Imperium Financial Group Limited — Proxy Solicitation & Information Statement 2014

Jul 30, 2014

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 adviser.

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

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.

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

CHINA NATIONAL CULTURE GROUP LIMITED 中國國家文化產業集團有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 745)

PROPOSALS FOR GENERAL MANDATES TO REPURCHASE SHARES AND ISSUE SHARES, RE-ELECTION OF DIRECTORS, ADOPTION OF 2014 SHARE OPTION SCHEME AND NOTICE OF ANNUAL GENERAL MEETING

The notice convening the annual general meeting of China National Culture Group Limited to be held at Ramada Hong Kong Hotel, 308 Des Voeux Road West, Hong Kong on Friday, 29 August 2014 at 10:00 a.m. is set out on pages 26 to 29 of this circular. Whether or not you intend to attend the meeting, you are requested to complete the accompanying proxy form for use at the annual general meeting in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the meeting if you so wish.

Hong Kong, 30 July 2014

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General mandate to repurchase shares	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General mandate to issue shares . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Re-election of directors . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Adoption of 2014 Share Option Scheme	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
AGM . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Voting by poll . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Action to be taken . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Recommendation . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix I — Explanatory Statement for the Share Repurchase
Mandate . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix II — Details of Directors proposed to be Re-elected at the
AGM . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Appendix III — Summary of the Principal Terms of the 2014 Share
Option Scheme . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
Notice of AGM . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26

DEFINITIONS

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

• “2004 Share Option Scheme”

• the existing share option scheme of the Company adopted on 6 September 2004

• “2014 Share Option Scheme”

• the new share option scheme proposed to be adopted at the AGM and the summary of the principal terms of which is set out in Appendix III to this circular

• “AGM Notice”

• the notice dated 30 July 2014 convening the AGM as set out on pages 26 to 29 of this circular

• “Annual General Meeting” or “AGM”

• the annual general meeting of the Company to be held at Ramada Hong Kong Hotel, 308 Des Voeux Road West, Hong Kong on Friday, 29 August 2014 at 10:00 a.m., the notice of which is set out on pages 26 to 29 of this circular

• “Articles of Association”

• the articles of association of the Company for the time being

• “Board”

• Board of Directors

• “Company”

• China National Culture Group Limited, a company incorporated in the Cayman Islands with limited liability, with its shares listed on the Stock Exchange

• “Directors”

• the directors of the Company

• “Grantee”

• any Participant who accepts an offer in accordance with the terms of the 2014 Share Option Scheme or (where the context so permits) a person entitled to any such Option in consequence of the death of the original Grantee or the legal personal representative of such person

• “Group”

• the Company and its subsidiaries

• “HK$”

Hong Kong dollar, the lawful currency of Hong Kong

• “Hong Kong”

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

• “Latest Practicable Date”

• 25 July 2014, being the latest practicable date prior to the printing of this circular

– 1 –

DEFINITIONS

• “Listing Rules”

• “Option(s)”

• “Participant(s)”

• “Repurchase Proposal”

• “Repurchase Resolution”

• “Share(s)”

• “Share Repurchase Rules”

• “Shareholder(s)”

• “Stock Exchange”

• “Subscription Price”

• “Takeovers Code”

• “%”

• the Rules Governing the Listing of Securities on the Stock Exchange

• option(s) to subscribe for Shares pursuant to 2014 Share Option Scheme and for the time being subsisting

• (a) any full-time or part-time employee of any member of the Group; (b) any consultant or adviser of any member of the Group; (c) any director (including executive, non-executive or independent non-executive directors) of any member of the Group; (d) any shareholder of any member of the Group; or (e) any distributor, contractor, supplier, agent, customer, business partner or service provider of any member of the Group, to be determined absolutely by the Board

• the proposal to give a general mandate to the Directors to exercise the powers of the Company to repurchase Shares up to a maximum of 10% of the issued share capital of the Company as at the date of the Repurchase Resolution

• the proposed ordinary resolution as referred to in resolution number 4 of the notice of the Annual General Meeting

• share(s) of HK$0.01 each in the share capital of the Company

• the relevant rules set out in the Listing Rules to regulate the repurchase by companies with primary listing on the Stock Exchange of their own securities on the Stock Exchange

• holder(s) of the Share(s)

• The Stock Exchange of Hong Kong Limited

• the price per Share at which a Grantee may subscribe for Shares on the exercise of an Option under the 2014 Share Option Scheme

• the Hong Kong Code on Takeovers and Mergers

• per cent

– 2 –

LETTER FROM THE BOARD

CHINA NATIONAL CULTURE GROUP LIMITED 中國國家文化產業集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 745)

Executive Directors: Mr. Tan Bondy Ms. Sun Wei Ms. Shen Lihong

Independent Non-Executive Directors: Mr. Liu Kwong Sang Dr. Wan Ho Yuen Terence Ms. Wang Miaojun Mr. Ma Qianli

Registered Office: Cricket Square Hutchins Drive, P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head Office and Principal Place of Business in Hong Kong: Room 901, Silver Fortune Plaza, 1 Wellington Street, Central, Hong Kong Hong Kong, 30 July 2014

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR GENERAL MANDATES TO REPURCHASE SHARES AND ISSUE SHARES, RE-ELECTION OF DIRECTORS, ADOPTION OF 2014 SHARE OPTION SCHEME AND NOTICE OF ANNUAL GENERAL MEETING

GENERAL MANDATE TO REPURCHASE SHARES

At the last annual general meeting of the Company held on 29 August 2013, resolutions of the Shareholders were passed giving general unconditional mandates to the Directors to:

• (i) allot, issue and otherwise deal with Shares not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company in issue as at the date of passing such resolution;

• (ii) to repurchase Shares up to a maximum of 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of such resolution; and

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LETTER FROM THE BOARD

• (iii) add to the general mandate for issuing Shares as mentioned in paragraph (i) above an amount representing the total nominal amount of the issued share capital of the Company repurchased by the Company under the general mandate granted to the Directors to repurchase Shares as mentioned in paragraph (ii) above.

The above general mandates will lapse at the conclusion of the forthcoming AGM. It is therefore proposed to seek your approval of the ordinary resolutions to be proposed at the AGM to give fresh general mandates to the Directors.

The Directors propose to seek your approval of the Repurchase Proposal to be proposed at the AGM, details of which are set out in Repurchase Resolution. An explanatory statement as required under the Share Repurchase Rules to provide the requisite information of the Repurchase Proposal is set out in Appendix I to this circular.

