MD&A & Governance - Director’s Report

The directors have pleasure in presenting their annual report and the audited financial statements for the year ended December 31, 2010.

Principal Activitiesopen

The Company acts as an investment holding company and also trades electrical and electronic products.

The principal activities of the principal subsidiaries and associates are set out in Notes 56 and 57 to the financial statements, respectively.

Results and Appropriationsopen

The results of the Group for the year ended December 31, 2010 are set out in the consolidated statement of comprehensive income on page 50.

An interim dividend of HK3.75 cents per share amounting to approximately HK$60,231,000 was paid to the shareholders during the year.

The directors now recommend the payment of a final dividend of HK6.25 cents per share to the shareholders on the register of members on May 20, 2011, amounting to approximately HK$100,414,000.

Property, Plant and Equipmentopen

The Group continued to expand its business and during the year spent approximately HK$102,260,000 on moulds and tooling and acquired office equipment, furniture and fixtures for approximately HK$41,732,000 and plant and machinery for approximately HK$100,520,000. Details of these and other movements in the property, plant and equipment of the Group and the Company during the year are set out in Note 17 to the financial statements.

Share Capital and Warrantsopen

Details of movements during the year in the share capital and warrants of the Company are set out in Note 44 to the financial statements.

During the year, holders of unlisted warrants previously issued by the Company, entitling the holder to subscribe for new shares of the Company at an exercise price of HK$5.10 per share between April 30, 2010 and April 30, 2012 (the “Warrants”), exercised 14,903,600 Warrants at the exercise price resulting in the issuance of 14,903,600 new shares of the Company.

During the year, the Group bought back 40,984,900 warrants from certain Warrants’ holders for a consideration of HK$101,843,000.

During the year, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company’s listed securities.

Directorsopen

The directors of the Company during the year and up to the date of this report were:

Group Executive Directors:
Mr Horst Julius Pudwill, Chairman
Prof Roy Chi Ping Chung JP, Vice Chairman
Mr Joseph Galli Jr, Chief Executive Officer
Mr Kin Wah Chan
Mr Chi Chung Chan
Mr Stephan Horst Pudwill

Non-executive Director:
Mr Vincent Ting Kau Cheung

Independent Non-executive Directors:
Mr Joel Arthur Schleicher
Mr Christopher Patrick Langley OBE
Mr Manfred Kuhlmann
Mr Peter David Sullivan

In accordance with Article 103 of the Company’s Articles of Association, Messrs. Horst Julius Pudwill, Joseph Galli Jr, Christopher Patrick Langley OBE and Peter David Sullivan will retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

No director proposed for re-election at the forthcoming Annual General Meeting has a service contract, which is not determinable by the Group within one year without payment of compensation, other than statutory compensation.

Terms of Office of Non-executive Directors and Independent Nonexecutive Directorsopen

The term of office for each of the Non-executive Directors and Independent Non-executive Directors is the period up to his retirement byrotation in accordance with Article 103 of the Company’s Articles of Association.

Directors’ and Chief Executive’s Interestsopen

As at December 31, 2010, the interests and short positions of the directors and the chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“SFO”)) which have been notified to the Company pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which any such director or chief executive has taken or deemed to have under such provisions of the SFO) or as recorded in the register required to be kept under section 352 of the SFO or otherwise notified to the Company and The Stock Exchange of Hong Kong Limited pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“the Listing Rules”) and as adopted by the Company, were as follows:

Name of directors	Capacity/Nature of interests	Interests in shares (other than pursuant to equity derivatives)⁽¹⁾	Interests in underlying shares pursuant to equity derivatives⁽¹⁾	Total interests in shares/ underlying shares	Approximate aggregate percentage of interests
Mr Horst Julius Pudwill	Beneficial owner Interests of spouse Interests of controlled corporation	145,361,000 760,000 253,159,794⁽²⁾	1,200,000 — —	400,480,794	24.93%
Prof Roy Chi Ping Chung JP	Beneficial owner Interests of spouse Interests of controlled corporation	56,405,948 136,000 37,075,030⁽³⁾	600,000 — —	94,216,978	5.86%
Mr Joseph Galli Jr	Beneficial owner	814,500	3,500,000	4,314,500	0.27%
Mr Kin Wah Chan	Beneficial owner	—	1,000,000	1,000,000	0.06%
Mr Chi Chung Chan	Beneficial owner	—	1,000,000	1,000,000	0.06%
Mr Stephan Horst Pudwill	Beneficial owner	4,509,500	1,000,000	5,509,500	0.34%
Mr Vincent Ting Kau Cheung	Beneficial owner	1,920,000	400,000	2,320,000	0.14%
Mr Joel Arthur Schleicher	Beneficial owner Interests of spouse	100,000 —	400,000 60,000⁽¹⁾	560,000	0.03%
Mr Christopher Patrick Langley OBE	Beneficial owner	500,000	400,000	900,000	0.06%
Mr Manfred Kuhlmann	Beneficial owner	—	400,000	400,000	0.02%
Mr Peter David Sullivan	Beneficial owner	—	400,000	400,000	0.02%

