Shaw Brothers Holdings Limited — Proxy Solicitation & Information Statement 2017

Oct 25, 2017

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Shaw Brothers Holdings Limited, you should at once hand this circular together with the enclosed form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or registered institution in securities 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.

==> picture [77 x 77] intentionally omitted <==

SHAW BROTHERS HOLDINGS LIMITED 邵氏兄弟控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00953)

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF 51% INTEREST IN AMBER JUNGLE LIMITED AND NOTICE OF EGM

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed “Definitions” in this circular.

A letter from the Board is set out on pages 5 to 14 of this circular.

A notice convening the EGM to be held at Empire Room 1, 1/F, Empire Hotel, 33 Hennessy Road, Wan Chai, Hong Kong, at 2:30 p.m. on Sunday, 19 November 2017 is set out on pages 37 to 38 of this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the Company’s branch 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 later than 48 hours before the time appointed for holding of the EGM or any adjournment thereof (as the case may be). Completion and return of a proxy form will not preclude you from attending and voting at the EGM or any adjournment thereof if you so wish.

26 October 2017

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
APPENDIX I – PROPERTY VALUATION OF THE TARGET GROUP . . . . . . . . . .	15
APPENDIX II – FINANCIAL INFORMATION OF THE GROUP. . . . . . . . . . . . . . .	24
APPENDIX III – GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
NOTICE OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37

– i –

DEFINITIONS

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

• “Agreement”

the conditional sale and purchase agreement dated 26 July 2017 entered into by the Company and the Purchaser in respect of the Disposal

• “Board”

the board of Directors

• “Business Day(s)”

• a day other than a Saturday, Sunday or public holiday in Hong Kong, when banks in Hong Kong are generally open for business

• “BVI”

• the British Virgin Islands

• “Cooperation Framework Agreement”

• the cooperation framework agreement dated 29 November 2016 entered into among the Company, CMC Holdings and Huaren Wenhua in respect of the collaboration in, amongst others, the investment, development and distribution of films and internet dramas and in artistes engagement (as amended by a supplemental agreement dated 10 February 2017)

• “CMC Holdings”

• CMC Holdings Limited, a company incorporated in the Cayman Islands with limited liability

• “Company”

• Shaw Brothers Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 00953)

• “Completion”

• completion of the sale and purchase of the Sale Interests in accordance with the provisions of the Agreement

• “connected person(s)”

• has the meaning ascribed to it in the Listing Rules

• “Consideration”

HK$41,000,000 for the Disposal

– 1 –

DEFINITIONS

“Director(s)” the director(s) of the Company from time to time “Disposal” the disposal of the Sale Interests by the Company pursuant to the Agreement “EGM” the extraordinary general meeting of the Company convened to be held on Sunday, 19 November 2017 at 2:30 p.m., the notice of which is set out in pages 37 to 38 of this circular “Fujian Meike” Fujian Meike Leisure Sports Goods Co., Limited（福建 美克休閒體育用品有限公司）, a wholly foreign-owned enterprise established in the PRC on 12 February 1999, and an indirect wholly-owned subsidiary of the Target Company “Group” the Company and its subsidiaries “Huaren Wenhua” 華人文化有限責任公司 (English transliteration for identification purpose: Huaren Wenhua Limited Liability Company), a company incorporated in the PRC with limited liability which Mr. Li Ruigang, the Chairman and a Nonexecutive Director, controls the exercise of the majority of the voting power at its general meeting

“HK$” Hong Kong dollar, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Independent Third Party(ies)” A party(ies) independent of and not connected with the Company and its connected person(s) “Latest Practicable Date” 23 October 2017 being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

– 2 –

DEFINITIONS

“Long Stop Date” 30 November 2017 or such later date the Purchaser and the Company may agree in writing “Mega Pacific” Mega Pacific Enterprises Limited（太平洋企業有限公司）, a company established under the laws of Hong Kong on 30 March 2009 and a direct wholly-owned subsidiary of the Target Company “Meike Hong Kong” Meike (H.K.) Trade Company Limited（美克（香港）貿 易投資有限公司）, a company established under the laws of Hong Kong on 31 August 2007 and an indirect whollyowned subsidiary of the Target Company “PRC” The People’s Republic of China “Purchaser” Champ Luck Enterprise Limited（福力企業有限公司）, a company incorporated in Hong Kong with limited liability “RMB” Renminbi, the lawful currency of the PRC “Sale Interests” 51% of the issued share capital of the Target Company “SFC” the Securities and Futures Commission of Hong Kong “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “Share(s)” share(s) of the Company “Shareholder(s)” holder(s) of Share(s) “subsidiary” has the meaning ascribed to it under the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) “Target Company” Amber Jungle Limited（珀森有限公司）, a company incorporated in the BVI with limited liability and is owned as to 51% by the Company and 49% by the Purchaser

– 3 –

DEFINITIONS

“Target Group” “%”

the Target Company and its subsidiaries per cent.

For the purpose of this circular, the following exchange rates have been used: (i) as of 26 July 2017: HK$1.00 equivalent to RMB0.88; and (ii) as of the Latest Practicable Date: HK$1.00 equivalent to RMB0.85. Such exchange rates have been used, where applicable, for illustration only and do not constitute a representation that any amounts were or may have been exchanged at this or any other rates or at all.

– 4 –

LETTER FROM THE BOARD

==> picture [77 x 77] intentionally omitted <==

SHAW BROTHERS HOLDINGS LIMITED 邵氏兄弟控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00953)

Chairman and Non-executive Director: Mr. Li Ruigang

Executive Directors: Mr. Ding Siqiang Ms. Ding Xueleng Mr. Jiang Wei Miss Lok Yee Ling Virginia

Non-executive Directors: Mr. Hui To Thomas

Independent Non-executive Directors: Mr. Pang Hong Mr. Poon Kwok Hing Albert Miss Szeto Wai Ling Virginia

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

Principal place of business in Hong Kong 19/F, Leighton Centre 77 Leighton Road Causeway Bay Hong Kong

Alternate Director: Mr. Gu Jiong (Alternate Director to Mr. Hui To Thomas)

26 October 2017

To the Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF 51% INTEREST IN AMBER JUNGLE LIMITED

INTRODUCTION

Reference is made to the announcement dated 26 July 2017 published by the Company on the Disposal.

– 5 –

LETTER FROM THE BOARD

On 26 July 2017 (after trading hours), the Company entered into the Agreement with the Purchaser, pursuant to which the Company has agreed to sell and the Purchaser has agreed to acquire the Sale Interests, representing 51% of the issued share capital of the Target Company, for a total cash Consideration of HK$41,000,000.

The Purchaser holds 49% of the total issued share capital of the Target Company and is therefore a connected person of the Company at the subsidiary level (as defined in the Listing Rules). Accordingly, the Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

Further, since certain of the applicable percentage ratios (as defined under the Listing Rules) in respect of the Disposal exceed 25% but are less than 75%, the Disposal constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement, circular and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

The purpose of this circular is to provide you with, among other things: (i) further information regarding the Disposal; (ii) other information as required by the Listing Rules; and (iii) the notice of the EGM.