GENERAL MANDATE TO ISSUE SHARES

Two ordinary resolutions will also be proposed at the AGM, namely ordinary resolution nos. 5 to 6 for granting to the Directors a general mandate to allot, issue and deal with new Shares not exceeding 20% of the issued share capital of the Company as at the date of the passing of ordinary resolution no. 5 and adding to such general mandate so granted to the Directors any Shares representing the aggregate nominal amount of the Shares repurchased by the Company after the granting of the general mandate to repurchase Shares up to 10% of the issued share capital of the Company as at the date of the passing of ordinary resolution no. 4.

The Company had 7,140,830,000 Shares in issue as at the Latest Practicable Date. Subject to the passing of the aforesaid ordinary resolution no. 5 and in accordance with the terms therein, the Company would be allowed to issue additional Shares up to the aggregate nominal amount of a maximum of 1,428,166,000 Shares on the basis that no further Shares will be issued or repurchased prior to the AGM.

Details of the share issue mandate and the extension of the share issue mandate are respectively set out in ordinary resolution nos. 5 and 6 in the AGM Notice.

RE-ELECTION OF DIRECTORS

As at the Latest Practicable Date, the executive Directors of the Company are Mr. Tan Bondy, Ms. Sun Wei and Ms. Shen Lihong and the independent non-executive Directors of the Company are Mr. Liu Kwong Sang (“Mr. Liu”), Dr. Wan Ho Yuen Terence, Ms. Wang Miaojun and Mr. Ma Qianli.

– 4 –

LETTER FROM THE BOARD

In accordance with articles 87(1) and 87(2) of the Articles of Association, at each annual general meeting of the Company, one-third of the Directors for the time being (or, if their number is not a multiple of three, the number nearest to but not greater than one-third) shall retire from office by rotation. Mr. Liu will retire at the forthcoming AGM and, being eligible, will offer himself for re-election.

In accordance with article 86(3) of the Articles of Association, Mr. Tan Bondy and Dr. Wan Ho Yuen Terence, who were appointed on 17 January 2014, Ms. Wang Miaojun, who was appointed on 5 February 2014, Ms. Sun Wei and Mr. Ma Qianli, who were appointed on 26 February 2014, Ms. Shen Lihong, who was appointed on 9 May 2014, will hold office until the conclusion of AGM and, being eligible, will offer themselves for re-election.

Mr. Liu was appointed as an independent non-executive Director in September 2004 and therefore would have served for more than nine years as at the date of the forthcoming AGM. He has confirmed his independence with reference to the factors set out in Rule 3.13 of the Listing Rules.

Having considered the requirements and obligations of an independent non-executive Director, including the factors to be taken into account in assessing his independence under Rule 3.13 of the Listing Rules, the Board believes that Mr. Liu continues to be independent and should be re-elected as an independent non-executive Director at the AGM. In addition, the Board believes that Mr. Liu has the character, integrity, independence and expertise to fulfill his role effectively and will continue to bring valuable experience, knowledge and professionalism to the Board for its efficient and effective functioning.

Details of the Directors proposed to be re-elected at the AGM are set out in Appendix II hereto.

ADOPTION OF 2014 SHARE OPTION SCHEME

The 2004 Share Option Scheme

The 2004 Share Option Scheme was adopted by the Company on 6 September 2004 and will expire on 6 September 2014. The 10% limit under the 2004 Share Option Scheme was refreshed on 29 August 2008. Under the terms of the 2004 Share Option Scheme, unless otherwise terminated or amended, the 2004 Share Option Scheme would remain in force for a period of 10 years from the date of its adoption. Apart from the 2004 Share Option Scheme, the Company has no other subsisting share option scheme as at the Latest Practicable Date.

– 5 –

LETTER FROM THE BOARD

During the term of the 2004 Share Option Scheme and up to the Latest Practicable Date, the Board has, on 24 July 2014, fully utilized the 10% limit and granted share options of 153,383,000 Shares to 10 individuals comprise one Director, certain employees and consultants of the Company to subscribe for Shares at an exercise price of HK$0.375 each for a validity period from 25 July 2014 to 6 September 2014, subject to acceptance of the grantee, under the 2004 Share Option Scheme. As at the Latest Practicable Date, the options granted in respect of 153,383,000 Shares have not been exercised and remain outstanding.

Adoption of the 2014 Share Option Scheme

The Board proposes the adoption of the 2014 Share Option Scheme at the AGM date, which will be valid for 10 years.

The purpose of the 2014 Share Option Scheme is to enable the Company to grant Options to the Participants, to recognise and acknowledge the contributions or potential contributions have made or will be made by the Participants to the Group as incentives and/or rewards for their contribution to the Group following the expiry of the 2004 Share Option Scheme. A summary of the principal terms of the proposed 2014 Share Option Scheme is set out in Appendix III of this circular. The terms of the 2014 Share Option Scheme is materially the same as the 2004 Share Option Scheme save for those changes which were made in compliance with amendments to Chapter 17 of the Listing Rules since 2004.

The Board considers that the adoption of 2014 Share Option Scheme is in the interests of the Group and will facilitate the retention and the recruitment of high-calibre employees and attract human resources that are valuable to the Group. To ensure that these purposes are achieved, the 2014 Share Option Scheme provides that the Board will grant Options only to Participants who have made valuable contribution to the business of the Group based on their performance and/or years of service, or who are regarded as valuable resources of the Group based on their working experience, knowledge in the industry and other relevant factors or are expected to be able to contribute to the prosperity, business development or growth of the Group based on their business connection or network or other relevant factors.

The provisions of the 2014 Share Option Scheme will comply with the requirements of Chapter 17 of the Listing Rules.

As at the Latest Practicable Date, there were 7,140,830,000 Shares in issue. Assuming that no further Share will be allotted, issued, repurchased or exercised under the 2004 Share Option Scheme prior to the AGM, the total number of Shares that may fall to be allotted and issued upon exercise of the Options would be 714,083,000 Shares, representing 10% of the total number of Shares in issue. No trustee will be appointed under the 2014 Share Option Scheme.

The Directors believe that the authority given to the Directors under the 2014 Share Option Scheme to specify any minimum holding period and/or performance targets as conditions in any Option granted and the requirement for a minimum subscription price

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LETTER FROM THE BOARD

as well as the authority to select the appropriate Participants as prescribed by the rules of the 2014 Share Option Scheme will serve to protect the value of the Company as well as to achieve the purposes of the 2014 Share Option Scheme.