Notes:

(1)

Interests in shares and underlying shares stated above represent long positions of the Company.

The interests of the directors of the Company in the underlying shares pursuant to equity derivatives, which were held as beneficial owner, represent share options granted to them respectively pursuant to the share option schemes adopted by the Company, details of which are separately disclosed in the section headed “Share Options” below. These share options are physically settled and unlisted.

The interests of the spouse of Mr Joel Arthur Schleicher in the underlying shares pursuant to listed equity derivatives represent an interest in 60,000 underlying shares held in the form of 12,000 American Depositary Receipts, each representing 5 shares of the Company.

(2)

These shares were held by the following companies in which Mr Horst Julius Pudwill has a beneficial interest:

	No. of shares
Sunning Inc.	216,084,764
Cordless Industries Company Limited *	37,075,030
	253,159,794

(3)

These shares were held by Cordless Industries Company Limited* in which Prof Roy Chi Ping Chung JP has a beneficial interest.

Cordless Industries Company Limited is owned as to 70% by Mr Horst
Julius Pudwill and as to 30% by Prof Roy Chi Ping Chung JP.

Save as disclosed above, none of the directors and the chief executive of the Company was interested or had any short position in any shares, underlying shares or debentures of the Company and its associated corporations (within he meaning of Part XV or the SFO) as at December 31, 2010.

Share Optionsopen

Scheme adopted on March 28, 2002 (“Scheme C”)
Scheme C was adopted pursuant to a resolution passed on March 28, 2002 for recognition of the contribution to the development and growth of the Group by the eligible persons. This scheme expired on March 27, 2007. Under Scheme C, the Board of Directors of the Company may grant share options to the following eligible persons (and their wholly owned companies) of the Company, its subsidiaries and any companies in which the Group holds any equity interest, to subscribe for shares in the Company:

employees; or
Non-executive Directors (including Independent Nonexecutive Directors); or
suppliers or customers; or
any person or entity that provides research, development or other technological support; or
shareholders.

Share options granted must be taken up within 21 days of the date of grant upon payment of HK$1.00 in cash by way of consideration for the grant thereof. Share options may be exercised at any time from the date of grant to the fifth anniversary thereof. The subscription price is set at the highest of: the closing price of the shares on the date of offer of the share option; or the average closing price of shares as stated in the daily quotation sheets issued by the Stock Exchange for the five trading days immediately preceding the date of offer; or the nominal value of shares on the date of offer.

The maximum number of shares in respect of which share options may be granted under Scheme C is not permitted to exceed 30.00% of the issued share capital of the Company from time to time or 10.00% of shares in issue as at the adoption date of Scheme C. No person shall be granted an option which exceeds1.00% of the shares in issue as at the date of offer in any12-month period up to the date thereof.

Scheme adopted on May 29, 2007 (“Scheme D”)
Following the termination of Scheme C, a new share option scheme was adopted pursuant to a resolution passed on May 29, 2007 for recognition of the contribution to the development and growth of the Group by the eligible persons. This scheme will expire on May 28, 2017. Under Scheme D, the Board of Directors of the Company may grant share options to the following eligible persons (and their wholly owned companies) of the Company, its subsidiaries and any companies in which the Group holds any equity interest, to subscribe for shares in the Company:

employees; or
Non-executive Directors (including Independent Nonexecutive Directors); or
secondees, or
business partners, agents, consultants; or
suppliers or customers; or
any person or entity that provides research, development or other technological support; or
shareholders.

Share options granted must be taken up within 21 days of the date of grant, upon payment of HK$1.00 in cash by way of consideration for the grant thereof. Share options may be exercised at any time from the date of grant to the tenth anniversary thereof. The subscription price is set at the highest of: the closing price of the shares on the date of offer of the share option; or the average closing price of shares as stated in the daily quotation sheets issued by the Stock Exchange for the five trading days immediately preceding the date of offer; or the nominal value of shares on the date of offer.

