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IMPORTANT NOTICE NOT FOR DISTRIBUTION TO ANY PERSON OR ADDRESS IN THE UNITED STATES Important: You must read

the following before continuing. The following applies to the Information Memorandum following this page (the Information Memorandum), and you are therefore advised to read this carefully before reading, accessing or making any other use of this Information Memorandum. In accessing the Information Memorandum, you agree to be bound by the following terms and conditions, including any modifications to them any time you receive any information from us. NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION AND THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE OR LOCAL SECURITIES LAWS. THIS INFORMATION MEMORANDUM MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER, AND IN PARTICULAR, MAY NOT BE FORWARDED TO ANY U.S. ADDRESS. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. ANY INVESTMENT DECISION SHOULD BE MADE ON THE BASIS OF THE FINAL TERMS AND CONDITIONS OF THE SECURITIES AND THE INFORMATION CONTAINED IN AN INFORMATION MEMORANDUM THAT WILL BE DISTRIBUTED TO YOU ON OR PRIOR TO THE CLOSING DATE AND NOT ON THE BASIS OF THE ATTACHED DOCUMENT. IF YOU HAVE GAINED ACCESS TO THIS TRANSMISSION CONTRARY TO ANY OF THE FOREGOING RESTRICTIONS, YOU ARE NOT AUTHORISED AND WILL NOT BE ABLE TO PURCHASE ANY OF THE SECURITIES DESCRIBED THEREIN. Confirmation of the Representation: In order to be eligible to view this Information Memorandum or make an investment decision with respect to the securities, investors must not be located in the United States. This Information Memorandum is being sent at your request and by accepting the electronic mail and accessing this Information Memorandum, you shall be deemed to have represented to us that the electronic mail address that you gave us and to which this electronic mail has been delivered is not located in the United States and that you consent to delivery of such Information Memorandum by electronic transmission. You are reminded that this Information Memorandum has been delivered to you on the basis that you are a person into whose possession this Information Memorandum may be lawfully delivered in accordance with the laws of jurisdiction in which you are located and you may not, nor are you authorised to, deliver this Information Memorandum to any other person. The materials relating to any offering of securities to which this Information Memorandum relates do not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. If a jurisdiction requires that such offering be made by a licensed broker or dealer and a Joint Lead Manager (as defined in the Information Memorandum) or any affiliate of such Joint Lead Manager is a licensed broker or dealer in that jurisdiction, such offering shall be deemed to be made by the underwriters or such affiliate on behalf of the Issuer (as defined in the Information Memorandum) in such jurisdiction.

This Information Memorandum has been sent to you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently none of the Issuer, the Guarantor (each as defined in the Information Memorandum), the Joint Lead Managers, any person who controls either Joint Lead Manager, any director, officer, employee or agent of the Issuer, the Guarantor, either Joint Lead Manager or affiliate of any such person accepts any liability or responsibility whatsoever in respect of any difference between this Information Memorandum distributed to you in electronic format and the hard copy version available to you on request from either Joint Lead Manager. You are responsible for protecting against viruses and other destructive items. Your use of this e-mail is at your own risk and it is your responsibility to take precautions to ensure that it is free from viruses and other items of a destructive nature.

CHEUNG KONG BOND SECURITIES LIMITED


(incorporated in the British Virgin Islands with Company Registration No. 1664368)

S$500,000,000 5.125 per cent. Guaranteed Senior Perpetual Securities Guaranteed by

CHEUNG KONG (HOLDINGS) LIMITED


(incorporated with limited liability under the laws of the Hong Kong Special Administrative Region with Company No. 24096)

Issue Price: 100 per cent.


The 5.125 per cent. Guaranteed Senior Perpetual Securities (the Securities) will be issued in an aggregate principal amount of S$500,000,000 by Cheung Kong Bond Securities Limited (the Issuer) and the due and punctual payment of all sums payable by the Issuer in respect of the Securities will be unconditionally and irrevocably guaranteed (the Guarantee of the Securities) by Cheung Kong (Holdings) Limited (the Guarantor). The Securities confer a right to receive distributions (each a Distribution) for the period from and including 9 September 2011 (the Issue Date) at the rate of 5.125 per cent. per annum (the Distribution Rate). Subject to the provisions of the Securities relating to deferral of Distribution (see Terms and conditions of the securities Distribution Distribution Deferral), Distribution is payable semi-annually in arrear on 9 March and 9 September of each year (each a Distribution Payment Date), with the first Distribution Payment Date falling in March 2012. The Issuer may, at its sole discretion, elect to defer Distribution which is otherwise scheduled to be paid on a Distribution Payment Date to the next Distribution Payment Date by giving notice to the holders of the Securities (Holders) and to Deutsche Bank AG Hong Kong Branch (the Fiscal Agent) not more than 12 nor less than seven Business Days (as defined in the terms and conditions of the Securities (the Terms and conditions of the securities)) prior to the scheduled Distribution Payment Date if, during the three months ending on the day before that scheduled Distribution Payment Date no dividend, distribution or other payment has been paid or declared by the Guarantor on or in respect of any of its Junior Securities (as defined in Terms and Conditions of the Securities). Any Distribution so deferred shall constitute Arrears of Distribution. The Issuer shall have no obligation to pay any Distribution (including any Arrears of Distribution and any Additional Distribution Amount (as defined in Terms and Conditions of the Securities)) on any Distribution Payment Date if it validly elects not to do so in accordance with the Terms and conditions of the securities and any failure to pay Distribution will not constitute a default of the Issuer in respect of the Securities or of the Guarantor in respect of the Guarantee of the Securities. The Issuer may, at its sole discretion, elect to (in accordance with the Terms and conditions of the securities) further defer any Arrears of Distribution. The Issuer is not subject to any limit as to the number of times Distributions and Arrears of Distribution can or shall be deferred pursuant to the Terms and Conditions of the Securities (See Terms and Conditions of the Securities Distribution Distribution Deferral). Each amount of Arrears of Distribution shall bear interest as if it constituted the principal of the Securities at the Distribution Rate and the amount of such interest (the Additional Distribution Amount) with respect to Arrears of Distribution shall be due and payable pursuant to the Terms and Conditions of the Securities and shall be calculated by applying the Distribution Rate to the amount of the Arrears of Distribution as described in Terms and conditions of the securities Distribution Cumulative Deferral. The Securities are perpetual securities and have no fixed final redemption date. The Securities may be redeemed at the option of the Issuer in whole, but not in part, on the Distribution Payment Date falling in September 2016 or any Distribution Payment Date thereafter on the Issuer giving not less than 30 nor more than 60 days notice to the Holders (which notice shall be irrevocable and shall oblige the Issuer to redeem the Securities on the relevant date for redemption) at 100 per cent. of their principal amount plus Distribution accrued to such date (including any Arrears of Distribution and any Additional Distribution Amount). The Securities may also be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days notice to the Holders, the Registrar (as defined in the Terms and Conditions of the Securities) and the Fiscal Agent (as defined in the Terms and Conditions of the Securities) at 100 per cent. of their principal amount, together with Distribution accrued to the date fixed for redemption (including any Arrears of Distribution and any Additional Distribution Amounts) upon the occurrence of: (i) any change in, or amendment to, the laws or regulations of the British Virgin Islands (in the case of the Issuer) or the Hong Kong Special Administrative Region (in the case of the Guarantor) or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after 2 September 2011 such that the Issuer or (as the case may be) the Guarantor has or would become obliged to pay additional amounts in respect of the Securities or the Guarantee of the Securities (as the case may be) and such obligation cannot be avoided by the Issuer or the Guarantor (as the case may be) taking reasonable measures available to it; or (ii) any change or amendment to the Relevant Accounting Standard (as defined in Terms and Conditions of the Securities) such that the Securities and/or the Guarantee of the Securities must not or must no longer be recorded as equity of the Guarantor pursuant to the Relevant Accounting Standard. See Terms and conditions of the securities Redemption and Purchase. The entire issue of the Securities will be held by The Central Depository (Pte) Limited (CDP or the Depository) in the form of a global certificate in registered form (the Global Certificate) for persons holding the Securities in securities accounts with CDP. Clearance of the Securities will be effected through an electronic book-entry clearance and settlement system for the trading of debt securities (Depository System) maintained by CDP. Settlement of over the counter trades in the Securities through the Depository System may only be effected through certain corporate depositors (Depository Agents) approved by CDP under the Companies Act, Chapter 50 of Singapore to maintain securities sub accounts and to hold the Securities in such securities sub accounts for themselves and their clients. See Clearing and settlement. Approval in-principle has been obtained from the Singapore Exchange Securities Trading Limited (the SGX-ST) for the listing and quotation of the Securities on the SGX-ST. Such permission will be granted when the Securities have been admitted to the Official List of the SGX-ST. The SGX-ST assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports contained herein. Admission to the Official List of the SGX-ST and quotation of the Securities on the SGX-ST is not to be taken as an indication of the merits of the Issuer, the Guarantor, their respective subsidiaries or associated companies or the Securities. This Information Memorandum has not been registered as a prospectus with the Monetary Authority of Singapore (the MAS). Please see the selling restrictions set out under the section Subscription and sale on page 72 of this Information Memorandum. Investing in the Securities involves certain risks. See Risk factors beginning on page 12. The Securities and the Guarantee of the Securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act) and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. For a description of these and certain further restrictions on offers and sales of the Securities and the distribution of this Information Memorandum, see Subscription and sale. The Securities will be represented by beneficial interests in the Global Certificate which will be deposited on the issue date with CDP. Beneficial interests in the Global Certificate held in book-entry form through CDP will be shown on, and transfers thereof will be effected only through, records maintained by CDP. The provisions governing the exchange of Global Certificates for Securities in definitive form (the Definitive Securities) are described in Summary of provisions relating to the securities while in global form. Joint Bookrunners and Joint Lead Managers

DBS Bank Ltd.


