholders.

— 40 —

PRINCIPAL TERMS OF THE OPTION SCHEMES

APPENDIX III

OPTION SCHEME

The following is a summary of the principal terms of the Option Scheme with the scheme period of ten (10) years commencing on the Adoption Date. The summary of the principal terms of the Option Scheme does not form part of, nor is it intended to be, part of the Option Scheme nor should it be taken as affecting the interpretation of the Option Scheme.

(1) Purpose of the Option Scheme

The purpose of the Option Scheme is to enable the Company to grant Options to directors, employees, suppliers, customers, consultants, agents and advisers of the Company and the Subsidiaries and any person who, in the sole discretion of the Board, has contributed or may contribute to the Group in recognition of their contribution to the Group.

(2) Eligible Participants

The Board may, subject to and in accordance with the provisions of the Option Scheme and the GEM Listing Rules, in its absolute discretion, offer any eligible participant Options to subscribe for such number of Shares at the subscription price determined in accordance with paragraph 5 below.

(3) Grant and Acceptance of Options

(i) An Option shall be deemed to have been granted by the Company and accepted by an eligible participant and to have taken effect when the duplicate letter comprising acceptance of the Option duly signed by the eligible participant together with a remittance in favour of the Company of HK$1.00 by way of consideration for the grant thereof is received by the Company on or before the last day for acceptance being a date within twenty-eight (28) days from (and inclusive of) the Offer Date. Such remittance shall in no circumstances be refundable.
(ii) No Option shall be granted by the Board to an eligible participant under the following circumstances:
(A) after the expiry of the Option Scheme or after the termination of the Option Scheme in accordance with paragraph 21;
(B) after inside information has come to its knowledge until such inside information has been announced in accordance with the GEM Listing Rules; or
(C) during the period commencing one month immediately preceding the earlier of: (a) the date of the board meeting (as such date is first notified to the Stock Exchange in accordance with the GEM Listing Rules) for the approval of the Company’s results for any year, half-year, quarterly or any other interim period (whether or not required under the GEM Listing Rules); and (b) the deadline for the Company to publish an announcement of its results for any year or half-year under the GEM Listing Rules,

— 41 —

PRINCIPAL TERMS OF THE OPTION SCHEMES

APPENDIX III

or quarterly or any other interim period (whether or not required under the GEM Listing Rules), and ending on the date of the results announcement. The period during which no Option may be granted will cover any period of delay in the publication of a results announcement.

(iii) Without prejudice to sub-paragraph (ii) above, no Option shall be granted by the Board to any Eligible Participant who is a Director, on any day on which the financial results of the company are published and:
(A) during the period of 60 days immediately preceding the publication date of the annual results or, if shorter, the period from the end of the relevant financial year up to the publication date of the results; and
(B) during the period of 30 days immediately preceding the publication date of the quarterly results and half-year results or, if shorter, the period from the end of the relevant quarterly or half-year period up to the publication date of the results;

(4) Option Period

An Option may be exercised at any time during a period to be determined and notified by the Directors to each grantee of the Option and such period shall not exceed the period of ten (10) years from the Offer Date.

(5) Subscription Price

The Subscription Price shall be determined by the Board in its absolute discretion but in any event shall be not less than the higher of (i) the closing price of the Shares on the Stock Exchange (as stated in the Stock Exchange’s daily quotations sheet) on the Offer Date, which must be a Business Day; (ii) the average closing price of the Shares on the Stock Exchange (as stated in the Stock Exchange’s daily quotations sheets) for the five (5) Business Days immediately preceding the Offer Date and (iii) the nominal value of the Shares.

(6) Transferability of Options

An Option is personal to the grantee of the Option and shall not be transferable or assignable and no grantee of the Option shall in any way sell, transfer, charge, mortgage, encumber or create any interest whatsoever in favour of any third party over or in relation to any Option or enter into any agreement so to do (save that, for the avoidance of doubt, the grantee of the Option may nominate a nominee to hold the Shares to be issued pursuant to the exercise of Options on trust for the sole benefit of such grantee of the Option provided that evidence of such trust arrangement between the grantee of the Option and the nominee shall be provided to the satisfaction of the Company.

Any breach of the foregoing by a grantee of the Option shall entitle the Company to revoke any Option or part thereof granted to such grantee of the Option to the extent not already exercised by notice. Such revocation notice shall be final and binding on the grantee of the Option.

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APPENDIX III

(7) Exercise of Options

An Option may be exercised in whole or in part during the Option Period in the circumstances and in the manner as set out in this paragraph or in paragraphs 8 to 12 below (as the case may be) by the grantee of the Option (or, as the case may be, his personal representative(s)) giving notice in writing to the Company stating that the Option is thereby exercised and the number of Shares in respect of which it is so exercised. Each such notice must be accompanied by a remittance for the full amount of the subscription price for Shares in respect of which the notice is given. Within twenty-one (21) days (or seven (7) days in the case of exercise pursuant to paragraph 9 below) after receipt of the notice and remittance and, where appropriate, the certificate from the Auditors or the independent financial adviser pursuant to paragraph 19 below, the Company shall accordingly allot and issue the relevant number of Shares to the grantee of the Option (or his nominee referred to in paragraph 6, or, in the event of an exercise of an Option by a Personal Representative pursuant to paragraph 8 below, to the estate of the grantee of the Option) credited as fully paid and issue to the grantee of the Option (or his nominee referred to in paragraph 6 or his estate in the event of an exercise by his personal representative(s) as aforesaid) a share certificate for the Shares so allotted and issued. The Grantee will receive (at the Board’s discretion), either Shares (subject to the receipt by the Company of the required Subscription Price in respect of the Shares), or an equivalent value in cash which is equal to the difference between the Subscription Price and the market value of the Share on or about the date on which the Option is exercised, as the Board may determine.