The maximum number of shares in respect of which share options may be granted under Scheme D is not permitted to exceed 30.00% of the issued share capital of the Company from time to time or 10.00% of shares in issue as at the adoption date of Scheme D. No person shall be granted an option which exceeds 1.00% of the shares in issue as at the date of offer in any 12-month period up to the date thereof.

The following table discloses movements in the Company’s share options during the year:

Share option holders	Date of share options granted	Share option scheme category	Outstanding at beginning of the year	Granted during the year	Exercised during the year	Lapsed during the year	Outstanding at end of the year	Subscription price HK$	Exercise period
Directors
Mr Horst Julius Pudwill	16.11.2009 26.11.2010	D D	600000 —	— 600000	— —	— —	600000 600000	6.770 8.310	16.11.2009 -15.11.2019 26.11.2010 -25.11.2020
Prof Roy Chi Ping Chung JP	16.11.2009	D	600,000	—	—	—	600,000	6.770	16.11.2009 -15.11.2019
Mr Joseph Galli Jr	1.11.2006 6.3.2007 16.11.2009	C C D	1,500,000 1,000,000 1,000,000	— — —	— — —	— — —	1,500,000 1,000,000 1,000,000	11.252 10.572 6.770	1.11.2006 -31.10.2011 6.3.2007 -5.3.2012 16.11.2009 -15.11.2019
Mr Kin Wah Chan	16.11.2009	D	1,000,000	—	—	—	1,000,000	6.770	16.11.2009 -15.11.2019
Mr Chi Chung Chan	16.11.2009	D	1,000,000	—	—	—	1,000,000	6.770	16.11.2009 -15.11.2019
Mr Stephan Horst Pudwill	16.11.2009	D	1,000,000	—	—	—	1,000,000	6.770	16.11.2009 -15.11.2019
Mr Vincent Ting Kau Cheung	16.11.2009	D	400,000	—	—	—	400,000	6.770	16.11.2009 -15.11.2019
Mr Joel Arthur Schleicher	16.11.2009	D	400,000	—	—	—	400,000	6.770	16.11.2009 -15.11.2019
Mr Christopher Patrick Langley OBE	16.11.2009	D	400,000	—	—	—	400,000	6.770	16.11.2009 -15.11.2019
Mr Manfred Kuhlmann	7.2.2005 16.11.2009	C D	100,000 400,000	— —	— —	(100,000) —	— 400,000	17.750 6.770	7.2.2005 – 6.2.2010 16.11.2009 – 15.11.2019
Mr Peter David Sullivan	16.11.2009	D	400,000	—	—	—	400,000	6.770	16.11.2009 -15.11.2019
Total for directors			9,800,000	600,000	—	(100,000)	10,300,000
Employees	7.4.2005	C	200,000	—	—	(200,000)	—	17.210	7.4.2005 -6.4.2010
	17.6.2005	C	250,000	—	—	(250,000)	—	17.950	17.6.2005 -16.6.2010
	1.1.2006	C	50,000	—	—	—	50,000	18.690	1.1.2006 -31.12.2010
	1.3.2006	C	2,315,000	—	—	(431,000)	1,884,000	13.970	1.3.2006 -28.2.2011
	15.6.2006	C	200,000	—	—	—	200,000	10.270	15.6.2006 -14.6.2011
	17.6.2006	C	350,000	—	—	—	350,000	10.550	17.6.2006 -16.6.2011
	4.10.2006	C	75,000	—	—	—	75,000	11.628	4.10.2006 -3.10.2011
	8.11.2006	C	30,000	—	—	—	30,000	12.200	8.11.2006 -7.11.2011
	4.12.2006	C	150,000	—	—	—	150,000	10.952	4.12.2006 -3.12.2011
	13.12.2006	C	20,000	—	—	—	20,000	10.560	13.12.2006 -12.12.2011
	1.1.2007	C	150,000	—	—	—	150,000	10.080	1.1.2007 -31.12.2011
	6.3.2007	C	4,835,000	—	—	(510,000)	4,325,000	10.572	6.3.2007 -5.3.2012
	20.7.2007	D	200,000	—	—	—	200,000	10.060	20.7.2007 -19.7.2017
	24.8.2007	D	2,310,000	—	—	(250,000)	2,060,000	8.390	24.8.2007 -23.8.2017
	16.10.2007	D	75,000	—	—	—	75,000	8.810	16.10.2007 -15.10.2017
	7.11.2007	D	40,000	—	—	—	40,000	8.088	7.11.2007 -6.11.2017
	23.11.2007	D	500,000	—	—	—	500,000	7.578	23.11.2007 -22.11.2017
	14.1.2008	D	1,320,000	—	—	(300,000)	1,020,000	7.566	14.1.2008 -13.1.2018
	17.4.2008	D	1,925,000	—	—	(100,000)	1,825,000	7.780	17.4.2008 -16.4.2018
	14.5.2008	D	240,000	—	—	—	240,000	7.500	14.5.2008 -13.5.2018
	30.5.2008	D	640,000	—	—	—	640,000	7.546	30.5.2008 -29.5.2018
	1.9.2008	D	150,000	—	—	—	150,000	7.450	1.9.2008 -31.8.2018
	2.9.2008	D	300,000	—	(300,000)	—	—	7.388	2.9.2008 -1.9.2018
	11.9.2008	D	50,000	—	—	—	50,000	7.430	11.9.2008 -10.9.2018
	2.10.2008	D	75,000	—	—	—	75,000	7.068	2.10.2008 -1.10.2018
	1.12.2008	D	100,000	—	—	—	100,000	2.340	1.12.2008 -30.11.2018
	16.11.2009	D	7,570,000	—	(145,000)	(90,000)	7,335,000	6.770	16.11.2009 -15.11.2019
	7.12.2009	D	100,000	—	—	—	100,000	6.790	7.12.2009 -6.12.2019
	21.12.2009	D	300,000	—	(25,000)	(50,000)	225,000	6.350	21.12.2009 -20.12.2019
	28.12.2009	D	30,000	—	—	—	30,000	6.390	28.12.2009 -27.12.2019
	13.9.2010	D	—	1,050,000	—	—	1,050,000	7.390	13.9.2010 -12.9.2020
Total for employees			24,550,000	1,050,000	(470,000)	(2,181,000)	22,949,000
Total for all categories			34,350,000	1,650,000	(470,000)	(2,281,000)	33,249,000