2 September 2011

J.P. Morgan

Each of the Issuer and the Guarantor, having made all reasonable enquiries, confirms that (i) this Information Memorandum contains all material information with respect to the Issuer, the Guarantor, and the Guarantors subsidiaries taken as a whole (the Guarantor and its subsidiaries collectively, the Group), and to the Securities and the Guarantee of the Securities (including all information which, according to the particular nature of the Issuer, the Guarantor, the Group, the Securities and the Guarantee of the Securities, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer, the Guarantor, the Group and of the rights attaching to the Securities), (ii) all statements of fact relating to the Issuer, the Guarantor, the Group and to the Securities and the Guarantee of the Securities contained in this Information Memorandum are in every material particular true and accurate and not misleading in any material respect, and that there are no other facts in relation to the Issuer, the Guarantor, the Group and to the Securities and the Guarantee of the Securities the omission of which would in the context of the issue of the Securities and the Guarantee of the Securities make any statement in this Information Memorandum misleading in any material respect, (iii) the statements of intention, opinion, belief or expectation with regard to the Issuer, the Guarantor and the Group contained in this Information Memorandum are honestly made or held and have been reached after considering all relevant circumstances and have been based on reasonable assumptions and (iv) all reasonable enquiries have been made by the Issuer and the Guarantor to ascertain such facts and to verify the accuracy of all such statements. This Information Memorandum has been prepared by the Issuer and the Guarantor solely for use in connection with the proposed offering of the Securities described in this Information Memorandum. The distribution of this Information Memorandum and the offering of the Securities in certain jurisdictions may be restricted by law. Persons into whose possession this Information Memorandum comes are required by the Issuer, the Guarantor, DBS Bank Ltd. and J.P. Morgan (S.E.A.) Limited (together with DBS Bank Ltd., the Joint Lead Managers) to inform themselves about and to observe any such restrictions. No action is being taken to permit a public offering of the Securities or the distribution of this document in any jurisdiction where action would be required for such purposes. There are restrictions on the offer and sale of the Securities and the circulation of documents relating thereto in certain jurisdictions and to persons connected therewith. For a description of certain further restrictions on offers, sales and resales of the Securities and distribution of this Information Memorandum, see Subscription and sale. No person has been or is authorised to give any information or to make any representation concerning the Issuer, the Guarantor, any member of the Group, the Securities or the Guarantee of the Securities other than as contained herein and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Issuer, the Guarantor, the Joint Lead Managers or the Agents (as defined in the Terms and Conditions of the Securities). Neither the delivery of this Information Memorandum (or any part thereof), the issue, offering, purchase or sale of the Securities shall, under any circumstances, constitute a representation, or give rise to any implication, that there has been no change or development reasonably likely to involve a change in the affairs, business or financial position of the Issuer, the Guarantor or any of their respective subsidiaries or associated companies (if any) or in the information herein since the date hereof or the date on which this Information Memorandum has been most recently amended or supplemented. This Information Memorandum does not constitute an offer of, or an invitation by or on behalf of the Issuer, the Guarantor, the Joint Lead Managers or the Agents to subscribe for or purchase ii

any of the Securities and may not be used for the purpose of an offer to, or a solicitation by, anyone in any jurisdiction or in any circumstances in which such offer or solicitation is not authorised or is unlawful. No representation or warranty, express or implied, is made or given by the Joint Lead Managers or the Agents as to the accuracy, completeness or sufficiency of the information contained in this Information Memorandum, and nothing contained in this Information Memorandum is, or shall be relied upon as, a promise, representation or warranty by the Joint Lead Managers or the Agents. Neither of the Joint Lead Managers has independently verified any of the information contained in this Information Memorandum and can give no assurance that this information is accurate, truthful or complete. This Information Memorandum is not intended to provide the basis of any credit or other evaluation nor should it be considered as a recommendation by the Issuer, the Guarantor, any member of the Group, the Joint Lead Managers or the Agents that any recipient of this Information Memorandum should purchase the Securities. Each potential purchaser of the Securities should determine for itself the relevance of the information contained in this Information Memorandum and its purchase of the Securities should be based upon such investigations with its own tax, legal and business advisers as it deems necessary. Accordingly, notwithstanding anything herein, neither of the Joint Lead Managers nor any of their respective officers, employees or agents shall be held responsible for any loss or damage suffered or incurred by the recipients of this Information Memorandum or such other document or information (or such part thereof) as a result of or arising from anything expressly or implicitly contained in or referred to in this Information Memorandum or such other document or information (or such part thereof) and the same shall not constitute a ground for rescission of any purchase or acquisition of any of the Securities by a recipient of this Information Memorandum or such other document or information (or such part thereof). This Information Memorandum and any other documents or materials in relation to the issue, offering or sale of the Securities have been prepared solely for the purpose of the initial sale or offer of the Securities. This Information Memorandum and such other documents or materials are made available to the recipients thereof solely on the basis that they are persons falling within the ambit of Section 274 and/or Section 275 of the Securities and Futures Act, Chapter 289 of Singapore (the SFA) and may not be relied upon by any person other than persons to whom the Securities are sold or with whom they are placed by the Joint Lead Managers as aforesaid or for any other purpose. Recipients of this Information Memorandum shall not reissue, circulate or distribute this Information Memorandum or any part thereof in any manner whatsoever. Neither of the Joint Lead Managers nor any of their respective officers or employees is making any representation or warranty expressed or implied as to the merits of the Securities or the subscription, purchase or acquisition thereof, the creditworthiness or financial condition or otherwise of the Issuer, the Guarantor, any member of the Group or their respective subsidiaries or associated companies (if any). Further, neither of the Joint Lead Managers makes any representation or warranty as to the Issuer, the Guarantor or their respective subsidiaries or associated companies (if any) or as to the accuracy, reliability or completeness of the information set out herein (including the legal and regulatory requirements pertaining to Sections 274, 275 and 276 or any other provisions of the SFA) and the documents which are incorporated by reference in, and form part of, this Information Memorandum.

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To the fullest extent permitted by law, neither of the Joint Lead Managers accepts any responsibility for the contents of this Information Memorandum nor for any other statement made or purported to be made by either of the Joint Lead Managers in connection with the Issuer, the Guarantor or the issue and offering of the Securities. The Joint Lead Managers accordingly disclaim all and any liability whether arising in tort or contract or otherwise (save as referred to above) which they might otherwise have in respect of this Information Memorandum or any such statement. Any purchase or acquisition of the Securities is in all respects conditional on the satisfaction of certain conditions set out in the Subscription Agreement (as defined herein) and the issue of the Securities by the Issuer to the Joint Lead Managers pursuant to the Subscription Agreement. Any offer, invitation to offer or agreement made in connection with the purchase or acquisition of the Securities or pursuant to this Information Memorandum shall (without any liability or responsibility on the part of the Issuer, the Guarantor or the Joint Lead Managers) lapse and cease to have any effect if (for any other reason whatsoever) the Securities are not issued by the Issuer to the Joint Lead Managers pursuant to the Subscription Agreement. The attention of recipients of this Information Memorandum is drawn to the restrictions on resale of the Securities set out under Subscription and sale on page 72 of this Information Memorandum. Any person(s) who is invited to subscribe for or purchase the Securities or to whom this Information Memorandum is sent shall not make any offer or sale, directly or indirectly, of any Securities or distribute or cause to be distributed any document or other material in connection therewith in any country or jurisdiction except in such manner and in such circumstances as will result in compliance with any applicable laws and regulations. It is recommended that persons proposing to subscribe for, purchase or otherwise acquire any of the Securities consult their own legal and other advisers before subscribing, purchasing or acquiring the Securities.

iv

Forward-looking statements
Certain statements under Risk factors, Description of the Guarantor and elsewhere in this Information Memorandum constitute forward-looking statements. The words including believe, expect, plan, anticipate, schedule, estimate and similar words or expressions identify forward-looking statements. In addition, all statements other than statements of historical facts included in this Information Memorandum, including, but without limitation, those regarding the financial position, business strategy, prospects, capital expenditure and investment plans of the Issuer, the Guarantor and the Group and the plans and objectives of the Issuer, the Guarantor and the Groups management for its future operations (including development plans and objectives relating to the Issuer, the Guarantor and the Groups operations), are forward looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results or performance of the Issuer, the Guarantor and the Group to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Issuer, the Guarantor and the Groups present and future business strategies and the environment in which the Issuer, the Guarantor and the Group will operate in the future. The Issuer, the Guarantor and the directors, employees and agents of the Issuer and the Guarantor, respectively do not assume (a) any obligation or undertaking to release any updates or revisions to any forward-looking statements contained herein to reflect any change in the Issuers or the Guarantors expectations with regard thereto or any change of events, conditions or circumstances, on which any such statements were based or (b) any liability in the event that any of the forward-looking statements does not materialise or turns out to be incorrect. This Information Memorandum discloses, under Risk factors and elsewhere, important factors that could cause actual results to differ materially from the Issuers or the Guarantors expectations. All subsequent written and forward-looking statements attributable to the Issuer or the Guarantor or persons acting on behalf of the Issuer or the Guarantor are expressly qualified in their entirety by such cautionary statements.

