09:27 CS CONSERVAT P<00351> - Announcement (5) As the Group incurred a net loss for its latest published audited accounts made up for the year ended 31 December 2003, the profits ratio calculated under Rule 14.07(2) of the Listing Rules produced an anomalous result. Nevertheless, the results of the other applicable tests specified under Rule 14.07 of the Listing Rules reveal, and the Company believes, that the Acquisition is a discloseable transaction. In view of the discretionary power of the Stock Exchange conferred under Rule 14.20 of the Listing Rules, the Company has submitted a number of alternative tests to the profits ratio, which may or may not be considered as appropriate by the Company. Since the signing of the acquisition agreement on 21 December 2004, the Company has been providing further information in relation thereto. However, as at the date of this announcement, the Stock Exchange has indicated that it still considers that the Company has not been able to substantiate its view. The Stock Exchange has indicated that it has not accepted the classification of the Acquisition as a discloseable transaction and that the Acquisition is a very substantial acquisition and hence it should be subject to the relevant Listing Rules including Shareholders' approval. The Stock Exchange is looking into the matter and may make further enquiries, if necessary. Further announcement will be made as and when appropriate. A circular containing the details of the Acquisition will be despatched to the Shareholders as soon as practicable. Unusual change in trade volume and Share price The Board has noted the increases in the price and trade volume of the Shares today, and wishes to state that the Board is not aware of the reasons for such increases, save for the Acquisition and as disclosed below: 1. The Company is under a preliminary negotiation with a third party which is not Beijing Yuk Chak nor a connected person of the Company in relation to a proposed acquisition of a company involving in the waste incineration and processing business and no agreement has been reached at the moment; and 2. Mr. Cheng Kin Chow, Tony, an independent non-executive Director, has disposed of 150,000 Shares in the market at a price of HK$0.65 per Share today. Shareholders and potential investors are advised to exercise caution when dealing in the Shares. Save as aforesaid, the Board also confirms that there are no negotiations or agreements relating to any intended acquisitions or realizations, which are discloseable under Rule 13.23 of the Listing Rules. Neither is the Board aware of any matter, discloseable under the general obligation imposed by Rule 13.09 of the Listing Rules, which is or may be of a price-sensitive nature. Made by the order of the Board, the Directors of which individually and jointly accept responsibility for the accuracy of the above statement. Definitions: "Abba China" Abba China Holdings Limited, a company incorporated in Hong Kong and being a wholly-owned subsidiary of the Company "Acquisition" the acquisition of the Equity Interest in BCS General Energy & Environment "Acquisition Agreements" the acquisition agreement dated 21 December 2004 and the supplemental acquisition agreement dated 4 March 2005 between Asset Palace and Beijing Yuk Chak in relation to the Acquisition "Asset Palace" Asset Palace International Limited, a company incorporated in British Virgin Islands with limited liability and a wholly-owned subsidiary of the Company "BCS General Energy (Beijing China Sciences General & Environment" Energy & Environment Co, Ltd.*), a limited company incorporated in the PRC "Beijing Yuk Chak" (Beijing Yuk Chak Enterprises Limited), a company incorporated in the PRC and the vendor of the Equity Interest "Board" the board of Directors "Company" China Sciences Conservational Power Limited, a company incorporated in Hong Kong with limited liability and the shares of which are listed on the main board of the Stock Exchange