Television Broadcasts Limited — Capital/Financing Update 2004

Nov 8, 2004

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.

(Incorporated in Cayman Islands with limited liability) (Stock Code: 290)

PLACING OF NEW SHARES UNDER GENERAL MANDATE AND

CHANGE OF HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG AND RESUMPTION OF TRADING

PLACING AGENT

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Kingston Securities Limited

PLACING OF NEW SHARES

The Company has conditionally agreed to place, through the Placing Agent on best effort basis, 64,454,000 Placing Shares to independent investors at a price of HK$0.23 per Placing Share. In the event that the actual placing size is less than 64,454,000 Placing Shares, a further announcement will be made by the Company upon the completion of the Placing.

The Placing Shares represent about 20% of the existing issued share capital of the Company of 322,272,000 Shares and about 16.67% of the Company’s issued share capital of 386,726,000 Shares as enlarged by the Placing.

The gross proceeds from the Placing will be HK$14.8 million. The net proceeds of about HK$14.4 million from the Placing will be retained as the general working capital of the Group.

The Placing Price of HK$0.23 represents (i) a discount of about 19.30% to the closing price of HK$0.285 per Share as quoted on the Stock Exchange on 4 November 2004, being the last trading day before this announcement; (ii) a discount of about 16.36% to the average of the closing price per Share of HK$0.276 as quoted on the Stock Exchange for the last five trading days ended 4 November 2004, being the last trading day before this announcement; (iii) a discount of about 15.75% to the average closing price of HK$0.273 in the five trading days immediately prior to the date of the Placing Agreement; and (iv) a discount of about 66.22% of the net asset value per Share of HK$0.6808 as at 31 March 2004, the latest audited financial information as shown in the 2004 annual report of the Company.

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China Conservational Power Holdings Limited – Announcement

5 November 2004

The Placing Price was negotiated on an arm’s length basis between the Company and the Placing Agent. The Directors consider that the terms of the Placing are fair and reasonable based on the current market condition and in the interests of the Company and its Shareholders as a whole.

The Placing is conditional upon, among other things, the Stock Exchange granting listing of and permission to deal in the Placing Shares.

The Placing is subject to termination on the occurrence of, amongst other things, any event of force majeure (which include events set out in greater detail below) at or before 10:00 a.m. on the completion date of the Placing.

CHANGE OF HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG

The head office and principal place of business of the Company in Hong Kong will be changed to unit 3606, 36/F., China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong with effect from 1 December 2004.

SUSPENSION AND RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:30 a.m. Friday, on 5 November 2004 pending the release of this announcement. Application has been made by the Company for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on Monday, 8 November 2004.

THE PLACING AGREEMENT DATED 4 NOVEMBER 2004

Issuer

China Conversational Power Holdings Limited

Placing Agent

The Placing Agent has conditionally agreed to place in aggregate 64,454,000 Placing Shares on best effort basis and will receive a placing commission of 2.5% on the gross proceeds of the Placing.

The Placing Agent and its ultimate beneficial owners are not connected persons (as defined in Listing Rules) of the Company and are third parties independent of the Company and its connected persons.

Placees

The Placing Agent will place the Placing Shares to not fewer than six Placees, each of whom (i) will not be a connected person (as defined in Listing Rules) of the Company; and (ii) is independent of the other Placees of the Company and its connected persons. No Placees will become substantial Shareholders upon the completion of the Placing.

Placing Shares

The Placing Shares represent (i) about 20% of the existing issued share capital of the Company of 322,272,000 Shares as at the date of this announcement; and (ii) about 16.67% of the issued share capital of the Company of 386,726,000 as enlarged by the Placing.

In the event that the actual placing size is less than 64,454,000 Placing Shares, a further announcement will be made by the Company upon the completion of the Placing.

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China Conservational Power Holdings Limited – Announcement

5 November 2004

The Placing Shares will rank, upon issue, pari passu in all respect with the Shares in issue on the date of allotment and issue of the Placing Shares.

Placing Price

The Placing Price was fixed on the day of which the Company and the Placing Agent entered into the Placing Agreement, i.e. 4 November 2004. The Placing Price of HK$0.23 represents (i) a discount of about 19.30% to the closing price of HK$0.285 per Share as quoted on the Stock Exchange on 4 November 2004, being the last trading day before this announcement; (ii) a discount of about 16.36% to the average of the closing price per Share of HK$0.276 as quoted on the Stock Exchange for the last five trading days ended 4 November 2004, being the last trading day before this announcement, (iii) a discount of about 15.75% to the average closing price of HK$0.273 in the five trading days immediately prior to the date of the Placing Agreement; and (iv) a discount of about 66.22% of the net asset value per Share of HK$0.6808 as at 31 March 2004, the latest audited financial information as shown in the Company’s 2004 annual report.

