Television Broadcasts Limited — Capital/Financing Update 2013

Feb 6, 2013

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.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

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China Fortune Financial Group Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 290) Website: http://www.290.com.hk

ISSUE OF CONVERTIBLE BOND UNDER GENERAL MANDATE

On 6 February 2013 after trading hours, the Company and the Subscriber entered into the Subscription Agreement in respect of the issue of the Convertible Bond in the principal amount of HK$32 million due three years from the date of issue at an exercise price of HK$0.10 per Conversion Share. Completion of the Subscription Agreement is subject to the conditions as set out in the paragraph headed ‘‘Conditions precedent’’ below. Detailed terms of the Convertible Bond are set out in the paragraph headed ‘‘Principal terms of the Convertible Bond’’ below. The net proceeds from the issue of Convertible Bond of approximately HK$32 million will be used for repayment of debts and/or as the general working capital of the Group.

Upon full conversion of the Convertible Bond at the Conversion Price at HK$0.10 (subject to adjustment), a total of 320,000,000 Conversion Shares will be issued, representing approximately 10.11% of the issued share capital of the Company as at the date of this announcement and approximately 9.18% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares.

Completion of the Subscription is subject to fulfillment of the conditions precedent under the Subscription Agreement. Accordingly, the Subscription may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

On 6 February 2013 after trading hours, the Company and the Subscriber entered into the Subscription Agreement in respect of the issue of the Convertible Bond in the principal amount of HK$32 million due three years from the date of issue at an exercise price of HK$0.10 per Conversion Share. Details of the Subscription Agreement and the terms of the Convertible Bond are set out below.

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SUBSCRIPTION AGREEMENT

1) Parties and Date

Date: 6 February 2013 Issuers: the Company Subscriber: the Subscriber

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the Subscriber and its ultimate beneficial owner(s) is not a connected person of the Company under the Listing Rules. The Subscriber is a company incorporated in the British Virgin Islands and is principally engaged in investment holdings. It is a wholly-owned subsidiary of PME Group Limited, the shares of which are listed on the Main Board of the Stock Exchange.

2) Principal terms of the Convertible Bond

Principal amount: HK$32 million

Issue price: 100% of the principal amount of the Convertible Bond Interest rate: 5% per annum and interest payable on the first anniversary, the second anniversary of the date of issue and the maturity date of the Convertible Bond

Maturity: The date falling on the third anniversary of the date of issue of the Convertible Bond

• Status and Transfer: (a) The obligations of the Company arising under the Convertible Bond constitute general, unconditional, unsecured and unsubordinated obligations of the Company, and rank and shall rank equally among and pari passu with all other present and future unsecured and unsubordinated obligations of the Company except for obligations accorded preference by mandatory provisions of applicable laws. No application shall be made for a listing of the Convertible Bond in any jurisdiction.

• (b) Save with the prior written consent of the Company and prior written notice in relation to such transfer or assignment has been given to the Company, no assignment or transfer of the Convertible Bond may be made. The Convertible Bond may only be transferred, if and only if, the transfer is made in accordance with any applicable requirements of the Stock Exchange, the Listing Rules, applicable laws and regulations. In the event of a transfer to a connected person (as defined in the Listing Rules) of the Company, prior approval from the Company and the Stock Exchange should be obtained.

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• (c) Any assignment or transfer of the Convertible Bond shall be in respect of the whole or any part (in multiples of HK$500,000) of the outstanding principal amount of the Convertible Bond. Title to the Convertible Bond passes only upon the cancellation of the existing certificate and the issue of a new certificate in accordance with the terms of the Convertible Bond. The Convertible Bond Holder will (except as otherwise required by law) be treated as the absolute owner of the Convertible Bond for all purposes (whether or not overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, or the theft or loss of, the certificates issued in respect of them) and no person will be liable for so treating the Convertible Bond Holder.

• (d) The Convertible Bond may be transferred by delivery to the Company of a duly executed transfer form together with the certificate(s) for the Convertible Bond being transferred. The Company shall, within ten (10) Business Days of receipt of such documents from the Convertible Bond Holder, cancel the existing Convertible Bond, issue a new Convertible Bond and certificate in respect thereof under the seal of the Company in favour of the transferee or assignee as applicable.

• (e) Any legal and other costs and expenses which may be incurred by the Company in connection with any transfer or assignment of the Convertible Bond or any request thereof shall be borne by the transferee alone.