(8) Rights on Cessation of Employment by Death

In the event of the grantee of the Option, being an employee of a member of the Group, ceasing to be an eligible participant of the Option Scheme by reason of his death and none of the events which would be a ground for termination of his employment under paragraph 14(v) arises, his personal representative(s) may exercise the vested portion of the Option (to the extent not already exercised) in whole or in part in accordance with paragraph 7 above within a period of twelve (12) months following the date of death, or such longer period as the Directors may determine.

(9) Rights on a General or Partial Offer

If a general or partial offer, whether by way of take-over offer, share buy-back offer, or scheme of arrangement or otherwise in like manner, is made to all the Shareholders, or all such holders other than the offeror and/or any person controlled by the offeror and/or any person acting in concert (as defined in the Takeovers Code) with the offeror and the offer becomes or is declared unconditional or such scheme of arrangement is formally proposed to the Shareholders during the Option Period, the grantee of the Option shall, notwithstanding any other terms on which his Options were granted, be entitled to exercise the vested portion of the Option (to the extent not already exercised) to its full extent or to the extent specified in the grantee’s notice to the Company in accordance with paragraph 7 above at any time during the period commencing after the offer becomes or is declared unconditional or the scheme of arrangement is formally proposed to the Shareholders and up to the close of such offer (or any revised offer) or the record date for entitlements under scheme of arrangement, as the case may be.

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PRINCIPAL TERMS OF THE OPTION SCHEMES

APPENDIX III

(10) Rights on Winding-up

In the event a notice is given by the Company to its Shareholders to convene a general meeting for the purposes of considering, and if thought fit, approving a resolution to voluntarily windup the Company, the Company shall on the same date as or as soon as after it despatches such notice to each Shareholder give notice thereof to all grantees of the Option (containing an extract of the provisions of this paragraph) and thereupon, each grantee of the Option or his personal representative(s) shall be entitled to exercise all or any of his vested portion of the Options (to the extent not already exercised) at any time not later than five (5) Business Days prior to the proposed general meeting of the Company by giving notice in writing to the Company, accompanied by a remittance for the full amount of the aggregate Subscription Price for the Shares in respect of which the notice is given whereupon the Company shall as soon as possible and, in any event, no later than the Business Day immediately prior to the date of the proposed general meeting referred to above, allot and issue the relevant Shares to the grantee of the Option credited as fully paid.

(11) Right on Compromise or Arrangement

In the event of a compromise or arrangement between the Company and its Shareholders or creditors being proposed for the purpose of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies, the Company shall give notice thereof to all grantees of the Option on the same date as it gives notice of the meeting to its Shareholders or creditors to consider such compromise or arrangement and any grantee of the Option (or his personal representative(s)) may by notice in writing to the Company accompanied by a remittance of the full amount of the Subscription Price for the Shares in respect of which the notice is given (such notice to be received by the Company not later than five (5) Business Days prior to the proposed meeting of Shareholders or creditors) exercise the vested portion of the Options (to the extent not already exercised) either to its full extent or to the extent specified in such notice and the Company shall as soon as possible and in any event no later than the Business Day immediately prior to the date of the proposed meeting of Shareholders or creditors, allot and issue such number of Shares to the grantee of the Option which falls to be issued on such exercise of the Option credited as fully paid and register the grantee of the Options as holder thereof.

(12) Rights on cessation of employment for other reasons

If the grantee of the Option ceases to be an eligible participant of the Option Scheme by resignation, retirement, expiry of employment contract or termination of employment for any reason other than death or other than on any of the grounds specified in paragraph 14(v) below before exercising the Option in full, the grantee of the Option may exercise the vested portion of the Option (to the extent not already exercised) in whole or in part in accordance with paragraph 7 above up to the date of cessation (which date shall be the last day on which the grantee of the Option was actually at work with the Company or the relevant Subsidiary whether salary is paid in lieu of notice or not) or for such longer period as is determined by the Board (which shall not exceed the Option Period as prescribed in the Offer).

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PRINCIPAL TERMS OF THE OPTION SCHEMES

APPENDIX III

(13) Rights attaching to Shares

Holders of the Options are not entitled to voting, dividend, transfer and other rights attached to the Shares, including those arising on a liquidation of the Company, save as otherwise provided herein or under the relevant laws or the Articles of the Company in effect from time to time. Shares to be allotted upon the exercise of an Option will be subject to all the provisions of the Articles of the Company for the time being in force and will rank pari passu in all respects with the existing fully paid Shares in issue on the date of allotment and accordingly will entitle the holders thereof to participate in all dividends or other distributions paid or made on or after the date of allotment other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date therefor shall be before the date of allotment. A Share allotted upon the exercise of an Option shall not carry voting rights until the name of the grantee of the Options has been duly entered onto the register of members of the Company as the holder thereof.