Certain defined terms and conventions


In this Information Memorandum, unless otherwise specified or the context requires, all references to Singapore are references to the Republic of Singapore, all references to Hong Kong are references to the Hong Kong Special Administrative Region and all references to the United States or U.S and references to the United States of America. References herein to Singapore dollars or S$ are to the lawful currency of Singapore, references to Hong Kong dollars, HK Dollars, HKD or HK$ are to the lawful currency of Hong Kong, references to Canadian dollars or C$ are references to the lawful currency of Canada and references to U.S. Dollars or US$ are to the lawful currency of the United States of America. All references to the PRC or to the Mainland are to the Peoples Republic of China, excluding Hong Kong, the Macau Special Administrative Region and Taiwan, all references to HKFRS are to Hong Kong Financial Reporting Standards. References herein to sq. m are to square metres. Unless otherwise stated, all information in this Information Memorandum is stated as at 25 August 2011, being the latest practicable date prior to the printing of this Information Memorandum for the purpose of ascertaining certain information contained in it. In this Information Memorandum, where information has been presented in thousands or millions of units, amounts may have been rounded up or down. Accordingly, totals of columns or rows of numbers in tables may not be equal to the apparent total of the individual items and actual numbers may differ from those contained herein due to rounding. References to information in billions of units are to the equivalent of a thousand million units.

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Contents
Page Page

Summary . . . . . . . . . . . . . . . . . . . . . . . Summary of the Offering . . . . . . . . . . . Selected financial information. . . . . . . Risk factors . . . . . . . . . . . . . . . . . . . . . . Terms and conditions of the securities . . . . . . . . . . . . . . . . . . . . . . Summary of provisions relating to the securities whilst in global form . . . . Use of proceeds . . . . . . . . . . . . . . . . . .

1 3 9 12 22 36 39

Capitalisation and indebtedness Description of the Issuer . . . . . . Description of the Guarantor . . Exchange rates . . . . . . . . . . . . . . Clearing and settlement. . . . . . . Taxation . . . . . . . . . . . . . . . . . . . Subscription and sale . . . . . . . . . General information. . . . . . . . . . Index to financial statements . .

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40 41 42 63 64 65 71 75 F-1

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Summary
The following summary is qualified in its entirety, and is subject to, the more detailed information and the financial information contained or referred to elsewhere in this Information Memorandum. The meanings of terms not defined in this summary can be found elsewhere in this Information Memorandum. Overview History and Introduction The investment holding and project management businesses now carried on by the Guarantor were established in 1958 by Mr. Li Ka-shing, the Chairman of the Guarantor. The Guarantor was incorporated in June 1971 under the name Cheung Kong Real Estate Company Limited. It adopted its present name in August 1972 and became a public listed company in November 1972. In 1979, the Guarantor acquired a strategic stake of approximately 22.4 per cent. of the issued share capital of Hutchison Whampoa Limited (Hutchison Whampoa), a listed conglomerate which operates and invests in five core businesses: ports and related services; property and hotels; retail; energy and infrastructure, finance and investments and other operations; and telecommunications. As at the date of this Information Memorandum, the Guarantors shareholding in Hutchison Whampoa is approximately 49.9 per cent. As at 31 July 2011, the combined market capitalisation of the Cheung Kong Groups Hong Kong listed companies amounted to HK$934 billion. The Cheung Kong Group operates in 52 countries and employs about 250,000 staff worldwide. Members of the Cheung Kong Group include the Guarantor, Hutchison Whampoa and Power Assets Holdings Limited (formerly known as Hongkong Electric Holdings Limited) (Power Assets), which are constituent stocks of the Hang Seng Index; Cheung Kong Infrastructure Holdings Limited (CKI), CK Life Sciences Intl., (Holdings) Inc., Hutchison Telecommunications Hong Kong Holdings Limited, Hutchison Harbour Ring Limited (HHR) and TOM Group Limited (TOM Group), which are companies listed on the Main Board of The Stock Exchange of Hong Kong Limited (SEHK). Principal Business The Group is engaged principally in property development and investment in Hong Kong and in different regions of the world, including Mainland China, the United Kingdom and Singapore and develops high quality and large-scale properties for sale and investment in the residential, retail, office, hotel and industrial sectors. The Groups high quality properties and after-sale services, complemented by flexible and market-responsive sales strategies, have been the cornerstone of the Groups success in property sales. Other major business activities of the Group in Hong Kong include property and project management, hotel and serviced suite operation and investment in securities. Through the Groups investment in Hutchison Whampoa, the Group is also involved in ports and related services; property and hotels; retail; energy and infrastructure, finance and investments and other operations; and telecommunications.

Business Strategy The Groups business strategy is to continue to: focus on property development in Hong Kong, Mainland China and overseas markets, particularly residential property developments featuring high quality design and construction to build on its reputation as a premier property developer in these markets; extend further its presence in property markets outside Hong Kong, with focused expansion in Mainland China, the United Kingdom and Singapore so as to increase its property portfolio with prime sites and quality projects, and to enhance the Groups established position and market share in these markets; maintain an on-going process of replenishing its land bank at low cost through direct purchases, site conversions and joint ventures with land owners; expand its quality portfolio of investment properties to enhance recurrent rental income; maintain a strategic investment holding in Hutchison Whampoa; and maintain a prudent policy on financial management.

Summary of the offering


The following is a summary of the terms and conditions of the Securities. For a more complete description of the Securities, see Terms and conditions of the securities. Terms used in this summary and not otherwise defined shall have the meanings given to them in Terms and Conditions of the Securities. Issuer . . . . . . . . . . . . . . . . . . . . . Guarantor . . . . . . . . . . . . . . . . . . Issue . . . . . . . . . . . . . . . . . . . . . . Cheung Kong Bond Securities Limited. Cheung Kong (Holdings) Limited. S$500,000,000 5.125 per cent. guaranteed senior perpetual securities. The Guarantor has, in the Deed of Guarantee, unconditionally and irrevocably guaranteed the due and punctual payment of all sums payable by the Issuer in respect of the Securities. The Securities constitute direct, unsecured, unconditional and unsubordinated obligations of the Issuer which rank pari passu and without any preference among themselves and at least pari passu with all other present and future unsecured, unconditional, unsubordinated obligations of the Issuer, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application. The Guarantee of the Securities constitutes a direct, unsecured, unconditional and unsubordinated obligation of the Guarantor which ranks at least pari passu with all other present and future unsecured, unconditional, unsubordinated obligations of the Guarantor, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application. 100 per cent. The Securities will be issued in registered form in the denomination of S$250,000 each and in higher integral multiples of S$1,000 in excess thereof.

Guarantee . . . . . . . . . . . . . . . . .

Status of the Securities . . . . . . .

Status of the Guarantee of the Securities . . . . . . . . . . . . . . . .

Issue Price . . . . . . . . . . . . . . . . . Form and Denomination . . . . . .

Distributions . . . . . . . . . . . . . . .

Subject to Condition 4(c) (Distribution Distribution Deferral), the Securities confer a right to receive distribution (each a Distribution) from 9 September 2011 (the Issue Date) at the Distribution Rate in accordance with Condition 4 (Distribution). Subject to Condition 4(c) (Distribution Distribution Deferral), Distribution shall be payable on the Securities semi-annually in arrear on 9 March and 9 September of each year (each, a Distribution Payment Date), with the first Distribution Payment Date falling in March 2012. The Distribution Rate shall be 5.125 per cent. per annum. The Issuer may, at its sole discretion, elect to defer Distribution which is otherwise scheduled to be paid on a Distribution Payment Date to the next Distribution Payment Date by giving notice (an Optional Deferral Notice) to the Holders (in accordance with Condition 14 (Notices)) and the Fiscal Agent not more than 12 nor less than seven Business Days prior to a scheduled Distribution Payment Date if, during the three months ending on the day before that scheduled Distribution Payment Date no dividend, distribution or other payment has been paid or declared by the Guarantor on or in respect of any of its Junior Securities (an Optional Deferral Event). The Issuer shall have no obligation to pay any Distribution (including any Arrears of Distribution and any Additional Distribution Amount) on any Distribution Payment Date if it validly elects not to do so in accordance with Condition 4(c)(i) (Distribution Deferral Optional Deferral) and any failure to pay Distribution shall not constitute a default of the Issuer in respect of the Securities or of the Guarantor in respect of the Guarantee of the Securities.

Distribution Rate . . . . . . . . . . . .

Optional Deferral of Distribution. . . . . . . . . . . . . . .

Cumulative Deferral . . . . . . . . .

Any Distribution deferred pursuant to Condition 4(c) (Distribution Distribution Deferral) shall constitute Arrears of Distribution. The Issuer may, at its sole discretion, elect to (in the circumstances set out in Condition 4(c)(i) (Distribution Distribution Deferral Optional Deferral)) further defer any Arrears of Distribution by complying with the foregoing notice requirement applicable to any deferral of an accrued Distribution. The Issuer is not subject to any limit as to the number of times Distributions and Arrears of Distribution can or shall be deferred pursuant to Condition 4(c) (Distribution Distribution Deferral) except that Condition 4(c)(iv) (Distribution Distribution Deferral Cumulative Deferral) shall be complied with until all outstanding Arrears of Distribution have been paid in full. If on any Distribution Payment Date, payment of all Distribution payments scheduled to be made on such date is not made in full by reason of Condition 4(c) (Distribution Distribution Deferral), the Issuer and the Guarantor shall not: (a) declare or pay any dividends, distributions or make any other payment on, and will procure that no dividend, distribution or other payment is made on any of its Junior Securities; or (b) redeem, reduce, cancel, buy-back or acquire for any consideration any of its Junior Securities, unless and until (i) the Issuer or the Guarantor has satisfied in full all outstanding Arrears of Distribution; or (ii) are permitted to do so by an Extraordinary Resolution (as defined in the Agency Agreement) of the Holders, provided that nothing in Condition 4(c) (Distribution Distribution Deferral) shall restrict the ability of the Issuer or the Guarantor to advance loans to any of their respective shareholders or shareholders of other subsidiaries of the Guarantor or otherwise invest in such shareholders or subsidiaries debt, howsoever issued or represented.