• (f) The Company shall maintain and give a full and complete register of the Convertible Bond Holder, the conversion, cancellation and destruction of the Convertible Bond, replacement Convertible Bond issued in substitution for any defaced, lost, stolen or destroyed Convertible Bond and of details and addresses of the Convertible Bond Holder from time to time. The Company shall make available such register to the Convertible Bond Holder for inspection at all reasonable times and will permit the Convertible Bond Holder to copy the same.

Payments:

• (a) All payments by the Company under the Convertible Bond shall be made in immediately available funds free and clear of any withholdings or deductions for any present or future taxes, imposts, levies, duties or other charges payable by the Company. In the event that the Company is required by law to make any such deduction or withholding from any amount paid, the Company shall pay to Convertible Bond Holder such additional amount as shall be necessary so that the Convertible Bond Holder continues to receive a net amount equal to the full amount which it would have received if such withholding or deduction had not been made.

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• (b) All payments by the Company under the Convertible Bond shall be made, not later than 11: 00 a.m. (Hong Kong time) on the due date, by remittance to such bank account in Hong Kong as the Convertible Bond Holder may notify the Company from time to time.

• (c) If the due date for payment of any amount in respect of the Convertible Bond is not a Business Day, the Convertible Bond Holder shall be entitled to payment on the next following Business Day in the same manner.

• (d) The Company shall not be obliged to make any payment on the redemption of the outstanding principal amount of the Convertible Bond until it has received the certificate for the Convertible Bond.

Redemption:

Unless previously converted, upon presentation the original certificate of the Convertible Bond on its maturity date to the Company, the Convertible Bond shall be redeemed by the Company at its principal amount and interest then outstanding.

The Company shall be entitled to redeem the Convertible Bond by repaying the Convertible Bond Holder(s) all the then outstanding principal amount of the Convertible Bond together with the interest accrued thereon (calculated up to and including the date of redemption) commencing from the first anniversary of the date of issue of the Convertible Bond provided that (i) the Company has served a written redemption notice to the Convertible Bond Holder(s); and (ii) such written redemption notice has been duly delivered by the Company to the Convertible Bond Holder(s) at least ten (10) Business Days prior to the date of redemption.

Conversion Price:

Conversion:

HK$0.10 per Conversion Share, subject to general anti-dilution adjustments due to, among other matters, consolidation or subdivision of the Shares, capitalisation of profits or reserves, capital distribution, subscription by way of rights or other events for issue of Shares.

• (a) The Convertible Bond can be converted from time-to-time after its issuance and prior to the expiry of its maturity date in strict accordance with the terms of the Convertible Bond.

• (b) No fraction of a Share shall be issued on conversion of the Convertible Bond. Fractional entitlements shall be ignored and any sum paid in respect thereof shall be retained by the Company for its own benefit. Shares issued upon conversion shall rank pari passu in all respects with all other existing Shares then outstanding as at the exercise date and be entitled to all dividends and other distributions, the record date of which falls on a date on or after the date of the conversion notice.

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• (c) The Convertible Bond Holder shall exercise the right of conversion to the extent that the public float of the Company will not be less than 25% of the issued share capital of the Company immediately after such conversion.

• (d) The Convertible Bond Holder shall not convert the Convertible Bond and the Company shall not issue any Conversion Shares if, upon such issue, the Convertible Bond Holder and the parties acting in concert with it, shall be interested in 30% (or such amount as may from time to time that may trigger a mandatory general offer or considered by the SFC as a change in control of the Company) or more of the then enlarged issued share capital of the Company at the date of the relevant conversion.

Events of default:

• If any of the following events occurs, the Convertible Bond Holder(s) may give notice to the Company that the Convertible Bond, on the giving of such notice, are immediately due and payable at its principal amount then outstanding:

• (a) the listing of the Shares (as a class) on the Stock Exchange:

• (i) ceases; or

• (ii) is suspended for a continuous period of thirty (30) Business Days, on each of which the Stock Exchange is generally open for trading, due to the default of the Company or any of the Directors;

• (b) the Company defaults in performance or compliance with any of its obligations contained in the Convertible Bond, which breach or default is incapable of remedy or, if capable of remedy, is not remedied within fourteen (14) Business Days after notice of such breach or default is sent from the Convertible Bond Holder(s) to the Company;