(14) Termination of Option Period and lapse of Options

The Option Period in respect of any Option shall automatically terminate and that Option (to the extent not already exercised) shall automatically lapse on the earliest of:

(i) subject to paragraphs 8-12, the expiry of the Option Period;
(ii) the expiry of the periods referred to in paragraphs 8, 9 and 12 respectively;
(iii) the date of commencement of the winding-up of the Company in respect of the situation contemplated by paragraph 10;
(iv) the date the compromise or arrangement referred to in paragraph 11 becomes effective;
(v) save as otherwise determined by the Board, the date on which the grantee of the Option, being an employee of a member of the Group, ceases to be an eligible participant of the Option Scheme by reason of a termination of his employment on any one or more of the following grounds: (i) that he has been guilty of persistent or serious misconduct; (ii) that he has become bankrupt or has become insolvent or has made any arrangement or composition with his creditors generally; (iii) that he has been convicted of any criminal offence (other than an offence which in the opinion of the Directors does not bring the grantee of the Option or the Company and its Subsidiaries into disrepute); or (iv) on any other ground on which an employer would be entitled to immediately terminate his employment pursuant to applicable laws or under the grantee’s employment contract. The date of termination as aforesaid shall be the last day on which the grantee of the Option was actually at work with the Company or the relevant Subsidiary whether salary is paid in lieu of notice or not;
(vi) the date on which the Directors shall exercise the Company’s right to revoke the Option by reason of a breach of paragraph 6 by the grantee of the Option in respect of that or any other Option;

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PRINCIPAL TERMS OF THE OPTION SCHEMES

APPENDIX III

(vii) if an Option was granted subject to certain conditions, restrictions or limitation, the date on which the Board resolves that the grantee of the Option has failed to satisfy or comply with such conditions, restrictions or limitation;
(viii) where the grantee of the Option is a supplier, customer, consultant, agent or adviser (whether an individual or a corporation) of a member of the Group, the date on which the Board resolves that the supplier, customer, consultant, agent or adviser has ceased to qualify as an Eligible Participant by reason of: (i) the termination of its business relationship with the relevant member of the Group; (ii) its failure to comply with any provision of the relevant contracts, or breaches its fiduciary duty under the common law; or (iii) any other grounds that the Board considers appropriate; and
(ix) the occurrence of such event or expiry of such period as may have been specified in the Offer.

(15) Cancellation of Options Granted but not Exercised

Any cancellation of Options granted but not exercised shall be subject to approval by the Board and the consent from the relevant grantee of the Option. Where any Option is cancelled and new Options are intended to be granted to the same grantee of the Option, the issue of such new Options may only be made under the Option Scheme with available unissued Options (excluding the cancelled Options) within the Mandate Limit of the Option Scheme.

(16) Maximum Number of Shares Available for Subscription

(i) The maximum number of Shares which may be issued upon exercise of all options to be granted at any time under the Option Scheme and any other share option schemes of the Company must not in aggregate exceed 10% of the relevant class of the Shares in issue as at the date when the Option Scheme was approved and adopted by the Shareholders (the “ Mandate Limit of the Option Scheme ”). Options lapsed in accordance with the terms of the Option Scheme will not be counted for the purpose of calculating the Mandate Limit of the Option Scheme.
(ii) The Company may seek approval by its Shareholders in general meeting for “refreshing” the Mandate Limit of the Option Scheme under the Option Scheme. However, the total number of Shares which may be issued upon exercise of all options to be granted under the Option Scheme and any other schemes of the Company under the limit as “refreshed” must not exceed 10% of the relevant class of the Shares in issue as at the date of passing the relevant resolution to refresh such limit. Options previously granted under the Option Scheme and any other schemes (including those outstanding, cancelled, lapsed in accordance with the Option Scheme or any other schemes or exercised options) will not be counted for the purpose of calculating the Mandate Limit of the Option Scheme as “refreshed”.
(iii) The Company may seek separate approval by its Shareholders in general meeting for granting Options beyond the Mandate Limit of the Option Scheme provided the Options in

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APPENDIX III

PRINCIPAL TERMS OF THE OPTION SCHEMES

excess of the Mandate Limit of the Option Scheme are granted only to eligible participants of the Option Scheme specifically identified by the Company before such approval is sought. The Company must send a circular to the Shareholders containing a generic description of the specified eligible participants of the Option Scheme who may be granted such Options, the number and terms of the Options to be granted, the purpose of granting Options to the specified eligible participants of the Option Scheme with an explanation as to how the terms of the Options serve such purpose, the information and the disclaimer required under the GEM Listing Rules.
(iv) The maximum number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under, the Option Scheme, the Award Scheme and any other schemes of the Company must not exceed 30% of the relevant class of the Shares in issue from time to time. No options may be granted under the Option Scheme, the Award Scheme or any other schemes of the Company if this will result in this limit being exceeded.

(17) Maximum Entitlement of each Eligible Participant

(i) Unless approved by the Shareholders, the total number of Shares issued and to be issued upon exercise of the Options granted to each eligible participant of the Option Scheme (including both exercised and outstanding Options) in any 12-month period must not exceed 1% of the relevant class of the Shares in issue.
(ii) The Company may grant further Options in excess of such limit subject to the approval of the Shareholders in general meeting with such eligible participant of the Option Scheme and his associates abstaining from voting (or his close associates (as defined in the GEM Listing Rules then in force) (or his associates if the eligible participant of the Option Scheme is a connected person) abstaining from voting).
(iii) The Company shall send a circular to the Shareholders and the circular must disclose the identity of the eligible participant of the Option Scheme, the number and terms of the Options to be granted (and Options previously granted to such eligible participant of the Option Scheme), the information and the disclaimer required under the GEM Listing Rules. The number and terms (including the Subscription Price) of Options to be granted to such eligible participant of the Option Scheme must be fixed before Shareholders’ approval and the date of Board meeting for proposing such further grant will be taken as the Offer Date for the purpose of calculating the Subscription Price.