The Placing Price was negotiated on an arm’s length basis between the Company and the Placing Agent. The Directors consider that the terms of the Placing are fair and reasonable based on the current favourable capital market environment and will be more attractive for the potential investors and in the interests of the Company and its Shareholders as a whole.

General Mandate

The Placing Shares will be issued under the general mandate (“General Mandate”) to allot, issue and deal with Shares granted to the Directors by resolution of the Shareholders passed at the annual general meeting (the “AGM”) of the Company held on 27 August 2004 subject to the limit up to 20% of the issued share capital of the Company as at the date of passing the resolution at the AGM (i.e. 64,454,400 Shares). As at the date of this announcement, none of the new Shares has been issued under the General Mandate.

Conditions of the Placing

Completion of the Placing is conditional upon, among other things:

• (i) the Listing Committee of the Stock Exchange granting approval for the listing of, and permission to deal in, the Placing Shares; and

• (ii) the obligation of the Placing Agent becoming unconditional and not being terminated in accordance with the terms of the Placing Agreement, including provisions regarding force majeure event.

None of the above conditions can be waived by the Company and the Placing Agent.

Termination and force majeure

The Placing Agreement may be terminated by the Placing Agent if at any time at or before 10:00 a.m. on the date for completion of the Placing Agreement, there occurs:

• (i) the introduction of any new law or regulation or any change in existing laws or regulations (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may, in the reasonable opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

• (ii) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before and/or after the date hereof) of a political, military, financial, economic, currency (including a change in the system under which the value of the Hong Kong currency is linked to the currency of the United States of

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China Conservational Power Holdings Limited – Announcement

5 November 2004

America) or other nature (whether or not sui generis with any of the foregoing), or in the nature of any local, national, international outbreak or escalation of hostilities or armed conflict, or affecting local securities market or the occurrence of any combination of circumstances which may, in the reasonable opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or adversely prejudices the success of the Placing of the Shares by potential investor(s) or otherwise makes it inexpedient or inadvisable for the Company or the Placing Agent to proceed with the Placing; or

• (iii) any change in market conditions or combination of circumstances in Hong Kong (including without limitation suspension or material restriction on trading in securities) occurs which affect the success of the Placing (such success being the placing of the Shares to potential investor(s)) or otherwise in the sole and absolute opinion of the Placing Agent make it inexpedient or inadvisable or inappropriate for the Company or the Placing Agent to proceed with the Placing; or

• (iv) any change in the circumstances of the Company or any members of the Group which may adversely affect the prospect of the Group; or

• (v) any incidence which, in the absolute opinion of the Placing Agent, may cause the Placing unadvisable to process.

The Directors are not aware of the occurrence of any of such events as at the date of this announcement.

COMPLETION OF THE PLACING

The conditions set out in the Placing Agreement is expected to be fulfilled on or before 31 December 2004, or such later date as may be agreed by the Company and the Placing Agent and the completion of the Placing will be take place on or before the third Business Day after the Placing Agreement become unconditional.

REASONS FOR THE PLACING

The Directors considered various ways of raising funds and consider that the Placing represents an opportunity to raise capital for the Company while broadening the shareholder base and the capital base of the Company.

In addition, according to the financial position as shown in the latest audited financial statements for the year ended 31 March 2004 included in the Company’s 2004 annual report, the Directors consider that the Group’s liquidity will be improved with the proceed from the Placing and therefore the Placing is in the interests of the Company and its Shareholders as a whole.

USE OF NET PROCEEDS

The net proceeds of about HK$14.4 million from the Placing will provide more flexibility for the Board to identify the new investment project in the PRC. Though there is no specific investment project identified by the Group at the present stage, with the growing economy in the PRC, the Group is optimistic that it would be able to identify certain attractive investments which will provide a promising return for the Shareholders in long term. In the event that no appropriate investment opportunity is identified by the Group, the net proceeds of about HK$14.4 million will be retained for the general working capital purpose in order to strengthen the capital base of the Group. The net proceeds raised per Share upon the completion of the Placing will be about HK$0.224 per Share.