THE AGREEMENT

Date

26 July 2017 (after trading hours)

Parties

Purchaser: Champ Luck Enterprise Limited Vendor: the Company

– 6 –

LETTER FROM THE BOARD

Assets to be disposed

Pursuant to the Agreement, the Company has agreed to sell, and the Purchaser has agreed to acquire the Sale Interests, representing 51% of the issued share capital of the Target Company.

Upon Completion, the Target Company will be wholly-owned by the Purchaser.

Conditions Precedent

Completion of the Agreement is subject to and conditional upon:

• (a) the obtaining of the approval of the Shareholders at the EGM in respect of the entering into of the Agreement by the Company, the transactions contemplated thereunder and the performance of the Company’s obligations thereunder in compliance with the Listing Rules and all other applicable laws and regulations;

• (b) all other necessary consents and approvals required to be obtained on the part of the Company, the Purchaser and the Target Company in respect of the Agreement and the transactions contemplated thereunder having been obtained and such consents and approvals have not been revoked;

• (c) the Company not having breached its warranties in the Agreement; and

• (d) the results of the business, financial and legal due diligence by the Purchaser on the Target Group being reasonably satisfactory to the Purchaser.

If the above conditions are not satisfied or otherwise waived by the Long Stop Date, the Agreement shall terminate and cease to have effect on the Long Stop Date except for any rights, remedies, obligations or liabilities of the parties that have accrued up to the date of termination, including the right to claim damages in respect of any breach of the Agreement which existed at or before the date of termination.

As at the date of this circular, condition (d) set out above had been satisfied.

– 7 –

LETTER FROM THE BOARD

Consideration

The total Consideration for the sale and purchase of the Sale Interests is HK$41,000,000 which shall be satisfied in cash. The payment of the Consideration should be made upon Completion to such account (or its nominee as directed by the Company) as the Company shall have specified in writing to the Purchaser prior to the Completion date.

The Consideration was determined based on arm’s length negotiations between the Company and the Purchaser with reference to the unaudited net asset value of the Target Group as at 30 June 2017. The difference between the amount of consideration of HK$41,000,000 and the net asset value of the Target Company aims to cover the professional fees and expenses of the Company arising from the Disposal and represents the intended gross amount of financial gain of the Company from the Disposal. The Board considered that it is fair and reasonable to determine the Consideration on such basis instead of other basis, such as turnover, gross profit or net profit, since the volatility of those figures are greatly affected by the economic situation and/or both the global and domestic markets from time to time.

It is noted that as disclosed in note (4) to the valuation certificate on page 21 of this circular, the independent professional valuer engaged to value the Target Group’s landed properties has attributed no commercial value to certain buildings and structures (“ Buildings and Structures ”) of the Target Group with a total gross floor area of approximately 8,098.00 sq.m. which are yet to obtain building ownership certificates. The depreciated replacement cost of these Buildings and Structures was however reflected in the unaudited net asset value of the Target Group as at 30 June 2017. The Consideration, which was determined with reference to the Target Group’s net asset value, had therefore taken into account the cost of the Buildings and Structures despite no commercial value was attributed to it by the professional valuer. Accordingly, the interest of the Company (as vendor of the Target Company) is not adversely affected by the attribution of no commercial value to the Buildings and Structures.

Completion

Subject to the fulfilment of the conditions precedent, completion of the Agreement shall take place on third Business Day after fulfilment (or waiver) of all conditions precedent or such other date the Purchaser and the Company shall agree in writing.

– 8 –

LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE DISPOSAL

It is expected that the Company will record a gain of approximately HK$912,000 on the Disposal, which represents the difference between the Consideration to be received by the Company from the Disposal before the estimated expenses to be incurred for the Disposal and 51% of the estimated net asset value of the Target Group upon Completion. After deducting the estimated transaction costs and expenses incidental to the Disposal which are estimated to be around HK$1,100,000, the Group expects to record a slight loss from the Disposal. It is expected that the net asset value of the Target Group at Completion will decrease compared with that as of 30 June 2017 as the Target Group continues to be loss making. Subject to audit, the actual amount of the gain/loss on the Disposal to be recognised by the Group will depend on the net asset value of the Target Group as at Completion and therefore may be different from the amount mentioned above.

Upon Completion, the Target Group will cease to be subsidiaries of the Company and the results, assets and liabilities of the Target Group will no longer be consolidated with the financial statements of the Group. Based on the unaudited consolidated management accounts of the Target Group as of 30 June 2017 and assuming there are no substantial changes in the assets and liabilities of the Target Group until Completion, the total assets of the Group would decrease by approximately RMB159 million, being the amount of Consideration minus the incidental costs of the Disposal and the total assets of the Target Group, and the total liabilities of the Group would reduce by approximately RMB126 million, being the amount of total liabilities of the Target Group to be de-consolidated from the Group’s consolidated financial statements. The difference between the estimated reductions of the Group’s total assets and total liabilities as a result of the Disposal is attributable to the non-controlling interest of the Target Group. The net asset of the Group will increase/decrease by the actual gain/loss arising from the Disposal immediately after Completion.

USE OF PROCEEDS

It is expected that the Company will receive gross proceeds of approximately HK$41,000,000 from the Disposal. The Company intends to use the proceeds from the Disposal as general working capital of the Group and/or future development of the Group’s business and/or funding any potential acquisitions if opportunities arise.

– 9 –

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Group is principally engaged in the manufacturing and trading of sporting goods, investments in films and artiste and event management.

The Target Company, through its wholly-owned subsidiaries, is principally engaged in investment holding and manufacturing and trading of sporting goods respectively. The Target Group holds the only manufacturing plant of the Group.

The Target Group began to incur loss for the year ended 31 December 2014. The loss after tax of the Target Group for the year ended 31 December 2015 and 31 December 2016 amounted to approximately RMB54.4 million and RMB8.6 million respectively. Besides, there were net cash outflows resulting from daily operating activities of approximately RMB18.5 million and RMB6.7 million for the year ended 31 December 2015 and 31 December 2016, respectively. If the Disposal is not carried out, the Group expects to continue to suffer loss and net cash outflows from operating activities of the Target Group in the coming years as the Group is unable to expand the domestic distribution channels and can only rely on the export sales with lower profit margin.

After the Disposal, the Group will cease operation in sporting goods manufacturing but will still have a subsidiary whose principal business is trading of sporting goods. Such subsidiary will only carry out trades when opportunities arise. Given that trading in sporting goods requires only light assets, the Group will no longer need to lock up substantial financial resources and management time in running the operation of sporting goods business after the Disposal. Such development will fit the current business model and focus of the Group.

