CMB_2001 — Page 13

Chairman's Statement (Continued)

THE REMAINING PORTION OF KOWLOON INLAND LOT 1300 (NO. 3, JORDAN ROAD, KOWLOON)

The Remaining Portion of Kowloon Inland Lot 1300 (No. 3, Jordan Road, Kowloon) has a site area of approximately 2,906 sq. ft. comprising a three storey building. In February 2001, the Group through one of its wholly-owned subsidiaries, purchased the property for redevelopment. It is the plan of the Group to demolish the existing building on the property and redevelop the property into a 26 storey building comprising serviced apartments and retail accommodation with a total gross floor area of approximately 29,880 sq. ft. Legal proceedings are in progress to obtain vacant possession of the property from the tenants. In view of the favourable location of the site, the property is expected to generate steady rental income for the Group upon completion of the redevelopment.

FUTURE OUTLOOK

The recovery of the property market at the beginning of the financial year under review has stalled as the year progressed and the expected downturn in the world economy makes it unlikely that the property market in Hong Kong will resume a recovery trend for the time being. Rental income from the Group's investment properties in Hong Kong is therefore expected to be adversely affected in the near term. On the other hand, recent acquisitions of high grade office buildings in the administrative and commercial centre of London coupled with the long leases to tenants with great covenant strength should continue to provide substantial and steady income for the Group in the years ahead. The Group is considering further investments in selective prime properties overseas when the right opportunity

arises.

The ongoing sale of the remaining residential units at "Les Saisons" by a jointly controlled entity of the Group should also continue to contribute to the Group's profit in the coming year.

The Group has maintained substantial funds to forge ahead with the development of its own land in Hong Kong and intends to continue to prudently pursue investment opportunities promising attractive returns.

Hong Kong, 19th October, 2001

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NGAN Kit-ling Chairman