(18) Grant of Options to a Director, Chief Executive or Substantial Shareholder of the Company, or any of their Respective Associates

Any grant of Option to a Director, chief executive or substantial shareholder (as defined in the GEM Listing Rules) of the Company, or any of their respective associates, under the Option Scheme must be approved by the independent non-executive Directors (excluding an independent non-executive Director who is the proposed grantee of the Option). Where any grant of Options to a substantial shareholder (as defined in the GEM Listing Rules) of the Company or an independent

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PRINCIPAL TERMS OF THE OPTION SCHEMES

APPENDIX III

non-executive Director or any of their respective associates, would result in the Shares issued or to be issued upon exercise of all options already granted or to be granted under the Option Scheme and any other schemes of the Company (including options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant:

(i) representing in aggregate over 0.1% of the relevant class of Shares in issue; and
(ii) having an aggregate value, based on the closing price of the Shares at the date of each grant, in excess of HK$5 million,

such further grant of Options must be approved by Shareholders. The Company must send a circular to the Shareholders. All connected persons (as defined in the GEM Listing Rules) of the Company (or the grantee of the Option, his associates and all core connected persons (as defined in the GEM Listing Rules then in force) of the Company) must abstain from voting in favour at such general meeting, but they may vote against the resolution at the general meeting of the Company provided that their intention to do so has been stated in relevant circular to Shareholders. Any vote taken at the meeting to approve the grant of such Options must comply with the requirements under the GEM Listing Rules. The circular must contain:

(i) details of the number and terms (including, among other things, the Subscription Price) of the Options to be granted to each eligible participant of the Option Scheme, which must be fixed before the Shareholders’ meeting and the date of Board meeting for proposing such further grant to be taken as the Offer Date for the purpose of calculating the Subscription Price;
(ii) a recommendation from the independent non-executive Directors (excluding an independent non-executive Director who is the proposed grantee of the Option) to the independent Shareholders as to voting;
(iii) the information required under rules 23.02(2)(d) and the disclaimer required under rule 23.02(4) of the GEM Listing Rules; and
(iv) the information required under rule 2.28 of the GEM Listing Rules.

(19) Reorganisation of Capital Structure

Whilst any Option remains exercisable or this Scheme remains in effect, in the event of any capitalisation issue, rights issue, sub-division or consolidation of the Shares or reduction of the share capital of the Company (other than an issue of Shares as consideration in a transaction to which the Company is a party), such corresponding adjustment (if any) shall be made to:

(i) the number or nominal amount of Shares to which the Option Scheme or any Option(s) relates (insofar as it is/they are unexercised); and/or
(ii) the Subscription Price of any Option; and/or

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PRINCIPAL TERMS OF THE OPTION SCHEMES

APPENDIX III

(iii) the method of exercise of any Option; and/or
(iv) the maximum number of Shares referred to in paragraphs 16, 17 and 18, as the Auditors or an independent financial adviser shall certify in writing to the Directors, provided that:
(a) any such adjustment shall be made on the basis that the proportion of the issued share capital of the Company to which a grantee of the Option is entitled after such adjustment shall remain as nearly as possible the same (but shall not be greater than) as to which he or she was entitled before such adjustment;
(b) no such adjustment shall be made the effect of which would be to enable a Share to be issued at less than its nominal value; and
(c) no such adjustment shall be made the effect of which would be to increase the proportion of the issued share capital of the Company for which any grantee of the Option would have been entitled to subscribe had he exercised all the Options held by him immediately prior to such adjustment.

The Auditors or the independent financial adviser shall also certify in writing to the Directors that the adjustments (other than any adjustment made on a capitalisation issue) satisfy the requirements set out in (a) to (c) above.

(20) Alterations to the Option Scheme

The Option Scheme may be altered in any respect by a resolution of the Board except:

(i) any alteration to the advantage of the eligible participants of the Option Scheme in relation to any matter contained in rule 23.03 of the GEM Listing Rules;
(ii) any alterations to the terms and conditions of the Option Scheme which are of a material nature or any change to the terms of Options granted, except alterations which take effect automatically under the existing terms of the Option Scheme;
(iii) any change to the authority of the Directors in relation to any alteration to the terms of the Option Scheme;
(iv) the provisions of the Option Scheme as to the definitions of “eligible participant of the Option Scheme”, “grantee of the Option”, “Option Period” and “Period of Option Scheme”; and
(v) the provisions of paragraphs 1, 2 and 3 (other than the time period referred to), and paragraph 14 and paragraphs 5-13, 16-19, 22-23 and paragraph 24, which shall only be altered with the prior sanction of a resolution of the Company in general meeting, provided that no such alteration shall operate to affect adversely the terms of issue of any Option granted or agreed to be granted prior to such alteration except with the consent or sanction

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PRINCIPAL TERMS OF THE OPTION SCHEMES

APPENDIX III

of such majority of the grantee of the Option as would be required of the holders of the Shares under the Articles for the time being of the Company for a variation of the rights attached to Shares. Any alterations to the terms and conditions of the Option Scheme shall comply with the relevant requirements of Chapter 23 of the GEM Listing Rules.