Restrictions in the case of a Deferral . . . . . . . . . . . . . . . . . .

Expected Closing Date. . . . . . . . Maturity Date . . . . . . . . . . . . . .

9 September 2011. There is no maturity date.

Redemption at the Option of the Issuer . . . . . . . . . . . . . . . .

The Securities may be redeemed at the option of the Issuer in whole, but not in part, on the Distribution Payment Date falling in September 2016 or any Distribution Payment Date thereafter (each, a Call Settlement Date) on the Issuers giving not less than 30 nor more than 60 days notice to the Holders (which notice shall be irrevocable and shall oblige the Issuer to redeem the Securities on the relevant Call Settlement Date at their principal amount plus Distribution accrued to such date (including any Arrears of Distribution and any Additional Distribution Amount)). (a) The Securities may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days notice to the Holders, the Registrar and the Fiscal Agent (which notice shall be irrevocable) at their principal amount, together with Distribution accrued to the date fixed for redemption (including any Arrears of Distribution and any Additional Distribution Amount), if: (i) (A) the Issuer has or will become obliged to pay additional amounts as provided or referred to in Condition 7 (Taxation) as a result of any change in, or amendment to, the laws or regulations of the British Virgin Islands or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations (including a holding by a court of competent jurisdiction), which change or amendment becomes effective on or after 2 September 2011; and (B) such obligation cannot be avoided by the Issuer taking reasonable measures available to it; or

Tax Redemption . . . . . . . . . . . . .

(ii) (A) the Guarantor has or (if a demand was made under the Guarantee of the Securities) would become obliged to pay additional amounts as provided or referred to in Condition 7 (Taxation) or the Guarantee of the Securities, as the case may be, as a result of any change in, or amendment to, the laws or regulations of Hong Kong or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations (including a holding by a court of competent jurisdiction), which change or amendment becomes effective on or after 2 September 2011 and (B) such obligation cannot be avoided by the Guarantor taking reasonable measures available to it; provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer or the Guarantor would be obliged to pay such additional amounts if a payment in respect of the Securities were then due or (as the case may be) a demand under the Guarantee of the Securities were then made. Redemption for Accounting Reasons . . . . . . . . . . . . . . . . . . The Securities may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days notice to the Holders (which notice shall be irrevocable) at their principal amount, together with Distribution accrued to the date fixed for redemption (including any Arrears of Distribution and any Additional Distribution Amount), if, as a result of any changes or amendments to HKFRS or any other accounting standards that may replace HKFRS for the purposes of the consolidated financial statements of the Guarantor (the Relevant Accounting Standard), the Securities and/or the Guarantee of the Securities must not or must no longer be recorded as equity of the Guarantor pursuant to the Relevant Accounting Standard. The Securities and the Guarantee of the Securities and any non-contractual obligations arising out of or in connection with the Securities and the Guarantee, will be governed by, and construed in accordance with, Singapore law.

Governing Law . . . . . . . . . . . . .

Clearing Systems . . . . . . . . . . . .

The Securities have been accepted for clearance and settlement by CDP under the following code: ISIN: SG6Q69973965

Clearance and Settlement . . . . .

Clearance of the Securities will be effected through an electronic book-entry clearance and settlement system for the trading of debt securities (Depository System) maintained by CDP. The Securities will be held by CDP in the form of the Global Certificate for persons holding the Securities in securities accounts with CDP. Delivery and transfer of Securities between such persons is by electronic book-entries in the records of the CDP only, as reflected in the securities accounts of such persons. Settlement of over-the-counter trades in the Securities through the Depository System may only be effected through certain corporate depositors (Depository Agents) approved by CDP under the Companies Act, Chapter 50 of Singapore to maintain securities sub-accounts and to hold the Securities in such securities sub-accounts for themselves and their clients. Accordingly, Securities for which trade settlement is to be effected through the Depository System must be held in securities sub-accounts with Depository Agents.

Registrar . . . . . . . . . . . . . . . . . . . Fiscal Agent . . . . . . . . . . . . . . . . Singapore Paying Agent . . . . . . Listing. . . . . . . . . . . . . . . . . . . . .

Deutsche Bank Luxembourg S.A. Deutsche Bank AG, Hong Kong Branch Deutsche Bank AG, Singapore Branch Approval in-principle has been obtained from the SGX-ST for the listing and quotation of the Securities on the SGX-ST. Such permission will be granted when the Securities have been admitted to the Official List of the SGX-ST. The SGX-ST assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports contained herein. Admission to the Official List of the SGX-ST and quotation of the Securities on the SGX-ST is not to be taken as an indication of the merits of the Issuer, the Guarantor, their respective subsidiaries or associated companies or the Securities. See Use of proceeds.

Use of Proceeds . . . . . . . . . . . . .

Selected financial information


The following tables set forth the summary consolidated financial information of the Group as at and for the periods indicated. The summary consolidated financial information for the years ended 31 December 2010, 31 December 2009 and 31 December 2008 set forth below is derived from the Guarantors audited consolidated financial statements for the years ended 31 December 2010 and 31 December 2009 (which have been audited by Deloitte Touche Tohmatsu, Certified Public Accountants, and are included in this Information Memorandum) and should be read in conjunction with such audited consolidated financial statements and the notes thereto. The summary consolidated financial information for the six months ended 30 June 2011 and 30 June 2010 set forth below is derived from the Guarantors unaudited published consolidated financial statements for the six months ended 30 June 2011 and should be read in conjunction with such published unaudited consolidated financial statements and the notes thereto.

Consolidated Income Statement


For the six months ended 30 June 2011(1) 2010(1) HK$ million For the year ended 31 December 2010(2) 2009(2) HK$ million 2008(3)

Group turnover . . . . . . . . . . . . . . . . . Share of property sales of jointly controlled entities . . . . . . . . . . . . . Turnover . . . . . . . . . . . . . . . . . . . . . . . Group turnover . . . . . . . . . . . . . . . Investment and other income . . . . Operating costs Property and related costs . . . . . Salaries and related expenses . . Interest and other finance costs Depreciation . . . . . . . . . . . . . . . . Other expenses . . . . . . . . . . . . . . .. .. . . . . . . . . . .

22,418 3,685 26,103 22,418 497 (14,646) (706) (130) (199) (218) (15,899) 2,948 1,419 11,383 23,284 34,667 (1,350) 33,317 33,259 58 33,317

17,244 3,074 20,318 17,244 394 (11,553) (581) (101) (200) (154) (12,589) 3,382 1,508 9,939 3,238 13,177 (605) 12,572 12,343 229 12,572

23,983 8,880 32,863 23,983 1,308 (15,113) (1,254) (222) (398) (336) (17,323) 8,183 1,737 17,888 10,237 28,125 (1,324) 26,801 26,478 323 26,801

17,702 6,591 24,293 17,702 2,614 (10,314) (1,032) (233) (349) (323) (12,251) 2,734 3,857 14,656 7,028 21,684 (1,644) 20,040 19,618 422 20,040 HK$8.47

12,856 3,580 16,436 12,856 466 (6,035) (944) (454) (284) (214) (7,931) 2,355 134 7,880 6,209 14,089 (859) 13,230 13,029 201 13,230 HK$5.63

Share of net profit of jointly controlled entities . . . . . . . . . . . . Increase in fair value of investment properties . . . . . . . . . . . . . . . . . . . Operating profit . . . . . . . . . . . . . . . Share of net profit of associates . . . Profit before taxation . . . . . . . . . . . Taxation . . . . . . . . . . . . . . . . . . . . . . Profit for the period . . . . . . . . . . . .

. . . . . . .

Profit attributable to Shareholders of the Guarantor . . . . Non-controlling interests . . . . . . . .

Earnings per share . . . . . . . . . . . . . . . HK$14.36

HK$5.33 HK$11.43

(1) derived from the Guarantors unaudited published consolidated financial statements for the six months ended 30 June 2011 (2) derived from the Guarantors audited consolidated financial statements for the year ended 31 December 2010 (3) derived from the Guarantors audited consolidated financial statements for the year ended 31 December 2009

10

Consolidated Statement of Financial Position


As at 30 June 2011(1) HK$ million 2010(2) As at 31 December 2009(2) HK$ million 2008(3)

Non-current assets Fixed assets . . . . . . . . . . . . . . . Investment properties . . . . . . Associates . . . . . . . . . . . . . . . . Jointly controlled entities . . . Investments available for sale Long term loan receivables . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

10,196 22,589 176,861 42,272 11,173 392 263,483 68,620 2,758 290 141 21,847 93,656 15,337 20,495 560 1,799 55,465 318,948 17,141 820 17,961 300,987 1,158 9,331 286,799 297,288 3,699 300,987

10,399 21,170 154,117 39,431 9,282 357 234,756 65,679 2,459 258 334 25,147 93,877 13,127 18,298 2,000 647 633 59,172 293,928 22,027 2,390 24,417 269,511 1,158 9,331 255,207 265,696 3,815 269,511

10,696 19,433 147,542 32,591 7,026 444 217,732 62,999 2,799 1,927 83 11,423 79,231 7,210 12,078 2,000 460 1,028 56,455 274,187 25,279 2,011 27,290 246,897 1,158 9,331 232,603 243,092 3,805 246,897

11,624 15,670 144,977 29,391 4,678 1,093 207,433 64,273 3,904 858 22 7,173 76,230 8,991 6,940 2,000 872 768 56,659 264,092 31,258 2,000 1,359 34,617 229,475 1,158 9,331 214,644 225,133 4,342 229,475

Current assets Stock of properties . . . . . . . . . . . . . . Debtors, deposits and prepayments Investments held for trading . . . . . . Derivative financial instruments . . . Bank balances and deposits . . . . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

Current liabilities Bank and other loans . . . . . . . . . . . . . . Creditors and accruals . . . . . . . . . . . . . Loan from joint development partner Derivative financial instruments . . . . . Provision for taxation . . . . . . . . . . . . . Net current assets . . . . . . . . . . . . . . . . . . Total assets less current liabilities . . . . . . Non-current liabilities Bank and other loans . . . . . . . . . . . . . . Loan from joint development partner Deferred tax liabilities . . . . . . . . . . . . .