The Directors consider that it is not appropriate to state the value of the Options that can be granted pursuant to the 2014 Share Option Scheme as if they had been granted as at the Latest Practicable Date. The Directors believe that any statement regarding the value of the Options as at the Latest Practicable Date will not be meaningful to the Shareholders, since the Options to be granted shall not be assignable, and no holder of the Options shall in any way sell, transfer, charge, mortgage or create any interest (legal or beneficial) in favour of any third party over or in relation to any Option.

In addition, the calculation of the Options is based on a number of variables such as the exercise price, exercise period, interest rate, expected volatility and other relevant variables. The Directors believe that any calculation of the value of the Options as at the Latest Practicable Date based on a great number of speculative assumptions would not be meaningful and would be misleading to the Shareholders.

Conditions precedent of the 2014 Share Option Scheme

The adoption of the 2014 Share Option Scheme is conditional upon:

• (i) the passing of ordinary resolution(s) by the Shareholders at the AGM to:

• (a) approve and adopt the 2014 Share Option Scheme;

• (b) authorise the Board to grant Options under the 2014 Share Option Scheme; and

• (c) authorise the Board to allot and issue Shares pursuant to the exercise of any Options to be granted pursuant to the 2014 Share Option Scheme; and

• (ii) the listing committee of the Stock Exchange (the “Listing Committee”) granting the approval for the listing of, and permission to deal in, on the Stock Exchange, any Shares which may fall to be allotted and issued by the Company pursuant to the exercise of the Options in accordance with the terms and conditions to the 2014 Share Option Scheme.

Subject to the obtaining of the Shareholders’ approval with respect to the adoption of the 2014 Share Option Scheme at the AGM, the total number of Shares which may be issued upon exercise of all Options to be granted under the 2014 Share Option Scheme and any other share option schemes of the Company must not in aggregate exceed 10% of the total issued share capital of the Company as at the date on which the 2014 Share Option Scheme is adopted unless the Company obtains a fresh approval from Shareholders to renew the 10% limit on the basis that the maximum number of Shares in respect of which Options may be granted under the 2014 Share Option Scheme together with any Options outstanding and yet to be exercised under the 2014 Share Option Scheme and any other share option schemes shall not exceed 30% of the issued share capital of the Company from time to time.

– 7 –

LETTER FROM THE BOARD

A copy of the 2014 Share Option Scheme is available for inspection at the Company’s principal place of business in Hong Kong at Room 901, Silver Fortune Plaza, 1 Wellington Street, Central, Hong Kong during normal business hours from the date hereof up to the date of AGM.

None of the Directors is a trustee of the 2014 Share Option Scheme or has any direct or indirect interest in the trustees of the 2014 Share Option Scheme, if any.

Application will be made to the Listing Committee for the approval of the listing of, and permission to deal in, the Shares which may fall to be issued pursuant to the exercise of the Options granted under the 2014 Share Option Scheme.

As at the Latest Practicable Date, no Shareholder has a material interest in the adoption of the 2014 Share Option Scheme. As such, no Shareholder is required to abstain from voting on the resolution in relation thereto.

AGM

Set out on pages 26 to 29 of this document is the AGM Notice.

At the AGM, resolutions will be proposed to the Shareholders in respect of ordinary business to be considered at the AGM, including the re-election of Directors, and special business to be considered at the AGM, being the ordinary resolutions to approve the proposed Repurchase Proposal, the general mandate for Directors to issue new Shares, the extension of the general mandate to issue new Shares by adding the number of Shares repurchased and the adoption of the 2014 Share Option Scheme.

VOTING BY POLL

Pursuant to article 66 of the Articles of Association and Rule 13.39(4) of the Listing Rules, all votes of the Shareholders at the general meetings must be taken by poll. All resolutions put to the vote of the AGM will therefore be decided by poll.

ACTION TO BE TAKEN

A proxy form for use at the AGM is enclosed herewith. Whether or not you intend to attend the AGM, you are requested to complete the proxy form and return it to the Company’s share registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the AGM or any adjournment thereof. Completion and return of a proxy form will not prevent you from attending and voting in person at the AGM if you so wish.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors believe that the Repurchase Proposal, the general mandate for Directors to issue new Shares, the extension of the general mandate to issue new Shares by adding the number of Shares repurchased, the re-election of Directors and the adoption of the 2014 Share Option Scheme are all in the best interest of the Company and the Shareholders. Accordingly, the Directors recommend that all Shareholders should vote in favour of such resolutions to be proposed at the AGM.

Yours faithfully, for and on behalf of

China National Culture Group Limited Shen Lihong Director

– 9 –

APPENDIX I

EXPLANATORY STATEMENT FOR THE SHARE REPURCHASE MANDATE

This appendix serves as an explanatory statement, as required by the Share Repurchase Rules, to provide requisite information to you for your consideration of the Repurchase Proposal.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 7,140,830,000 Shares.

Subject to the passing of the Repurchase Resolution and on the basis that no further Share will be issued or repurchased prior to the AGM, the Company would be allowed under the Repurchase Proposal to repurchase a maximum of 714,083,000 Shares representing not more than 10% of the issued share capital of the Company as at the Latest Practicable Date.

The Repurchase resolution would continue in force until the conclusion of the next annual general meeting of the Company or the expiration of period within which the next annual general meeting of the Company is required by law to be held or it is revoked or varied by an ordinary resolution of Shareholders in general meeting of the Company, whichever is the earliest.

2. REASONS FOR REPURCHASES

The Directors believe that the Repurchase Proposal is in the best interests of the Company and the Shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset and/or earnings per Share of the Company and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders as a whole.

3. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its Memorandum and Articles of Association and the laws of the Cayman Islands. The laws of the Cayman Islands provide that the amount to be repaid in connection with a share repurchase may be paid from the profits of the Company and/or the proceeds of a new issue of Shares made for the purpose of the repurchase or out of capital, if the Company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business.

There might be an adverse impact on the working capital or gearing position of the Company as compared with the position disclosed in the audited financial statements contained in the annual report for the year ended 31 March 2014 in the event that the Repurchase Proposal was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Proposal to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

– 10 –

APPENDIX I

EXPLANATORY STATEMENT FOR THE SHARE REPURCHASE MANDATE

4. SHARE PRICES

The highest and lowest prices at which the Shares have traded on the Stock Exchange during each of the previous twelve months before the Latest Practicable Date were as follows:

		Shares
	Highest		Lowest
	HK$		HK$
2013
July	0.360		0.270
August	0.370		0.270
September	0.500		0.238
October	0.740		0.365
November	0.760		0.600
December	1.860		0.700
2014
January	2.220		0.900
February	1.960		1.220
March	1.550		0.520
April	1.000		0.145
May	0.430		0.265
June	0.285		0.199
July (up to Latest Practicable Date)	0.405		0.199

5. UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make repurchases pursuant to the Repurchase Resolution and in accordance with the Listing Rules and the applicable laws of the Cayman Islands.