(21) Termination of the Option Scheme

The Company by ordinary resolution in general meeting may at any time terminate the operation of the Option Scheme and in such event no further Options will be offered but in all other respects the provisions of the Option Scheme shall remain in force. In particular, all Options granted prior to the termination and yet to be exercised shall continue to be valid and exercisable in accordance with the terms of the Option Scheme.

(22) No Performance Target and Minimum Period to Hold

Unless otherwise specified by the Board, a grantee is not required to achieve any performance target or to hold an Option for a minimum period from the date of grant before any Option granted under the Option Scheme can be exercised.

(23) Share Capital

The exercise of any Option shall be subject to the Shareholders in general meeting approving any necessary increase in the share capital of the Company. Subject thereto, the Directors shall make available sufficient of the then authorised but unissued share capital of the Company to allot the Shares on the exercise of any Option.

(24) Vesting Period

The vesting period, if any, for each Option to be granted pursuant to the Option Scheme shall be specified by the Board in the relevant offer letter at the time of grant.

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GENERAL INFORMATION

APPENDIX IV

1 RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM 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 DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS AND SHORT POSITIONS IN SHARE, UNDERLYNG SHARES AND DEBENTURES

So far as is known to any Director or chief executive of the Company, as of the Latest Practicable Date, the interests or short positions of the Directors and chief executive of the Company in the Shares, underlying Shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (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 or 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 referred to therein, or which were required, pursuant to the Rules 5.46 to 5.67 of the GEM Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

(i) Long position in the Shares or underlying Shares

		Number of	Approximately
		Shares or	percentage of interest
Name of Director	Capacity	underlying shares	in the Company
Mr. Zheng Fushuang	Founder of a	210,278,278	33.92%
	discretionary trust1
Mr. Guo Langhua	Beneficial owner2	31,842,106	5.14%
Mr. Liu Baodong	Beneficial owner3	28,237,338	4.55%
Mr. Zhang Yaqin	Beneficial owner4	450,596	0.07%
Mr. Frank Christiaens	Beneficial owner4	450,596	0.07%

Notes:

Mr. Zheng Fushuang is the settlor and a beneficiary of Future Success Trust. Future Success Trust holds the entire issued share capital of ZFS Holdings, which in turn holds the entire issued share capital of Wing Success Holdings Limited, a controlling shareholder of the Company. Therefore, Mr. Zheng Fushuang is deemed to be interested in the Shares held by Wing Success Holdings Limited.
As at 31 December 2016, Mr. Guo was interested in options which representing 15,921,053 underlying shares upon fully exercise of such options. As at the Latest Practicable Date, Mr. Guo held 15,921,053 shares and the remaining interest is the options representing 15,921,053 underlying shares upon fully exercise of such options.

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GENERAL INFORMATION

APPENDIX IV

As at 31 December 2016, Mr. Liu was interested in options which representing 14,118,669 underlying shares upon fully exercise of such options. As at the Latest Practicable Date, Mr. Liu held 14,118,669 shares and the remaining interest is the options representing 14,118,669 underlying shares upon fully exercise of such option.
Interests in options granted pursuant to the Pre-IPO Share Option Scheme.

Save as disclosed above and to the best knowledge of the Directors, as of the Latest Practicable Date, none of the Directors or chief executive of the Company had any interest or short position in the shares or underlying shares or debentures of the Company or any of its associated corporations 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 or 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 referred to therein, or which were required to be notified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules.

3 SUBSTANTIAL SHAREHOLDERS’ INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY

So far as was known to the Directors, as at the Latest Practicable Date, the following persons (other than the Directors or chief executive of the Company) had, or were deemed to have, interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or which were recorded in the register required to be kept by the Company under Section 336 of the SFO, or who were directly or indirectly interested in 10% or more of the number of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group:

			Approximately
			percentage of interest
Name of shareholder	Capacity	Number of shares held	in the Company
Mr. ZHENG Fushuang	Founder of a	210,278,278	33.92%
	discretionary trust1
HSBC International	Trust and interest of	210,278,278	33.92%
Trustee Limited	controlled
	corporation2
ZFS Holdings	Interest of controlled	210,278,278	33.92%
	corporation2
Wing Success Holdings	Legal owner and	210,278,278	33.92%
Limited	beneficial owner
Eagle Eyes Investment	Interest of controlled	98,098,000	15.82%
Limited	corporation
New Horizon Capital	Interest of controlled	98,098,000	15.82%
IV, L.P.	corporation
New Horizon Capital	Interest of controlled	98,098,000	15.82%
Partners III, L.P.	corporation
Carvillo Success	Legal owner and	98,098,000	15.82%
Limited	beneficial owner

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GENERAL INFORMATION

APPENDIX IV

Notes:

Mr. ZHENG Fushuang is the settlor and a beneficiary of Future Success Trust. Future Success Trust holds the entire issued share capital of ZFS Holdings, which in turn holds the entire issued share capital of Wing Success Holdings Limited. Therefore, Mr. ZHENG Fushuang is deemed to be interested in the Shares held by Wing Success Holdings Limited.
HSBC International Trustee Limited is the trustee of Future Success Trust and holds the entire issued share capital of ZFS Holdings which in turn holds the entire issued share capital of Wing Success Holdings Limited. Therefore, HSBC International Trustee Limited and ZFS Holdings are each deemed under the SFO to be interested in the Shares held by Wing Success Holdings Limited.

