CONNECTED TRANSACTION ENTERING INTO THE LIMITED LIABILITY PARTNERSHIP AGREEMENT

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. (A joint stock limited company incorporated in the People s Republic of China with limited liability) (Stock Code: 3636) CONNECTED TRANSACTION ENTERING INTO THE LIMITED LIABILITY PARTNERSHIP AGREEMENT The Board announces that, on 25 November 2016 (after the trading hours), the Company, with Poly Group and its five subsidiaries or associates, entered into a Limited Liability Partnership Agreement, and proposes to jointly initiate the establishment of the Poly Limin Fund and subscribe for limited liability partnership shares of Poly Limin Fund with an amount of RMB30,000,000. As at the date of this announcement, Poly Group directly holds 43.30% equity interest of the Company and indirectly holds 20.40% equity interest of the Company through Poly Southern, a subsidiary of Poly Group, hence Poly Group is a connected person of the Company pursuant to Chapter 14A of the Listing Rules. Since Poly Group and its subsidiaries directly and indirectly hold a total of 40.87%, %, 47.32%, 30.00% and % of the shares of Poly Real Estate, Poly International, Poly Property, Jiulian Development and Poly Fund Management Company respectively, Poly Real Estate, Poly International, Poly Property, Jiulian Development and Poly Fund Management Company are subsidiaries or associates of Poly Group, therefore, constitute connected persons of the Company. Therefore, entering into the Limited Liability Partnership Agreement and the transactions contemplated thereunder constitute the connected transaction of the Company pursuant to the Listing Rules. As the highest applicable percentage ratio of the Subscription calculated in accordance with the Listing Rules is higher than 0.1% but less than 5%, such transaction is subject to the relevant reporting and announcement requirements but exempted from the independent shareholders approval requirement as set out in Chapter 14A of the Listing Rules. The Directors (including independent non-executive Directors) are of the view that although the Limited Liability Partnership Agreement and the transactions contemplated thereunder have not been entered into in the ordinary and usual course of business of the Company, the terms of the Limited Liability Partnership Agreement and the transactions contemplated thereunder are based on normal commercial terms, are fair and reasonable, and in the interests of the Company and its Shareholders as a whole. When the Board approved the resolution in relation to entering into the Limited Liability Partnership Agreement, the Directors who have material interests in such transaction have abstained from voting

2 The Board announces that, on 25 November 2016 (after the trading hours), the Company, with Poly Group and its five subsidiaries or associates, entered into a Limited Liability Partnership Agreement, and proposes to jointly initiate the establishment of the Poly Limin Fund and subscribe for limited liability partnership shares of Poly Limin Fund with an amount of RMB30,000,000. THE LIMITED LIABILITY PARTNERSHIP AGREEMENT Major terms of the Limited Liability Partnership Agreement are set out as below: Signing date : 25 November 2016 Date of incorporation : Year The specific date of incorporation is subject to the completion of record registration on the Asset Management Association of China. Name of the fund : Poly Limin (Tianjin) Equity Investment Fund Limited Partnership (Limited Partnership) Fund size : RMB300,000,001 Parties and amount of contribution : Limited partners Poly Real Estate Poly Group The Company Poly International Poly Property Jiulian Development RMB100,000,000 RMB80,000,000 RMB30,000,000 RMB30,000,000 RMB30,000,000 RMB30,000,000 General Partner/Executive Partner Poly Fund Management Company RMB1 Capital contribution : Currency contribution Investment focus : Propose to directly invest in the Poverty Alleviation Fund. By adopting the market-oriented mode of operation, Poly Limin Fund mainly invests in poor areas for resource development and utilization, industrial park construction, development of new urbanization, etc. The main revenue source of Poly Limin Fund is the dividends to shareholders of the Poverty Alleviation Fund. Poly Limin Fund withdraws investment via project equity transfer and other ways