None of the Directors nor, to the best of their knowledge, having made all reasonable enquiries, their associates (as defined in the Listing Rules), have any present intention to sell any Shares to the Company or its subsidiaries under the Repurchase Proposal if such is approved by the Shareholders.

No connected persons (as defined in the Listing Rules) have notified the Company that they have a present intention to sell Shares to the Company or its subsidiaries, or have undertaken not to do so, in the event that the Repurchase Proposal is approved by the Shareholders.

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APPENDIX I

EXPLANATORY STATEMENT FOR THE SHARE REPURCHASE MANDATE

6. TAKEOVERS CODE

If on the exercise of the power to repurchase Shares pursuant to the Repurchase Proposal, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code. As a result, a Shareholder or group of Shareholders acting in concert could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, the register of interests in shares and short positions maintained by the Company pursuant to Section 336 of the SFO showed that the Company has been notified of the following interests, being 5% or more of the Company’s issued share capital:

			Approximate
			percentage of
			shareholding
			if the
		Approximate	Repurchase
		percentage of	Mandate is
	Number of	existing	exercised in
Name of Shareholder	Shares held	shareholding	full
Huge Leader Holdings Limited (note)	1,723,000,000	24.13%	26.81%
Mr. Xiao Baoyan (note)	1,723,000,000	24.13%	26.81%
Ms. Chan Ka Wai (note)	1,723,000,000	24.13%	26.81%

Note: Huge Leader Holdings Limited is owned as to 60% by Mr. Xiao Baoyan and 40% by Ms. Chan Ka Wai.

The Directors are not aware of any consequences which may arise under the Takeovers Code as a result of any repurchases made under the Repurchase Proposal. The Company has no present intention to repurchase Shares to such extent as to result in the amount of Shares held by the public being reduced to less than 25%.

7. SHARE REPURCHASES MADE BY THE COMPANY

The Company had not repurchased any Shares (whether on the Stock Exchange or otherwise) in the six months preceding the Latest Practicable Date.

– 12 –

APPENDIX II

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

The following are the particulars of the Directors proposed to be re-elected at the AGM:

1. Mr. Tan Bondy , aged 47, was appointed as an executive Director of the Company in January 2014. Mr. Tan holds a Bachelor of Commerce degree in company law from Murdoch University, Australia and a Bachelor of Business degree in marketing from Edith Cowan University, Australia. Mr. Tan is an entrepreneur and has over 20 years of experience in marketing management and business development with several international enterprises in People’s Republic of China (“China”) and Hong Kong. Mr. Tan is currently the honorary advisor of China National Culture & Arts Co., Ltd (中國文化藝術有 限公司), a sole state owned holding enterprise under the Ministry of Culture of China. Mr. Tan also serves as the Chief Executive Officer of Beijing Cultural Artworks Exchange (北京文化藝術品交易所) which is the sole cultural artworks exchange in China approved by the China Securities Regulatory Commission and Beijing Municipal Bureau of Financial Works for securitization operation, being an exchange platform for trading of listed shares which held assets of cultural artworks, films or TV contents. Mr. Tan is also an overseas investment advisor of China Ruilian Holding Corporation (中 國瑞聯實業集團有限公司) and an investment advisor of Northern Enterprise Group Corporation (北方企業集團).

Mr. Tan has no relationship with any other directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Mr. Tan does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Mr. Tan has entered into a service agreement as executive Director with the Company on 17 January 2014 with no fixed term of service. Mr. Tan shall hold office only until the next general meeting of the Company. The appointment is subject to retirement by rotation and re-election at the annual general meeting in accordance with the provisions of the Articles of Association. Mr. Tan will be entitled to receive a director’s fee as recommended by the remuneration committee and determined by the Board from time to time by reference to his duties and responsibilities with the Company and the market conditions and authorized by the Shareholders at the annual general meeting.

Save as disclosed above, Mr. Tan has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his re-election and there are no other information that should be disclosed pursuant to rule 13.51(2)(h) to (v) of the Listing Rules.

1. Ms. Sun Wei , aged 30, was appointed as an executive Director of the Company in February 2014. Ms. Sun holds a Bachelor of Arts in English Education degree from Shanghai International Studies University, PRC, a Master of Science degree in Finance from Clark University, United States of America and a Postgraduate Certificate in Professional Accounting from City

– 13 –

APPENDIX II

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

University of Hong Kong. Ms. Sun has over three years of experience in accounting and administration.

Ms. Sun has no relationship with any other directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Ms. Sun does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Ms. Sun has entered into a service agreement as executive Director with the Company on 26 February 2014 with no fixed term of service. Ms. Sun shall hold office only until the next general meeting of the Company. The appointment is subject to retirement by rotation and re-election at the annual general meeting in accordance with the provisions of the Articles of Association. Ms. Sun will be entitled to receive a director ’s fee as recommended by the remuneration committee and determined by the Board from time to time by reference to her duties and responsibilities with the Company and the market conditions and authorized by the Shareholders at the annual general meeting.

Save as disclosed above, Ms. Sun has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with her re-election and there are no other information that should be disclosed pursuant to rule 13.51(2)(h) to (v) of the Listing Rules.

1. Ms. Shen Lihong , aged 30, was appointed as an executive Director of the Company in May 2014. Ms. Shen was graduated with a Bachelor degree in law from the University of Yangzhou in June 2007, and a Master degree in public relations from the East China University of Finance in July 2010. Ms. Shen has five years of experience in media, film promotion and distribution, and investor relations.

Ms. Shen has no relationship with any other directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Ms. Shen does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Ms. Shen has entered into a service agreement as executive Director with the Company on 9 May 2014 with no fixed term of service. Ms. Shen shall hold office only until the next general meeting of the Company. The appointment is subject to retirement by rotation and re-election at the annual general meeting in accordance with the provisions of the Articles of Association. Ms. Shen will be entitled to receive a director’s fee as recommended by the remuneration committee and determined by the Board from time to time by reference to her duties and responsibilities with the Company and the market conditions and authorized by the Shareholders at the annual general meeting.

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APPENDIX II

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

Save as disclosed above, Ms. Shen has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with her re-election and there are no other information that should be disclosed pursuant to rule 13.51(2)(h) to (v) of the Listing Rules.