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any other person (other than the Directors and chief executive of the Company) who had an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or which were recorded in the register required to be kept by the Company under Section 336 of the SFO, or who was directly or indirectly interested in 10% or more of the number of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group.

4 DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed to enter into, a service contract with any member of the Group which does not expire or is not determinable by such member of the Group within one year without payment of compensation, other than the statutory compensation.

5 DIRECTORS’ DISCLOSURE OF INTEREST

As at the Latest Practicable Date:

(a) none of the Directors was materially interested, directly or indirectly, in any contract or arrangement entered into by any member of the Group subsisting at the date of this circular and which was significant in relation to the business of the Group;
(b) save as Mr. ZHENG Fushuang, who holds 44% of equity interest in Xinxin Holding Co., Ltd. and 90.3% of equity interest in Xin’aote Silicon Valley Video Technology Co., Ltd. both of which are connected persons of the Company that, lease certain office and property premises to the Group (the “ Non-exempt Continuing Connected Transactions ”), none of the Directors had any direct or indirect interest in any assets which have been since 31 December 2016 (being the date to which the latest published audited accounts of the Company were made up), (i) acquired or disposed of by; (ii) leased to; (iii) are proposed to be acquired or disposed of by; or (iv) are proposed to be leased to, any member of the Group. For details of the Non-exempt Continuing Connected Transactions, please refer to the 2016 annual report; and
(c) save as Mr. ZHENG Fushuang is the sole director of Wing Success Holdings limited, a controlling shareholder of the Company, none of the Directors is director or employee of a company which has an interest or short position in the shares or underlying shares of the Company which would fall to disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the Securities and Futures Ordinances.

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APPENDIX IV

6 MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors confirmed that there has been no material adverse change in the financial or trading position of the Group since 31 December 2016, being the date to which the latest published audited consolidated financial statements of the Group were made up.

7 LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration or claim of material importance and, so far as the Directors were aware, no litigation or claims of material importance are pending or threatened by or against any member of the Group.

8 COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or controlling shareholders of the Company or, so far as is known to them, any of their respective associates was interested in any business (apart from the Group’s business) which competes or is likely to compete either directly or indirectly with the Group’s business.

9 INTERESTS OF THE COMPLIANCE ADVISER

As confirmed by the Company’s compliance advisor, Reorient Financial Markets Limited (the “ Compliance Advisor ”), save as the compliance adviser agreement entered into between the Company and the Compliance Advisor dated 18 August 2015, none of the Compliance Adviser or its directors, employees or close associates (as defined under the GEM Listing Rules) had any interest in the Group or in the share capital of any member of the Group which is required to be notified to the Company pursuant to Rule 6A.32 of the GEM Listing Rules.

10 EXPERT AND CONSENT

The following is the qualification of the expert who has been named in this circular or has given opinion or advice which is contained in this circular:

Name

Qualification

Vinco Capital a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

As at the Latest Practicable Date, Vinco Capital did not have any shareholding, direct or indirect, 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.

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GENERAL INFORMATION

APPENDIX IV

As at the Latest Practicable Date, Vinco Capital did not have any direct or indirect interest in any assets which have been acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2016, being the date to which the latest published audited financial statements of the Group were made up.

As at the Latest Practicable Date, Vinco Capital has not withdrawn its written consent to the issue of this circular with the inclusion in this circular of its letter and reference to its name and opinion in the form and context in which they appear in this circular.

11 MISCELLANEOUS

(a) The joint company secretaries of the Company are Mr. Qian Yiyue and Mr. Au Wai Keung.
(b) The Company’s Hong Kong branch share registrar is Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
(c) The registered address of the Company is P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The principal place of business of the Company in Hong Kong is Room 606-607, 6/F, Chine Merchants Building, 152-155 Connaught Road Central, Hong Kong.

12 DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be made available for inspection at the King & Wood Mallesons, 13/F, Gloucester Tower, 15 Queen’s Road Central, Central, Hong Kong during normal business hours for a period of 14 days from the date of this circular (inclusive):

(a) the Award Scheme;
(b) the Option Scheme;
(c) the grant letter from the Company to Mr. Gao Yunhao regarding the grant of 1,750,000 awarded shares under the Award Scheme;
(d) the letter from the Independent Board Committee, the text of which is set out in this circular;
(e) the letter from Vinco Capital, being the Independent Financial Adviser, the text of which is set out in this circular;
(f) the written consent from Vinco Capital as referred to in paragraph headed “Expert and Consent” in this appendix; and
(g) this circular.

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NOTICE OF THE 2017 AGM

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CHINA DIGITAL VIDEO HOLDINGS LIMITED 中國數字視頻控股有限公司

( Incorporated in Cayman Islands with limited liability )

(Stock Code: 8280)

