TCL Corporation Forms 3rd Board of Directors

TCL Corporation Forms 3rd Board of Directors

June 20th,2008

June 20th 2008, Shen Zhen - TCL Corporation (000100.SZ) convened the first meeting of its third board of directors. Motions considered and passed at the meeting included a motion to clarify the positions of executive and non-executive directors within the new board structure. The board elected Li Dongsheng as President and Yang Xiaopeng and Zheng Zhuanlie as Vice-presidents.

Li Dongsheng, Zheng Zhuanlie, Han Fangming, Bo Lianming and Zhao Zhongyao were confirmed as executive directors; Yang Xiaopeng and Rudy Provoost were confirmed as non-executive directors; and Zeng Xianzhang, Chen Shengtian, Ding Yuan and Ye Yuejian were confirmed as independent non-executive directors.

This marked the official formation of TCL Corporation s third board of directors.

In comparison to the previous board, TCL s current board is markedly younger, with members of the energetic post-1960s generation such as Ding Yuan, Yang Xiaopeng and Han Fangming occupying five seats. The addition of these new members will inject new vitality into the TCL board. TCL Corporation also indicated that independent non-executive directors Zhu Youzhi, now 72 years old, and Yang Shizhong, would retire from the board under a clause preventing independent directors from holding seats for more than two consecutive terms.

The new board includes even more industry specialists. Executive Director Zhao Zhongyao, elected this year, joined TCL in December 1991, and has previously held key posts in the corporation, including President of TCL Electronics Retail Co., Ltd., President of TCL Multimedia s Electronics Department and CEO of TCL-Thomson Electronics.

As an executive director, he has extensive experience in the operations and business management of the company, and has a high degree of specialized expertise. Zhao Zhongyao is currently President of TCL s LCD Module Project, and according to industry insiders, his appointment to TCL Corporation s board demonstrates the company s increasing emphasis on upstream module resources.

Industry insiders have noted that TCL Corporation s current board members have considerable experience in internationalization, and this reflects the corporation s determination to continue its strategy of internationalization. Board members such as Han Fangming, Ding Yuan and Chen Shengtian all have many years experience in the international management and research fields.

Han Fangming conducted doctoral research at Harvard University, and has more than a decade of international experience in areas including political relations, public services and business risk management. Ding Yuan, currently professor of accounting at the China Europe International Business School (CEIBS), obtained his doctorate in accounting from France s University of Montesquieu-Bordeaux IV, and also holds an MBA from Poitiers University, France; before joining CEIBS, he was a tenured professor in the Accounting and Management Control Department of the HEC School of Management, also in France.

Chen Shengtian is currently president of Taiwan s Sampo Group, and has many years of market development experience in both the international and Taiwan markets; he is both the president of Sampo Group and a senior figure in three mainland Chinese businesses: Sampo Enterprise (Tianjin) Co., Ltd., Sampo Electric Device (Suzhou) Co., Ltd., and Sampo Electric (Suzhou) Co., Ltd. The addition of these new members to the board will lend powerful support to the internationalization of TCL Corporation s operations.

TCL Corporation s new board members also bring a significant increase in public accountability. Group president Li Dongsheng was a representative at the 10th and 11th National People s Congress, and a party representative at the 16th National People s Congress. In addition, board member and executive director Han Fangming has previously held key political posts as a member of the 10th and 11th National Committees of the Chinese People s Political Consultative Conference and as deputy director of the Political Consultative Conference s Committee for Foreign Affairs.

Led by this team, TCL will become even more socially responsible.

TCL Corporation has indicated that the recent transitional board elections were focused on the company s long-term development plans. Since its first forays into internationalization, the company s business philosophy has become clearer and it can now draw upon a wealth of management experience. As internationally renowned large-scale consumer electronics multinational, TCL Corporation is already well prepared for future challenges, underpinned by the belief that strengthening the nation comes through strengthening industry.

The new board of directors is certainly to lead the company further along the road to an even brighter future.

It is also understood that a motion on changes to the offering price of non-publicly offered company stock subscriptions by Li Dongsheng, was discussed and passed at the meeting of the board. At the beginning of this month, the company formally declared its targeted stock issue plan to the China Securities Regulatory Commission, through which the firm plans to raise RMB1.

69bn to construct two LCD TV module projects, one small to medium-size, and the other a large-scale project. As a strategic investor, Li Dongsheng subscribes an 18% share. Based on earlier set prices, Li Dongsheng s subscription price would have been 90% of the average company share price 20 trading days prior to the pricing base day, i.

e. 4.51 yuan per share. After the recent changes, Li Dongsheng s subscription price was adjusted to be no less than 90% of the average company share price 20 trading days prior to the pricing base day. The minimum price of 4.51 yuan thus no longer applies, instead, the price will be based on inquiry results as for other shareholders, but with a lock-up period of 3 years, which is longer than other shareholders.

This demonstrates Li Dongsheng s confidence in the company s future, which will also benefit subscriptions by other investors to a certain extent.

If we look at the company s overall performance this year, it is evident that TCL Corporation s business situation has fundamentally changed from the preceding two years, giving Li Dongsheng ample reason to be confident that TCL s future will be even better. On March 14th, the company published its 2007 annual report, showing that the company had returned to profitability and escaped from its "*ST" difficulties.

On April 30th, the company announced its 2008 first quarter business results, which showed that the company had made strong profits and achieved simultaneous profitability in two of its main businesses, the multimedia and communications businesses. According to the latest business data released in May 2008, the company s LCD TV sales have more than doubled compared to the same period last year.

There was also strong growth in overall sales in the mobile phone business, and there were excellent growth trends for domestic appliances such as air conditioners and washing machines. The series of results not only strengthens the confidence of TCL s management and staff, but even more importantly, it creates a solid foundation for the company s recovery growth.