1. Mr. Liu Kwong Sang , aged 52, has been an independent non-executive Director of the Company since September 2004. Mr. Liu has been practising as a certified public accountant in Hong Kong with more than 25 years of experience in accounting profession. Mr. Liu graduated from the Hong Kong Polytechnic University with a bachelor degree in Accountancy (with honours) and obtained the Master degree in Business Administration from the University of Linclon, the United Kingdom. He is an associate member of the Institute of Chartered Accountants in England and Wales, a fellow member of the Association of Chartered Certified Accountants, a fellow member of the Institute of Financial Accountants, the United Kingdom and a fellow member of the Institute of Public Accountants (formerly known as “National Institute of Accountants”), Australia. Mr. Liu is also a fellow member of the Hong Kong Institute of Certified Public Accountants, a fellow member of the Taxation Institute of Hong Kong, a Certified Tax Adviser and a fellow member of the Society of Registered Financial Planners. Mr Liu acts as independent non-executive directors of Polytec Asset Holdings Limited and of Dragonite International Limited (formerly known as “Ruyan Group (Holdings) Limited”), securities of both are listed on the main board of the Stock Exchange, and of abc Multiactive Limited and of TLT Lottotainment Group Limited whose securities are listed on the GEM board of the Stock Exchange, and of Pacific CMA, Inc. whose securities were previously listed on the American Stock Exchange.

Mr. Liu has no relationship with any other directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Mr. Liu does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Mr. Liu has entered into a service contract as independent non-executive Director with the Company for a period of 1 year from 1 September 2013. The appointment is subject to retirement by rotation and re-election at the annual general meeting in accordance with the provisions of the Articles of Association. Mr. Liu will be entitled to receive a director ’s fee as recommended by the remuneration committee and determined by the Board from time to time by reference to his duties and responsibilities with the Company and the market conditions and authorized by the Shareholders at the annual general meeting.

Save as disclosed above, Mr. Liu has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his re-election and there are no other information that should be disclosed pursuant to rule 13.51(2)(h) to (v) of the Listing Rules.

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APPENDIX II

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

1. Dr. Wan Ho Yuen Terence , aged 46, was appointed as an independent non-executive Director of the Company in January 2014. Dr. Wan holds a Bachelor of Arts degree with honors in Business Administration from Bolton Institute of Higher Education, the United Kingdom, a Bachelor of Law degree from Tsing Hua University, China, a Master of Business degree in Accounting from Victoria University of Technology, Australia, a Master of Arts degree in international accounting from City University of Hong Kong and a Doctor of Philosophy in Business Administration in Accounting from Bulacan State University, the Philippines. Dr. Wan is a Fellow member and Certified Tax Advisor of the Taxation Institute of Hong Kong, a Fellow member and a Certified Public Accountant (Practicing) of Hong Kong Institute of Certified Public Accountants, a Certified Practising Accountant of CPA (Australia) and a Certified Management Accountant of the Institute of Certified Management Accountant, Australia. Dr. Wan has over 22 years of experiences in corporate finance, advisory, business management and accounting with several professional accounting firms and companies. Dr. Wan is currently the director of an accounting firm based in Hong Kong.

Dr. Wan has no relationship with any other directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Dr. Wan does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Dr. Wan has entered into a service agreement as independent non-executive Director with the Company on 17 January 2014 with no fixed term of service. Dr. Wan shall hold office only until the next general meeting of the Company. The appointment is subject to retirement by rotation and re-election at the annual general meeting in accordance with the provisions of the Articles of Association. Dr. Wan will be entitled to receive a director ’s fee as recommended by the remuneration committee and determined by the Board from time to time by reference to his duties and responsibilities with the Company and the market conditions and authorized by the Shareholders at the annual general meeting.

Save as disclosed above, Dr. Wan has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his re-election and there are no other information that should be disclosed pursuant to rule 13.51(2)(h) to (v) of the Listing Rules.

1. Ms. Wang Miaojun , aged 33, was appointed as an independent non-executive Director of the Company in February 2014. Ms. Wang holds a bachelor degree in Electronics and Information Engineering from Shenzhen University. Ms. Wang has over 10 years of experience in IT and media industry. Ms. Wang is currently a general manager of the online media department and a director in an online media company. Ms. Wang had extensive experience in operation

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APPENDIX II

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

and management and had held management roles in electronics, IT and media companies and had an established network of relationship within IT industry in the PRC.

Ms. Wang has no relationship with any other directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Ms. Wang does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Ms. Wang has entered into a service agreement as independent non-executive Director with the Company on 5 February 2014 with no fixed term of service. Ms. Wang shall hold office only until the next general meeting of the Company. The appointment is subject to retirement by rotation and re-election at the annual general meeting in accordance with the provisions of the Articles of Association. Ms. Wang will be entitled to receive a director’s fee as recommended by the remuneration committee and determined by the Board from time to time by reference to her duties and responsibilities with the Company and the market conditions and authorized by the Shareholders at the annual general meeting.

Save as disclosed above, Ms. Wang has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with her re-election and there are no other information that should be disclosed pursuant to rule 13.51(2)(h) to (v) of the Listing Rules.

1. Mr. Ma Qianli , aged 38, was appointed as an independent non-executive Director of the Company in February 2014. Mr. Ma holds a Bachelor degree in architectural from Shenyang Architectural and Civil Engineering Institute and a Master of Interactive Multimedia degree from University of Technology Sydney, Australia. Mr. Ma has several years of properties development and architecture experience.

Mr. Ma has no relationship with any other directors, senior management, substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Mr. Ma does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Mr. Ma has entered into a service agreement as independent non-executive Director with the Company on 26 February 2014 with no fixed term of service. Mr. Ma shall hold office only until the next general meeting of the Company. The appointment is subject to retirement by rotation and re-election at the annual general meeting in accordance with the provisions of the Articles of Association. Mr. Ma will be entitled to receive a director ’s fee as recommended by the remuneration committee and determined by the Board from time to time by reference to his duties and responsibilities with the

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APPENDIX II

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

Company and the market conditions and authorized by the Shareholders at the annual general meeting.

Save as disclosed above, Mr. Ma has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his re-election and there are no other information that should be disclosed pursuant to rule 13.51(2)(h) to (v) of the Listing Rules.

In the opinion of the Directors, other than the aforesaid matters, there are no other matters need to be brought to the attention of the Shareholders in relation to the re-election of the above Directors.

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APPENDIX III

SUMMARY OF THE PRINCIPAL TERMS OF THE 2014 SHARE OPTION SCHEME

The following is a summary of the principal terms of the 2014 Share Option Scheme proposed to be adopted at the AGM.

(a) Purpose

The purpose of the 2014 Share Option Scheme is to reward Participants who have contributed to the Group and to provide incentives to Participants to work towards the success of the Company.