NOTICE IS HEREBY GIVEN that an annual general meeting (the “ Meeting ”) of China Digital Video Holdings Limited (the “ Company ”) will be held on 18 May 2017 at 10:30 a.m. at Beijing Schonbrunn Hotel, Number 125, Xisihuanbei Road, Haidian District, Beijing, PRC for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

to approve and confirm the grant of 1,750,000 connected awarded shares pursuant to the share award scheme adopted by the board of directors of the Company (the “ Board ”) on 20 March 2017 (the “ Award Scheme ”) to Gao Yunhao (高雲浩);
to approve and confirm the grant of 10,250,000 independent awarded shares pursuant to the Award Scheme to 29 selected participants who are not connected persons of the Company under the Award Scheme;
to authorise any one executive director of the Company to do all things and sign all documents in connection with the allotment and issue of the awarded shares pursuant to the Award Scheme.
Conditional upon The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) granting the approval for the listing of and permission to deal in, on the Stock Exchange, any shares of the Company (the “ Shares ”) which may be issued upon the exercise of any options which may be granted under the new share option scheme of the Company (the rules of which are set out in the document marked “A” produced to this meeting and initialled by the chairman of this meeting for the purpose of identification) (the “ Option Scheme ”), to approve and adopt the Option Scheme by the Company and to authorise any one executive director of the Company, at their absolute discretion, to grant options to subscribe for the Shares thereunder and to allot, issue and deal in any Shares pursuant to the exercise of the options which may be granted under the Option Scheme and to do all such acts as the executive director of the Company may in their absolute discretion consider necessary or expedient in order to give full effect to the Option Scheme.”
To receive, consider and adopt the audited consolidated financial statements of the Company and the reports of the directors of the Company (the “ Directors ”) and and auditors for the year ended 31 December 2016.

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NOTICE OF THE 2017 AGM

To re-appoint Grant Thornton Hong Kong Limited as auditors of the Company and the Board be authorised to fix their remuneration.
(a) To re-elect Ms. CAO Qian as an independent non-executive Director.
(b) To re-elect Mr. LIU Baodong as an executive Director.
(c) To re-elect Mr. Frank CHRISTIAENS as an independent non-executive Director.
To authorise the Board to fix the respective Directors’ remuneration.
“ THAT :
(a) subject to paragraph (c) of this resolution below, the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with authorized and unissued shares in the capital of the Company and to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into Shares) which might require the exercise of such powers be and is hereby generally and unconditionally approved;
(b) the Directors be and are hereby authorised during the Relevant Period (as defined below) to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into Shares) which might or would require the exercise of such powers (including but not limited to the power to allot, issue and deal with additional Shares in the capital of the Company) during or after the end of the Relevant Period (as defined below);
(c) the total number of shares allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors pursuant to the approval in paragraphs (a) and (b) of this resolution above, otherwise than pursuant to:
- (i) a Rights Issue (as defined below);
- (ii) the exercise of the outstanding conversion rights attached to any convertible securities issued by the Company, which are convertible into Shares;
- (iii) the exercise of any options granted under the share option scheme(s) adopted by the Company or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to subscribe for Shares in the Company; or
- (iv) any scrip dividend scheme or similar arrangement providing for the allotment of shares in the Company in lieu of the whole or part of a dividend in accordance with with the articles of association of the Company (the “ Articles ”) from time to time,

shall not exceed 20% of the total number of issued Shares as at the date of passing this resolution and the said approval shall be limited accordingly; and

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NOTICE OF THE 2017 AGM

(d) for the purposes of this resolution:

“Relevant Period” means the period from the time of the passing of this resolution until whichever is the earliest 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 laws of the Cayman Islands or the Company’s Articles to be held; or
(iii) the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting.

“Rights Issue” means an offer of shares open for a period fixed by the Directors to holders of shares on the register of members on a fixed record date in proportion to their then holdings of such shares (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 any relevant jurisdiction, or the requirements of any recognized regulatory body or any stock exchange).”

10. “ THAT :

(a) subject to paragraph (c) of this resolution below, the exercise by the Directors during the Relevant Period (as defined below) of all powers of the Company to repurchase its shares on Stock Exchange or on any other stock exchange recognized by the Securities and Futures Commission of Hong Kong and the Stock Exchange, subject to and in accordance with the applicable laws, rules and regulations, be and is hereby, generally and unconditionally approved;
(b) the approval in paragraph (a) of this resolution above shall be in addition to any other authorization given to the Directors and shall authorize the Directors on behalf of the Company during the Relevant Period (as defined below) to procure the Company to repurchase its Shares at a price determined by the Directors;
(c) the total number of Shares to be repurchased pursuant to the approval in paragraph (a) above shall not exceed 10% of the total number of issued Shares as at the date of passing this resolution and the said approval shall be limited accordingly; and
(d) for the purposes of this resolution:

“Relevant Period (as defined below)” means the period from the time of the passing of this resolution until whichever is the earliest of:

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

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NOTICE OF THE 2017 AGM

(ii) the expiration of the period within which the next annual general meeting of the Company is required by the laws of the Cayman Islands or the Company’s Articles to be held; or
(iii) the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting.”
“ THAT conditional upon the passing of the ordinary resolutions 9 and 10 as set out in this notice convening the Meeting (the “ Notice ”), the general mandate granted to the Directors pursuant to ordinary resolution 9 as set out in the Notice be and is hereby extended by the addition thereto of an amount representing the total number of shares repurchased by the Company under the authority granted pursuant to ordinary resolution 10 as set out in this Notice, provided that such amount shall not exceed 10% of the total number of issued Shares as at the date of passing this resolution.”

By Order of the Board China Digital Video Holdings Limited ZHENG Fushuang Chairman

Hong Kong, 11 April 2017

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NOTICE OF THE 2017 AGM

As at the date of this notice, the executive Directors are Mr. ZHENG Fushuang, Mr. GUO Langhua and Mr. LIU Baodong, and the independent non-executive Directors are Mr. Frank CHRISTIAENS, Mr. ZHANG Yaqin and Ms. CAO Qian.