. . . . . . .

. . . . . . .

. . . . . . .

. . . . . . .

. . . . . . .

. . . . . . .

...... ...... ......

Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Representing: Share capital . . . . . . . . . Share premium . . . . . . . Reserves . . . . . . . . . . . . . Shareholders funds . . . . Non-controlling interests Total equity . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1) derived from the Guarantors unaudited published consolidated financial statements for the six months ended 30 June 2011 (2) derived from the Guarantors audited consolidated financial statements for the year ended 31 December 2010 (3) derived from the Guarantors audited consolidated financial statements for the year ended 31 December 2009

11

Risk factors
Prior to making any investment decision, prospective investors should consider carefully all of the information in this Information Memorandum, including the risks and uncertainties described below. The business, financial condition or results of operations of the Group could be materially adversely affected by any of these risks. The Issuer and the Guarantor believe that the following factors may affect their ability to fulfil their respective obligations under the Securities and the Guarantee of the Securities. All of these factors are contingencies which may or may not occur and the Issuer and the Guarantor are not in a position to express a view on the likelihood of any such contingency occurring. Factors which the Issuer and the Guarantor believe may be material for the purpose of assessing the market risks associated with the Securities and the Guarantee of the Securities are also described below. The Issuer and the Guarantor believe that the factors described below represent the principal risks inherent in investing in the Securities, but the inability of the Issuer or the Guarantor to pay principal, distribution or other amounts or fulfil other obligations on or in connection with the Securities or the Guarantee of the Securities may occur for other reasons and the Issuer and the Guarantor do not represent that the statements below regarding the risks of holding the Securities are exhaustive. Terms used in this section and otherwise not defined shall have the meanings given to them in Terms and conditions of the securities. Limitations of this Information Memorandum This Information Memorandum does not purport to nor does it contain all information that a prospective investor or existing holder of the Securities may require in investigating the Issuer and the Guarantor, prior to making an investment or divestment decision in relation to the Securities. Neither this Information Memorandum nor any other document or information (or any part thereof) delivered or supplied under or in relation to the Securities is intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by the Issuer, the Guarantor or the Joint Lead Managers that any recipient of this Information Memorandum or any such other document or information (or such part thereof) should subscribe for or purchase, own or dispose of the Securities. Each person receiving this Information Memorandum acknowledges that such person has not relied on the Issuer, the Guarantor, their respective subsidiaries or associated companies (if any) or the Joint Lead Managers or any person affiliated with each of them in connection with its investigation of the accuracy or completeness of the information contained herein or of any additional information considered by it to be necessary in connection with its investment or divestment decision. Any recipient of this Information Memorandum contemplating subscribing for or purchasing or disposing of the Securities should determine for itself the relevance of the information contained in this Information Memorandum and any such other document or information (or any part thereof) and its investment or divestment should be, and shall be deemed to be, based solely upon its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer, the Guarantor, their respective subsidiaries and associated companies (if any), the terms and conditions of the Securities and any other factors relevant to its decision, including the merits and risks involved.

12

Risks relating to the Issuer and the business of the Guarantor and the Group The Issuer is a thinly capitalised special purpose vehicle The Issuer is a thinly capitalised special purpose vehicle with no significant net assets. When subscribing for or purchasing the Securities, investors are relying on the Guarantors creditworthiness and no one else. Risks associated with property developments There exist general risks inherent in property development and in the ownership of properties, including, among other things, risks that financing for development may not be available on favourable terms, that construction may not be completed on schedule or within budget, that long-term financing may not be available on completion of construction, that developed properties may not be sold or leased on profitable terms, that there will be intense competition from other developers or property owners which may lead to vacant properties or an inability to sell or rent properties on favourable terms, that purchasers or tenants may default, that properties held for rental purpose will need to be renovated, repaired and re-let on a periodic basis, that it may not be possible to renew leases or re-let spaces when existing leases expire, and that the property market conditions are subject to changes in environmental laws and regulations and zoning laws and other governmental rules and fiscal policies. Property values and rental values are also affected by factors such as political developments, governmental regulations and changes in planning or tax laws, levels of interest rates and consumer prices, the overall supply of properties and the imposition of government measures to dampen property prices. Investment in property is generally illiquid, which may limit the ability of the Group to timely realise property assets into cash. In addition, suitable land of significant size at appropriate prices is not easy to obtain due to limited supply of land in Hong Kong, while acquisition of land in the Mainland and other overseas markets may be subject to various other regulatory requirements or restrictions. Future growth prospects of the property development business is therefore affected by the availability and price levels of prime sites in Hong Kong, the Mainland and other overseas markets. Properties could suffer physical damage by fire or other causes and the Group may be exposed to any potential risks associated with public liability claims, resulting in losses (including loss of rent and value of properties) which may not be fully compensated for by insurance proceeds, and such events may in turn affect the Groups financial condition or results of operations. There is also the possibility of other losses for which the Group may not obtain insurance at a reasonable cost or at all. Should an uninsured loss or a loss in excess of insured limits occur, payment of compensation may be required and this may affect the returns on capital invested in that property. The Group would also remain liable for any debt or other financial obligation, such as committed capital expenditures related to that property. In addition, insurance policies will have to be renewed every year and acceptable terms for coverage will have to be negotiated, thus exposing the Group to the volatility of the insurance markets, including the possibility of increases in insurance premiums.

13

Risks associated with the holding company structure The Guarantor is a holding company that operates through subsidiaries. It is principally a holding company with limited operations of its own. The Guarantor will depend, to a significant extent, upon the receipt of dividends from its subsidiaries and associates to meet its overhead expenses and to make payments with respect to its obligations, including its obligations under the Guarantee of the Securities, and in order to provide funds to its subsidiaries and associates. The ability of subsidiaries and associates of the Guarantor to pay dividends to their respective shareholders (including the Guarantor) is subject to the performance and cash flow requirements of such subsidiaries and associates and to applicable law and restrictions contained in debt instruments of such subsidiaries and associates if any. The Guarantors obligations under the Guarantee of the Securities will be effectively subordinated to all existing and future obligations of its direct and indirect subsidiaries and associates. All claims of creditors of these subsidiaries and associates, including trade creditors, lenders and all other creditors, will have priority as to the assets of such entities over claims of the Guarantor and its creditors, including holders of the Securities as beneficiaries of the Guarantee of the Securities. No assurance can be given that the Guarantor will have sufficient cash flow from dividends to satisfy its obligations, including its obligations under the Guarantee of the Securities or otherwise to enable the Issuer to make payments under the Securities, or that its subsidiaries and associates will pay dividends at all. Risks associated with geographic and market concentration and general political and economic conditions The Group derives its revenue and operating profits mainly from its Hong Kong property investment activities and is consequently highly dependent on the state of the Hong Kong property market. As the Groups property investment portfolio is predominantly concentrated in Hong Kong, a disaster affecting Hong Kong or changes in the political and economic environment of Hong Kong would have a greater impact on the Group than if its properties were more geographically diversified. Historically, the Hong Kong property market has been cyclical and Hong Kong property values have been affected by the supply and demand of comparable properties, the rate of economic growth in Hong Kong, political and economic developments in Mainland China and the condition of the global economy. On 1 July 1997, Hong Kong became a Special Administrative Region of the Peoples Republic of China. Although Hong Kong has thus far enjoyed a high degree of legislative, judicial and economic autonomy since the handover, there can be no assurance that there will not be a change in regulatory oversight as a consequence of the exercise by the Peoples Republic of China of its sovereignty over Hong Kong or, should such change occur, that the Groups business, financial condition and the results of its operations will not be adversely affected. The Groups revenue is mainly generated from its operations in Hong Kong. Accordingly, its operations and performance may be affected by the general political and economic environment in Hong Kong and Mainland China. Future political or economic instability or a sustained slowdown in domestic economic activities in Hong Kong and Mainland China, especially in relation to property, will adversely affect the Groups business.