(b) Who may join

The Directors may at their absolute discretion grant Options to (a) any full-time or part-time employee of any member of the Group; (b) any consultant or adviser of any member of the Group; (c) any director (including executive, non-executive or independent non-executive directors) of any member of the Group; (d) any shareholder of any member of the Group; or (e) any distributor, contractor, supplier, agent, customer, business partner or service provider of any member of the Group, to be determined absolutely by the Board. If Options are granted to Participants, regards will be had as to, inter alia, the relationship of the grantee to the Group, the length of time of relationship, the contribution made or to be made to the Group, etc.

(c) Duration of the 2014 Share Option Scheme

The 2014 Share Option Scheme shall be valid and effective for a period of 10 years commencing on 29 August 2014.

(d) Acceptance and exercise of Option

An offer of the grant of an Option may be accepted within 28 days from the date of grant together with a remittance of HK$1.00 by way of consideration for the grant thereof. An Option may be exercise during such period as the Board may in its absolute discretion determine, save that such period shall not be more than ten (10) years from the date of grant.

(e) Exercise Price

The exercise price of the Option shall be determined at the discretion of the Directors which shall not be less than the higher of (i) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the date of grant; (ii) the average closing price of the Shares as stated in the Stock Exchange’s daily quotations sheets for the five trading days immediately preceding the date of grant, and (iii) the nominal value of the Shares.

(f) Minimum holding period

Save as determined at the discretion of the Board, there is no minimum holding period before an Option is exercisable.

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APPENDIX III

SUMMARY OF THE PRINCIPAL TERMS OF THE 2014 SHARE OPTION SCHEME

(g) Performance target

Save as determined at the discretion of the Board, there is no performance target that must be achieved before any Options can be exercised.

(h) Transferability of Options

An Option shall be personal to the Grantee and shall not be assignable or transferable and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favour of any other person over or in relation to any Option. Any breach of the foregoing by the Grantee shall entitle the Company to cancel any outstanding Option or any part thereof granted to such Grantee to the extent not already exercised without incurring any liability on the part of the Company.

(i) Rights on ceasing to be a Participant

• (1) in the event of the Grantee ceasing to be a Participant by reason of his death before exercising his Option in full and none of the events which would be a ground for termination of his employment as specified in paragraph (o)(4) below having arisen, his legal personal representative(s) may exercise the Option up to the Grantee’s entitlement as at the date of death (to the extent not already exercised) within the period of 12 months following his death provided that where any of the events set out in paragraph (j), (k), (l) and (m) below occurs prior to his death or within such period of 6 months following his death, then his personal representative(s) may so exercise the Option only within such of the various periods respectively set out in such paragraphs provided further that if within a period of 3 years prior to the Grantee’s death, the Grantee had committed any of the acts specified in paragraph (o)(4) below which would have entitled the Company to terminate his employment prior to his death, the Board may at any time forthwith terminate his Option (to the extent not already exercised) by written notice to the Grantee’s legal personal representative(s) and/or to the extent the Option has been exercised in whole or in part by his legal personal representative(s), but Shares have not been allotted, he shall be deemed not to have so exercised such Option and the Company shall return to him the amount of the Subscription Price for the Shares received by the Company in respect of the purported exercise of such Option;

• (2) in the event of a Grantee who is an employee or a Director of the Company or another member of the Group ceasing to be a Participant for any reason other than his death or the termination of his employment or directorship on one or more of the grounds specified in paragraph (o)(4) below, his Option (to the extent not already exercised) shall lapse on the date of cessation or termination of such employment (which date shall be the Grantee’s last actual working day with the Company or the relevant subsidiary whether salary is paid in lieu of notice or not) and shall on that day cease to be exercisable;

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APPENDIX III

SUMMARY OF THE PRINCIPAL TERMS OF THE 2014 SHARE OPTION SCHEME

• (3) in the event of a Grantee who is not an employee or a Director of the Company or another member of the Group ceasing to be a Participant as and when determined by the Board by resolution for any reason other than his death the Board may by written notice to such Grantee within one month from the date of such cessation determine the period within which his Option (or such remaining part thereof) shall be exercisable following the date of such cessation; and

• (4) in the event of the Grantee ceasing to be a Participant by reason of the termination of his employment or directorship on one or more of the grounds specified in paragraph (o)(4) below, his Option shall lapse automatically (to the extent not already exercised) and shall not be exercisable on or after the date of termination of his employment and to the extent the Grantee has exercised his Option in whole or in part, but Shares have not been allotted to him, the Grantee shall be deemed not to have so exercised such Option and the Company shall return to the Grantee the amount of the Subscription Price for the Shares received by the Company in respect of the purported exercise of such Option.

(j) Rights on a takeover

In the event a general offer by way of takeover or otherwise (other than by way of scheme of arrangement pursuant to paragraph (k) below) is made to all the Shareholders (or all such Shareholders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert with the offeror) and such offer becomes or is declared unconditional prior to the expiry date of the relevant Option, the Company shall forthwith notify all Grantees and any Grantee (or his legal personal representative) shall be entitled to exercise his Option in full (to the extent not already exercised) or to the extent as notified by the Company at any time within such period as shall be notified by the Company.

(k) Rights on a scheme of arrangement

In the event a general offer for Shares by way of scheme of arrangement is made to all the Shareholders and has been approved by the necessary number of Shareholders at the requisite meetings, the Company shall forthwith notify all Grantees and any Grantee (or his legal personal representative) may at any time thereafter (but before such time as shall be notified by the Company) exercise his Option to its full extent or to the extent notified by the Company.

(l) Rights on winding up

In the event a notice is given by the Company to its Shareholders to convene a Shareholders’ meeting for the purpose of considering and, if thought fit, approving a resolution to voluntarily windup the Company, the Company shall forthwith give notice thereof to all Grantees and any Grantee (or his legal personal representative) may at any

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APPENDIX III

SUMMARY OF THE PRINCIPAL TERMS OF THE 2014 SHARE OPTION SCHEME

time thereafter (but before such time as shall be notified by the Company) exercise his Option to its full extent or to the extent notified by the Company, and the Company shall as soon as possible and in any event no later than three days prior to the date of the proposed Shareholders’ meeting, allot, issue and register in the name of the Grantee such number of Shares to the Grantee which fall to be issued on such exercise.

