11:01     TVB<00511> - Announcement (3)                                       

    of invoice. In the past, the Group had also provided                      
    technical and management services support to MBNS                         
    from 1997 to 2001. The services to be provided under                      
    these agreements include, inter alia, evaluation of                       
    programme materials; creating promotional and                             
    marketing materials; sourcing of programmes;                              
    co-ordination on regulatory issues; creation of                           
    interstitials programming; editing of on-air                              
    promotional materials; monitoring of signal                               
    transmission and quality of signal; arranging                             
    promotional and marketing events and campaigns. For                       
    these agreements only, they will be terminated once                       
    the licensing agreement of the relevant channels and                      
    programmes come to an end.                                                
                                                                              
    Agreement for the provision of advertising sales                          
    services between TVBSE and MBNS                                           
    On 30 September 2004, TVBSE entered into an agreement                     
    with MBNS pursuant to which MBNS appoints TVBSE as                        
    an advertising sales agent to handle all commercial,                      
    advertising and sponsorship sales for Asian                               
    Entertainment Channel, TVB8 channel, TVBS-Asia                            
    channel, Wah Lai Toi, Xing He channel and any other                       
    channels as may be requested by MBNS from time to time                    
    for the period from 1 October 2004 to 30 September                        
    2009.                                                                     
                                                                              
    In return, TVBSE is entitled to a share of the                            
    advertising revenue after deduction of any discounts,                     
    commissions, bonuses, rebates or other gratuity given                     
    to advertisers and advertising agents which is                            
    payable by MBNS monthly in arrears within 120 days                        
    after the end of each month. In addition, MBNS agrees                     
    to pay TVBSE a fixed amount per contract year to defray                   
    TVBSE's costs for establishing a sales team to work                       
    in conjunction with MBNS to handle all advertising                        
    and sponsorship sales.                                                    
                                                                              
    Basis of Consideration                                                    
    The consideration payable and receivable by the Group                     
    under the Agreements are agreed between the parties                       
    after arm's length negotiation with reference to the                      
    historical dealings between the parties, an upturn                        
    in economy which will likely result in higher                             
    subscriber number and advertising revenue, the                            
    projection of subscription figure for the Malaysian                       
    pay television market and the subscribers growth                          
    guaranteed by MBNS.                                                       
                                                                              
    Aggregation of transactions                                               
    As the Agreements were all completed within a 12 month                    
    period and were entered into by the Group with the                        
    same party, the Stock Exchange determined that the                        
    Agreements should be aggregated and be treated as if                      
    they were one transaction under Rule 14A.25 of the                        
    Listing Rules.                                                            
                                                                              
    CAP AMOUNT                                                                
    TVB proposes to set a Cap Amount of HK$220,000,000                        
    (from January to December 2005), HK$236,000,000 (from                     
    January to December 2006), HK$256,000,000 (from                           
    January to December 2007), HK$274,000,000 (from                           
    January to December 2008) and HK$219,000,000 (from                        
    January to September 2009) during the continuance of                      
    the Agreements based on the past growth rate in                           
    subscription and advertising income, the monthly fees                     
    payable under the provision of management services                        
    arrangement, the residential subscriber growth of                         
    28,000 subscribers for every period of 12 months                          
    guaranteed by MBNS and the potential fluctuation of                       
    currency exchange rate between Malaysian Ringgits and                     
    Hong Kong Dollars.                                                        
                                                                              
    REASONS FOR THE TRANSACTIONS