14

Economic developments outside Hong Kong, such as the recent global credit and liquidity crisis, efforts by the government of the Peoples Republic of China to control inflation in the Mainland China and interest rate movements in the United States, could also adversely affect the property market in Hong Kong. In the event of economic decline and recession, the Group may experience market pressures that affect Hong Kong property companies, such as pressures from tenants or prospective tenants to provide rent reductions or other incentives. Rental values are also affected by factors such as political developments, governmental regulations and changes in planning or tax laws, interest rate levels and inflation. Risks associated with industry trends and interest rates The trends in the industries in which the Group operates, including the property market sentiment and conditions, the property values in Hong Kong, mark to market value of securities investments, the currency environment and interest rate cycles, may pose significant impact on the Groups results. There can be no assurance that the combination of industry trends and interest rates the Group may experience in the future will not adversely affect its financial condition or results of operations. In particular, income from finance and treasury operations is dependent upon the capital markets, interest rates and currency environment, and the worldwide economic and market conditions, and therefore there can be no assurance that changes in these conditions will not adversely affect the Groups financial condition or results of operations. The volatilities in the financial markets may also adversely affect the income to be derived by the Group from its finance and treasury activities. Risks associated with the effect of global credit markets on the economy Economic developments outside Hong Kong could also adversely affect the property market in Hong Kong and the Groups overall business. In the second half of 2008, the global credit markets experienced significant dislocations and liquidity disruptions which had originated from the liquidity disruptions in the United States and the European Union credit and sub-prime residential mortgage markets. These and other related events, such as the previous collapse of a number of financial institutions, have had a significant adverse impact on the global credit and financial markets. The deterioration in the financial markets resulted in a recession in the United States and global economy, which led to significant declines in employment, household wealth, consumer demand and lending and as a result adversely affected economic growth in Hong Kong and elsewhere. There can be no assurance that a recession in the United States or global economy will not also result in an oversupply of property and reduced property prices and rentals in Hong Kong and Mainland China. Although global economic conditions have improved and certain credit markets have shown signs of recovery in 2011 due in large part to stimulus measures adopted by various governments, there is no assurance that these credit markets will continue to recover or that the various governments will maintain their stimulus measures. If the economic recovery fails to continue or if an economic slowdown were to return, the Group may have difficulty accessing the financial markets, which could make it more difficult or expensive to obtain funding and, in addition, there can be no assurance that

15

the Group will be able to raise finance at a reasonable cost. The Group may also be subject to solvency risks of banks and of its counterparties in its financial investments and arrangements. These may have a material adverse impact on the operations of the Group. Highly competitive markets The Groups principal business operations face significant competition across the markets in which they operate. New market entrants and intensified price competition among existing market players could adversely affect the Groups financial condition or results of operations. Competition risks faced by the Group include (a) an increasing number of developers undertaking property investment and development in Hong Kong, Mainland China and in other overseas markets, which may affect the market share and returns of the Group; and (b) significant competition and pricing pressure from other developers which may adversely affect the financial performance of the Groups operations. Risks associated with currency fluctuations The results of the Group are recorded in Hong Kong dollars but its various subsidiaries, associates and joint ventures may receive revenue and incur expenses in other currencies. Any currency fluctuations on translation of the accounts of these subsidiaries, associates and joint ventures and also on the repatriation of earnings, equity investments and loans may therefore impact on the Groups performance. Although currency exposures have been managed by the Group, a depreciation or fluctuation of the currencies in which the Group conducts operations relative to the Hong Kong dollar could adversely affect the Groups financial condition or results of operations. Risks associated with strategic partners Some of the businesses of the Group are conducted through non wholly-owned subsidiaries, associates and joint ventures in which the Group shares control (in whole or in part) and strategic alliances have been formed by the Group with other strategic or business partners. There can be no assurance that any of these strategic or business partners will continue their relationships with the Group in the future or that the Group will be able to pursue its stated strategies with respect to its non wholly-owned subsidiaries, associates and joint ventures and the markets in which they operate. Furthermore, the joint venture partners may (a) have economic or business interests or goals that are inconsistent with those of the Group, (b) take actions contrary to the Groups policies or objectives, (c) undergo a change of control, (d) experience financial and other difficulties or (e) be unable or unwilling to fulfill their obligations under joint ventures, which may affect the Groups financial condition or results of operations. Impact of local, national and international regulations The local business risks in different countries and cities in which the Group operates could have a material impact on the financial condition, results of operations and growth prospects of the businesses in the relevant market. The Group has investments in different countries and cities around the world and the Group is, and may increasingly become, exposed to different and changing political, social, legal, tax, regulatory and environmental requirements at the local, national or international level. Also, new policies or measures by governments, whether fiscal, tax, regulatory, environmental or other competitive changes, may lead to an increase in additional or unplanned capital

16

expenditure, pose a risk to the overall investment return of the Groups businesses and may delay or prevent the commercial operation of a business with resulting loss of revenue and profit. Impact of new accounting standards The Hong Kong Institute of Certified Public Accountants (HKICPA) has from time to time issued new and revised Hong Kong Financial Reporting Standards (HKFRS). As accounting standards continue to develop, HKICPA may in the future issue new and revised HKFRS and the Group may be required to adopt new accounting policies which might or could have a significant impact on the Groups financial position or results of operations. The Groups financial condition or results of operations are affected by those of the Hutchison Group The Guarantor maintains a shareholding of approximately 49.9 per cent. in Hutchison Whampoa, its major associate. Hutchison Whampoa, a company incorporated in Hong Kong in July 1977, is a Hong Kong-based multinational conglomerate whose securities are listed on the SEHK. The profit contribution from Hutchison Whampoa and its consolidated subsidiaries (the Hutchison Group) has been a significant part of the Guarantors recurrent income. The Hutchison Group operates five core business divisions in 52 countries, including ports and related services; property and hotels; retail; energy and infrastructure, finance and investments and other operations; and telecommunications. The Groups financial condition and results of operations are materially affected by those of the Hutchison Group. In addition, the core businesses of the Hutchison Group are different from those of the Group, and as a result, the Group is indirectly exposed to the risks that the Hutchison Group is facing. Risks associated with outbreak of highly contagious diseases In 2003, there was an outbreak of Severe Acute Respiratory Syndrome (SARS) in Hong Kong, Mainland China and other places. The SARS outbreak had a significant adverse impact on the economies of the affected countries. The spread of Influenza A H1N1 in 2009 also affected many areas of the world and there were reported cases of NDM-1 in many countries and regions. There can be no assurance that there will not be another significant global outbreak of a severe communicable disease such as avian influenza or SARS. If such an outbreak were to occur, it may have a material adverse impact on the operations of the Group and its results of operations may suffer. Risks Relating to the Securities The Securities are perpetual securities and investors have no right to require redemption The Securities are perpetual and have no maturity date. The Issuer is under no obligation to redeem the Securities at any time and the Securities can only be disposed of by sale. Holders who wish to sell their Securities may be unable to do so at a price at or above the amount they have paid for them, or at all, if insufficient liquidity exists in the market for the Securities.

17

The Issuer and the Guarantor may raise other capital which affects the price of the Securities The Issuer and/or the Guarantor may raise additional capital through the issue of other securities or other means. There is no restriction, contractual or otherwise, on the amount of securities or other liabilities which the Issuer and the Guarantor may issue or incur and which rank senior to, or pari passu with, the Securities. The issue of any such securities or the incurrence of any such other liabilities may reduce the amount (if any) recoverable by Holders on a Winding-Up of the Issuer and/or the Guarantor and/or may increase the likelihood of a deferral of Distribution under the Securities. The issue of any such securities or the incurrence of any such other liabilities might also have an adverse impact on the trading price of the Securities and/or the ability of Holders to sell their Securities. Holders may not receive Distribution payments if the Issuer elects to defer Distribution payments and any decision to elect to defer Distribution may be influenced by the Guarantors majority shareholder The Issuer may, at its sole discretion, elect to defer any scheduled Distribution on the Securities for any period of time. Each of the Issuer and the Guarantor is subject to certain restrictions in relation to the payment of dividends on its equity and the redemption and repurchase of its equity until any Arrears of Distribution are satisfied. The Issuer is not subject to any limits as to the number of times Distributions can be deferred pursuant to the Terms and Conditions of the Securities subject to compliance with the foregoing restrictions. Although Distributions are cumulative, the Issuer may defer their payment for an indefinite period of time by delivering the relevant deferral notices to the Holders, and Holders have no rights to claim any Distribution, Arrears of Distribution or Additional Distribution Amount if there is such a deferral. The Issuers decision to defer Distribution on the Securities will be dictated by the decision of the Guarantor, of which it is a wholly-owned subsidiary. These decisions of the Guarantor are, in turn, subject to the influence of its majority shareholder, which also exercises board and management control over the Guarantor. Investors should be aware that the interests of the Issuer and the Guarantor and of the shareholders of the Guarantor, including the majority shareholder, may be different to the interests of the Holders. Further, the Issuer and the Guarantor are permitted to continue to advance loans to and otherwise invest in the debt, equity and other securities of their respective shareholders, including the majority shareholder, or the shareholders of other subsidiaries of the Guarantor whilst deferring Distribution on the Securities. Any funds which are so advanced or invested will not be available to service Distribution. The Securities may be redeemed at the Issuers option at any time on or after five years after the Issue Date or the occurrence of certain other events The Terms and Conditions of the Securities provide that the Securities are redeemable at the option of the Issuer on any Distribution Payment Date falling on or after the date which is five years after the Issue Date at 100 per cent. of their principal amount together with all outstanding Arrears of Distribution (if any), Additional Distribution Amounts (if any) and Distribution (if any) accrued to the date fixed for redemption. In addition, the Issuer also has the right to redeem the Securities at 100 per cent. of their principal amount together with all outstanding Arrears of Distribution (if any), Additional Distribution Amounts (if any) and Distribution (if any) accrued to the date fixed for redemption upon the occurrence of: (i) any change in, or amendment to, the laws or 18