(m) Rights on compromise or arrangement

In the event of a compromise or arrangement, other than a scheme of arrangement contemplated in paragraph (k) above, between the Company and its members or creditors is proposed in connection with a scheme for the reconstruction or amalgamation of the Company, the Company shall give notice thereof to all Grantees on the same date as it gives notice of the meeting to its members or creditors to consider such compromise or arrangement and the Grantee (or his legal personal representative) may at any time thereafter but before such time as shall be notified by the Company exercise his Option either to its full extent or to the extent notified by the Company, and the Company shall as soon as possible and in any event no later than three days prior to the date of the proposed Shareholders’ meeting, allot, issue and register in the name of the Grantee such number of Shares which fall to be issued on such exercise.

(n) Ranking of the Share

The Shares to be allotted upon the exercise of an Option shall be subject to all the provisions of the bye-laws of the Company for the time being in force and shall rank pari passu in all respects (including the rights arising on a liquidation of the Company) with the existing fully paid Shares in issue on the date on which those Shares are allotted on exercise of the Option and accordingly shall entitle the holders to participate in all dividends or other distributions paid or made after the date on which Shares are allotted other than any dividends or distributions previously declared or recommended or resolved to be paid or made if the record date thereof shall be on or before the date on which the Shares are allotted. Prior to exercise, the options shall have no voting, dividend and other rights of Shareholders.

(o) Lapse of Options

An Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the earliest of:

• (1) the expiry of the period referred to in paragraph (d) above;

• (2) the expiry of the periods referred to in paragraphs(i), (j), (k), (l) and (m) above;

• (3) the date of the commencement of the winding-up of the Company;

• (4) the date on which the Grantee (if an employee or Director of the Company or another member of the Group) ceases to be a Participant by reason of the termination of his employment or directorship on the grounds that he has been guilty of serious misconduct, or appears either to be unable to pay or to

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APPENDIX III

SUMMARY OF THE PRINCIPAL TERMS OF THE 2014 SHARE OPTION SCHEME

have no reasonable prospect of being able to pay his debts or has committed any act of bankruptcy or has become insolvent or has made any arrangements or compromise with his creditors generally, or has been convicted of any criminal offence involving his integrity or honesty or on any other grounds on which an employer would be entitled to terminate his employment summarily;

• (5) the date on which the Grantee commits a breach of paragraph (h) above; and

• (6) the date the Grantee ceases to be a Participant for any other reason.

(p) Cancellation of Options

Any Options granted but not exercised may be cancelled if the Participant so agrees and new Options may be granted to the Grantee provided that such new Options fall within the limits approved by Shareholders, excluding the cancelled Options, and are otherwise granted in accordance with the terms of the 2014 Share Option Scheme.

(q) Maximum number of Shares

The maximum number of Shares which may be issued upon exercise of all Options to be granted under the 2014 Share Option Scheme and any other share option schemes of the Company shall not, in the absence of Shareholders’ approval, in aggregate exceed 10% in nominal amount of the aggregate of Shares in issue on the date of adoption (the “Scheme Mandate Limit”). Options lapsed will not be counted for the purpose of calculating the Scheme Mandate Limit.

The Scheme Mandate Limit may be renewed at any time subject to prior Shareholders’ approval but in any event, the total number of Shares which may be issued upon exercise of all Options to be granted under the 2014 Share Option Scheme and any other share option schemes of the Company under the limit as refreshed must not exceed 10% of the Shares in issue as at the date of approval of the renewed limit. Options previously granted under the 2014 Share Option Scheme or any other share option schemes of the Company (including those outstanding, cancelled, lapsed in accordance with the terms or exercised options) will not be counted for the purpose of calculating the limit as renewed.

The Company may grant Options beyond the Scheme Mandate Limit to Participants if separate Shareholders’ approval has been obtained for granting Options beyond the Scheme Mandate Limit to Participants specifically identified by the Company before such Shareholders’ approval is sought; and the Company has first sent a circular to Shareholders containing such information as may be required by the Listing Rules then prevailing to be included in such circular.

At any time, the maximum number of Shares which may be issued upon exercise of all Options which then has been granted and have yet to be exercised under the 2014 Share Option Scheme and any other share option schemes of the Company shall not, in the absence of Shareholders’ approval, in aggregate exceed 30% of the Shares in issue from time to time.

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APPENDIX III

SUMMARY OF THE PRINCIPAL TERMS OF THE 2014 SHARE OPTION SCHEME

(r) Maximum entitlement of each Grantee

The maximum number of Shares issued and to be issued upon exercise of the Options granted to each Grantee under the 2014 Share Option Scheme (including both exercised and outstanding Options) in any 12-month period shall not (when aggregated with any Shares subject to options granted during such period under any other share option scheme(s) of the Company other than those options granted pursuant to specific approval by the Shareholders in a general meeting) exceed 1% of the Shares in issue for the time being (the “Individual Limit”). Any further grant of Options exceeding the Individual Limit must be separately approved by Shareholders in general meeting with such Participant and his associates abstaining from voting. The Company must send a circular to the Shareholders disclosing the identity of the Participant in question, the number and terms of the Options to be granted (and Options previously granted to such Participant) and such other information required under the Listing Rules.

(s) Grant of Options to connected persons

Any grant of Options to any Director, chief executive or substantial shareholder (as such term as defined in the Listing Rules) of the Company, or any of their respective associates shall be subject to the prior approval of the independent non-executive Directors of the Company (excluding independent non-executive Directors who are the proposed Grantees of the Options in question). Where any grant of Options to a substantial shareholder or an independent non-executive Director of the Company, or any of their respective associates, would result in the Shares issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled or 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 Shares in issue on the date of such grant; and

• (ii) having an aggregate value, based on the closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange on the date of grant, in excess of HK$5 million,

such further grant of Options shall be subject to prior approval by resolution of the Shareholders. The Company shall send a circular to the Shareholders in accordance with the Listing Rules and all connected persons of the Company shall abstain from voting in favour of the resolution at such general meeting of the Shareholders.

(t) Adjustments

In the event of an alteration in the capital structure of the Company whilst any Option remains exercisable by way of capitalisation issue, rights issue, subdivision or consolidation of shares, or reduction of the share capital of the Company in accordance with legal requirements and requirements of the Stock Exchange (other than any

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APPENDIX III

SUMMARY OF THE PRINCIPAL TERMS OF THE 2014 SHARE OPTION SCHEME

alteration in the capital structure of the Company as a result of an issue of Shares as consideration in a transaction to which the Company is a party), such corresponding adjustments (if any) shall be made to (i) the number or nominal amount of Shares subject to the Option so far as unexercised or (ii) the subscription price, or any combination thereof, provided that any such adjustments shall give a Grantee the same proportion of the equity capital of the Company as that to which that Grantee was previously entitled and no such adjustments shall be made to the extent that a Share would be issued at less than its nominal value.

