CMB_1998 — Page 12

Report of the Directors (Continued)

MAJOR CUSTOMERS AND SUPPLIERS

For the

(a) the

(b)

(c)

year

ended 30th June, 1998

aggregate amount of turnover attributable to the Group's five largest customers represented less than 30 per cent of the Group's total turnover;

the aggregate amount of purchases (not including the purchases of items which are of a capital nature) attributable to the Group's five largest suppliers represented approximately 52 per cent by value of the Group's total purchases; and

The amount of purchases attributable to the Group's largest supplier represented approximately 20 per cent by value of the Group's total purchases.

At no time during the year have the directors, their associates or any shareholders of the Company (which to the knowledge of the directors owns more than 5% of the Company's share capital) had any interest in these major customers and suppliers.

YEAR 2000 ISSUE

The Company has conducted a comprehensive review of its computer systems to identify the systems that could be affected by the "Year 2000" issue and the Company presently believes that the Year 2000 problem will not pose significant operational problems for the Company.

SUMMARY OF FINANCIAL DATA

A summary of the Group's financial data for the last five years is shown on page 33.

COMPLIANCE WITH THE CODE OF BEST PRACTICE

The Company has complied throughout the year with paragraphs 1 to 13 of the Code of Best Practice as set out by the Stock Exchange of Hong Kong Limited in Appendix 14 to the Listing Rules.

AUDITORS

Our auditors, KPMG Peat Marwick, have informed us that they will practise under the name of KPMG with effect from 19th November, 1998. A resolution for the re-appointment of KPMG is to be proposed at the forthcoming Ordinary Yearly Meeting.

Hong Kong, 17th November, 1998

9

By order of the board

NGAN Kit-ling Director