3 Management mode : As the general partner of Poly Limin Fund, Poly Fund Management Company is responsible for the execution of the partnership affairs of Poly Limin Fund, and represents Poly Limin Fund externally. Poly Limin Fund has an investment decision-making committee (whose members are appointed by the general partner) responsible for making investment and withdrawal decisions regarding the external investment projects of Poly Limin Fund. Any final investment or withdrawal decision of Poly Limin Fund is subject to the approval of all members of the investment decision-making committee. Limited partners do not execute the affairs of Poly Limin Fund, and only need to pay the contribution in accordance with the share of the subscribed fund, and share the fund investment return or bear the fund investment loss according to the proportion of fund shares held; limited partners are entitled to supervise the execution of partnership affairs by the executive partner and change the general partner. Meanwhile, the general partner of Poly Limin Fund does not charge any management fee to the limited partners and does not withdraw excess earnings. All the revenue from the operation of Poly Limin Fund will be distributed by the limited partners according to the proportion of contribution. Term of operation : The term of the partnership for the fund is 15 years, and may be reasonably extended based on the operation condition. BASIS OF DETERMINATION The Company s contribution to the Poly Limin Fund is determined by the Subscription shares. The source of funds for this Subscription is the Company s own funds. REASONS AND BENEFITS In response to the appeals of the State-owned Assets Supervision and Administration Commission of the State Council of the PRC (SASAC) for the establishment of fund for industrial investment in poverty regions, the Poverty Alleviation Fund was set up by the funding of multiple central stateowned enterprises, and is mainly used in poor areas for resource development and utilization, industrial park construction, development of new urbanization, etc. Poly Group proposes to participate in the poverty alleviation construction by way of establishing Poly Limin Fund, and proposes to directly invest in the Poverty Alleviation Fund. The Company makes contribution for the Subscription to fulfill its social responsibilities

4 IMPLICATIONS UNDER THE LISTING RULES As at the date of this announcement, Poly Group directly holds 43.30% equity interest of the Company and indirectly holds 20.40% equity interest of the Company through Poly Southern, a subsidiary of Poly Group, hence Poly Group is a connected person of the Company pursuant to Chapter 14A of the Listing Rules. Since Poly Group and its subsidiaries directly and indirectly hold a total of 40.87%, %, 47.32%, 30.00% and % of the shares of Poly Real Estate, Poly International, Poly Property, Jiulian Development and Poly Fund Management Company respectively, Poly Real Estate, Poly International, Poly Property, Jiulian Development and Poly Fund Management Company are subsidiaries or associates of Poly Group, therefore, constitute connected persons of the Company. Therefore, entering into the Limited Liability Partnership Agreement and the transactions contemplated thereunder constitute the connected transaction of the Company pursuant to the Listing Rules. As the highest applicable percentage ratio of the Subscription calculated in accordance with the Listing Rules is higher than 0.1% but less than 5%, such transaction is subject to the relevant reporting and announcement requirements but exempted from the independent shareholders approval requirement as set out in Chapter 14A of the Listing Rules. OPINIONS OF THE BOARD As chairman of the Company, Mr. Xu Niansha (chairman of Poly Group), Director Mr. Wang Lin (vice general manager of Poly Group), Director Mr. Zhang Xi (vice general manager of Poly Group) and Director Mr. Zhao Zigao (head of the News Centre of Poly Group) all serve at Poly Group, they are considered to be connected with the entering into the Limited Liability Partnership Agreement and the transactions contemplated thereunder, and have abstained from voting on the Board resolution for approving such transaction. Save as disclosed above, there are no other Directors who have any material interest in such transaction and no other Directors need to abstain from voting on the Board resolution for considering and approving such transaction. The Directors (including independent non-executive Directors) are of the view that although the Limited Liability Partnership Agreement and the transactions contemplated thereunder have not been entered into in the ordinary and usual course of business of the Company, the terms of the Limited Liability Partnership Agreement and the transactions contemplated thereunder are based on normal commercial terms, are fair and reasonable, and in the interests of the Company and its Shareholders as a whole. When the Board approved the resolution in relation to entering into the Limited Liability Partnership Agreement, the said Directors who have material interests in such transaction have abstained from voting

5 INFORMATION ON THE PARTIES (1) Information on the Company The Company is a joint stock company with limited liability incorporated in the PRC on 14 December 2010 and a leading culture and art enterprise in the PRC with diversified business operations. The Company is mainly engaged in art business and auction, performance and theatre management and cinema investment and management. (2) Information on Poly Group Established in 1992, Poly Group is a state-owned enterprise managed by the SASAC. Apart from culture and arts business, in which Poly Group is engaged through the Company, Poly Group is primarily engaged in international trading, real estate development, investment and exploitation in resource field, manufacturing of civilian explosive equipment and blasting service. (3) Information of Poly Real Estate Poly Real Estate is a joint stock company with limited liability incorporated in the PRC (listed on the Shanghai Stock Exchange, stock code: ), and is principally engaged in the real estate development and operation. Poly Group, together with its subsidiaries, holds a total of 40.87% of its equity, and is the actual controller of Poly Real Estate. (4) Information of Poly International Poly International is a limited liability company incorporated in the PRC, which is principally engaged in the investment and management of manufacturing, resources, high technology, distribution and service sectors, trade agency, import and export businesses, contracting of various overseas international bidding projects, etc. Poly Group directly holds % stake in Poly International, and is the actual controller of Poly International. (5) Information of Poly Property Poly Property is a limited liability company incorporated in the PRC, and is a wholly-owned subsidiary of Poly Property Group Co., Limited (a limited company incorporated in Hong Kong and listed on the Stock Exchange of Hong Kong Limited, stock code: 0119), which is mainly engaged in property development and investment. Poly Group, together with its subsidiaries, holds a total of 47.32% stake in Poly Property, and is the actual controller of Poly Property

