10:16     TCL COMM<02618> - Announcement & Resumption of Trading (3)          

    The Share Swap will constitute material modifications to the terms        
    of the Put and Call Option Agreement (details of which are set out        
    in the Listing Document), under which, among other things, the            
    Company granted to Alcatel a put option, in consideration of a call       
    option granted by the Company to Alcatel, to exchange the Alcatel         
    Shares to be exercised by Alcatel on or after 31 August 2008 for such     
    number of the Shares to be agreed between the parties or otherwise        
    in accordance with the formula as set out therein. The Put and Call       
    Option Agreement will be terminated upon completion of the                
    acquisition of the Alcatel Shares by the Company.                         
                                                                              
    The shareholdings of the Company before and after completion of the       
    Share Swap are as follows:                                                
                                                                              
    Before completion of Share Swap                                           
     (For more details, please refer to the press announcement today.)        
    After completion of Share Swap                                            
    (For more details, please refer to the press announcement today.)         
                                                                              
    Notes:                                                                    
                                                                              
    (1)   TCL Corporation holds interest in the Company through T.C.L.        
    Industries Holdings (H.K.) Limited, its wholly owned subsidiary.          
                                                                              
    (2)   Jasper Ace Limited, Alcatel and other shareholders (save for        
    certain Directors) are regarded as public shareholders under the          
    Listing Rules. (Please refer to the annual report of the Company for      
    the interest of the Directors.)                                           
                                                                              
    Based on the audited accounts of T&A HK as at 31 December 2004 and        
    the unaudited accounts as at 31 March 2005, the net loss before           
    taxation and extraordinary items attributable to the Alcatel Shares       
    for the financial year of 2004 and first quarter of 2005 amounted         
    to about HK$119 million and HK$162 million respectively, and the net      
    loss after taxation and extraordinary items attributable to the           
    Alcatel Shares amounted to about HK$116 million and HK$161 million        
    respectively. Based on the audited accounts of T&A SAS as at 31           
    December 2004 and the unaudited accounts as at 31 March 2005, its         
    net loss before taxation and extraordinary items for the financial        
    year of 2004 and first quarter of 2005 amounted to about HK$289           
    million and HK$309 million respectively, and its net loss after           
    taxation and extraordinary items amounted to about HK$285 million         
    and HK$302 million respectively.                                          
                                                                              
    Based on the net asset value of T&A HK as shown in its audited accounts   
    of T&A HK as at 31 December 2004, the Alcatel Shares represent a value    
    of about HK$342 million. Based on the average closing price of            
    HK$0.448 per Share for the 5 trading days prior to the date of this       
    announcement, 141,375,000 Shares to be issued pursuant to the Share       
    Swap (and assuming no further Shares will be issued thereafter until      
    the Share Swap Completion Date) represent a value of about HK$63.34       
    million. Accordingly, the market value of the 141,375,000 Shares to       
    be issued pursuant to the Share Swap of about HK$63.34 million as         
    arrived above represents about a discount of 81% of the value of the      
    Alcatel Shares, and the cash consideration of 10 million (about           
    HK$99.76 million) represents a discount of about 71% of the value         
    of the Alcatel Shares.                                                    
                                                                              
    Based on the net asset value of T&A HK as shown in its unaudited          
    accounts of T&A HK as at 31 March 2005, the Alcatel Shares represent      
    a value of about HK184 million. Based on the average closing price        
    of HK$0.448 per Share for the 5 trading days prior to the date of         
    this announcement, 141,375,000 Shares to be issued pursuant to the        
    Share Swap (and assuming no further Shares will be issued thereafter      
    until the Share Swap Completion Date) represent a value of about          
    HK$63.34 million. Accordingly, the market value of the 141,375,000        
    Shares to be issued pursuant to the Share Swap of about HK$63.34          
    million as arrived above represents about a discount of 66% of the        
    value of the Alcatel Shares, and the cash consideration of 10 million     
    (about HK$99.76 million) represents a discount of about 46% of the        
    value of the Alcatel Shares.                                              
                                                                              
    The Directors are of the view that the cash consideration and the         
    payment by way of Share Swap for the acquisition of the Alcatel Shares    
    were negotiated and determined on an arm's length basis and on normal     
    commercial terms.                                                         
                                                                              
    Based on the audited accounts of T&A HK as at 31 December 2004, the       
    total assets attributed to the Alcatel Shares amounted to about           
    HK$1,333 million. Based on the unaudited consolidated accounts of         
    T&A HK as at 31 March 2005, its turnover and net loss for the three       
    months ended 31 March 2005 amounted to about HK$1,027 and HK$357          
    million respectively, and its net asset value as at 31 March 2005         
    was about HK$409 million.                                                 
                                                                              
    Based on the unaudited accounts of the Group as at 31 March 2005,         
    the turnover of T&A HK and T&A SAS attributed about 61% and 40% of        
    the Group's turnover respectively.