The Group started to refine its business strategies in 2015 by introducing new business elements into its business matrix in an attempt to diversify its then single and stagnant business model. The Group entered into the entertainment industry towards the end of 2015 and generated revenues of approximately RMB79.4 million from investment in films and artiste and event management for the year ended 31 December 2016. The encouraging recorded sales from box office of the films in which the Group invested had proved that the Group is moving towards an appropriate direction for improving the business performance and strategy of the Group. The Group also commenced its artiste management business in the second quarter of 2016. As at 30 June 2017, there were more than 20 artistes under the management of the Group. The Group intends to expand its artiste management business and expects that more artistes will join.

– 10 –

LETTER FROM THE BOARD

Under the current volatile economic situation and sluggish view of the future global market condition in the coming years, and the estimated gain (before expenses) on the Disposal of approximately HK$912,000, the Directors are of the view that the Disposal represents a good opportunity to allow the Group to shed off the burden of the net loss of the Target Group and realize the capital invested in the Sale Interests, as well as to improve the overall financial position of the Group, and hence is in the interest of the Company and the shareholders as a whole. Upon Completion, the Group will no longer need to make further capital contribution to the Target Group for its operations. The Group can allocate more financial resources and management efforts to potential investment opportunities on film investment projects and artiste management business which could derive more attractive returns to the Group. This arrangement is expected to increase shareholders’ value and benefit the Company and the Shareholders as a whole.

Apart from the Disposal, at present the Company has no current intention or negotiation and has not entered into any agreement, arrangement or understanding to conduct equity fund raisings, scale down its existing business and/or regarding any potential acquisition or disposal which constitutes a notifiable transaction under Chapter 14 of the Listing Rules.

The Directors (including the independent non-executive Directors) consider that the terms of the Disposal are fair and reasonable and in the interests of the Group and the Shareholders as a whole.

INFORMATION ON THE PURCHASER

To the best knowledge of the Directors, the Purchaser is principally engaged in investment holding and its ultimate beneficial owner is Mr. Ng Hock Guan.

To the Directors’ best knowledge, information and belief having made all reasonable enquiry, apart from the Purchaser being a 49% shareholder of the Target Company, the Purchaser and its ultimate beneficial owner do not have any connections with the Group and are independent of the connected persons of the Company.

INFORMATION ON THE TARGET COMPANY

The Target Company is a company established in the BVI with limited liability. The Target Company, through its wholly-owned subsidiaries, is principally engaged in the manufacturing and trading of sporting goods. The Company holds 51% interest in the Target Group, and the Target Group holds the only manufacturing plant of the Group.

– 11 –

LETTER FROM THE BOARD

Set out below is the shareholding structure of the Target Company as at the date of this circular:

==> picture [229 x 244] intentionally omitted <==

----- Start of picture text -----

Company Purchaser
51% 49%
Target Company (BVI)
100%
Mega Pacific (Hong Kong)
100%
Fujian Meike (PRC)
100%
Meike Hong Kong (Hong Kong)
----- End of picture text -----

The principal activity of each of the Target Company, Mega Pacific and Meike Hong Kong is investment holding. Fujian Meike is principally engaged in the manufacturing and trading of sporting goods.

Set out below are certain unaudited financial information of the Target Group as for each of the two financial years ended 31 December 2015 and 2016, and six months ended 30 June 2017:

	Year ended	Year ended	Six months	Six months
	31 December	31 December		ended
	2015	2016	30	June 2017
	(Unaudited)	(Unaudited)	(Unaudited)
	RMB(’000)	RMB(’000)	RMB(’000)
Results
Turnover	128,147	93,778		43,984
(Loss) before tax	(54,396)	(8,585)		(193)
(Loss) after tax	(54,396)	(8,585)		(193)
Asset and liabilities
Total assets	190,746	173,821		194,955
Net assets	77,711	69,134		68,941

– 12 –

LETTER FROM THE BOARD

The unaudited consolidated net asset value of the Target Group as at 30 June 2017 was approximately RMB68.9 million (equivalent to approximately HK$78.5 million) and the share of the said net asset value attributable to the Sale Interests amounted to approximately RMB35.1 million (equivalent to approximately HK$40.1 million). The Target Company is a company incorporated in the BVI. Statutory annual audit is not required under BVI law. As such, the consolidated financial information of the Target Group is unaudited.

Upon Completion, the Company will not hold any interest in the Target Company and the Target Company will cease to be a subsidiary of the Company.

LISTING RULES IMPLICATIONS

The Purchaser holds 49% of the total issued share capital of the Target Company and is therefore a connected person of the Company at the subsidiary level (as defined in the Listing Rules). Accordingly, the Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. Pursuant to Rule 14A.101 of the Listing Rules, a connected transaction between the listed issuer’s group and a connected person at the subsidiary level on normal commercial terms or better is exempt from the circular, independent financial advice and shareholders’ approval requirements if: (1) the listed issuer’s board of directors has approved the transactions; and (2) the independent non-executive directors have confirmed that the terms of the transaction are fair and reasonable, the transaction is on normal commercial terms or better and in the interests of the listed issuer and its shareholders as a whole.

The Company has obtained the approval from the Board (including the independent nonexecutive Directors) regarding the Agreement and the transactions contemplated thereunder (comprising the Disposal) and the Directors (including the independent non-executive Directors) have confirmed that the terms of the Agreement and the Disposal are fair and reasonable, and that the Disposal is on normal commercial terms or better and in the interests of the Company and the Shareholders as a whole. As such, the Agreement and the Disposal are exempted from the circular, independent financial advice and shareholders’ approval requirements under Chapter 14A of the Listing Rules by virtue of Rule 14A.101 of the Listing Rules.

Further, since certain of the applicable percentage ratios (as defined under the Listing Rules) in respect of the Disposal exceed 25% but are less than 75%, the Disposal also constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to reporting, announcement, circular and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

– 13 –

LETTER FROM THE BOARD

THE EGM

A notice convening the EGM to be held at Empire Room 1, 1/F, Empire Hotel, 33 Hennessy Road, Wan Chai, Hong Kong, at 2:30 p.m. on Sunday, 19 November 2017 is set out on pages 37 to 38 of this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the Company’s branch 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 later than 48 hours before the time appointed for holding of the EGM or any adjournment thereof (as the case may be). Completion and return of a proxy form will not preclude you from attending and voting at the EGM or any adjournment thereof if you so wish.

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, no Shareholder has a material interest in the Disposal. As such no Shareholder is required to abstain from voting at the EGM in respect of the resolution approving the Agreement and the transactions contemplated thereunder.

The resolution proposed at the EGM will be taken by way of poll. An announcement on the poll results will be made by the Company after the EGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

RECOMMENDATION

The Directors (including the independent non-executive Directors) believe that the Agreement have been negotiated on an arm’s length basis and is on normal commercial terms which are fair and reasonable and in the interests of the Group and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors) recommend that all Shareholders should vote in favour of the resolution to be proposed at the EGM.

OTHER INFORMATION

The attention of the Shareholders is drawn to the other information set out in the appendices to this circular.

Shareholders and other investors should note that completion of the Disposal is subject to the satisfaction of various conditions precedent and therefore there is no assurance that the Disposal will be implemented as contemplated or at all. Shareholders and other investors are advised to exercise caution when dealing in the securities of the Company.

