Television Broadcasts Limited — M&A Activity 2005

Jul 18, 2005

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 the Cayman Islands with limited liability)

(Stock Code: 290)

PROPOSED ACQUISITION OF CERTAIN INTEREST IN A COMPANY ENGAGED IN APPLICATION SOFTWARE DESIGN AND DISTRIBUTION AND RESUMPTION OF TRADING

The Board announces that on 15 July 2005, Excellent Legend, the Third Party and the Guarantor entered into the Letter of Intent in relation to the Proposed Acquisition. On the date of the signing of the Letter of Intent, Excellent Legend has paid to the Third Party an amount of HK$10,000,000 as earnest money.

Pursuant to the terms of the Letter of Intent, the Proposed Acquisition is subject to, among others, the completion of a due diligence review of the affairs of the Target Company to the satisfaction of Excellent Legend and the 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 and action will be taken to comply with the disclosure/ approval requirements under the Listing Rules in respect of the Proposed Acquisition.

Trading of the shares of the Company was suspended with effect from 9:36 a.m. on Monday, 18 July 2005 pending the issue of this announcement and application was made for resumption of trading of the shares from 9:30 a.m. on Tuesday, 19 July 2005.

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

THE LETTER OF INTENT

Reference is made to the announcement made by the Company dated 13 July 2005, among other things, the proposed acquisition of certain interest in a company which was principally engaged in design and distribution of application software specialized for hospitals and clinics in the PRC.

The Board announces that on 15 July 2005, Excellent Legend, the Third Party and the Guarantor entered into the Letter of Intent in relation to the Proposed Acquisition. The following is a summary of the terms of the Letter of Intent:

Date : 15 July 2005 Parties : 1. the Third Party; 2. Excellent Legend, an indirect wholly owned subsidiary of the Company; and

1. the Guarantor

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China Conservational Power Holdings Limited – Announcement 18 July 2005

Subject matter

• : Pursuant to the Letter of Intent, Excellent Legend may acquire from the Third Party certain interest in the Target Company. The Target Company is a limited liability company established in the PRC in May 2005 and is principally engaged in the business of design and distribution of application software for hospitals and clinics in the PRC. The Third Party is currently interested in 70% of the issued share capital of the Target Company. The Company has not yet determined the percentage of interest in the Target Company to be acquired by Excellent Legend which will be subject to further negotiation between the parties upon completion of the due diligence review of the affairs of the Target Company.

• Consideration : The consideration for the Proposed Acquisition and the payment thereof will be subject to further negotiation between the parties upon completion of the due diligence review of the affairs of the Target Company.

• Earnest money : Pursuant to the terms of the Letter of Intent, Excellent Legend shall pay to the Third Party an amount of HK$20 million (“Earnest Money”) as earnest money. On 15 July 2005, the date of the signing of the Letter of Intent, Excellent Legend has paid to the Third Party an amount of HK$10 million. The remaining HK$10 million shall be paid to the Third Party upon commencement of the due diligence review of the affairs of the Target Company.

In the event Excellent Legend notifies the Third Party of its intention not to proceed with the Proposed Acquisition by the End-date of the Due Diligence Review Period (as defined below) or the parties failed to reach an agreement in respect of the Proposed Acquisition by the expiration of the Exclusivity Period (as defined below), the Third Party shall refund the Earnest Money received to Excellent Legend without interest within 7 days upon receipt of a written notification from Excellent Legend.

The obligation of the Third Party to repay the Earnest Money to Excellent Legend under the Letter of Intent is guaranteed by the Guarantor, who is interested in 80% of the issued share capital of the Third Party.

Due diligence

• : Excellent Legend was granted a three-month period commencing from the date of the Letter of Intent up to 14 October 2005 (the “Due Diligence Review Period”) to conduct a due diligence review of the affairs of the Target Company and to determine whether or not to proceed with the Proposed Acquisition by giving written notice to the Third Party within 7 days after the expiration of the Due Diligence Review Period (“End-date of the Due Diligence Review Period”). The Due Diligence Review Period may be extended by agreement between the parties. The Company intends to commence the due diligence review of the affairs of the Target Company as soon as practicable.

