The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.

The functional currency of the Company is United States dollars. The presentation currency has been changed from Hong Kong Dollars to United States Dollars in 2011 so as to be consistent with the functional currency of the Company.

The condensed consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments which are measured at fair value.

The accounting policies and method of computations used in the condensed consolidated financial statements for the six months ended June 30, 2011 are the same as those followed in the preparation of the Group’s annual financial statements for the year ended December 31, 2010, except as described below.

In the current interim period, the Group has applied for the first time, a number of new standards, amendments and interpretations (“new or revised HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) that are effective for accounting periods beginning on January 1, 2011.

The application of the above new or revised HKFRSs in the current interim period has had no material effect on the amounts reported in these condensed consolidated financial statements and/or disclosures set out in these condensed consolidated financial statements.

The Group has not early applied new or revised standards that have been issued but are not yet effective. The following new or revised standards have been issued after the date the consolidated financial statements for the year ended December 31, 2010 were authorised for issuance and are not yet effective:

The above five new or revised standards on consolidation, joint arrangements and disclosures were issued by the HKICPA in June 2011 and are effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted provided that all of these new or revised standards are applied early at the same time. The directors of the Company anticipate that these new or revised standards will be applied in the Group’s consolidated financial statements for financial year ending December 31, 2013 and the potential impact is described below.

HKFRS 10 replaces the parts of HKAS 27 Consolidated and Separate Financial Statements that deal with consolidated financial statements. Under HKFRS 10, there is only one basis for consolidation, that is control. In addition, HKFRS 10 includes a new definition of control that contains three elements: (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) ability to use its power over the investee to affect the amount of the investor’s returns. Extensive guidance has been added in HKFRS 10 to deal with complex scenarios. Overall, the application of HKFRS 10 requires a lot of judgement. The application of HKFRS 10 might result in the Group no longer consolidating some of its investees and consolidating investees that were not previously consolidated.

Other than disclosed above, the directors of the Company anticipate that the application of these new or revised standards and interpretations will have no material impact on the results and the financial position of the Group.

The following is an analysis of the Group’s revenue and results by reportable and operating segment for the period under review:

For the period ended June 30, 2011

Segment profit represents the profit earned by each segment without allocation of share of results of associates and finance costs. This is the measure reported to the Group’s Chief Executive Officer, the chief operating decision maker (“CODM”) of the Group, for the purpose of resource allocation and performance assessment.

The following is an analysis of the Group’s assets by reportable and operating segment reported to the CODM of the Group:

Restructuring costs in 2010 represent the Group’s accrued labor and staff costs related to the relocation of production from Germany to lower cost locations.

Hong Kong Profits Tax is calculated at 16.5% (2010: 16.5%) of the estimated assessable profits for the period.

Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

A dividend of HK6.25 cents (approximately US0.80 cent) per share (2010: HK4.50 cents (approximately US0.58 cent) per share) was paid to shareholders as the final dividend for 2010 on July 8, 2011.

The Directors have determined that an interim dividend of HK5.00 cents (approximately US0.64 cent) per share (2010: HK3.75 cents (approximately US0.48 cent) per share) should be paid to the shareholders of the Company whose names appear in the Register of Members on September 16, 2011.

The calculation of the basic and diluted earnings per share attributable to the ordinary shareholders of the Company is based on the following data:

The computation of diluted earnings per share for the six months ended June 30, 2011 does not assume the exercise of the Company’s certain outstanding share options if the exercise price of these options is higher than the average market price for shares.

The computation of diluted earnings per share for the six months ended June 30, 2010 does not assume the conversion of the Company’s convertible bonds since their exercise would result in an increase in earnings per share and does not assume the exercise of the Company’s certain outstanding share options if the exercise price of these options is higher than the average market price for shares.

During the period, the Group spent approximately US$44 million (for the six months ended June 30, 2010: US$47 million) and US$23 million (for the six months ended June 30, 2010: US23 million) on the acquisition of property, plant and equipment and intangible assets respectively.

The Group has a policy of allowing credit periods ranging from 60 days to 120 days. The aging analysis of trade receivables based on the invoice date is as follows:

All the Group’s bills receivable at June 30, 2011 are due within 120 days.

The aging analysis of trade payables based on the invoice date is as follows:

All the Group’s bills payable at June 30, 2011 are due within 120 days.

During the period, the Group obtained new bank borrowings in the amount of US$161 million (2010: US$392 million) which are either London Interbank Offered Rate (“LIBOR”) or Hong Kong best lending rates based. The Group repaid the existing bank borrowings in the amount of US$336 million (2010: US$258 million).

In 2009, the Group issued two tranches of 5-year 8.5% coupon convertible bonds with an aggregate principal amount of US$150,000,000 (“Convertible Bonds 2014″). Unless previously redeemed, converted or purchased and cancelled, the Convertible Bonds 2014 will be redeemed at their principal amount on the maturity date on April 30, 2014.

At the option of the Convertible Bond 2014′s holders, on April 30, 2012, the holders may redeem Convertible Bond 2014 at the principal amount plus accrued interest to the date of redemption. Accordingly, the Convertible Bond 2014 is classified as current liabilities as of June 30, 2011.

The weighted average effective interest rate of Convertible Bond 2014 is 15.57%.