Yours faithfully, For and on behalf of

Shaw Brothers Holdings Limited Li Ruigang

Chairman

– 14 –

PROPERTY VALUATION OF THE TARGET GROUP

APPENDIX I

The following is the text of a letter and a valuation certificate, prepared for the purpose of incorporation in this circular received from International Valuation Limited, an independent valuer, in connection with its valuation as at 31 July 2017 of the property interests of the Group.

Room 1203A, 12/F Kai Tak Commercial Building 317-319 Des Voeux Road Central Hong Kong Tel: (852) 2348 1777 Email: team@ivl.hk

Date: 26 October 2017

The Board of Directors Shaw Brothers Holdings Ltd. 19/F, Leighton Centre 77 Leighton Road, Causeway Bay Hong Kong

Dear Sirs,

INSTRUCTIONS

In accordance with your instructions for us to value various properties in which Shaw Brothers Holdings Ltd. (the “ Company ”) and its subsidiaries (hereinafter together referred to as the “ Group ”) have interests in the People’s Republic of China (the “ PRC ”), we confirm that we have carried out property inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market values of the property interests as at 31 July 2017 (referred to as the “ Valuation Date ”).

This letter which forms part of our valuation report explains the basis and methodologies of valuation, clarifying assumptions, valuation considerations, title investigation and limiting conditions of this valuation.

– 15 –

PROPERTY VALUATION OF THE TARGET GROUP

APPENDIX I

BASIS OF VALUATION

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

VALUATION METHODOLOGY

In valuing the property interests held and occupied by the Group, we have adopted depreciated replacement cost approach by a combination of the open market value of land portions and depreciated replacement cost of the buildings and structures standing on the land. Hence, the sum of the two results represents the value of the properties as a whole. In the valuation of the land portions, direct comparison approach has been adopted and the value of the land has been determined by market-based evidence; and reference has been made to the comparable sales transactions as available in the subject localities.

The nature of the buildings and structures cannot be valued using direct comparison approach due to the special nature of the buildings and that there is no market sale comparable evidence of the same characteristics in the vicinity. Besides, as market rental comparable evidence of the same characteristics is not available, investment approach is not applicable as well. Investment approach is based on the capitalization of the net rental incomes of existing leases with due allowance for reversionary income potential taking into account the market rental as at the date of valuation. They have therefore been valued on the basis of their depreciated replacement cost. The depreciated replacement cost approach considers the cost to reproduce or replace in new condition the property appraised in accordance with current construction costs for similar buildings and structures in the locality, with allowance for accrued depreciation as evidenced by observed condition or obsolescence present, whether arising from physical, functional or economic causes. The depreciated replacement cost approach generally furnishes the most reliable indication of value for the property in the absence of a known market based on comparable sales. The approach is subject to adequate potential profitability of the business.

VALUATION CONSIDERATIONS

In valuing the property interests, we have complied with all the requirements contained in Chapter 5 and Practice Note 12 to the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards 2012 Edition published by The Hong Kong Institute of Surveyors.

– 16 –

PROPERTY VALUATION OF THE TARGET GROUP

APPENDIX I

VALUATION ASSUMPTIONS

Our valuations have been made on the assumption that the seller sells the property interests on the open market in their existing states without the benefit of deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements, which could serve to affect the values of the property interests.

In undertaking our valuation, we have assumed that, unless otherwise stated, transferable land use rights in respect of the property interests for specific terms at nominal annual land use fees have been granted and that any premium payable has already been fully paid. We have also assumed that the owners of the properties have enforceable titles to the properties and have free and uninterrupted rights to use, occupy or assign the properties for the whole of the respective unexpired terms as granted.

No allowance has been made in our report for any outstanding or additional land premium, charges, mortgages or amounts owing on the property interests valued nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property interests are free from encumbrances, restrictions and outgoings of an onerous nature, which could affect their values.

Other special assumptions of the property interests, if any, have been stated out in the footnotes of the valuation certificates attached herewith.

TITLE INVESTIGATION

We have been, in some instances, shown copies of various title documents and other documents relating to the property interests and have made relevant enquiries. We have not examined the original documents to verify the existing title to the property interests and any material encumbrances that might be attached to the property interests or any lease amendments. However, we have relied considerably on the information given by the Company’s PRC legal adviser, Grandall Law Firm (Fuzhou)（國浩律師（福州）事務所）, concerning the validity of the Group’s title to the property interests located in the PRC.

All legal documents provided by the Group have been used for reference only. No responsibility regarding legal title to the property interests is assumed in this valuation report.

– 17 –

PROPERTY VALUATION OF THE TARGET GROUP

APPENDIX I

LIMITING CONDITIONS

We have inspected the exterior, and wherever possible, the interior of the properties but no structural survey had been made. In the course of our inspection, we did not note any serious defects. We are not, however, able to report that the properties are free from rot, infestation or any other structural defects. Further, no test has been carried out on any of the building services. All dimensions, measurements and areas are only approximates. We have not been able to carry out detailed on-site measurements to verify the site and floor areas of the properties and we have assumed that the areas shown on the copies of documents handed to us are correct.

The site inspection of the property was carried out by Mr. Ian Ng, who is a registered professional surveyor, on 17 July 2017.

We have not carried out any soil investigations to determine the suitability of the soil conditions and the services etc. for any future development. Our valuations are prepared on the assumption that these aspects are satisfactory and that no extraordinary expenses or delays will be incurred during the construction period. We do not make any allowance for contamination or pollution of the land, if any, which may have been caused by past usage.

We have relied to a considerable extent on information provided by the Group and have accepted advice given to us on such matters, in particular, but not limited to, the sales records, tenure, planning approvals, statutory notices, easements, particulars of occupancy, site and floor areas and all other relevant matters in the identification of the property interests.

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

Liability in connection with this valuation report is limited to the client to whom this report is addressed and for the purpose for which it is carried out only. We will accept no liability to any other parties or any other purposes.

This report is to be used only for the purpose stated herein, any use or reliance for any other purpose, by you or third parties, is invalid. No reference to our name or our report in whole or in part, in any document you prepare and/or distribute to third parties may be made without written consent.

– 18 –

PROPERTY VALUATION OF THE TARGET GROUP

APPENDIX I

EXCHANGE RATE

Unless otherwise stated, all monetary amounts stated in this report are in Renminbi (RMB).

Our valuation certificate is herewith attached.

Yours faithfully, For and on behalf of International Valuation Limited

Ian Ng MHKIS RPS(GP) General Manager – Real Estate

Mr. Ian Ng is a Registered Professional Surveyor with over 10 years’ experience in valuation of properties in HKSAR, Macau SAR and mainland China. Mr. Ng is a Professional Member of The Hong Kong Institute of Surveyors.

