09:43 MIN XIN HOLD<00222> - Announcement (2) have been satisfied, the Acquisition has not been completed. THE SUPPLEMENTAL AGREEMENT Date 2 March 2005 Parties Vendor: the liquidation team of FITIC. FITIC was principally engaged in, among other businesses, financial services and investments before the liquidation. Purchaser: the Company. Terms of the Supplemental Agreement (i.e. revised terms of the Agreement) The Supplemental Agreement amends the consideration as set out in the Agreement. Other than such amendment, the Agreement remains the same. Subject matter of the Revised Acquisition The subject matter of the Revised Acquisition, that is the Asset, being 108,000,000 Huaneng Domestic Shares, represents approximately 0.90% of the issued share capital of Huaneng as at 30 September 2004. Consideration The Vendor submitted an application for the sale of the Asset to the SASAC under the Agreement. The SASAC required the Vendor to adjust the consideration. The SASAC approved the Acquisition based on the revised consideration as agreed between the Vendor and the SASAC. On 21 February 2005, the Vendor notified the Company in writing of the outcome of the negotiation in respect of the revised consideration between the Vendor and the SASAC (the `Notification'). It is stated in the Notification that the SASAC considered the consideration of the Acquisition relatively low and required the Vendor to adjust the consideration of the Acquisition to a higher level in order to reflect the good prospect of the underlying Asset to the Acquisition and after further discussion between the Vendor and the SASAC, the acquisition cost per Huaneng Domestic Share was adjusted from RMB3.32 (equivalent to approximately HK$3.14) to RMB3.462 (equivalent to approximately HK$3.27) and the SASAC approved the Revised Acquisition. On that basis, the Vendor sent the Notification for the Board's consideration. The Board is satisfied that the Notification is true and valid because the Vendor is the liquidation team of FITIC, which is a state-owned enterprise set up by the Fujian Provincial Government. Pursuant to the Supplemental Agreement, the consideration under the Revised Acquisition was adjusted from RMB358,560,000 (equivalent to approximately HK$338,936,000) to RMB373,896,000 (equivalent to approximately HK$353,432,000) based on the revised acquisition cost of RMB3.462 (equivalent to approximately HK$3.27) per Huaneng Domestic Share. The adjusted consideration was agreed after the Board's careful consideration having taken into account the business potential and growth prospect of the Huaneng Group. The consideration and all calculations are based on the accounts of Huaneng (under PRC Accounting Standards) unless stated otherwise. Based on the net asset value per Huaneng Share under PRC Accounting Standards as at 31 December 2003, the net asset value attributable to such 108,000,000 Huaneng Domestic Shares amounted to approximately RMB311,580,000 (equivalent to approximately HK$294,527,000). The consideration of the Revised Acquisition of RMB373,896,000 (equivalent to approximately HK$353,432,000) represents a premium of 20.0% over the net asset value attributable to the Asset and is approximately 4.28% higher than the consideration for the Acquisition of RMB358,560,000 (equivalent to approximately HK$338,936,000). The consideration of the Revised Acquisition would be satisfied in cash within 20 days from the date when all of the conditions set out in the section headed `Conditions precedent of the Agreement' below are being satisfied. The Group intends to fund the Revised Acquisition primarily from internal cash resources with the remaining balance by a bank loan of approximately HK$120,000,000. Acquisition cost of each share in the Asset under the Revised Acquisition The Asset comprises 108,000,000 Huaneng Domestic Shares. Based on the consideration of the Revised Acquisition of RMB373,896,000 (equivalent to approximately HK$353,432,000), acquisition cost per Huaneng Domestic Share under the Revised Acquisition is RMB3.462 (equivalent to approximately HK$3.27). The acquisition cost per Huaneng Domestic Share represents: 1. a discount of approximately 52.26% to HK$6.85, the closing price of the Huaneng H Share on the Stock Exchange on 28 June 2004, being the last trading day before the suspension of trading in the Shares prior to the date of the Previous Announcement;