Creative China Holdings Limited entered into a cooperation framework agreement with Truth Pictures (Hong Kong) Limited on 6 September 2021 (after trading hours) in relation to the Potential Cooperation between the Company and Truth Pictures subject to the terms and conditions of the formal agreement(s) by project(s) (the "Formal Agreement(s)"). According to the Cooperation Framework Agreement, the parties thereto have agreed to establish an in-depth cooperation on the aspects of importing foreign films to Mainland China (the "Imported Films"), including: 1) distribution and broadcasting in cinema, television station and new media; and 2) marketing promotional planning of the Imported Films (the "Potential Cooperation"). The Cooperation Framework Agreement shall be valid for five years and automatic renewal for one year indefinitely if no party disagrees when it expires. The Group is principally engaged in the businesses of (i) program production, film and television program pre-production, distribution and related services; (ii) concert and event organisation; (iii) mobile live broadcasting and e-commerce; and (iv) artist management. The Group is experienced in marketing promotional planning of domestic and foreign imported films by providing marketing event organisation services including the premiere ceremony for the film, producing high-quality television programs on the reality casting variety show of films, programs introducing upcoming films with film trailers, interviews of the cast and behind-the-scene video in Mainland China. In recent years, the Group has expanded its program production business to distribution of licensing rights of serial programs and invest in pre-production of films and serial programs. As disclosed in the annual report of the Company for the year ended 31 December 2020, the Group would first focus on the three major businesses in the film and television industry chain, namely project planning and script creation, production and publishing to generate more value to the Group. The Board is of the view that the Cooperation Framework Agreement, subject to the Formal Agreement(s) to be entered into, would enable the Group to expand its arm into the film sector, diversify its program production segment and expand its market share in the film industry, and broaden its income stream. Based on the above reasons and benefits, the Directors are of the view that the entering into of the Cooperation Framework Agreement is in line with the business of the Group and is in the interests of the Company and its shareholders as a whole.