– 19 –

PROPERTY VALUATION OF THE TARGET GROUP

APPENDIX I

VALUATION CERTIFICATE

Market Value in Existing State as Property Description and Tenure Particular of Occupancy at 31 July 2017 Land and buildings The property comprises three parcels of The property is currently RMB64,000,000 located at No. 186 land with a total area of approximately occupied by the Group for Binhai Road, Xibian 35,993.00 sq.m. erected upon eighteen manufacturing purpose. (Renminbi Village, Chendai buildings completed in between 2000 Sixty Four Town, Jinjiang City, and 2014. Million) Fujian Province, the PRC The property is situated in Xibian Village of Chendai Town in Jinjiang （中國福建省晉江市 City. Development in the vicinity 陳埭鎮溪邊村濱海 are mainly industrial and residential 路186號之土地和房 developments. 屋） The total gross floor area of the buildings is approximately 70,769.51 sq.m. The land use rights of the property were granted for terms expiring on between 25 June 2055 and 25 March 2057 for industrial use.

Notes:

• (1) Pursuant to three State-owned Land Use Rights Certificates issued by Land and Resources Bureau of Jinjiang City（晉 江市國土資源局）, the land use rights of three parcels of land with a total site area of approximately 35,993.00 sq.m. were granted to Fujian Meike Leisure Sports Goods Co., Limited（福建美克休閒體育用品有限公司）, 51% interestowned by the Company, for industrial use with details are as follows:

State-owned Land Use Rights Certificate	Date of Issue	Expiry Date	Site Area
			(sq.m.)
			(Approx.)
Jin Guo Yong (2009) Di No. 00892	13/10/2009	25/6/2055	24,683.00
（晉國用(2009)第00892號）
Jin Guo Yong (2009) Di No. 00891	13/10/2009	25/6/2055	5,420.00
（晉國用(2009)第00891號）
Jin Guo Yong (2009) Di No. 00728	24/8/2009	25/3/2057	5,890.00
（晉國用(2009)第00728號）

– 20 –

APPENDIX I

PROPERTY VALUATION OF THE TARGET GROUP

• (2) Pursuant to three Building Ownership Certificates issued by Planning Construction and Real Estate Administration Bureau of Jinjiang City（晉江市規劃建設與房產管理局）, the building ownership rights of eleven buildings for industrial use with a total gross floor area of approximately 62,671.51 sq.m. are owned by Fujian Meike Leisure Sports Goods Co., Limited with details are as follows:

			Gross
Building Ownership Certificate	Date of Registration	No. of Block	Floor Area
			(sq.m.)
			(Approx.)
Jin Fang Quan Zheng Chen Dai Zi Di	19/11/2009	Two	11,171.10
No. 000679
（晉房權證陳埭字第000679號）
Jin Fang Quan Zheng Chen Dai Zi Di	9/1/2015	One	6,998.33
No. 201500298
（晉房權證陳埭字第201500298號）
Jin Fang Quan Zheng Chen Dai Zi Di	16/2/2015	Eight	44,502.08
No. 201502160
（晉房權證陳埭字第201502160號）

• (3) As advised by the Company, seven buildings with a total gross floor area of approximately 8,098.00 sq.m. are not yet granted with proper title certificate(s) as at Valuation Date. The details of the buildings are as follows:

Building (Namely)	Gross Floor Area
	(sq.m.)
	(Approx.)
Electrical Station	230.00
Security Room	40.00
New Dormitory	2,310.00
Security Room (West)	152.00
Security Room (North)	16.00
#1 Warehouse	4,455.00
#2 Warehouse	895.00

• (4) We have attributed no commercial value to the buildings with a total gross floor area of approximately 8,098.00 sq.m. as mentioned in Note (3) above as the building ownership certificate(s) have not been obtained yet. For reference purpose, we are of the opinion that the depreciated replacement cost (excluding the land value) of these buildings in their existing states, assuming that the relevant building ownership certificates have been obtained and the buildings are freely disposed of in the market, as at the Valuation Date, would be RMB6,000,000. As advised by the Company, the application of the relevant building ownership certificates to the government authority is in progress. It was expected that the certificates can be obtained in early 2018 after the fire and safety control equipments have been installed or upgraded.

• (5) According to the information from the Company, there is no environmental issues and litigation dispute; and there is no plan for renovation or change of the use of the property.

– 21 –

PROPERTY VALUATION OF THE TARGET GROUP

APPENDIX I

• (6) The major certificates and permits of the property are summarized as follows:

• (i) State-owned Land Use Rights Certificate Yes (ii) Building Ownership Certificate Yes

• (7) We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal adviser, which contains, inter alia, the following:

• (i) Fujian Meike Leisure Sports Goods Co., Limited legally owns the property and is entitled to lease, transfer and dispose of the property subject to the prior consent from the mortgagee;

• (ii) The land use rights and building ownership rights of portions of the property with a site area and a gross floor area of approximately 5,890 sq.m. and approximately 6,998.33 sq.m. respectively are subject to a mortgage in favour of Industrial and Commercial Bank of China Limited – Jinjiang Chen Dai Branch（中國工商銀行股份有 限公司晉江陳埭支行）;

• (iii) The land use rights and building ownership rights of portions of the property with a site area and a total gross floor area of approximately 5,420 sq.m. and approximately 11,171.10 sq.m. respectively are subject to a mortgage in favour of Agricultural Bank of China – Jinjiang Branch（中國農業銀行股份有限公司晉江市支 行）;

• (iv) The land use rights and building ownership rights of portions of the property with a site area and a total gross floor area of approximately 24,683 sq.m. and approximately 44,502.08 sq.m. respectively are subject to a mortgage in favour of Industrial and Commercial Bank of China Limited – Jinjiang Branch（中國工商銀行股份 有限公司晉江分行）; and

• (v) The land premium has been paid in full.

– 22 –

APPENDIX I

PROPERTY VALUATION OF THE TARGET GROUP

PROPERTY VALUE RECONCILIATION STATEMENT

	Land and buildings
	located at No. 186
	Binhai Road,
	Xibian Village,
	Chendai Town,
	Jinjiang City,
	Fujian Province,
Property	the PRC
Valuation as at 31 July 2017 (Note 1)	RMB64,000,000
Carrying value as at 30 June 2017 (Note 2)	RMB63,560,000
Movement for one month ended 31 July 2017 (Note 3)	–
Revaluation Surplus	RMB440,000

Notes:

• 1 Value based on the property valuation report as per Appendix I of this circular.

• 2 Carrying value extracted from the reviewed accountant report as at 30 June 2017 of the Company. The carrying value excludes the values of the buildings with a total gross floor area of approximately 8,098.00 sq.m. without building ownership certificate.

• 3 Movement of carrying value between 30 June 2017 and 31 July 2017 is based on the management account of the Company.

– 23 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

1. FINANCIAL INFORMATION OF THE GROUP

Details of the financial information of the Group for each of the three years ended 31 December 2014, 2015 and 2016 are disclosed in the annual reports of the Company for the years ended 31 December 2014, 2015 and 2016, respectively. These annual reports are published on the website of the Stock Exchange (http://www.hkexnews.hk) and the website of the Company (http://www.shawbrotherspictures.com):

• annual report of the Company for the year ended 31 December 2014 published on 16 April 2015;

• annual report of the Company for the year ended 31 December 2015 published on 29 April 2016; and

• annual report of the Company for the year ended 31 December 2016 published on 27 April 2017.

