CMB_2001 — Page 6

Report of the Directors

The directors have pleasure in submitting their annual report together with the audited statement of accounts for the year ended 30th June, 2001.

GROUP'S ACTIVITIES AND OPERATIONS

The principal activities of the company and the group are property development and investment. The principal activities and other particulars of the subsidiaries are set out in note 10 on the accounts.

The geographical analysis of the group's turnover and operating profit is set out in note 2 on the accounts.

JOINTLY CONTROLLED ENTITIES

Particulars of jointly controlled entities at 30th June, 2001 are set out in note 11 on the accounts.

ACCOUNTS

The profit of the company and of the group for the year ended 30th June, 2001 and the state of affairs of the company and of the group at that date are set out in the accounts on pages 14 to 34.

A first interim dividend of HK$0.10 per share and a special dividend of HK$0.80 per share were paid on 11th April, 2001. A second interim dividend of HK$0.40 per share was paid on 5th September, 2001. The directors now recommend that a final dividend of HK$0.10 per share and a special dividend of HK$1.80 per share be paid in respect of the year ended 30th June, 2001 and that HK$10,000,000 be transferred to general reserve.

FIXED ASSETS

Movements in fixed assets during the year are set out in note 9 on the accounts.

DIRECTORS

The directors during the year are given on page 2 and further information regarding directors is given on page 12.

In accordance with articles 120A and 122 of the company's articles of association, Dr. Henry Ngan, Messrs. Liu Lit-mo, Fritz Helmreich and James Y.C. So retire from the board and, being eligible, offer themselves for re-election.

DIRECTORS' INTERESTS IN SHARES

At 30th June, 2001, the directors and their associates had the following interests in the issued share capital of the company as recorded in the register of directors' share interests:

Ordinary shares of HK$2 each

Ngan Shing-kwan Ngan Kit-ling Ngan Kit-keung Dr Henry Ngan Liu Lit-mo Fritz Helmreich

James Y.C. So

Personal interests

Family interests

Other

interests

808,637 (Note 1)

33,468 (Note 2)

4,578,799

33,468 (Note 2)

6,671,468

1,250

33,468 (Note 2)

6,903,579

250

33,468 (Note 2)

62,250 6,000 600

Note 1: Mr. Ngan Shing-kwan passed away on 14th April, 2001 and 808,637 shares in the company are included in his estate. Note 2: The 33,468 shares in the company are included in the estate of the late Madam Wong Yick-mui, wife of the late Mr. Ngan

Shing-kwan.