Television Broadcasts Limited — Capital/Financing Update 2004

Dec 6, 2004

CHINA CONSERVATIONAL POWER HOLDINGS LIMITED 中國環保電力控股有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 290)

LETTER OF INTENT – PROPOSED ACQUISITION OF UP TO 49% OF THE EQUITY INTEREST OF A PHARMACEUTICAL PRODUCTS DISTRIBUTION AND INVESTMENT COMPANY IN THE PEOPLE’S REPUBLIC OF CHINA, UPDATE ON FORMATION OF JOINT VENTURE IN THE PEOPLE’S REPUBLIC OF CHINA AND APPOINTMENT OF EXECUTIVE DIRECTOR

The Proposed Acquisition

The Board announces that on 6 December 2004, Country Super entered into the Letter of Intent with the PRC Party in relation to the Proposed Acquisition.

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Pursuant to the Letter of Intent, Country Super was granted, among others, an exclusive right to negotiate with the PRC Party in respect of the Proposed Acquisition for a period of four months from the date of the Letter of Intent, that is, up to 5 April 2005.

The Proposed Acquisition is subject to completion of a due diligence review of the affairs of the PRC Company and negotiation and finalization of the terms and conditions in relation thereof. Accordingly, the Proposed Acquisition may or may not be consummated.

Further announcement will be made by the Company in respect of any further material development of the Proposed Acquisition. Shareholders and investors should exercise caution in dealing in the shares of the Company. Update on formation of Dongguan JV The Dongguan JV has been formally established on 5 November 2004 for a term of 25 years to 4 November 2029. The registered capital in the amount of RMB110 million (equivalent to HK$103.77 million) has been fully paid up by the parties by 24 November 2004. Appointment of executive Director The Board also announces that Mr. Lin Hoi Kwong was appointed as executive Director effective 6 December 2004.

THE PROPOSED ACQUISITION The Letter of Intent

Reference is made to the announcement made by the Company dated 22 November 2004.

On 6 December 2004, Country Super and the PRC Party entered into the Letter of Intent which is legally binding on the parties. The following is a summary of the terms of the Letter of Intent: Date : 6 December 2004

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• Parties : (1) the PRC Party, which is not connected with the Company, the directors, chief executive, substantial shareholders of the Company, its subsidiaries and their respective associates (as defined in the Listing Rules) and is not a connected person of the Company (within the meaning of the Listing Rules); and

• (2) Country Super, a wholly owned subsidiary of the Company

Subject matter

• : Pursuant to the Letter of Intent, the PRC Party has granted Country Super the right to acquire up to 49% of the equity interest of the PRC Company. The exact percentage of the equity interest in the PRC Company to be acquired by Country Super and the terms and conditions of the Proposed Acquisition is subject to further negotiation between the parties.

• Consideration : The consideration for the Proposed Acquisition and the payment thereof will be subject to further negotiation between the parties.

Due diligence

• : Country Super was granted a four-month period commencing from the date of the Letter of Intent up to 5 April 2005 (the “Due Diligence Review Period”) to conduct a due diligence review of the affairs of the PRC Company and to determine whether or not to proceed with the Proposed Acquisition by giving written notice to the PRC Party. The Due diligence Review Period may be extended by agreement between the parties.

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• :

• Exclusivity Country Super was granted a four-month exclusivity period commencing from the date of the Letter of Intent (ie. 6 December 2004) up to 5 April 2005 (the “Exclusivity Period”) to negotiate with the PRC Party in respect of the Proposed Acquisition. The Exclusivity Period may be extended by agreement between the parties.

• Lapse of the If the parties fail to reach an agreement Letter of Intent : in relation to the Proposed Acquisition by the expiration of the Exclusivity Period or if Country Super notifies the PRC Party of its intention not to proceed with the Proposed Acquisition on or before the expiration of the Due Diligence Review Period, the Letter of Intent will lapse and neither party shall have liability towards the other party.

General

The Proposed Acquisition is subject to completion of a due diligence review of the affairs of the PRC Company and negotiation and finalization of the terms and conditions in relation thereof. Accordingly, the Proposed Acquisition may or may not be consummated.

Further announcement will be made by the Company in respect of any further material development of the Proposed Acquisition.

Shareholders and investors should exercise caution in dealing in the shares of the Company.

UPDATE ON FORMATION OF DONGGUAN JV

References is made to the circulars issued by the Company dated 27 October 2003, 14 January 2004 and 9 March 2004 and the announcements made by the Company dated 7 October 2003, 28 November 2003, 2 December 2003, 24 December 2003, 17 February 2004, 18 May 2004 and 7 October 2004,

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respectively, relating to, among others, the possibility of formation of joint venture companies in the PRC between the Group and China Sciences Group to carry out the business of waste incineration and processing in the PRC, the entering into of a framework agreement on 2 December 2003 for the Dongguan JV, the entering into of the Co-operation Agreement on 24 December 2003 for the formation of the Dongguan JV, the termination of the Co-operation Agreement and the entering into of the Tripartite Co-operation Agreement on 13 February 2004 and the transfer of the interest in the Dongguan JV by one of the parties to the Tripartite Co-operation Agreement to China Sciences Group.