The Company shall engage the auditors of the Company for the time being or an independent financial advisor to certify in writing, either generally or as regards any particular Grantee, that the adjustments made by the Company satisfy the requirements set out in the 2014 Share Option Scheme.

(u) Variations

Those specific provisions of the 2014 Share Option Scheme which relate to the matters set out in Rule 17.03 of the Listing Rules cannot be altered to the advantage of the Participants, and changes to the authority of the Board in relation to any alteration of the terms of the 2014 Share Option Scheme shall not be made, in either case, without the prior approval of Shareholders in general meeting. Any alterations to the terms and conditions of the 2014 Share Option Scheme which are of a material nature, or any change to the terms of Options granted, must also, to be effective, be approved by the Shareholders in general meeting, except where the alterations take effect automatically under the existing terms of the 2014 Share Option Scheme. The 2014 Share Option Scheme so altered must comply with Chapter 17 of the Listing Rules.

(v) Termination

The Company by ordinary resolution in general meeting or the Board may at any time terminate the 2014 Share Option Scheme and in such event no further Options may be granted but in all other respects the provisions of the 2014 Share Option Scheme shall remain in full force and effect in respect of Options which are granted during the life of the 2014 Share Option Scheme and which remain unexpired immediately prior to the termination of the operation of the 2014 Share Option Scheme.

– 25 –

NOTICE OF ANNUAL GENERAL MEETING

CHINA NATIONAL CULTURE GROUP LIMITED 中國國家文化產業集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 745)

NOTICE IS HEREBY GIVEN that an annual general meeting of China National Culture Group Limited (the “Company”) will be held at Ramada Hong Kong Hotel, 308 Des Voeux Road West, Hong Kong on Friday, 29 August 2014 at 10:00 a.m. for the following purposes:

ORDINARY RESOLUTIONS

1. To receive and consider the audited financial statements and the reports of the Directors and auditors for the year ended 31 March 2014.

2. To re-elect Directors and to authorize the board of Directors to fix the remuneration of the Directors.

3. To re-appoint Elite Partners CPA Limited as the auditors of the Company and to authorize the board of Directors to fix their remuneration.

4. As special business, to consider and, if thought fit, pass the following resolution as an ordinary resolution:

“ THAT :

• (a) subject to paragraph (b) below, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares of HK$0.01 each in the capital of the Company on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the securities of the Company may be listed and recognized by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of shares of the Company which the Directors of the Company are authorized to repurchase pursuant to the approval in paragraph (a) above shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of this Resolution and the said approval shall be limited accordingly; and

– 26 –

NOTICE OF ANNUAL GENERAL MEETING

• (c) for the purposes of this Resolution, “Relevant Period” means the period from 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 law to be held; and

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

• As special business, to consider and, if thought fit, pass the following resolution as an ordinary resolution:

“ THAT :

• (a) subject to paragraph (c) below, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of HK$0.01 each in the capital of the Company and to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into shares of the Company) which would or might require the exercise of such power be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) above shall authorize the Directors of the Company during the Relevant Period (as hereinafter defined) to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into shares of the Company) which would or might require the exercise of such power after the end of the Relevant Period;

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors of the Company pursuant to the approval in paragraph (a) above, otherwise than (i) a Rights Issue (as hereinafter defined); (ii) an issue of shares under any option scheme or similar arrangement for the time being adopted for the grant or issue of shares or rights to acquire shares of the Company; (iii) an issue of shares upon the exercise of the subscription or conversion rights under the terms of any warrants or any securities of the Company which are convertible into shares of the Company; or (iv) an issue of shares as scrip dividends pursuant to the articles of association of the Company from time to time, shall not exceed 20% of the aggregate

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NOTICE OF ANNUAL GENERAL MEETING

nominal amount of the issued share capital of the Company as at the date of passing this Resolution, and the said approval shall be limited accordingly; and

• (d) for the purpose of this Resolution,

“Relevant Period” means the period from 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 law to be held; and

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

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

1. As special business, to consider and, if thought fit, pass the following resolution as an ordinary resolution:

“ THAT subject to the passing of the Resolution nos. 4 and 5 set out in the notice convening this meeting, the general mandate granted to the Directors of the Company to allot, issue and deal with additional shares pursuant to Resolution no. 5 set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of shares in the capital of the Company repurchased by the Company under the authority granted pursuant to Resolution no.4 set out in the notice convening this meeting, provided that such amount of shares so repurchased shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of the said Resolution.”

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NOTICE OF ANNUAL GENERAL MEETING

1. As special business, to consider and, if thought fit, pass the following resolution as an ordinary resolution:

“ THAT :

conditional upon the listing committee of The Stock Exchange of Hong Kong Limited granting approval for the listing of, and permission to deal in, the shares (up to 10% of the shares of the Company in issue as at the date hereof) falling to be issued pursuant to the exercise of any options granted under the share option scheme referred to in the circular of the Company dated 30 July 2014, the terms of which are set out in the printed document produced to the meeting and marked “A” and initialled by a director of the Company hereof for identification purpose (the “2014 Share Option Scheme”), the 2014 Share Option Scheme be and is hereby approved and adopted to be the share option scheme of the Company and that the board of directors of the Company be authorised to grant options thereunder and to allot and issue shares pursuant to the 2014 Share Option Scheme and take all such steps as may be necessary or desirable to implement such 2014 Share Option Scheme.”

On behalf of the board Shen Lihong Director

Hong Kong, 30 July 2014

Notes:

1. Any member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more (if holding two or more shares) proxies to attend and vote instead of him. A proxy need not be a member of the Company.

2. To be valid, the proxy form, together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof, must be lodged with the Company’s share registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the proxy form will not preclude a member from attending and voting in person at the meeting.

3. With regard to item no. 2 in this notice, the Board of Directors of the Company proposes that the Directors, namely Mr. Tan Bondy, Ms. Sun Wei, Ms. Shen Lihong, Mr. Liu Kwong Sang, Dr. Wan Ho Yuen Terence, Ms. Wang Miaojun and Mr. Ma Qianli be re-elected as Directors of the Company. Details of the said Directors are set out in the Appendix II to the circular to Shareholders dated 30 July 2014.

As at the date hereof, the Board of Directors comprises Mr. Tan Bondy, Ms. Sun Wei and Ms. Shen Lihong as Executive Directors and Mr. Liu Kwong Sang, Dr. Wan Ho Yuen Terence, Ms. Wang Miaojun and Mr. Ma Qianli as Independent Non-Executive Directors.

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