The weighted average closing prices of shares on the options grant date during 2010 and 2009 were HK$7.49 and HK$6.84 respectively.

The closing price of the Company’s shares immediately before various dates of grant ranged from HK$7.26 to HK$7.90.

The weighted average closing prices of the Company’s shares immediately before various dates during 2010 on which the share options were exercised were HK$8.15. No share options were exercised in 2009.

The fair values of the share options granted in 2010 and 2009 measured at various dates of grant ranged from HK$1.89 to HK$2.14 and HK$1.65 to HK$1.75 per option respectively.

Arrangements to Purchase Shares or Debenturesopen

Other than as disclosed above, at no time during the year was the Company, or any of its subsidiaries, a party to any arrangements to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate and neither the directors or the chief executive, nor any of their spouses or children under the age of 18, had any right to subscribe for the securities of the Company, or had exercised any such right.

Director’s Interests in Contracts of Significanceopen

No contract of significance, to which the Company, or any of its subsidiaries, was a party and in which a director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year.

Substantial Shareholder’s Interestsopen

As at December 31, 2010, the interests and short positions of the following persons, other than directors and chief executive of the Company, in the shares, underlying shares and debentures of the Company which have been disclosed to the Company pursuant to Divisions 2 and 3 of Part XV of the SFO have been recorded in the register kept by the Company pursuant to section 336 of the SFO:

Name	Total interests in shares (L/S/LP)*	Approximate aggregate percentage of interests
Capital Research and Management Company⁽¹⁾	145,857,000 (L)	9.08% (L)
Credit Suisse Group AG⁽²⁾	81,168,892 (L) 81,250,633 (S)	5.05% (L) 5.06% (S)
FMR LLC⁽³⁾	162,186,500 (L)	10.09% (L)
Hang Seng Bank Trustee International Limited⁽⁴⁾	80,915,000 (L)	5.04% (L)
JPMorgan Chase & Co.⁽⁵⁾	178,461,655 (L) 6,414,744 (S) 156,460,911 (LP)	11.11% (L) 0.40% (S) 9.74% (LP)

* (L/S/LP) represents (Long position/Short position/Lending Pool)

Notes:

(1)

The capacity of Capital Research and Management Company in holding the 145,857,000 shares of long position was as investment manager. Its 100% controlling shareholder is The Capital Group Companies, Inc.