• (c) an encumbrancer takes possession or a receiver, manager or other similar officer is appointed of the whole or any material part of the undertaking, property, assets or revenues of the Company or any of its subsidiaries;

• (d) the Company becomes insolvent or is unable to pay its debts as they mature or applies for or consents to the appointment of any administrator, liquidator or receiver of the whole or any material part of its undertaking, property, assets or revenues or enters into a general assignment or compromise with or for the benefit of its creditors;

• (e) an order is made or an effective resolution passed for winding-up of the Company or any of its material subsidiaries;

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• (f) the Company defaults in the payment of the principal in respect of the Convertible Bond when and as the same ought to be paid and such default is not remedied by the Company within fourteen (14) Business Days of the due date thereof;

• (g) any other debentures, bonds, notes, Convertible Bond or other instruments of indebtedness or any other loan indebtedness (‘‘Indebtedness’’) of the Company or any securities convertible into or exchangeable for Shares (‘‘Equity Linked Securities’’) of the Company become prematurely repayable following a default in respect of the terms thereof which shall not have been remedied, or the Company or any of its subsidiaries defaults in the repayment of the Indebtedness or Equity Linked Securities at the maturity thereof or at the expiration of any applicable grace period thereof, or any guarantee of or indemnity in respect of any Indebtedness or Equity Linked Securities of others given by the Company or any of its material subsidiaries shall not be honored when due and called upon;

provided that notwithstanding the foregoing, if the Company shall fail to issue the Conversion Shares in accordance with the terms of the Convertible Bond, any Convertible Bond Holder shall be entitled to bring an action against the Company for either specific performance or damages. At any time after the principal amount of the Convertible Bond has become payable, any of the Convertible Bond Holder may without further notice institute such proceedings as it may think fit to enforce payment of the monies due.

Voting: The Convertible Bond Holder shall not be entitled to receive notices of, attend or vote at any meetings of the Company by reason only of it being the Convertible Bond Holder.

Upon full conversion of the Convertible Bond at the Conversion Price at HK$0.10 (subject to adjustment), a total of 320,000,000 Conversion Shares will be issued, representing approximately 10.11% of the issued share capital of the Company as at the date of this announcement and approximately 9.18% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares.

The Convertible Shares shall rank pari passu in all respects with the Shares in issue as at the date on which the notice is given for exercise of the conversion rights attaching to the Convertible Bond. There will not be any restrictions for the subsequent sale of the Conversion Shares by their holder(s).

The Conversion Price (i) represents a discount of approximately 8.26% over the closing price of HK$0.109 per Share as quoted on the Stock Exchange on the Last Trading Day; (ii) represents a discount of approximately 14.09% over the average closing price of HK$0.1164 per Share as quoted on the Stock Exchange for the 5 consecutive trading days immediately prior to the Last Trading Day; and (iii) represents a discount of

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approximately 13.27% over the average closing price of HK$0.1153 per Share as quoted on the Stock Exchange for the 10 consecutive trading days immediately prior to the Last Trading Day.

3) Conditions precedent

Completion of the Subscription Agreement is conditional upon the fulfillment of the following conditions precedent:

• (a) the Subscriber completes and is satisfied reasonably with the result of the due diligence to be conducted on the Company;

• (b) each of the warranties given by the Company under the Subscription Agreement remaining true and accurate in all material respects up to Completion;

• (c) the performance and observance by the Company of all the undertakings and covenants on the part of the Company contained in the Subscription Agreement; and

• (d) the Stock Exchange shall have granted the listing of and permission to deal in the Conversion Shares.

The Subscriber shall have the discretion to waive all or any part of the conditions set out above except condition (d) and any waiver so granted may be subject to such conditions as the Subscriber may deem fit.

If the conditions set out above shall not have been fulfilled or waived by 5: 00 p.m. (Hong Kong time) on the day falling 90 days of the date of the Subscription Agreement (or such later date as the parties may agree in writing), the Subscription Agreement shall automatically terminate and none of the parties to the Subscription Agreement shall have any claim of any nature or liabilities thereunder whatsoever against any of the other parties under the Subscription Agreement (save for any antecedent breaches).

4) Completion

Completion shall take place in Hong Kong on the day immediately after which the conditions precedent set out in the Subscription Agreement are fulfilled and/or waived.