The Dongguan JV has been formally established on 5 November 2004 for a term of 25 years to 4 November 2029. The registered capital in the amount of RMB110 million (equivalent to HK$103.77 million) has been fully paid up by the parties by 24 November 2004 in cash as to 51% by HTH and as to 49% by China Sciences Group, in proportion to their respectively equity interest therein. The contribution by HTH is RMB56.1 million (equivalent to approximately HK$52.93 million).

APPOINTMENT OF EXECUTIVE DIRECTOR

Mr. Lin Hoi Kwong was appointed as executive Director effective from 6 December 2004.

Mr. Lin, age 33, holds a Bachelor degree in Business Administration from the Thames Valley University, United Kingdom and a Master of Science degree in Marketing from The National University of Ireland. He has over seven years experience in corporate development and business strategies. During the period from February 2001 to February 2004, Mr. Lin was an executive director of Central China Enterprises Limited (“Central China”), a company listed on the Main Board of The Stock Exchange of Hong Kong Limited. Saved for his previous directorship in Central China, Mr. Lin has not held any directorship in any other publicly listed companies in the last three years.

On 6 December 2004, Mr. Lin has entered into a service agreement (the “Service Agreement”) with the Company for a

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term of one year, commencing on 6 December 2004, terminable by either party giving not less than three months’ written notice to the other party. The Service Agreement will continue thereafter and can be terminated by either party by giving one month written notice. The term of office of Mr. Lin is subject to the rotation provisions in the articles of association of the Company. Under the articles of association of the Company, Mr. Lin will hold the office of director until the next annual general meeting of the Company and is eligible for re-election. Under the Service Agreement, Mr. Lin is entitled to a remuneration of 13 monthly salary of HK$50,000 each month and a discretionary bonus determined by the Board. The terms of the Service Agreement is determined by the Board by reference to the experience and responsibilities of Mr. Lin in the Company. Apart from his directorship with the Company, Mr. Lin is a director of Country Super. Save as disclosed, he does not held any position in other members of the Company. The wife of Mr. Lin is also a director of certain subsidiaries of the Company.

Mr. Lin is the nephew of Mr. Hon Ming Kong, an executive Director and a substantial shareholder of the Company. Save as disclosed, Mr. Lin has no relation with the directors, chief executives and substantial shareholders of the Company and its subsidiaries.

As at the date of this announcement, the wife of Mr. Lin is interested in 2,000 shares of the Company and options to subscribe for 2,000,000 shares granted under the share option scheme of the Company, of which Mr. Lin is deemed to be interested in under Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

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DEFINITION

In this announcement, unless the context otherwise requires, terms used herein shall have the following meaning:

“Board”

“China Sciences Group”

• “Company”

• “Country Super”

• “Dongguan JV”

• “HTH”

• “Letter of Intent”

the board of directors of the Company; 中科實業集團（控股）公司 (China Sciences Enterprise Group (Holding) Corporation)*, a large scale enterprise group established by 中國科學院 (Chinese Academy of Science);

China Conservational Power Holdings Limited, a company incorporated in the Cayman Islands whose securities are listed on The Stock Exchange of Hong Kong Limited;

Country Super Limited, an indirectly wholly owned subsidiary of the Company and is incorporated in Hong Kong;

the equity joint venture, 東莞中科環 保電力有限公司 (Dongguan China Sciences Conservational Power Co., Ltd.)*, is owned as to 51% by HTH and as to 49% by China Science Group;

Hong Tong Hai Investments Limited, a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company;

the legally binding letter of intent dated 6 December 2004 entered into between Country Super and the PRC Party in relation to the Proposed Acquisition;

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“Listing Rules”

“PRC”

“PRC Company”

“PRC Party”

“parties”

“Proposed Acquisition”

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;

The People’s Republic of China;

the company established in the PRC and engaged in pharmaceutical products distribution and investment in the pharmaceutical business in the PRC, which is the subject matter of the Proposed Acquisition;

the beneficial owner of the entire equity interest of the PRC Company;

Country Super and the PRC Party and a “party” shall refer to either one of them; and

the proposed acquisition of not more than 49% of the equity interest of the PRC Company by Country Super.

In this announcement, HK$1.00 is equivalent to RMB1.06. The conversion rate is for the purpose of illustration only and does not constitute a representation that any amounts have been, could have been, or may be exchanged at the aforementioned or any other rates.

As at the date of this announcement, the Board consists of:

Executive Directors

Mr. Chan Tat Chee (Chairman)

Mr. Hon Ming Kong

Mr. Lee Yu Leung

Mr. Chen Jun Nong Mr. Pascal Ting

Mr. Lin Hoi Kwong

Non-executive Director Mr. Li Yong, Alfa

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Independent Non-executive Directors

Mr. Fork Siu Lun, Tommy Mr. Tsoi Wai Kwong Mr. Loo Chung Keung, Steve

By order of the Board CHINA CONSERVATIONAL POWER HOLDINGS LIMITED CHAN Tat Chee Chairman

Hong Kong, 6 December 2004

* for identification purpose

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

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