(2)

The following is a breakdown of the interests in shares of Credit Suisse Group AG:

	Total interests in shares
Name	Remarks	Direct interests	(L/S)	Deemed interests	(L/S)	Approximate percentage of interests
Credit Suisse Group AG	(2a)	—	—	81,168,892	(L)	5.05%
		—	—	81,250,633	(S)	5.06%
Credit Suisse AG	(2b)	33,384,512	(L)	47,784,380	(L)	5.05%
		33,384,512	(S)	47,866,121	(S)	5.06%
Credit Suisse AG, New York Branch	(2b)	9,750	(L)	—	—	0.00%
Credit Suisse International	(2b)	68,123	(L)	—	—	0.00%
Credit Suisse (Hong Kong) Limited	(2b)	155,000	(S)	—	—	0.01%
Credit Suisse Holdings (USA), Inc.	(2b)	—	—	13,738,470	(L)	0.86%
		—	—	13,738,470	(S)	0.86%
Credit Suisse (USA), Inc.	(2b)	—	—	13,738,470	(L)	0.86%
		—	—	13,738,470	(S)	0.86%
Credit Suisse Securities (USA) LLC	(2b)	13,738,470	(L)	—	—	0.86%
		13,738,470	(S)	—	—	0.86%
Credit Suisse Investments (UK)	(2b)	—	—	33,968,037	(L)	2.11%
		—	—	33,972,651	(S)	2.11%
Credit Suisse Investment Holdings (UK)	(2b)	—	—	33,968,037	(L)	2.11%
		—	—	33,972,651	(S)	2.11%
Credit Suisse Securities (Europe) Limited	(2b)	33,968,037	(L)	—	—	2.11%
		33,972,651	(S)	—	—	2.11%

Remarks:

(2a)

Credit Suisse Group AG is listed on the Swiss Stock Exchange and listed as ADS on the New York Stock Exchange. The capacity of Credit Suisse Group AG in holding the 81,168,892 shares of long position and 81,250,633 shares of short position was as a controlled corporation.

(2b)

Credit Suisse AG, Credit Suisse AG, New York Branch, Credit Suisse International, Credit Suisse (Hong Kong) Limited, Credit Suisse Holdings (USA), Inc., Credit Suisse (USA), Inc., Credit Suisse Securities (USA) LLC, Credit Suisse Investments (UK), Credit Suisse Investment Holdings (UK) and Credit Suisse Securities (Europe) Limited were all direct or indirect owned by Credit Suisse Group AG and by virtue of the SFO, Credit Suisse Group AG was deemed to be interested in the shares held by these subsidiaries.

(3)

The following is a breakdown of the interests in shares of FMR LLC:

	Total interests in shares
Name	Remarks	Direct interests	(L/S)	Deemed interests	(L/S)	Approximate percentage of interests
FMR LLC	(3a)	—	—	162,186,500	(L)	10.09%
Fidelity Management & Research Company	(3b)	—	—	139,343,000	(L)	8.67%
Fidelity Management Trust Company, Pyramis Global Advisors LLC	(3b)	—	—	22,843,500	(L)	1.42%

Remarks:

(3a)

The capacity of FMR LLC in holding the 162,186,500 shares of long position was as an investment manager.

(3b)

Fidelity Management & Research Company and Fidelity Management Trust Company, Pyramis Global Advisors LLC were all indirect owned by FMR LLC and by virtue of the SFO, FMR LLC was deemed to be interested in the shares held by these subsidiaries.

(4)

The following is a breakdown of the interests in shares of Hang Seng Bank Trustee International Limited:

	Total interests in shares
Name	Remarks	Direct interests	(L/S)	Deemed interests	(L/S)	Approximate percentage of interests
Hang Seng Bank Trustee International Limited	(4a)	—	—	80,915,000	(L)	5.04%
Cheah Company Limited	(4b)	—	—	80,915,000	(L)	5.04%
Cheah Capital Management Limited	(4b)	—	—	80,915,000	(L)	5.04%
Value Partners Group Limited	(4b)	—	—	80,915,000	(L)	5.04%
Value Partners Limited	(4b)	80,915,000	(L)	—	—	5.04%

Remarks:

(4a)

The capacity of Hang Seng Bank Trustee International Limited in holding the 80,915,000 shares of long position was as Trustee (other than bare trustee).

(4b)

Cheah Company Limited, Cheah Capital Management Limited, Value Partners Group Limited and Value Partners Limited were all direct or indirect owned by Hang
Seng Bank Trustee International Limited and by virtue of the SFO, Hang Seng Bank Trustee International Limited was deemed to be interested in the shares held by these subsidiaries.