• Exclusivity

• : During the Due Diligence Review Period (or such later date as the parties may agreed) (the “Exclusivity Period”), Excellent Legend has an exclusive right to negotiate with the Third Party in respect of the Proposed Acquisition.

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China Conservational Power Holdings Limited – Announcement

18 July 2005

Lapse of the Letter of Intent

:

• If the parties fail to reach an agreement in relation to the Proposed Acquisition by the expiration of the Exclusivity Period or if Excellent Legend notifies the Third Party of its intention not to proceed with the Proposed Acquisition on or before the End-date of the Due Diligence Review Period, the Letter of Intent will lapse and neither party shall have liability towards the other party nor has any claim against the other party.

Pursuant to the terms of the Letter of Intent, the Proposed Acquisition is subject to, among others, the completion of a due diligence review of the affairs of the Target Company to the satisfaction of Excellent Legend and the negotiation and finalization of the terms and conditions in relation to the Proposed Acquisition.

Further announcement will be made by the Company in respect of any further material development of the Proposed Acquisition and action will be taken to comply with the disclosure/ approval requirements under the Listing Rules in respect of the Proposed Acquisition.

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

RESUMPTION OF TRADING

Trading of the shares of the Company was suspended with effect from 9:36 a.m. on Monday, 18 July 2005 pending the issue of this announcement and application was made for resumption of trading of the shares from 9:30 a.m. on Tuesday, 19 July 2005.

DEFINITION

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

“Board”	the board of directors of the Company;
“Company”	China Conservational Power Holdings Limited, a company incorporated in the
	Cayman Islands whose securities are listed on The Stock Exchange of Hong
	Kong Limited;
“Excellent Legend”	Excellent Legend Limited, an indirect wholly owned subsidiary of the Company;
“Guarantor”	the guarantor of the obligations of the Third Party to refund the Earnest Money
	under the Letter of Intent, who is a PRC national and independent of and not
	connected with the Company, the directors, chief executives and substantial
	shareholders of the Company and its subsidiaries and their respective associates
	(as defined in the Listing Rules);
“Letter of Intent”	the letter of intent dated 15 July 2005 and entered into among Excellent Legend,
	the Third Party and the Guarantor in relation to the Proposed Acquisition;
“Listing Rules”	The Rules Governing the Listing of Securities on The Stock Exchange of
	Hong Kong Limited;
“PRC”	The People’s Republic of China and for the sole purpose of this announcement
	excludes Hong Kong Special Administrative Region, Macau Special
	Administrative Region and Taiwan;
“Target Company”	a company established in the PRC in May 2005 and is principally engaged in
	the business of design and distribution of application software for hospitals
	and clinics in the PRC;

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China Conservational Power Holdings Limited – Announcement

18 July 2005

“Third Party”

• a company established in the PRC and is interested in 70% of the issued share capital of the Target Company and 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

• “Proposed Acquisition”

• the proposed acquisition of certain interest in the Target Company from the Third Party by Excellent Legend.

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

Executive Directors:

Mr. Chan Tat Chee (Chairman) Mr. Hon Ming Kong Mr. Lee Yu Leung Mr. Pascal Ting Mr. Lin Hoi Kwong

Mr. Zhao Lin

Non-executive Director:

Mr. Li Yong, Alfa

Independent Non-executive Directors:

Mr. Loo Chung Keung, Steve Mr. Tsoi Wai Kwong Mr. Au-Yeung Ka Cheung Mr. Wong Tik Tung

By Order of the Board China Conservational Power Holdings Limited Chan Tat Chee Chairman

Hong Kong, 18 July 2005

Please also refer to the published version of this announcement in The Standard.

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China Conservational Power Holdings Limited – Announcement 18 July 2005