2. INDEBTEDNESS

The Group’s bank borrowing of RMB33,000,000 were unsecured and guaranteed by the Target Group’s subsidiary. Save as aforesaid or as otherwise mentioned herein, and apart from intra-group liabilities, the Group did not have outstanding borrowings, mortgages, charges, debentures, loan capital and overdraft, debt securities or similar indebtedness, finance lease or hire purchase commitment, liabilities under acceptances or acceptance credits or any guarantees or material contingent liabilities as at the close of business on 31 August 2017, being the latest practicable date for the purpose of this statement of indebtedness prior to printing of this circular.

Save as aforesaid, the Directors are not aware of any material changes in the indebtedness contingent liabilities and commitments of the Group since 31 August 2017, the date to which the indebtedness statement is made and up to Latest Practicable Date.

3. MATERIAL ADVERSE CHANGE

The Directors confirm that they are not aware of any 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 accounts of the Group were made up to, up to and including the Latest Practicable Date.

– 24 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

4. WORKING CAPITAL

The Directors are of the opinion that, after taking into account of the Group’s internal resources, cash flow from operations, the present facilities available and also the effect of the Disposal, the Group will have sufficient working capital to satisfy its present requirements, that is, for at least the next 12 months from the date of this circular in the absence of unforeseen circumstances.

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group is principally engaged in investments in films, artiste and event management business and manufacturing and trading of sporting goods.

As disclosed in the annual report of the Group for the year ended 31 December 2016, the Group reported revenue of RMB187.6 million (2015: RMB147.7 million), representing a yearon-year increase of approximately 27.0% or approximately RMB39.9 million. Loss for the year amounted to RMB31.3 million, which approximately decreased by RMB74.6 million as compared to loss of approximately RMB105.9 million for the year ended 31 December 2015 mainly due to the positive contribution from entertainment business and substantial decrease in impairment loss of trade receivables.

Provided the current volatile economic situation and sluggish view of the future domestic and overseas market condition, the Directors are of the view that the sales of sporting goods may further decrease in the coming years and that the Disposal represents a good opportunity to allow the Group to realize the capital invested in the Sale Interests and at the same time improve the overall financial position of the Group. Besides, the Disposal will allow the Group to seek other potential investments with attractive returns to the Company and the Shareholders.

The entertainment industry in the PRC has been booming in recent years. Despite a slowdown of growth in total box office revenue in the PRC in 2016, the PRC is still a sizable market which generated around RMB45.7 billion box office revenue in 2016, representing one of the largest movie markets in the world. Inspired by the prospering entertainment industry in the PRC, the Group has grabbed hold of the trend and continued the refinement of its business strategy and optimisation of its resources allocation for healthy growth and sustainable development of the entertainment businesses.

– 25 –

APPENDIX II

FINANCIAL INFORMATION OF THE GROUP

During the year ended 31 December 2016, the Group generated revenues of approximately RMB79.4 million from its entry into the entertainment industry. Over half of such revenue came from the Group’s investments in two films, namely From Vegas to Macau III（賭城風雲3）and Line Walker（使徒行者）, which contributed approximately RMB44,195,000 to the revenue and approximately RMB9,437,000 to the gross profit of the Group. In addition, the Group has further invested in other films and drama series including Shed Skin Papa（脫皮爸爸）, House of Rising Sons（我要高飛）, Sons of the Neon Night（風林火山）and Flying-Tiger（飛虎極戰）. FlyingTiger is a drama series production that had completed shooting in September 2017 and is under post-production processing and expected to commence broadcasting on YOUKU（優酷）and its connected platforms in the first quarter of 2018. Flying-Tiger is about the stories of special duties unit and organized crime and triad bureau of the police force of Hong Kong. It showcases a number of Hong Kong & cross border crimes featuring heavily armed action scenes. It also exquisitely narrates the storylines among the brotherhood, family, love and ethics of the lives of the police force. Flying-Tiger is directed by Raymond Lee（李惠民）and starring Bosco Wong（黃宗澤）, Michael Miu（苗僑偉）, Ron Ng（吳卓羲）, Eddie Cheung（張兆輝）and Michael Wong（王敏 德）, who are experienced actors and have played the roles of police in different films and drama series in their acting careers. The producer of Flying-Tiger is Miss Lok Yee Ling Virginia (“Miss Lok”), an executive Director of the Company. With years of experience in motion pictures, Miss Lok has produced a number of major box office hits, which include Turning Point（Laughing Gor 之變節）and Line Walker（使徒行者）. The drama series Flying-Tiger following its completion of post-production and release is expected to show to the audience a mega production of one of the coolest and most stirring police dramas, and is estimated to bring substantial revenue to the film and drama series investment business of the Group.

Given the positive outcome and that the Group has a strong management and professional execution team which is very experienced in producing and distributing popular films, dramas and non-dramas, the Group casts confidence not only on the box office income of the films and contract income from drama series which will generate promising revenues to the Group, but also on the reputation of the Company via the theatrical screens and web television channels in the PRC, Hong Kong and other regions around the world in the forthcoming years.

The Group also commenced its artiste management business in the second quarter of 2016. As at the Latest Practicable Date, there were more than twenty artistes under the management of the Group. The Company is negotiating with certain artistes to engage the Group as their exclusive manager and it is expected that some more artistes will join the Group during the year ending 31 December 2017. The Group intends to expand its artiste management business and will continue to seek additional artistes to join. With the continued increase in the number of artistes under the management of the Group, more artiste performances are expected to be carried out and more revenue will be generated from artiste commission.

– 26 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

To capitalise on its entertainment industry network and resources, the Group entered into the Cooperation Framework Agreement with CMC Holdings and Huaren Wenhua in November 2016. The Cooperation Framework Agreement was approved by the independent Shareholders at the extraordinary general meeting of the Company held on 13 March 2017.

With the potential collaborations by the Group with CMC Holdings and Huaren Wenhua on both the film/drama series investment projects and artiste management, resources and experiences in areas of film development and production, marketing and a stronger film distribution network in the PRC and worldwide as well as a larger pool of talents could be shared with mutual benefit. These will enable the Group to further stretch and expand in its entertainment businesses on top of its own core competitive advantages of the solid experiences and extensive connections of its management team.

– 27 –

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS OF DIRECTORS AND CHIEF EXECUTIVES

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which are required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules to be notified to the Company and the Stock Exchange, were as follows:

Long position in the shares and in the underlying shares of the Company

		Number of
		shares/	Appropriate
		underlying	percentage of
Name of Director	Capacity/Nature	shares interested	shareholding
			(Note 1)
Li Ruigang	Interest of	425,000,000	29.94%
	controlled corporation	(Note 2)
Ding Siqiang	Beneficial owner	4,034,000	0.28%
Ding Xueleng	Interest of spouse	4,034,000	0.28%
		(Note 3)

– 28 –

GENERAL INFORMATION

APPENDIX III

Notes:

1. The percentage is calculated based on the total number of ordinary shares of the Company in issue as at the Latest Practicable Date, which was 1,419,610,000.

