TOM Group Limited — Capital/Financing Update 2005

Apr 26, 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.

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(Stock Code: 2383)

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(Stock Code: 8282)

JOINT ANNOUNCEMENT

UPDATE

ON VERY SUBSTANTIAL ACQUISITION INVOLVING THE ISSUE OF SHARES AND CONNECTED TRANSACTIONS

in relation to Acquisition of 100% of the issued share capital of Puccini International Limited

The board of directors of TOM and TOM Online announce that based on the Puccini 2004 Audited Accounts, the Earn-out Amount is US$132,094,090 (equal to 7.7 times the 2004 Net Profit) and the Earn-out Consideration will be paid to Cranwood in the following manner:

• (i) US$66,047,045 (being 50% of the Earn-out Amount) will be paid in cash by the end of April 2005; and (ii) US$47,547,044 (being US$66,047,045 (being 50% of the Earn-out Amount) less US$18,500,001) will be satisfied by the issue and allotment of shares of TOM Online (credited as fully paid) at an issue price equal to the Average Closing Price.

Accordingly, 304,155,503 Earn-out Consideration Shares (credited as fully paid) at HK$1.21933333 per share were issued and allotted to Cranwood and its nominee on 25 April 2005.

Reference is made to the circular of TOM Group Limited (“TOM”) dated 3 November 2003 in respect of the acquisition of 100% of the issued share capital of Puccini International Limited (“Puccini Acquisition”) and the prospectus of TOM Online Inc. (“TOM Online”) dated 2 March 2004. Unless otherwise defined herein, terms used herein shall have the same meaning as defined in the Circular. Completion of the Puccini Acquisition took place on 19 November 2003.

Payment of Earn-out Consideration

Pursuant to the Sale and Purchase Agreement, the consideration for the Puccini Acquisition comprises the Initial Consideration and the Earn-out Consideration.

The Initial Consideration comprises (i) the sum of US$1 in cash; and (ii) the sum of US$18.5 million, which has been satisfied by the issue and allotment of 96,200,000 new shares of TOM Online at an issue price of HK$1.5 per share, has been paid to Cranwood in 2004.

Pursuant to the Sale and Purchase Agreement, Bright Horizon shall pay the Earn-Out Consideration to satisfy the balance of the consideration for the Puccini Acquisition in the following manner:

• (i) an amount equal to 50% of the Earn-Out Amount will be paid in cash; and

• (ii) an amount equal to 50% of the Earn-Out Amount less US$18,500,001 will be satisfied by the issue and allotment of such number of shares of TOM Online (credited as fully paid) at an issue price equal to the average closing price of shares of TOM Online as quoted on GEM for the 30 trading days (“Average Closing Price”) immediately preceding the date of the auditors’ report on the audited accounts of Puccini for the year ended 31 December 2004 (“Puccini 2004 Audited Accounts”).

Based on the Puccini 2004 Audited Accounts which was issued on 6 April 2005, the consolidated net profit after tax and before extraordinary items of Puccini for the year ended 31 December 2004 (“2004 Net Profit”) was US$17,155,076.63.

The Earn-out Amount is US$132,094,090 (equal to 7.7 times the 2004 Net Profit) and the Earn-out Consideration will be paid to Cranwood in the following manner:

• (iii) US$66,047,045 (being 50% of the Earn-out Amount) will be paid in cash by the end of April 2005; and

• (iv) US$47,547,044 (being US$66,047,045 (being 50% of the Earn-out Amount) less US$18,500,001) will be satisfied by the issue and allotment of shares of TOM Online (credited as fully paid) at an issue price equal to the Average Closing Price.

  • Accordingly, 304,155,503 new shares of HK$0.01 each in the capital of TOM Online (“Earn-out Consideration Shares”) (credited as fully paid) at HK$1.21933333 per share (being the Average Closing Price immediately preceding the date of the auditors’ report on the Puccini 2004 Audited Accounts) were issued and allotted to Cranwood and its nominee on 25 April 2005.

The Earn-Out Consideration Shares have been issued and allotted pursuant to the general mandate granted to the directors of TOM Online by the written resolutions of the then sole shareholder of TOM Online on 12 February 2004.

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Upon the issue and allotment of the Earn-out Consideration Shares, Cranwood and its associates (as defined under the GEM Listing Rules) is deemed to be interested in approximately 9.95% of the issued share capital of TOM Online and approximately 22.86% of the issued share capital of TOM Online is in the public hands.

By Order of the Board TOM GROUP LIMITED Angela Mak Company Secretary

By Order of the Board TOM ONLINE INC. Angela Mak Company Secretary

Hong Kong, 25 April 2005 As at the date hereof, the directors of TOM are: Executive Directors: Non-executive Directors: Independent non-executive Directors: Mr. Sing Wang Mr. Frank Sixt (Chairman) Mr. Henry Cheong Ms. Tommei Tong Ms. Debbie Chang Ms. Anna Wu Mrs. Susan Chow Mr. James Sha Mr. Edmond Ip Mrs. Angelina Lee Mr. Holger Kluge Mr. Wang Lei Lei As at the date hereof, the directors of TOM Online are: Executive Directors: Non-executive Directors: Independent non-executive Directors: Mr. Wang Lei Lei Mr. Frank Sixt (Chairman) Mr. Gordon Kwong Mr. Xu Zhiming Mr. Sing Wang (Vice Chairman) Mr. Ma Wei Hua Mr. Peter Schloss Ms. Tommei Tong Dr. Lo Ka Shui Ms. Elaine Feng Mr. Fan Tai Alternate Director: Mr. Wu Yun Mrs. Susan Chow (Alternate to Mr. Frank Sixt)

• for identification purpose

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

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