Computer And Technologies Holdings Limited — Capital/Financing Update 2003

Oct 29, 2003

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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CHINA AEROSPACE INTERNATIONAL HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

DISCLOSEABLE TRANSACTION ISSUE OF SHARES BY CASIL NETWORK SYSTEM ENGINEERING LIMITED

The directors of China Aerospace International Holdings Limited wish to announce that its whollyowned subsidiary, CASIL Network System Engineering Limited will issue shares representing 51% of its enlarged issued share capital (as enlarged by the subscription) to New World Infrastructure Limited pursuant to a strategic alliance agreement entered into between the Company and New World Infrastructure Limited on 27 October 2003.

On 27 October 2003, China Aerospace International Holdings Limited (the “Company”) entered into an unconditional strategic alliance agreement (the “Strategic Alliance Agreement”) with New World Infrastructure Limited (“NWI”), an independent third party not connected with the directors, chief executive or substantial shareholders of the Company or its subsidiaries or any of their respective associates (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”)) nor does it hold any shares of the Company as at the date of this announcement. Under the strategic alliance, the Company and NWI will collectively develop interactive and satellite digital TV in China through a joint venture company.

The joint venture is expected to be owned 51% by NWI and 49% by the Company. Pursuant to the Strategic Alliance Agreement, NWI will invest HK$150 million into CASIL Network System Engineering Limited (“CNSE”) by way of subscription in cash for shares representing 51% of its enlarged issued share capital of HK$300,000,000 (as enlarged by the subscription) to NWI and will thereafter change its name to China Aerospace New World Technology Limited (“CANW”). The subscription monies will be paid within 10 days from the date of the Agreement. The consideration of this transaction was arrived at after arm’s length negotiation between the Company and NWI having regard to the future prospect of the business to be conducted by CANW. It is expected that the proceeds from the subscription will be applied in the development of interactive and satellite digital TV in China.

CNSE is an investment holding company which is wholly-owned by the Company. The net tangible asset value of CNSE as at 31 December 2002 was HK$50,693,000. The net losses before and after taxation and extraordinary items of CNSE were HK$2,250 and HK$2,250 for the year ended 31 December 2002 respectively and the net profits before and after taxation and extraordinary items of CNSE were HK$459,561 and HK$459,561 for the year ended 31 December 2001 respectively.

The Company expected that the strategic alliance with NWI will facilitate its development of interactive and satellite digital TV services in China.

The transaction contemplated under the Strategic Alliance Agreement constitutes a discloseable transaction under rule 14.12 of the Listing Rules and is a deemed disposal under Practice Note 13 of the Listing Rules. Further details of the transaction will set out in a circular to be circulated to shareholders of the Company in accordance with the Listing Rules.

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By order of the Board of Directors Rui Xiaowu Chairman & President

Hong Kong, 28 October 2003

“Please also refer to the published version of this announcement in China Daily”

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