2. Mr. Li Ruigang was interested in such 425,000,000 Shares through certain corporations controlled directly or indirectly by him. Shine Investment Limited (“Shine Investment”), Shine Holdings Cayman Limited (“Shine Holdings”), CMC Shine Acquisition Limited (“CMC Shine Acquisition”), CMC Shine Holdings Limited (“CMC Shine Holdings”), CMC Holdings, GLRG Holdings Limited (“GLRG Holdings”) and Gold Pioneer Worldwide Limited (“Gold Pioneer”) were the substantial shareholders of the Company. Shine Investment was interested in such 425,000,000 Shares. Shine Investment was 85% owned by Shine Holdings which was wholly-owned by CMC Shine Acquisition. CMC Shine Acquisition was wholly-owned by CMC Shine Holdings which was wholly-owned by CMC Holdings. CMC Holdings was 86.19% owned by Gold Pioneer and 0.48% owned by GLRG Holdings which was wholly-owned by Gold Pioneer. Therefore, each of Shine Holdings, CMC Shine Acquisition, CMC Shine Holdings, CMC Holdings, GLRG Holdings and Gold Pioneer was deemed to be interested in such 425,000,000 Shares held by Shine Investment. Gold Pioneer was 100% owned by Mr. Li Ruigang.

3. Ms. Ding Xueleng is the spouse of Mr. Ding Siqiang. She was deemed or taken to be interested in all the Shares that Mr. Ding Siqiang was interested in.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules to be notified to the Company and the Stock Exchange.

– 29 –

GENERAL INFORMATION

APPENDIX III

Save as disclosed below, as at the Latest Practicable Date, so far as was known to the Directors, none of the Directors is a director or employee of a company which has an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Name of company which had such discloseable interest Position of such director Name of Director or short position within such company Mr. Li Ruigang CMC Holdings chairman and director Television Broadcasts vice chairman and Limited (“TVB”) non-executive director Gold Pioneer director Mr. Hui To Thomas CMC Holdings president, chief strategy officer and executive director TVB non-executive director Miss Lok Yee Ling Virginia Shine Investment director TVB assistant general manager (talent management and development)

– 30 –

GENERAL INFORMATION

APPENDIX III

3. DISCLOSURE OF INTERESTS OF SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as the Directors are aware, each of the following persons (other than a Director or chief executive of the Company or their respective associates) had an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Long position in the shares and in the underlying shares of the Company

		No. of shares/	Approximate
Name of		underlying	percentage of
substantial		shares	shareholdings
shareholders	Capacity/Nature	interested	of the Company
			(Note 1)
Gold Pioneer	Interest of controlled	425,000,000	29.94%
	corporation	(Note 2)
GLRG Holdings	Interest of controlled	425,000,000	29.94%
	corporation	(Note 2)
CMC Holdings	Interest of controlled	425,000,000	29.94%
	corporation	(Note 2)
CMC Shine Holdings	Interest of controlled	425,000,000	29.94%
	corporation	(Note 2)
CMC Shine Acquisition	Interest of controlled	425,000,000	29.94%
	corporation	(Note 2)
Shine Holdings	Interest of controlled	425,000,000	29.94%
	corporation	(Note 2 and 4)
Shine Investment	Beneficial owner	425,000,000	29.94%
		(Note 2 and 4)
TVB	Deemed Interest	425,000,000	29.94%
		(Note 3 and 4)
Mr. Xie Qing Yu	Beneficial owner	88,052,000	6.20%

– 31 –

GENERAL INFORMATION

APPENDIX III

Notes:

1. The percentage is calculated based on the total number of ordinary shares of the Company in issue as at the Latest Practicable Date, which was 1,419,610,000.

2. Shine Investment, Shine Holdings, CMC Shine Acquisition, CMC Shine Holdings, CMC Holdings, GLRG Holdings and Gold Pioneer were the substantial shareholders of the Company. Shine Investment was interested in such 425,000,000 Shares. Shine Investment was 85% owned by Shine Holdings which was wholly-owned by CMC Shine Acquisition. CMC Shine Acquisition was wholly-owned by CMC Shine Holdings which was wholly-owned by CMC Holdings. CMC Holdings was 86.19% owned by Gold Pioneer and 0.48% owned by GLRG Holdings which was wholly-owned by Gold Pioneer. Therefore, each of Shine Holdings, CMC Shine Acquisition, CMC Shine Holdings, CMC Holdings, GLRG Holdings and Gold Pioneer was deemed to be interested in such 425,000,000 Shares held by Shine Investment. Gold Pioneer was 100% owned by Mr. Li Ruigang. Mr. Li Ruigang was interested in such 425,000,000 Shares through the above corporations controlled directly or indirectly by him.

3. TVB was deemed to be interested in such 425,000,000 Shares through its interest in Shine Investment (also see Note 4 below).

4. Shine Investment, Shine Holdings and TVB were parties of the agreement (the “Agreement”) to hold the interest in such 425,000,000 Shares. The Agreement was the one to which section 317 of the SFO applied.

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any other persons (not being a Director or chief executive of the Company) who had an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the any other member of the Group or had any options in respect of such capital.

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group which do not expire or are not terminable within one year without payment of compensation (other than statutory compensation).

– 32 –

GENERAL INFORMATION

APPENDIX III

5. DIRECTORS’ COMPETING INTERESTS

As at the Latest Practicable Date, the following Directors (including their respective close associates) were considered to have interests in businesses which may compete, either directly or indirectly, with the businesses of the Group, particulars of which are set out below:

Description of businesses of Name of the entities which may the entities which may compete with the businesses of compete with the businesses Nature of Director’s Name of Director the Group of the Group interests in the entities Mr. Li Ruigang CMC Holdings Film investment and Ultimate controlling shareholder, artiste management chairman and director Huaren Wenhua Film investment and Ultimate controlling shareholder artiste management Flagship Entertainment Film investment, production Ultimate controlling shareholder Group Limited and distribution TVB Film investment and Vice chairman and artiste management non-executive director Mr. Hui To Thomas CMC Holdings Film investment and President, chief strategy officer and artiste management an executive director TVB Film investment and Non-executive director artiste management Mr. Jiang Wei Gravity Pictures Film Film production Director Production Company and distribution Miss Lok Yee Ling Virginia TVB Film investment and Assistant general manager (talent artiste management management and development)

Name of Director

Save as disclosed above, as at the Latest Practicable Date, so far as the Directors were aware, none of the Directors, the proposed Directors or their respective close associates (as defined in the Listing Rules) had any interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

– 33 –

GENERAL INFORMATION

APPENDIX III

6. INTERESTS IN ASSETS AND/OR CONTRACTS AND OTHER INTERESTS

As at the Latest Practicable Date:

• (a) save for the Cooperation Framework Agreement, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group, which contract or arrangement was subsisting at the Latest Practicable Date and which was significant in relation to the business of the Group; and

• (b) none of the Directors or experts named in the section headed “Expert’s Consent and Qualifications” in this appendix had any direct or indirect interest in any assets which had been, since 31 December 2016 (the date to which the latest published audited accounts of the Company were made up), acquired, disposed of by, or leased to any member of the Group, or were proposed to be acquired, disposed of by, or leased to any member of the Group.

