Television Broadcasts Limited — M&A Activity 2005

Feb 3, 2005

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 290)

UPDATE ON 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

The Board announces that on 3 February 2005, Country Super, CITIC Assets Management and the PRC Party entered into the Investment Framework Agreement in relation to the Proposed Acquisition. The Investment Framework Agreement supercedes the Letter of Intent.

Pursuant to the terms of the Investment Framework Agreement, the Proposed Acquisition is subject to, among others, the completion of a reorganization of the PRC Company, a due diligence review of the affairs of the PRC Company to the satisfaction of Country Super 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.

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

THE INVESTMENT FRAMEWORK AGREEMENT

References are made to the announcements made by the Company dated 22 November 2004 and 6 December 2004, respectively.

The Board announces that on 3 February 2005, Country Super, CITIC Assets Management and the PRC Party entered into the Investment Framework Agreement in relation to the Proposed Acquisition. The Investment Framework Agreement supercedes the Letter of Intent. The following is a summary of the terms of the Investment Framework Agreement:

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China Conservational Power Holdings Limited – Announcement 3 February 2005

Date

Parties

• : 3 February 2005

• : (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). The PRC Party is indirectly wholly owned by CITIC Group;

  • 1. CITIC Assets Management, which is deemed to be interested in 111,116,666 shares in China Sciences Conservational Power Limited, a company listed on the Main Board of The Stock Exchange of Hong Kong Limited and which both of Mr. Chan Tat Chee and Mr. Hon Ming Kong are deemed to be interested in approximately 35% of its issued share capital. CITIC Assets Management is indirectly owned as to 53% by CITIC Group ;and

  • (3) Country Super, an indirect wholly owned subsidiary of the Company

Subject matter

• Consideration

Due diligence

• : Pursuant to the Investment Framework Agreement, Country Super may invest in up to 49% of the equity interest of the PRC Company upon completion of a reorganization, pursuant to which the PRC Company may be converted into a sino-foreign joint venture. The reorganization of the PRC Company will be led by CITIC Assets Management. 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.

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

• : CITIC Assets Management and Country Super were granted a three-month period commencing from the date of the Investment Framework Agreement up to 2 May 2005 (the “Due Diligence

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China Conservational Power Holdings Limited – Announcement

3 February 2005

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.

• Exclusivity

  • : During the Due Diligence Review Period, Country Super has an exclusive right (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 Investment : If the parties fail to reach an agreement in relation to Framework Agreement 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 Investment Framework Agreement will lapse and neither party shall have liability towards the other party.

Pursuant to the terms of the Investment Framework Agreement, the Proposed Acquisition is subject to, among others, the completion of a reorganization of the PRC Company, a due diligence review of the affairs of the PRC Company to the satisfaction of Country Super 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.

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

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China Conservational Power Holdings Limited – Announcement

3 February 2005

DEFINITION

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

	the board of directors of the Company;
work	CITIC International Assets Manageme	nt Limited, a	company
	incorporated in Hong Kong and indirectGroup as to 53%;China Conservational Power Holdingincorporated in the Cayman Islands whosThe Stock Exchange of Hong Kong LimitCountry Super Limited, an indirect whothe Company;	ly owned bys Limited, ae securities ared;lly owned sub	the CITIC
			company
			e listed on
			sidiary of
	the investment framework agreement dated 3 Febrand entered into among the PRC Party, CITIC Assets M		uary 2005anagement
	and Country Super in relation to the Propthe legally binding letter of intent dated 6into between Country Super and the PRC	osed AcquisitiDecember 20Party in rela	on;04 enteredtion to the
	Proposed Acquisition as disclosed in thethe Company dated 6 December 2004;the Rules Governing the Listing of SeExchange of Hong Kong Limited;The People’s Republic of China;	announcemencurities on	t made byThe Stock
	a company established in the PRC and enproducts distribution and investment in thein the PRC and is currently wholly owned	gaged in pharpharmaceuticby the PRC P	maceuticalal businessarty;

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China Conservational Power Holdings Limited – Announcement 3 February 2005

“Proposed Acquisition” the proposed acquisition of up to 49% of the equity interest of the PRC Company by Country Super.

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. Chen Jun Nong

• Mr. Pascal Ting

• Mr. Lin Hoi Kwong

Non-executive Director:

Mr. Li Yong, Alfa

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, 3 February 2005

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

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China Conservational Power Holdings Limited – Announcement

3 February 2005