regulations of the British Virgin Islands (in the case of the Issuer) or the Hong Kong Special Administrative Region (in the case of the Guarantor) or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after 2 September 2011 such that the Issuer or the Guarantor (as the case may be) has or would become obliged to pay additional amounts in respect of the Securities or the Guarantee of the Securities (as the case may be) and such obligation cannot be avoided by the Issuer or the Guarantor (as the case may be) taking reasonable measures available to it; or (ii) any change or amendment to the Relevant Accounting Standard (as defined in Terms and Conditions of the Securities) such that the Securities and/or the Guarantee of the Securities must not or must no longer be recorded as equity of the Guarantor pursuant to the Relevant Accounting Standard. The date on which the Issuer elects to redeem the Securities may not accord with the preference of individual Holders. This may be disadvantageous to Holders in light of market conditions or the individual circumstances of the Holder of Securities. In addition, an investor may not be able to reinvest the redemption proceeds in comparable securities at an effective distribution rate at the same level as that of the Securities. There are limited remedies for default under the Securities and the Guarantee of the Securities Any scheduled Distribution will not be due if the Issuer elects to defer that Distribution pursuant to the Terms and Conditions of the Securities. Notwithstanding any of the provisions relating to non-payment defaults, the right to institute Winding-Up proceedings is limited to circumstances where payment has become due and the Issuer (failing which, the Guarantor) fails to make the payment when due. The only remedy against the Issuer and the Guarantor available to any Holder of Securities for recovery of amounts in respect of the Securities and/or the Guarantee of the Securities following the occurrence of a payment default after any sum becomes due in respect of the Securities and/or the Guarantee of the Securities will be proving in such Winding-Up and/or claiming in the liquidation of the Issuer and/or the Guarantor in respect of any payment obligations of the Issuer and/or the Guarantor arising from the Securities and/or the Guarantee of the Securities. The Securities contain provisions regarding modification and waivers which may affect the rights of Holders The Terms and Conditions of the Securities contain provisions for calling meetings of Holders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Holders, including Holders who did not attend and vote at the relevant meeting and Holders who voted in a manner contrary to the majority. In addition, an Extraordinary Resolution in writing signed by or on behalf of the Holders of not less than 90 per cent. of the aggregate principal amount of Securities outstanding shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of Holders duly convened and held. The Terms and Conditions of the Securities also provide that the Securities, the Terms and Conditions of the Securities, the Deed of Covenant, the MDSA and the Deed of Guarantee may be amended without the consent of the Holders to correct a manifest error. In addition, the parties to the Agency Agreement may agree to modify any provision thereof, but the Issuer shall not agree, without the consent of the Holders, to 19

any such modification unless it is of a formal, minor or technical nature, it is made to correct a manifest error or it is, in the opinion of such parties, not materially prejudicial to the interests of the Holders. An active trading market for the Securities may not develop The Securities are a new issue of securities for which there is currently no trading market. Although approval in-principle has been obtained from the SGX-ST for the listing and quotation of the Securities on the SGX-ST, no assurance can be given that the Issuer will obtain or be able to maintain a listing of the Securities on the Official List of the SGX-ST or that an active trading market for the Securities will develop or as to the liquidity or sustainability of any such market, the ability of Holders to sell their Securities or the price at which Holders will be able to sell their Securities. The Joint Lead Managers are not obliged to make a market in the Securities and any such market making, if commenced, may be discontinued at any time at the sole discretion of the Joint Lead Managers. The Securities are issued by a special purpose vehicle and the Guarantee of the Securities is given by a holding company The Issuer is an indirect wholly-owned subsidiary of the Guarantor formed for the principal purpose of issuance of the Securities and will on-lend the entire proceeds (after deduction of commission, costs and expenses in relation thereto) from the issue of the Securities to the Guarantor and/or its subsidiaries. The Issuer does not and will not have any net assets other than a nominal share capital and such on-lent loans and its ability to make payments under the Securities depends on timely payments under such loans. In the event that the Guarantor and/or its subsidiaries do not make such payments due to limitations in such loans or other agreements, lack of available cashflows or other factors, the Issuers ability to make payments under the Securities could be adversely affected. The Guarantor is primarily a holding company and its ability to make payments in respect of the Guarantee of the Securities or to fund payments by the Issuer depends largely upon the receipt of dividends, distributions, interest or advances from its wholly or partly owned subsidiaries, its associated companies and the Groups jointly controlled entities. The ability of the subsidiaries and associated companies of the Guarantor and the Groups jointly controlled entities to pay dividends and other amounts to the Guarantor may be subject to their profitability and to applicable laws and to restrictions on the payment of dividends contained in their respective constitutional documents, financing or other agreements. Payments under the Guarantee of the Securities are structurally subordinated to all existing and future liabilities and obligations of each of the Guarantors subsidiaries (other than the Issuer), its associated companies and the Groups jointly controlled entities. Claims of creditors of such companies will have priority as to the assets of such companies over the Guarantor and its creditors, including Holders seeking to enforce the Guarantee of the Securities. In addition, a part of the Guarantors subsidiaries indebtedness is secured on the assets of those subsidiaries, and the beneficiaries of the security will have priority as to those assets, which would reduce the amount available to unsecured parties, including Holders, in the event of an insolvency. The terms of the Securities do not restrict the ability of the Guarantors subsidiaries, associated companies and jointly controlled entities to incur additional debt. In addition, further issues of equity interests by such subsidiaries, associated companies and jointly controlled entities may dilute the ownership interest of the Guarantor in such entities.

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Tax treatment of the Securities is unclear An advance tax ruling will be requested from the Inland Revenue Authority of Singapore (IRAS) to confirm, amongst other things, whether Holders may enjoy the tax concessions available for qualifying debt securities under the qualifying debt securities scheme, as set out in Taxation Singapore, provided that the relevant conditions are met. Should the IRAS, in giving its tax ruling, impose additional tax disclosure requirements on the Issuer or other conditions and the Issuer decides, in its sole and absolute discretion, not to comply with these additional tax disclosure requirements or conditions, the Securities may not be regarded as qualifying debt securities and Holders thereof may not be eligible for the tax concessions under the qualifying debt securities scheme. There is no guarantee that a favourable ruling will be obtained from the IRAS. If, on the other hand, the IRAS rules that the Holders are not eligible for the tax concessions under the qualifying debt securities scheme, the tax treatment to Holders may differ, as set out in Taxation Singapore. Investors and Holders should consult their own accounting and tax advisers regarding the Singapore income tax consequences of their acquisition, holding and disposal of the Securities. Integral multiples of less than the specified denomination The denominations of the Securities are S$250,000 and in higher integral multiples of S$1,000 in excess thereof. It is possible that the Securities may be traded in amounts in excess of S$250,000 that are not integral multiples of S$250,000. In such a case, a Holder who, as a result of trading such amounts, holds a principal amount of less than S$250,000 will not receive a definitive Certificate in respect of such holding (should definitive Certificates be printed) and would need to purchase a principal amount of Securities such that it holds an amount equal to one or more denominations. If definitive Certificates are issued, Holders should be aware that definitive Certificates which represent Securities which have a denomination that is not an integral multiple of S$250,000 may be illiquid and difficult to trade.

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Terms and conditions of the securities


The following (other than the words in italics) is the text of the Terms and Conditions of the Securities which will appear on the reverse of each of the definitive certificates evidencing the Securities: The S$500,000,000 5.125 per cent. guaranteed senior perpetual securities (the Securities, which expression includes any further securities issued pursuant to Condition 13 (Further issues) and forming a single series therewith) of Cheung Kong Bond Securities Limited (the Issuer) are constituted by a deed of covenant dated 9 September 2011 (as amended or supplemented from time to time, the Deed of Covenant) executed by the Issuer and are the subject of (a) a deed of guarantee dated 9 September 2011 (as amended or supplemented from time to time, the Deed of Guarantee) executed by Cheung Kong (Holdings) Limited (the Guarantor); (b) a fiscal agency agreement dated 9 September 2011 (as amended or supplemented from time to time, the Agency Agreement) between the Issuer, the Guarantor, Deutsche Bank Luxembourg S.A. as registrar (the Registrar, which expression includes any successor registrar appointed from time to time in connection with the Securities), Deutsche Bank AG, Hong Kong Branch as fiscal agent (the Fiscal Agent, which expression includes any successor fiscal agent appointed from time to time in connection with the Securities), Deutsche Bank AG, Singapore Branch (the Singapore Paying Agent which expression includes any successor Singapore paying agent appointed from time to time in connection with the Securities), the transfer agent named therein (the Transfer Agent, which expression includes any successor or additional transfer agent appointed from time to time in connection with the Securities) and the paying agents named therein (together with the Fiscal Agent and the Singapore Paying Agent, the Paying Agents, which expression includes any successor or additional paying agents appointed from time to time in connection with the Securities); and (c) a master depository services agreement dated 9 September 2011 (the MDSA) between the Issuer and The Central Depository (Pte) Limited (the Depository). References herein to the Agents are to the Registrar, the Fiscal Agent, the Singapore Paying Agent, the Transfer Agent and the Paying Agents and any reference to an Agent is to any one of them. Certain provisions of these terms and conditions (the Conditions) are summaries of the Agency Agreement, the Deed of Covenant and the Deed of Guarantee and subject to their respective detailed provisions. The Holders (as defined in Condition 3(a) (Register, Title and Transfers Register)) are bound by, and are deemed to have notice of, all the provisions of the Agency Agreement, the Deed of Covenant and the Deed of Guarantee applicable to them and are deemed to have notice of those provisions applicable to them in the MDSA. Copies of the Agency Agreement, the Deed of Covenant, the Deed of Guarantee and the MDSA are available for inspection by Holders during normal business hours at the Specified Offices (as defined in the Agency Agreement) of each of the Agents, the initial Specified Offices of which are set out below. 1. Form and Denomination The Securities are in registered form in the denomination of S$250,000 and in higher integral multiples of S$1,000 in excess thereof (each, an Authorised Denomination).