7. MATERIAL CONTRACTS

As at the Latest Practicable Date, save for (i) the sale and purchase agreement dated 25 January 2016 and entered into between the Company and the Purchaser in respect of the disposal of 49% interest in the Target Company and (ii) the Agreement entered into between the Company and the Purchaser in relation to the Disposal, there was no contract (not being contracts entered into the ordinary course of business), entered into by the members of the Group within the two years immediately preceding the issue of this circular.

8. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance, and so far as the Directors were aware, no litigation or claim of material importance was pending or threatened against the Company or any of its subsidiaries.

– 34 –

GENERAL INFORMATION

APPENDIX III

9. EXPERTS’ CONSENTS AND QUALIFICATIONS

The following is the qualification of the experts who have given their opinions or advice which are contained in this circular.

Name Qualification Grandall Law Firm (Fuzhou) PRC lawyer International Valuation Limited Independent professional property valuer

As at the Latest Practicable Date, each of the above experts:

• (a) did not have any shareholding, directly or indirectly, in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group;

• (b) did not have any direct or indirect interest in any assets which had been acquired or disposed of by or leased to any member of the Group or were proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2016, being the date up to which the latest published audited financial statements of the Group were made: and

• (c) had given and had not withdrawn its written consent to the issue of this circular with the inclusion of and reference to its name, letter and/or report in the form and context in which they respectively appear.

10. GENERAL

• (I) The registered office of the Company is situated at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.

• (II) The principal place of business of the Company in Hong Kong is at 19/F, Leighton Centre, 77 Leighton Road, Causeway Bay, Hong Kong.

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

– 35 –

GENERAL INFORMATION

APPENDIX III

• (IV) The secretary to the Company is Miss Chan Yin Yi Annie, who is an associate member of the Hong Kong Institute of Chartered Secretaries and the Institute of Chartered Secretaries and Administrators.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal place of business in Hong Kong of the Company at 19/F, Leighton Centre, 77 Leighton Road, Causeway Bay, Hong Kong from 9:30 a.m. to 5:30 p.m., Monday to Friday (other than public holidays) from the date of this circular up to and including 17 November 2017:

• (I) the memorandum and articles of association of the Company;

• (II) the annual reports of the Company for each of the financial years ended 31 December 2015 and 31 December 2016;

• (III) the property valuation report from International Valuation Limited, the texts of which are set out in appendix I to this circular;

• (IV) the material contracts referred to in the paragraph headed “Material Contracts” in this appendix;

• (V) the PRC legal opinion issued by Grandall Law Firm (Fuzhou) in relation to the title of the property, referred to in note (7) to the valuation certificate set out in appendix I to this circular;

• (VI) the written consents referred to in the paragraph headed “Experts’ Consents and Qualifications” in this appendix;

• (VII) the continuing connected transactions circular of the Company dated 17 February 2017 in relation to the Cooperation Framework Agreement; and

• (VIII) this circular.

– 36 –

NOTICE OF EGM

==> picture [77 x 77] intentionally omitted <==

SHAW BROTHERS HOLDINGS LIMITED 邵氏兄弟控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00953)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “Meeting”) of the shareholders of Shaw Brothers Holdings Limited (the “Company”) will be held at Empire Room 1, 1/F, Empire Hotel, 33 Hennessy Road, Wan Chai, Hong Kong, at 2:30 p.m. on Sunday, 19 November 2017 for the purpose of considering and, if thought fit, passing (with or without modification) the following resolution as ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT :

• (A) the sale and purchase agreement dated 26 July 2017 (the “Agreement”) entered into between the Company as vendor and Champ Luck Enterprise Limited as purchaser, in relation to the disposal by the Company of 51% shareholding in Amber Jungle Limited and transactions contemplated thereunder be and are hereby approved, ratified and confirmed;

• (B) any one director of the Company be and is hereby authorised for and on behalf of the Company to take all steps necessary or expedient in his/her opinion to implement and/or give effect to the terms of the Agreement and all transactions contemplated thereunder and all other matters incidental thereto or in connection therewith; and

– 37 –

NOTICE OF EGM

• (C) any one director of the Company be and is hereby authorised for and on behalf of the Company to execute all such documents, instruments and agreements and to do all such acts or things incidental to, ancillary to or in connection with the matters contemplated under the Agreement.”

By order of the Board Shaw Brothers Holdings Limited Li Ruigang Chairman

Hong Kong, 26 October 2017

Notes:

1. Any member of the Company entitled to attend and vote at the Meeting (or any adjournment thereof) is entitled to appoint one or more proxies (who must be individuals) to attend and, on a poll, vote instead of him and a proxy so appointed shall have the same right as the member to speak at the Meeting (or any adjournment thereof). A proxy need not be a member of the Company.

2. In the case of joint registered holders of any share of the Company, any one of such persons may vote at the Meeting, either personally or by proxy, in respect of such share of the Company as if he was solely entitled thereto. If more than one of such joint registered holders are present, personally or by proxy, at the Meeting, one of the said persons so present being the most or, as the case may be, the more senior shall alone be entitled to vote in respect of the relevant joint holding and, for this purpose, seniority shall be determined by reference to the order in which the names of the joint holders stand on the register of members of the Company in respect of the relevant joint holding.

3. In order to be valid, the proxy form must be completed and deposited at the branch share registrar of the Company in Hong Kong at Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, 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 any member from attending and voting in person at the Meeting or any adjournment thereof. In the event that a member of the Company attends the Meeting in person after having lodged his form of proxy, the form of proxy will be deemed to have been revoked.

5. The ordinary resolution as set out above will be determined by way of a poll.

6. The transfer books and register of members of the Company will be closed from Wednesday, 15 November 2017 to Sunday, 19 November 2017, both dates inclusive (the “Book Close Period”) for the purpose of determining shareholders’ attendance at the Meeting. During the Book Close Period, no transfer of shares will be registered. In order to qualify for attendance at the Meeting, all share transfer documents accompanied by the relevant share certificates must be lodged with the office of the Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, for registration not later than 4:30 p.m. on Tuesday, 14 November 2017.

7. As at the date of this notice, the board of directors of the Company consists of Mr. Li Ruigang as chairman and nonexecutive director; Mr. Ding Siqiang, Ms. Ding Xueleng, Mr. Jiang Wei and Miss Lok Yee Ling Virginia as executive directors; Mr. Hui To Thomas as non-executive director; Mr. Pang Hong, Mr. Poon Kwok Hing Albert and Miss Szeto Wai Ling Virginia as independent non-executive directors; and Mr. Gu Jiong as alternate director to Mr. Hui To Thomas.

8. A form of proxy for the EGM is enclosed.

– 38 –