COMMENTS

REVIEW

For the period under review, the Company’s net asset per share (after dividend distribution) increased by about 39% as it rose from Rs 30.23 on 1 July 2006 to reach Rs 42.01 on 31 December 2006. Such a result was primarily driven by the positive performances registered on both our local and overseas portfolios.

As far as the Company’s Net Income after Tax is concerned, at 31 December 2006 it stood at Rs 14.3m compared to Rs 14.2m at a similar date last year thereby, leaving earnings per share at 31cs.

LOOKING AHEAD

The performance of our highly diversified portfolio is closely linked to the evolution of stock markets both locally and worldwide. On the local front, since the balance sheet date, the positive run existing previously has gathered further momentum on the back of strong local and foreign interests on some blue chip holdings, with the market reaching new highs. Based on prevailing fundamentals which include positive expectations in the banking and tourism sectors, the high asset backing of sugar counters and the healthy state of some companies in terms of debt and profitability, the local equity still offers some interesting opportunities such that the near term prospects remain good.

Turning to the international scene, with several equity markets already looking overbought relative to both bonds and to their own history from a technical perspective, the overnight sell-off in China A-shares has triggered a sharp pull-back in global stocks. At this stage, any correction in markets is welcome given the breakneck ascent seen since the lows in mid 2006. Given such a scenario, we are re-adjusting our strategy to better position the portfolio accordingly.

By order of the Board

Gaetan Wong To Wing

General Manager

28 February 2007