Television Broadcasts Limited — Share Issue/Capital Change 2002

Aug 8, 2002

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Yew Sang Hong (Holdings) Limited, you should at once hand this circular and the accompanying Annual Report 2002 and form of proxy to the purchaser or the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, 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 circular.

YEW SANG HONG (HOLDINGS) LIMITED 耀 生 行（集 團）有 限 公 司 [*]

(Incorporated in the Cayman Islands with limited liability)

GENERAL MANDATES FOR ISSUE OF NEW SHARES AND REPURCHASE BY THE COMPANY OF ITS OWN SHARES

A notice convening an annual general meeting of Yew Sang Hong (Holdings) Limited to be held at Unit 3616, 36/F, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong on Friday, 23rd August, 2002 at 11:00 a.m. is contained in the Annual Report 2002 of the Company (the “Annual Report 2002”). Shareholders are advised to read the notice and to complete and return the form of proxy enclosed with the Annual Report 2002 in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the Annual General Meeting or any adjourned meeting. Completion and return of the form of proxy shall not preclude you from attending and voting at the meeting or any adjourned meeting should you so desire.

30th July, 2002

* for identification only

LETTER FROM THE CHAIRMAN

YEW SANG HONG (HOLDINGS) LIMITED 耀 生 行（集 團）有 限 公 司 [*]

(Incorporated in the Cayman Islands with limited liability)

Executive Directors:

Mr. Lai Sai Sang (Chairman) Ms. Leung Sau Che, Jennifer Mr. Chuk Wai Chun, Winston Mr. Lee Yu Leung Mr. Zhang Dachun Mr. Hon Hing Kong

Registered office: Ugland House P.O. Box 309 George Town Grand Cayman Cayman Islands British West Indies

Independent Non-executive Directors:

Mr. Ip Ying Chuen Mr. Lau Chun Kay Mr. Lam Kwok Cheong Mr. Wong Tik Tung

Head office and principal place of business in Hong Kong 13th Floor, Hing Yip Centre 37 Beech Street Tai Kok Tsui Kowloon

Date: 30th July, 2002

To the shareholders of the Company

Dear Sir or Madam,

GENERAL MANDATES FOR ISSUE OF NEW SHARES AND REPURCHASE BY THE COMPANY OF ITS OWN SHARES

INTRODUCTION

At the annual general meeting (“Annual General Meeting”) of Yew Sang Hong (Holdings) Limited (the “Company”) to be held at 11:00 a.m. on 23rd August, 2002 at Unit 3616, 36/F., China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong, the notice of which is set out on pages 7 to 9 of the annual report of the Company for the year ended 31st March, 2002 (the “Annual Report 2002”), ordinary resolutions will be proposed:

(a) to grant a repurchase mandate to the directors (the “Directors”) of the Company to enable them to exercise the powers of the Company to repurchase shares of the Company

* for identification only

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LETTER FROM THE CHAIRMAN

(the “Shares”) which are fully paid up with an aggregate amount not exceeding 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of such resolutions (the “Repurchase Mandate”); and

• (b) to grant a general and unconditional mandate to the Directors to enable them to exercise the powers of the Company to allot, issue and otherwise deal with additional Shares up to a maximum of 20 per cent. of the aggregate nominal share capital of the Company in issue as at the date of passing of such resolution (the “Share Issue Mandate”).

In addition, conditional upon the granting of the Repurchase Mandate, an ordinary resolution will be proposed to increase the number of Shares to be allotted and issued under the Share Issue Mandate by an additional number representing such number of Shares repurchased under the Repurchase Mandate.

Under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”), the Company is required to send to its shareholders all information which is reasonably necessary to enable shareholders to make an informed decision as to whether to vote for or against the resolution to renew the granting of the Repurchase Mandate to the Directors. This circular is prepared for such purpose and to give you further details so as to enable you to make an informed decision on whether to vote for or against the resolutions to be proposed at the Annual General Meeting in relation to the Repurchase Mandate and the Share Issue Mandate. An explanatory statement as required under the Listing Rules to provide the requisite information concerning the Repurchase Mandate is set out in the appendix hereto.

THE REPURCHASE MANDATE

By resolutions of the shareholders of the Company passed on last year’s annual general meeting duly held on 28th September, 2001 (the “Shareholders’ Resolutions”), the Directors were granted a general mandate to repurchase the Shares on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). Such Repurchase Mandate will lapse at the conclusion of the Annual General Meeting unless renewed at that meeting.

At the Annual General Meeting, an ordinary resolution will be proposed to grant the Repurchase Mandate to the Directors.

The Repurchase Mandate will, if granted, remain in effect until the earliest of (i) the conclusion of the next annual general meeting of the Company; (ii) the expiration of the period within which the next annual general meeting of the Company is required by any applicable laws of the Cayman Islands or by the articles of association of the Company (“the Articles of Association”); and (iii) its revocation or variation by an ordinary resolution of the shareholders in general meeting.

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LETTER FROM THE CHAIRMAN

THE SHARE ISSUE MANDATE

By the Shareholders’ Resolutions, the Directors were granted a general mandate to allot, issue and deal with the additional Shares not exceeding 20 per cent. of the issued share capital of the Company. Such Share Issue Mandate will lapse at the conclusion of the Annual General Meeting unless renewed at that meeting.

At the Annual General Meeting, an ordinary resolution will be proposed to grant the Share Issue Mandate to the Directors in order to increase the flexibility for raising capital to facilitate expansion plan of the Company as the Directors consider appropriate.

The Share Issue Mandate will, if granted, remain effective until the earliest of (i) the conclusion of the next annual general meeting of the Company; (ii) the expiration of the period within the next annual general meeting of the Company is required by any applicable laws of the Cayman Islands or by the Articles of Association; and (iii) its revocation or variation by an ordinary resolution of the shareholders in general meeting.