(5)

The following is a breakdown of the interests in shares of JPMorgan Chase & Co.:

	Total interests in shares
Name	Remarks	Direct interests	(L/S)	Deemed interests	(L/S)	Approximate percentage of interests
JPMorgan Chase & Co.	(5a)	— — —	— — —	178,461,655 6,414,744 156,460,911	(L) (S) (LS)	11.11% 0.40% 9.74%
JPMorgan Chase Bank, N.A.	(5b)	156,460,911 —	(L) —	5,638,500 5,603,000	(L) (S)	10.09% 0.35%
J.P. Morgan Securities Ltd.	(5b)	5,603,000 5,603,000	(L) (S)	— —	— —	0.35% 0.35%
J.P. Morgan Chase International Holdings	(5b)	— —	— —	5,603,000 5,603,000	(L) (S)	0.35% 0.35%
J.P. Morgan Chase (UK) Holdings Limited	(5b)	— —	— —	5,603,000 5,603,000	(L) (S)	0.35% 0.35%
J.P. Morgan Capital Holdings Limited	(5b)	— —	— —	5,603,000 5,603,000	(L) (S)	0.35% 0.35%
J.P. Morgan International Finance Limited	(5b)	— —	— —	5,638,500 5,603,000	(L) (S)	0.35% 0.35%
Bank One International Holdings Corporation	(5b)	— —	— —	5,638,500 5,603,000	(L) (S)	0.35% 0.35%
J.P. Morgan International Inc.	(5b)	— —	— —	5,638,500 5,603,000	(L) (S)	0.35% 0.35%
JF Asset Management Limited	(5b)	14,420,500	(L)	—	—	0.90%
JPMorgan Asset Management (Asia) Inc.	(5b)	—	—	15,550,500	(L)	0.97%
JPMorgan Asset Management Holdings Inc.	(5b)	—	—	15,550,500	(L)	0.97%
J.P. Morgan Whitefriars Inc.	(5b)	35,500	(L)	—	—	0.00%
J.P. Morgan Overseas Capital Corporation	(5b)	—	—	35,500	(L)	0.00%
JF International Management Inc.	(5b)	1,130,000	(L)	—	—	0.07%
J.P. Morgan Markets Limited	(5b)	811,744 811,744	(L) (S)	— —	— —	0.05% 0.05%
Bear Stearns Holdings Limited	(5b)	— —	— —	811,744 811,744	(L) (S)	0.05% 0.05%
Bear Stearns UK Holdings Limited	(5b)	— —	— —	811,744 811,744	(L) (S)	0.05% 0.05%
The Bear Stearns Companies LLC	(5b)	— —	— —	811,744 811,744	(L) (S)	0.05% 0.05%

Remarks:

(5a)

JPMorgan Chase & Co. is listed on New York Stock Exchange. The capacity of JPMorgan Chase & Co. in holding the 178,461,655 shares of long position, 6,414,744 shares of short position and 156,460,911 shares of lending pool respectively was as controlled corporation.

(5b)

JPMorgan Chase Bank, N.A., J.P. Morgan Securities Ltd., J.P. Morgan Chase International Holdings, J.P. Morgan Chase (UK) Holdings Limited, J.P. Morgan Capital Holdings Limited, J.P. Morgan International Finance Limited, Bank One International Holdings Corporation, J.P. Morgan International Inc., JF Asset Management Limited, JPMorgan Asset Management (Asia) Inc., JPMorgan Asset Management Holdings Inc., J.P. Morgan Whitefriars Inc., J.P. Morgan Overseas Capital Corporation, JF International Management Inc., J.P. Morgan Markets Limited, Bear Stearns Holdings Limited, Bear Stearns UK Holdings Limited and The Bear Stearns Companies LLC were all direct or indirect owned by JPMorgan Chase & Co. and by virtue of the SFO, JPMorgan Chase & Co. was deemed to be interested in the shares held by these subsidiaries.

Save as disclosed, no other person was interested in or had a short position in the shares, underlying shares and debentures of the Company which would fall to be disclosed to the Company under Divisions 2 and 3 of the Part XV of the SFO as at December 31, 2010.

Sufficiency of Public Floatopen

The Company has maintained a sufficient public float throughout the year ended December 31, 2010.

Donationsopen

During the year, the Group made charitable and other donations totalling HK$3,918,000.

Auditoropen

A resolution will be submitted to the Annual General Meeting to re-appoint Messrs Deloitte Touche Tohmatsu as auditor of the Company.

On behalf of the Board

Horst Julius Pudwill
Chairman
Hong Kong

March 24, 2011