REASON FOR THE ISSUE OF CONVERTIBLE BOND AND USE OF PROCEEDS

The net proceeds from the issue of Convertible Bond of approximately HK$32 million will be used for repayment of debts and/or as the general working capital of the Group.

The Directors consider that the raising of funds by the issue of Convertible Bond is justifiable taking into account the recent market conditions which represent an opportunity for the Group to strengthen its capital base and financial position. The Directors consider that the issue of Convertible Bond is an appropriate means of raising additional capital of the Company since it will not have an immediate dilution effect on the shareholding of the existing Shareholders.

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The Conversion Price was agreed upon based on the recent closing prices of the Shares as quoted on the Stock Exchange. The Directors (including the independent non-executive Directors) consider that the terms of the Subscription Agreement, which were arrived at after arm’s length negotiations between the Company and the Subscriber, are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

EXISTING CONVERTIBLE BONDS

Reference is made to the announcement of the Company dated 21 December 2011 in relation to, among other matters, the issue of convertible bonds in the principal amount of HK$40,384,615 by the Company to Ever Step Holdings Limited (‘‘Ever Step Convertible Bonds’’). As at the date of this announcement, there were outstanding Ever Step Convertible Bonds in the principal amount of HK$40,384,615 which upon full exercise of the conversion rights attaching to the Ever Step Convertible Bonds pursuant to the terms thereof, the Company may have to issue up to 201,923,075 new Shares, representing approximately 6.38% of the issued share capital of the Company as at the date of this announcement.

SHAREHOLDING STRUCTURE

For illustrative purpose only, set out below is the shareholding structure of the Company (a) as at the date of this announcement; and (b) immediately upon full conversion of the Convertible Bond at the Conversion Price (without adjustment), assuming there being no other change in the issued share capital and shareholding structure of the Company since the date of this announcement and no exercise of the conversion rights attaching to the Ever Step Convertible Bonds:

Shareholders Jadehero Limited (Note 1) Mankind Investment Limited (‘‘MIL’’) (Note 2) Right Magic Limited (Note 3) So Chi Yuk Other public shareholders The Subscriber	As at the date of this announcement Number of Shares (approx. % of shareholding) 800,000,000 25.27% 500,000,000 15.79% 263,738,000 8.33% 200,000,000 6.32% 1,402,347,668 44.29% — — 3,166,085,668 100.00%	Upon full conversion of the Convertible Bond Number of Shares (approx. % of shareholding) 800,000,000 22.95% 500,000,000 14.34% 263,738,000 7.57% 200,000,000 5.74% 1,402,347,668 40.22% 320,000,000 9.18% 3,486,085,668 100.00%	Upon full conversion of the Convertible Bond Number of Shares (approx. % of shareholding) 800,000,000 22.95% 500,000,000 14.34% 263,738,000 7.57% 200,000,000 5.74% 1,402,347,668 40.22% 320,000,000 9.18% 3,486,085,668 100.00%
			100.00%

Notes:

1. Mr. Wong Kam Fat Tony is a non-executive Director whereas Mr. Xia Yingyan is an executive Director. Jadehero Limited (‘‘Jadehero’’), a company incorporated in the British Virgin Islands with limited liability, beneficially held 800,000,000 Shares. Jadehero is owned as to 20% by Marvel Steed Limited and as to 80% by Southlead Limited. Mr. Wong is the sole beneficial owner of the entire equity interest in Marvel Steed Limited whereas Mr. Xia is the sole beneficial owner of the entire equity interest in Southlead Limited.

2. MIL beneficially held 500,000,000 Shares. MIL is wholly-owned by China Cinda (HK) Asset Management Co., Limited (‘‘China Cinda (HK)’’) which is in turn wholly-owned by Well Kent International Investment Company Limited (‘‘Well Kent’’). Well Kent is wholly-owned by China Cinda Asset Management Co. Ltd.. For the purpose of the SFO, China Cinda (HK), Well Kent and China Cinda Asset Management Co. Ltd. are deemed or taken to be interested in the Shares held by MIL.

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1. Right Magic Limited, Sure Venture Investment Limited and Excel Return Enterprise Limited beneficially held 263,738,000 Shares, 40,000,000 Shares and 7,000,000 Shares respectively. Right Magic Limited, Sure Venture Investment Limited and Excel Return Enterprise Limited are all indirect wholly-owned subsidiaries of China Railway Logistics Limited. For the purpose of the SFO, China Railway Logistics Limited is deemed or taken to be interested in the Shares held by Right Magic Limited, Sure Venture Investment Limited and Excel Return Enterprise Limited.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

The Company has not carried out any fund raising activities during the 12 months immediately preceding the date of this announcement.