In addition, if the Repurchase Mandate is granted, an ordinary resolution will be proposed at the Annual General Meeting providing that any Shares repurchased under the Repurchase Mandate (up to maximum of 10 per cent. of the issued shares as at the date of the granting of the Share Issue Mandate) will be added to the total number of Shares which may be allotted and issued under the Share Issue Mandate.

The Directors have no immediate plans to issue any new Shares other than Shares which may fall to be issued under the share option scheme of the Company or any scrip dividend scheme which may be approved by the shareholders of the Company.

ACTION TO BE TAKEN

Whether or not you intend to attend the Annual General Meeting, you are requested to complete and return the form of proxy accompanied with Annual Report 2002 in accordance with the instructions printed thereon not less than 48 hours before the time appointed for holding the Annual General Meeting. The return of the form of proxy will not preclude you from attending and voting at the Annual General Meeting if you so wish.

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LETTER FROM THE CHAIRMAN

RECOMMENDATION

The Directors believe that the Repurchase Mandate and the Share Issue Mandate are in the best interests of the Company and its shareholders.

Accordingly, the Directors recommend that all shareholders should vote in favour of the ordinary resolutions to be proposed at the Annual General Meeting.

Yours faithfully

For and on behalf of the Board of Directors of

Yew Sang Hong (Holdings) Limited Mr. Lai Sai Sang

Chairman

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EXPLANATORY STATEMENT

APPENDIX

This Appendix serves as an explanatory statement, as required by the Listing Rules, to provide you with requisite information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolution approving the Repurchase Mandate.

1. SHARE CAPITAL

As at 30th July, 2002, being the latest practicable date prior to the printing of this circular (the “Latest Practicable Date”), the issued share capital of the Company comprised 223,800,000 Shares.

Subject to the passing of the proposed resolution for the approval of the Repurchase Mandate and on the basis that no Shares are issued or repurchased by the Company prior to the Annual General Meeting, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 22,380,000 Shares.

2. REASONS FOR THE REPURCHASE

The Directors believe that the Repurchase Mandate is in the best interests of the Company and its shareholders. An exercise of the Repurchase Mandate may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the value of the net assets of the Company and/or earnings the Company and will only be made if the Directors believe that it will benefit the Company and its shareholders.

3. FUNDING OF REPURCHASES

Repurchases of Shares will be funded entirely from the Company’s legally available cash flow or working capital facilities.

An exercise of the Repurchase Mandate in full could have a material adverse impact on the working capital and gearing position of the Company as compared with the position disclosed in the audited financial statements contained in the Annual Report 2002. The Directors do not, however, intend to make any repurchase in circumstances that would have any material adverse impact on the working capital or gearing position of the Company which in the opinion of the Directors are from time to time appropriate for the Company or would reduce the public float to below 25 per cent..

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EXPLANATORY STATEMENT

APPENDIX

4. SHARE PRICES

The highest and lowest prices at which Shares were traded on the Stock Exchange during the previous twelves months were as follows:

Month	Highest	Lowest
	(HK$)	(HK$)
2001
July	0.980	0.970
August	1.090	0.950
September	1.000	0.340
October	1.010	0.600
November	1.020	0.670
December	0.850	0.690
2002
January	0.830	1.560
February	3.150	1.440
March	3.325	2.725
April	4.875	2.900
May	6.250	4.450
June	6.200	5.850
July	9.200	5.500

5. GENERAL

None of the Directors, to the best of their knowledge, having made all reasonable enquiries, nor any of their associates (as defined in the Listing Rules), has any present intention to sell to the Company or its subsidiaries any Shares if the Repurchase Mandate is approved at the Annual General Meeting.

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make repurchases pursuant to the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of the Cayman Islands.

If a shareholder's proportionate interest in the voting rights of the Company increases on the Company exercising its powers to repurchase Shares pursuant to the Repurchase Mandate, such increase will be treated as an acquisition for the purposes of Rule 32 of the Hong Kong Code of Takeovers and Mergers (the “Takeovers Code”). As a result, a shareholder or group of shareholders acting in concerts could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

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EXPLANATORY STATEMENT

APPENDIX

As at the Latest Practicable Date, and according to the register kept by the Company pursuant to Section 16(1) of the Securities (Disclosure of Interests) Ordinance, the substantial shareholders of the Company as follows:

		Percentage of
	Number of Shares	shareholding
YSH Investments Limited_(Note 1)_	78,702,000	35.2%
Highworth Venture Limited_(Note 2)_	56,000,000	25.0%
AWH Fund Limited_(Note 3)_	25,981,000	11.6%

Notes:

1. YSH Investments Limited is a company beneficially owned by Mr. Lai Sai Sang and his wife, Chairman of the Company and a Director respectively.

2. Highworth Venture Limited is a company benefically owned by Mr. Hon Ming Kong, a Director.

3. Based on the information provided by the SDI unit of the Stock Exchange on 26th June, 2002.

The Directors have no intention to exercise the Repurchase Mandate to such an extent that will result in the number of Shares in the hands of public falling below the prescribed minimum percentage of 25 per cent.. In addition, the directors are not aware of any consequences of any repurchase of the Company’s Shares which will arise under the Takeover Code.

No connected persons (as defined in the Listing Rules) have notified the Company that they have a present intention to sell any Shares to the Company, or have undertaken to do so, in the event that the Repurchase Mandate is approved at the Annual General Meeting.

6. SHARE REPURCHASE MADE BY THE COMPANY

The Company has not purchased any of its Shares (whether on the Stock Exchange or otherwise) during the previous twelves months preceding the Latest Practicable Date.

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