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China Conservational Power Holdings Limited – Announcement

5 November 2004

EFFECT ON SHAREHOLDING STRUCTURE

The existing shareholding structure of the Company and the shareholding structure of the Company upon issue of the Placing Shares are set out as below:

Name of Shareholders YSH Investments Limited (Note 1) Highworth Venture Limited (Note 2) Public shareholders – the Placees – other public shareholders Total Note:	Existing shareholding (Shares) 43,756,000 54,900,000 – 223,616,000 322,272,000	Per cent. (%) Approximately 13.58% 17.04% – 69.38% 100.00%	Shareholding immediately after the Placing (Shares) 43,756,000 54,900,000 64,454,000 223,616,000 386,726,000	Per cent. (%) Approximately 11.31% 14.20% 16.67% 57.82%
				100.00%

1. Mr. Lai Sai Sang, the former chairman of the Company and existing director of certain subsidiaries of the Company, has 90.4% beneficial interest in YSH Investments Limited.

2. Highworth Venture Limited is a company wholly owned by Mr. Hon Ming Kong, the chairman of the Company and an executive Director.

APPLICATION FOR LISTING

Application will be made by the Company to the Stock Exchange for the grant of the listing of, and permission to deal in, the Placing Shares.

GENERAL

The Group is principally engaged in electrical engineering contracting business, trading in electrical equipment and material, internet travel booking services, investment holding, securities brokerage, company secretarial services and sea freight forwarding services. The Directors consider the terms of the Placing Agreement to be fair and reasonable and in the interests of the Company and the Shareholders as a whole. In addition, given the existing market conditions in Hong Kong and the general economic environment, the Directors also consider that the timing of the Placing is appropriate and is also in the interests of the Company and its Shareholders as a whole.

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China Conservational Power Holdings Limited – Announcement

5 November 2004

The following table summaries the capital raising activities of the Group for the 12 months immediately before the date of this announcement:

• Date of Intended use Actual use of net proceeds as at announcement Event Net proceeds of net proceeds the date of this announcement Approximately

• 17 February 2004 Placing of HK$41.6 million Funding the waste Approximately HK$21.2 million 53,712,000 Shares incineration and was used for establishing for at a price of processing business the waste incineration and HK$0.80 per Share in the PRC, processing business in the PRC and working capital and the remaining approximately HK$20.4 million are allocated for further investment in the waste incineration and processing business and for general working capital purpose

CHANGE OF HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG

The head office and principal place of business of the Company in Hong Kong will be changed to Unit 3606, 36/F., China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong with effect from 1 December 2004.

SUSPENSION AND RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:30 a.m. on Friday, 5 November 2004 pending the release of this announcement. Application has been made by the Company for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on Monday, 8 November 2004.

TERMS AND DEFINITIONS

“Board”

the board of Directors

• “Business Day” any day (excluding a Saturday) on which banks generally are open for business in Hong Kong

• “Company” China Conservational Power Holdings Limited, a company incorporated in Cayman Islands with limited liability and the shares of which are listed on the Stock Exchange

• “Director(s)” director(s) of the Company

• “Group” the Company and its subsidiaries

• “Hong Kong” Hong Kong Special Administrative Region of the People’s Republic of China

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

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China Conservational Power Holdings Limited – Announcement

5 November 2004

“Placees” any individual(s), institutional or other professional investor(s) or any of their respective subsidiaries or associates procured by the Placing Agent to subscribe for any of the Placing Shares pursuant to the Placing Agent’s obligation under the Placing Agreement “Placing” the placing of 64,454,000 new Shares pursuant to the terms of the Placing Agreement “Placing Agent” Kingston Securities Limited, a licensed corporation to carry on business in types 1, 4, 6 and 9 regulated activities (dealing in securities, advising on securities and corporate finance and asset management) under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“Placing Agreement” a conditional placing agreement entered into between the Company and the Placing Agent dated 4 November 2004 in relation to the Placing

• “Placing Price” HK$0.23 per Placing Share

• “Placing Shares” an aggregate of 64,454,000 Shares to be placed pursuant to the terms of the Placing Agreement

• “Shares” ordinary shares of HK$0.10 each in the share capital of the Company

• “Shareholder(s)” holders of the Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “%” per cent.

By order of the Board CHINA CONSERVATIONAL POWER HOLDINGS LIMITED Hon Ming Kong Chairman

Hong Kong, 5 November 2004

As at the date hereof, the Board comprises nine directors of which Messrs. Hon Ming Kong, Hon Yik Kwong, Lee Yu Leung, Chen Jun Nong, Pascal Ting as executive directors; and Mr. Li Yong, Alfa as non-executive director and Messrs. Fork Siu Lun, Tommy, Tsoi Wai Kwong, Loo Chung Keung, Steve as independent nonexecutive directors.

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

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China Conservational Power Holdings Limited – Announcement

5 November 2004