LISTING RULES IMPLICATION

The Conversion Shares will be allotted and issued under the General Mandate. As at the date of this announcement, no part of the General Mandate has been utilized. Accordingly, the issue of the Conversion Shares is not subject to any approval by the Shareholders.

No application will be made for the listing of, or permission to deal in, the Convertible Bond on the Stock Exchange or any other stock exchange. Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares.

Completion of the Subscription is subject to fulfillment of the conditions precedent under the Subscription Agreement. Accordingly, the Subscription may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

DEFINITIONS

Terms or expressions used in this announcement shall, unless the context otherwise requires, have the meanings ascribed to them below:

• ‘‘Board’’ the board of Directors ‘‘Business Day’’ a day (except Saturday, Sunday or public holiday) on which banks in Hong Kong are generally open for business

• ‘‘Company’’ China Fortune Financial Group Limited, a company incorporated in the Cayman Islands with limited liability and the Shares of which are listed on the Stock Exchange

• ‘‘Completion’’ completion of the Subscription Agreement in accordance with its terms and conditions

• ‘‘connected person’’ has the meaning ascribed thereto in the Listing Rules

• ‘‘Conversion Price’’ HK$0.10 per Share (subject to adjustment)

• ‘‘Conversion Shares’’ the Shares which may fall to be allotted and issued upon exercise of the conversion rights attaching to the Convertible Bond

• ‘‘Convertible Bond’’ the 5% coupon convertible bond in the principal amount of HK$32 million due three years from the date of issue to be issued by the Company to the Subscriber pursuant to the Subscription Agreement

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‘‘Convertible Bond	means the person who is for the time being the holder of the
Holder(s)’’	Convertible Bond
‘‘Directors’’	the directors of the Company
‘‘General Mandate’’	the general mandate granted to the Directors pursuant to an ordinary
	resolution passed at the annual general meeting of the Company held
	on 15 August 2012 to allot, issue and deal with up to 633,217,133 new
	Shares, representing 20% of the aggregate nominal amount of the
	issued share capital of the Company on the date of such annual
	general meeting
‘‘Group’’	the Company and its subsidiaries
‘‘Hong Kong’’	The Hong Kong Special Administrative Region of the People’s
	Republic of China
‘‘Last Trading Day’’	6 February 2013, being the date of this announcement
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on the Stock Exchange
‘‘SFC’’	The Securities and Futures Commission of Hong Kong
‘‘SFO’’	the Securities and Futures Ordinance (Chapter 571, laws of Hong
	Kong)
‘‘Share(s)’’	ordinary share(s) of HK$0.10 each in the capital of the Company
‘‘Shareholder(s)’’	holder(s) of the Shares
‘‘Stock Exchange’’	The Stock Exchange of Hong Kong Limited
‘‘Subscriber’’	One Express Group Limited, a company incorporated in the British
	Virgin Islands with limited liability and is a wholly-owned subsidiary
	of PME Group Limited, a company whose shares are listed on the
	Main Board of the Stock Exchange
‘‘Subscription’’	the subscription of the Convertible Bond by the Subscriber pursuant
	to the terms of the Subscription Agreement
‘‘Subscription	the subscription agreement dated 6 February 2013 and entered into
Agreement’’	between the Company and the Subscriber in relation to the
	subscription and issue of the Convertible Bond

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Hong Kong dollars, the lawful currency of Hong Kong

‘‘HK$’’

‘‘%’’

per cent.

By Order of the Board China Fortune Financial Group Limited Ng Cheuk Fan Keith Managing Director

Hong Kong, 6 February 2013

As at the date of this announcement, the Board consists of four executive Directors, namely Mr. Zhang Min (Chairman), Mr. Ng Cheuk Fan Keith (Managing Director), Mr. Hon Chun Yu and Mr. Xia Yingyan; two non-executive Directors, namely Mr. Wong Kam Fat Tony (Vice chairman) and Mr. Wu Ling; and three independent non-executive Directors, namely Mr. Lam Ka Wai Graham, Mr. Ng Kay Kwok and Mr. Tam B Ray Billy.

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