6 (6) Information of Jiulian Development Jiulian Development is a joint stock company with limited liability incorporated in the PRC (listed on the Shenzhen Stock Exchange, stock code: ), which is mainly engaged in the research and development, production and sales of civil explosive equipment, construction of blasting and technical services, and wholesale and retail of chemical products (excluding chemical dangerous goods), etc. Poly Group holds 98,210,400 shares of Jiulian Development through Poly Permanent Union Holding Group Limited (its holding company), representing 30.00% of the total share capital of such company, and is the actual controller of Jiulian Development. (7) Information of Poly Fund Management Company Poly Fund Management Company is a limited liability company incorporated in the PRC, and is principally engaged in entrusted management of equity investment enterprises, investment management and related consulting business. Poly Group indirectly holds % equity of Poly Fund Management Company through Poly Investment Holdings Co., Ltd. (its whollyowned subsidiary), and is the actual controller of Poly Fund Management Company. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions have the following meanings: associate(s) Board Company connected person(s) controlling shareholder(s) Director(s) Hong Kong has the meaning ascribed to it under the Listing Rules the board of Directors of the Company Poly Culture Group Corporation Limited, a joint stock company with limited liability incorporated in the PRC on 14 December 2010, the H shares of which are listed on The Stock Exchange of Hong Kong Limited with the stock code of has the meaning ascribed to it under the Listing Rules has the meaning ascribed to it under the Listing Rules the director(s) of the Company the Hong Kong Special Administrative Region of the PRC - 6 -

7 Jiulian Development Listing Rules Limited Liability Partnership Agreement Poly Fund Management Company Poly Group Poly International Poly Limin Fund Poly Property Poly Real Estate Poly Southern Poverty Alleviation Fund Guizhou Jiulian Industrial Explosive Material Development Co.,Ltd. ( 貴州久聯民爆器材發展股份有限公司 ), a joint stock company with limited liability incorporated in the PRC, the shares of which are listed on the Shenzhen Stock Exchange with the stock code of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited the limited liability partnership agreement entered into by the Company, Poly Real Estate, Poly Group, Poly International, Poly Property, Jiulian Development and Poly Fund Management Company on 25 November 2016 Poly (Tianjin) Equity Investment Fund Management Co., Ltd., a limited liability company incorporated in the PRC China Poly Group Corporation ( 中國保利集團公司 ), a state-owned company incorporated in the PRC and the controlling shareholder of the Company, and (where the context requires) including its subsidiaries Poly International Holdings Co., Ltd. ( 保利國際控股有限公司 ), a limited liability company incorporated in the PRC Poly Limin (Tianjin) Equity Investment Fund Limited Partnership (Limited Partnership) Poly Property Group Co., Limited ( 保利置業集團有限公司 ), a limited liability company incorporated in the PRC Poly Real Estate Group Co., Ltd. ( 保利房地產 ( 集團 ) 股份有限公司 ), a joint stock company with limited liability incorporated in the PRC, whose shares are listed on the Shanghai Stock Exchange with the stock code of Poly Southern Group Limited ( 保利南方集團有限公司 ), a stateowned company incorporated in the PRC, is a wholly-owned subsidiary of Poly Group and a substantial shareholder of the Company the Central State-owned Enterprises Poverty Regional Industrial Investment Fund Co., Ltd. ( 中央企業貧困地區產業投資基金股份有限公司 ) - 7 -

8 PRC RMB Subscription the People s Republic of China the lawful currency of the PRC the matter of the Company s subscription of Poly Limin Fund with an investment of RMB30,000,000 % per cent By order of the Board Poly Culture Group Corporation Limited XU Niansha Chairman Beijing, the PRC 25 November 2016 As at the date of this announcement, the executive Directors are Mr. Xu Niansha, Mr. Li Nan, Mr. Zhang Xi and Mr. Jiang Yingchun; the non-executive Directors are Mr. Wang Lin and Mr. Zhao Zigao; and the independent non-executive Directors are Mr. Li Boqian, Ms. Li Xiaohui and Mr. Yip Wai Ming