09:44 MIN XIN HOLD<00222> - Announcement (5) (Note) Dividend RMB0.15 RMB0.17 RMB0.25 - - paid per Huaneng Share (Approximate) (Note) Dividend 50.0% 50.0% 55.6% N/A N/A payout ratio Note: Adjusted for the issue of bonus Huaneng Shares and the conversion of additional paid-in capital of Huaneng, details of which are set out in the announcement of Huaneng dated 16 March 2004. REASONS FOR ENTERING INTO THE SUPPLEMENTAL AGREEMENT The Acquisition is subject to (a) the approval by the Independent Shareholders at the extraordinary general meeting of the Company held on 17 September 2004 which was duly passed and (b) approvals required by the PRC and Hong Kong (where applicable) laws and regulations. The Vendor submitted an application for the sale of the Asset to the SASAC. The SASAC required the Vendor to adjust the consideration. The SASAC approved the Revised Acquisition based on the revised consideration as agreed between the Vendor and the SASAC. On 21 February 2005, the Company received the Notification from the Vendor. 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. As at the date of this announcement, not all the conditions precedent of the Agreement have been satisfied and the Acquisition has not been completed. The long stop date of the Agreement is 18 July 2005. As set out in the section headed `Information on the Group' above, the Group is engaged in, among other activities, investment holding. Power supply in the PRC has not been able to meet the recent economic growth of the country. The imbalance in the supply and demand of power in the PRC is expected to continue until 2007. Huaneng is a leading power supplier in the PRC which has benefited from the growing economy. In light of the above, the Company is optimistic of the growth and prospects of quality power producers in the PRC of which Huaneng is a market leader. The Board, including the independent non-executive Directors, considered the revised consideration is acceptable in view of the quality and prospect of the underlying Asset to the Acquisition. As a result, the Supplemental Agreement was entered into by the Company and the Vendor on 2 March 2005. The consideration under the Revised Acquisition was adjusted to RMB373,896,000 (equivalent to approximately HK$353,432,000) pursuant to the Supplemental Agreement. The consideration for the Revised Acquisition 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 adjusted consideration, approved by the SASAC, was agreed after the Board's careful consideration having taken into account the business potential and growth prospect of the Huaneng Group. After taking into account the financial performance of Huaneng during the six months ended 30 June 2004, the Directors are of the view that the consideration of the Revised Acquisition is justifiable. The SASAC has granted the approval of the Revised Acquisition based on the revised consideration stated above. FINANCIAL EFFECTS OF THE REVISED ACQUISITION Upon completion of the Revised Acquisition, the consolidated net asset value of the Group shall remain unchanged as the increase in long term investments of the Group will be offset by the decrease in cash and bank balances and an increase in bank borrowings of the Group. GENERAL The Vendor is the liquidation team of FITIC. As the consideration for the Revised Acquisition represents more than 100% under one of the Percentage Ratios, the Revised Acquisition constitutes a very substantial acquisition for the Company under the Listing Rules. As the Asset is beneficially owned by FITIC, the controlling shareholder (as defined in the Listing Rules) of the Company holding approximately 41.96% interest in the existing share capital of the Company and hence a connected person of the Company under the Listing Rules, the Revised Acquisition will be treated as a connected transaction for the Company under the Listing Rules and will be subject to the approval of the Independent Shareholders by poll at