Notes:

Any member of the Company entitled to attend and vote at the Meeting shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at the Meeting. A proxy need not be a member of the Company. On a poll, votes may be given either personally or by proxy.
The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same.
In order to be valid, the instrument appointing a proxy and (if required by the Board) the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, shall be delivered to the office of the Hong Kong branch share registrar and transfer office of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the Meeting or any adjournment thereof. Delivery of the form of proxy shall not preclude a member of the Company from attending and voting in person at the Meeting and, in such event, the form of proxy shall be deemed to be revoked.
No instrument appointing a proxy shall be valid after expiration of 12 months from the date named in it as the date of its execution, except at an adjourned Meeting or on a poll demanded at the Meeting or any adjournment thereof in cases where the Meeting was originally held within 12 months from such date.
Where there are joint holders of any shares, any one of such joint holders may vote at the Meeting, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint holders be present at the Meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose, seniority shall be determined by the order in which the names stand in the Register of Members of the Company in respect of the joint holding.
To ascertain shareholders’ eligibility to attend and vote at this Meeting, the register of members of the Company will be closed from 15 May 2017 to 18 May 2017 (both days inclusive), during which period no share transfer will be effected. In order to qualify for attending and voting at the annual general meeting, unregistered holders of shares of the Company should ensure that all completed transfer forms accompanied by the relevant share certificates must be lodged with the Hong Kong branch share registrar and transfer office of the Company, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration no later than 4:30 p.m., on 12 May 2017.
An explanatory statement containing the information necessary to enable the members to make an informed decision as to whether to vote for or against the ordinary resolution 10 as set out in this notice is set out in Appendix I to this circular.
Details of the retiring directors proposed to be re-elected as Directors of the Company at the Meeting are set out in Appendix II to this circular.
A form of proxy for use at the Meeting is enclosed.

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AI assistant

China Digital Video Holdings Limited — AGM Information 2017

51364_rns_2017-04-10_cf89e6b7-fdd8-4b99-ac0b-31dbb768d7d3.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

CHINA DIGITAL VIDEO HOLDINGS LIMITED 中國數字視頻控股有限公司

(1) ADOPTION OF AWARD SCHEME

(7) NOTICE OF THE ANNUAL GENERAL MEETING

CHARACTERISTICS OF THE GROWTH ENTERPRISES MARKET (“GEM”) OF THE STOCK EXCHANGE

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

CHINA DIGITAL VIDEO HOLDINGS LIMITED 中國數字視頻控股有限公司

(Stock Code: 8280)

(1) ADOPTION OF AWARD SCHEME

(7) NOTICE OF THE ANNUAL GENERAL MEETING

INTRODUCTION

LETTER FROM THE BOARD

LETTER FROM THE BOARD

ADOPTION OF THE AWARD SCHEME

Duration

Administration

Mandate Limit of the Award Scheme

LETTER FROM THE BOARD

Operation

Restrictions

LETTER FROM THE BOARD

Vesting

Voting Rights

Lapse of Award

LETTER FROM THE BOARD

Termination

LETTER FROM THE BOARD

PROPOSED ISSUE OF AWARDED SHARES PURSUANT TO THE AWARD SCHEME

Award to the Connected Selected Participant

Award to the Independent Selected Participants

LETTER FROM THE BOARD

Conditions

Reasons and Basis for the Award of the Awarded Shares

LETTER FROM THE BOARD

Further Details of the Awarded Shares

LETTER FROM THE BOARD

Fund Raising Activities in the Past Twelve Months

PROPOSED ADOPTION OF THE OPTION SCHEME

Summary of the Option Scheme Rules

Condition Precedent of the Option Scheme

LETTER FROM THE BOARD

Mandate Limit of the Option Scheme

Further details of the Option Scheme

LETTER FROM THE BOARD

Value of Options

GEM LISTING RULES IMPLICATIONS

LETTER FROM THE BOARD

Establishment of Independent Board Committee and Appointment of Independent Financial Adviser

Information about the Company

PROPOSED GRANTING OF THE ISSUANCE MANDATE AND REPURCHASE MANDATE

LETTER FROM THE BOARD

PROPOSED RE-ELECTION OF THE RETIRING DIRECTORS

2017 AGM AND PROXY ARRANGEMENT

LETTER FROM THE BOARD

RECOMMENDATION

CLOSURE OF REGISTER OF MEMBERS

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

CHINA DIGITAL VIDEO HOLDINGS LIMITED 中國數字視頻控股有限公司

CONNECTED TRANSACTION IN RELATION TO THE PROPOSED ISSUE OF NEW SHARES UNDER THE AWARD SCHEME TO CONNECTED SELECTED PARTICIPANT PURSUANT TO SPECIFIC MANDATE

RECOMMENDATION

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Frank CHRISTIAENS

ZHANG Yaqin

LETTER FROM VINCO CAPITAL

Vinco Capital Limited

CONNECTED TRANSACTION PROPOSED ISSUE OF NEW SHARES UNDER THE AWARD SCHEME TO CONNECTED PERSONS PURSUANT TO SPECIFIC MANDATE

INTRODUCTION

LETTER FROM VINCO CAPITAL

LETTER FROM VINCO CAPITAL

BASIS OF OUR OPINION AND RECOMMENDATION

PRINCIPAL FACTORS AND REASONS CONSIDERED

I. Background of and reasons for the Award

Information of the Company

China Digital Video Holdings Limited AGM Information 2017