10:06     TCL MULTIMEDIA<01070> - Announcement (1)                            

    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.                                                             
                                                                              
    TCL MULTIMEDIA TECHNOLOGY HOLDINGS LIMITED                                
     (incorporated in the Cayman Islands with limited liability)              
                                                                              
    (Stock Code: 1070)                                                        
                                                                              
    MEMORANDA OF UNDERSTANDING                                                
    CONNECTED TRANSACTIONS                                                    
                                                                              
    The Board is pleased to announce that the Group has reached an            
    understanding with Thomson in relation to certain principles on           
    the basis of which certain existing arrangements in relation to           
    the operation of TTE, the joint venture company established               
    between Thomson and the Company on 30 July 2004 pursuant to the           
    Combination Agreement will be amended. Two binding memoranda of           
    understanding were entered into on 21 April 2005 in respect of (a)        
    the sales and marketing activities in respect of the Group's              
    products in the U.S., Canada, and Europe and (b) the operation of         
    the Angers Factory located in France.                                     
                                                                              
    The MOUs provide that the parties will enter into a number of             
    Definitive Agreements to implement the principles contained in the        
    MOUs.                                                                     
                                                                              
    The transactions contemplated under the MOUs will give rise to            
    certain modifications to a number of Transaction Documents in             
    respect of which Independent Shareholder's approval was obtained          
    on 2 July 2004. The Company has specifically undertaken that it           
    will comply in full with all applicable requirements set out in           
    Chapter 14A of the Listing Rules upon any material variation of           
    those Transaction Documents. Accordingly, completion of certain           
    transactions contemplated under the MOUs will be subject to               
    Independent Shareholders' approval.                                       
                                                                              
    Thomson is a connected person of the Company by virtue of its 33%         
    interest in the existing issued share capital of TTE. Certain             
    transactions contemplated under the MOUs will, when entered into,         
    constitute non-exempt on-going connected transactions of the              
    Company under Chapter 14A of the Listing Rules and it is                  
    anticipated that they will be subject to Independent Shareholders'        
    approval as the amount to be involved is expected to exceed 2.5%          
    of the Relevant Ratio. Detailed terms of the transactions                 
    contemplated under the MOUs will be set out in the Definitive             
    Agreements to be finalised in due course. A further announcement          
    will be issued when the Definitive Agreements are finalised. A            
    connected transaction circular in respect of the transactions will        
    be issued following the issue of the announcement relating to the         
    Definitive Agreements.                                                    
                                                                              
    The Directors believe that the MOUs were made on normal commercial        
    terms which are fair and reasonable so far as the Company and the         
    Shareholders are concerned.                                               
                                                                              
    MEMORANDA OF UNDERSTANDING DATED 21 APRIL 2005                            
                                                                              
    Background                                                                
                                                                              
    Reference is made to the joint venture established pursuant to the        
    Combination Agreement and a number of Transaction Documents               
    entered into pursuant thereto (details of which are set out in the        
    Merger Circular). Thomson is a connected person of the Company by         
    virtue of its 33% interest in the existing issued share capital           
    of TTE. Details of the arrangement with Thomson in connection with        
    the operation of TTE have been set out in a number of Transaction         
    Documents and disclosed in the Merger Circular.                           
                                                                              
    The TTE Board has been monitoring the development and operation           
    of TTE's TV business (including its arrangement with Thomson in           
    respect of the Angers Factory as described below under the heading        
    ``Angers MOU'') since its establishment in August 2004. In the past,      
    manufacturing has been undertaken by TTE whereas the sales and            
    marketing activities in the U.S., Canada and Europe have been             
    undertaken by Thomson pursuant to the sales and marketing agency          
    agreements. The TTE Board has formed the view that for TTE to             
    operate more effectively, (a) such sales and marketing activities         
    should be transferred from Thomson and integrated into TTE to             
    enable TTE to have control over such activities and (b) the               
    arrangement for the Angers Factory should be modified in the manner       
    described below.