CMB_2001 — Page 9

Report of the Directors (Continued)

COMMENTARY ON ANNUAL RESULTS

Revenue and Profit

Turnover of the Group for the year under review increased to HK$68 million from HK$52 million in the previous year. The main cause of this increase was the increase in investment return from the investment properties held by the Group. The profit after taxation attributable to shareholders for the year under review increased to HK$260 million from HK$231 million in the previous year.

Liquidity and Financial Resources

For the year under review, net cash inflow from operating activities was HK$40 million (2000: inflow of HK$17 million). Total dividends paid to shareholders during the year amounted to HK$194 million (2000: HK$130 million). Payment for capital investment amounted to HK$231 million (2000: HK$391 million). The consolidated cash flow statement for the Group for the year ended 30th June, 2001 is set out on pages 18 and 19 of this annual report.

At 30th June, 2001, the Group had no bank borrowing and had cash and cash equivalents of HK$2,229 million which were held in the form of short term deposits or cash at banks and in hand.

Capital Expenditure and Commitments

Capital expenditure incurred during the year amounting to HK$231 million was for the purchase of investment properties and properties held for redevelopment.

There are no capital commitments at 30th June, 2001.

MAJOR CUSTOMERS AND SUPPLIERS

The information in respect of the Group's turnover and purchases attributable to the major customers and suppliers during the financial year is as follows:

The largest customer

Five largest customers in aggregate

The largest supplier

Five largest suppliers in aggregate

Percentage of the Group's total Turnover

42%

Purchases

89%

25% 82%

At no time during the year have the directors, their associates or any shareholder 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.

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