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2. Status of the Securities and the Guarantee of the Securities (a) Status of the Securities: The Securities constitute direct, unsecured, unconditional and unsubordinated obligations of the Issuer which rank pari passu and without any preference among themselves and at least pari passu with all other present and future unsecured, unconditional, unsubordinated obligations of the Issuer, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application. (b) Status of the Guarantee of the Securities: The Guarantor has, in the Deed of Guarantee, unconditionally and irrevocably guaranteed the due and punctual payment of all sums payable by the Issuer in respect of the Securities. This guarantee (the Guarantee of the Securities) constitutes a direct, unsecured, unconditional and unsubordinated obligation of the Guarantor which ranks at least pari passu with all other present and future unsecured, unconditional, unsubordinated obligations of the Guarantor, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application. 3. Register, Title and Transfers (a) Register: The Registrar will maintain a register (the Register) in respect of the Securities outside Hong Kong and the United Kingdom in accordance with the provisions of the Agency Agreement. In these Conditions, the Holder of a Security means the person in whose name such Security is for the time being registered in the Register (or, in the case of a joint holding, the first named thereof). A certificate (each, a Certificate) will be issued to each Holder in respect of its registered holding. Each Certificate will be numbered serially with an identifying number which will be recorded in the Register. (b) Title: The Holder of each Security shall (except as otherwise required by law) be treated as the absolute owner of such Security for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing on the Certificate relating thereto (other than the endorsed form of transfer) or any notice of any previous loss or theft of such Certificate) and no person shall be liable for so treating such Holder. No person shall have any right to enforce any term or condition of the Securities or the Agency Agreement under the Contracts (Rights of Third Parties) Act, Chapter 53B of Singapore. For so long as any of the Securities is represented by the Global Certificate (as defined in the Agency Agreement) and the Global Certificate is held by the Depository, each person who is for the time being shown in the records of the Depository as the holder of a particular principal amount of such Securities (in which regard any certificate or other document issued by the Depository as to the principal amount of such Securities standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated by the Issuer, the Guarantor, the Fiscal Agent and all other agents of the Issuer or the Guarantor as the holder of such principal amount of Securities other than with respect to the payment of principal, distributions and any other amounts in respect of the Securities, for which purpose the Holder of the Global Certificate shall be treated by the Issuer, the Guarantor, the Fiscal Agent and all other agents of the Issuer as the holder of such Securities in accordance with and subject to the terms of the Global Certificate (and the expression Holder and related expressions shall be

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construed accordingly). Securities which are represented by the Global Certificate will be transferable only in accordance with the rules and procedures for the time being of the Depository. (c) Transfers: Subject to paragraphs (f) (Closed periods) and (g) (Regulations concerning transfers and registration) below, a Security may be transferred upon surrender of the relevant Certificate, with the endorsed form of transfer duly completed, at the Specified Office of the Registrar or any Transfer Agent, together with such evidence as the Registrar or (as the case may be) such Transfer Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer; provided, however, that a Security may not be transferred unless the principal amount of Securities transferred and (where not all of the Securities held by a Holder are being transferred) the principal amount of the balance of Securities not transferred are Authorised Denominations. Where not all the Securities represented by the surrendered Certificate are the subject of the transfer, a new Certificate in respect of the balance of the Securities will be issued to the transferor. (d) Registration and delivery of Certificates: Within five business days of the surrender of a Certificate in accordance with paragraph (c) (Transfers) above, the Registrar will register the transfer in question and deliver a new Certificate of a like principal amount to the Securities transferred to each relevant Holder at its Specified Office or (as the case may be) the Specified Office of any Transfer Agent or (at the request and risk of any such relevant Holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant Holder. In this paragraph, business day means a day, excluding a Saturday and a Sunday, on which commercial banks are open for general business (including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Transfer Agent has its Specified Office. (e) No charge: The transfer of a Security will be effected without charge by or on behalf of the Issuer, the Guarantor, the Registrar or any Transfer Agent but against such indemnity as the Registrar or (as the case may be) such Transfer Agent may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer. (f) Closed periods: Holders may not require transfers to be registered during the period of 15 days ending on the due date for any payment of principal or Distribution (as defined in Condition 4(a) (Distribution Accrual of Distribution)) in respect of the Securities. (g) Regulations concerning transfers and registration: All transfers of Securities and entries on the Register are subject to the detailed regulations concerning the transfer of Securities scheduled to the Agency Agreement. The parties to the Agency Agreement may agree, without the consent of the Holders to any modifications to any provisions thereof (including the regulations concerning the transfer of Securities). A copy of the current regulations will be mailed (free of charge) by the Registrar to any Holder who requests in writing a copy of such regulations.

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4. Distribution (a) Accrual of Distribution: Subject to Condition 4(c) (Distribution Distribution Deferral), the Securities confer a right to receive distribution (each a Distribution) from 9 September 2011 (the Issue Date) at the Distribution Rate in accordance with this Condition 4. Subject to Condition 4(c) (Distribution Distribution Deferral), Distribution shall be payable on the Securities semi-annually in arrear on 9 March and 9 September of each year (each, a Distribution Payment Date), with the first Distribution Payment Date falling in March 2012. Unless otherwise provided for in these Conditions, each Security will cease to confer the right to receive any Distribution from the due date for redemption unless, upon due presentation, payment of the full amount due is improperly withheld or refused. In such latter event, Distribution will continue to accrue at the applicable Distribution Rate (after as well as before any judgment) up to but excluding whichever is the earlier of (a) the date on which all sums due in respect of any Security are received by or on behalf of the relevant Holder and (b) the day which is seven days after the Fiscal Agent has notified the Holders that it has received all sums due in respect of the Securities up to such seventh day (except to the extent that there is a failure in the subsequent payment to the relevant Holders under these Conditions). The amount of Distribution payable on each Distribution Payment Date shall be S$6,406.25 in respect of each Security of S$250,000 denomination and S$25.63 in respect of each Security of S$1,000 denomination. If a Distribution is required to be paid in respect of a Security on any other date, it shall be calculated by multiplying the Distribution Rate by the Day Count Fraction, rounding the resulting figure to the nearest cent (half a cent being rounded upwards) and multiplying such rounded figure by the denomination of such Security and Day Count Fraction means, in respect of any period, the number of days in the relevant period divided by 365. Distribution payable under this Condition will be paid in accordance with Condition 6 (Payments). For so long as any of the Securities is represented by the Global Certificate and the Global Certificate is held by the Depository, the Distributions (including Arrears of Distribution and Additional Distribution Amounts) payable on such Securities will be determined based on the aggregate holdings of Capital Securities of each person who is for the time being shown in the records of the Depository as the holder of a particular principal amount of such Securities. (b) Rate of Distribution: The rate of distribution (Distribution Rate) applicable to the Securities shall be 5.125 per cent. per annum. (c) Distribution Deferral: (i) Optional Deferral: The Issuer may, at its sole discretion, elect to defer Distribution which is otherwise scheduled to be paid on a Distribution Payment Date to the next Distribution Payment Date by giving notice (an Optional Deferral Notice) to the Holders (in accordance with Condition 14 (Notices)) and the Fiscal Agent not more than 12 nor less than seven Business Days prior to a scheduled Distribution Payment Date if, during the three months ending on the

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day before that scheduled Distribution Payment Date no dividend, distribution or other payment has been paid or declared by the Guarantor on or in respect of any of its Junior Securities (an Optional Deferral Event). (ii) No obligation to pay: The Issuer shall have no obligation to pay any Distribution (including any Arrears of Distribution and any Additional Distribution Amount) on any Distribution Payment Date if it validly elects not to do so in accordance with Condition 4(c)(i) (Distribution Distribution Deferral Optional Deferral) and any failure to pay Distribution shall not constitute a default of the Issuer in respect of the Securities or of the Guarantor in respect of the Guarantee of the Securities. (iii) Requirements as to Notice: Each Optional Deferral Notice shall be accompanied, in the case of the notice to the Fiscal Agent, by a certificate in the form scheduled to the Agency Agreement signed by two directors of the Guarantor confirming that an Optional Deferral Event has occurred and is continuing. The Fiscal Agent shall be entitled to accept such certificate as sufficient evidence of the occurrence of an Optional Deferral Event, in which event it shall be conclusive and binding on the Holders. (iv) Cumulative Deferral: Any Distribution deferred pursuant to this Condition 4(c) shall constitute Arrears of Distribution. The Issuer may, at its sole discretion, elect to (in the circumstances set out in Condition 4(c)(i) (Distribution Distribution Deferral Optional Deferral)) further defer any Arrears of Distribution by complying with the foregoing notice requirement applicable to any deferral of an accrued Distribution. The Issuer is not subject to any limit as to the number of times Distributions and Arrears of Distribution can or shall be deferred pursuant to this Condition 4(c) except that this Condition 4(c)(iv) shall be complied with until all outstanding Arrears of Distribution have been paid in full. Each amount of Arrears of Distribution shall bear interest as if it constituted the principal of the Securities at the Distribution Rate and the amount of such interest (the Additional Distribution Amount) with respect to Arrears of Distribution shall be due and payable pursuant to this Condition 4 and shall be calculated by applying the Distribution Rate to the amount of the Arrears of Distribution and otherwise mutatis mutandis as provided in the foregoing provisions of this Condition 4. The Additional Distribution Amount accrued up to any Distribution Payment Date shall be added for the purpose of calculating the Additional Distribution Amount accruing thereafter, to the amount of Arrears of Distribution remaining unpaid on such Distribution Payment Date so that it will itself become Arrears of Distribution. (v) Restrictions in the case of Deferral: If on any Distribution Payment Date, payment of all Distribution payments scheduled to be made on such date is not made in full by reason of this Condition 4(c), the Issuer and the Guarantor shall not: (a) declare or pay any dividends, distributions or make any other payment on, and will procure that no dividend, distribution or other payment is made on any of its Junior Securities; or

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(b) redeem, reduce, cancel, buy-back or acquire for any consideration any of its Junior Securities, unless and until the Issuer or the Guarantor (i) has satisfied in full all outstanding Arrears of Distribution; or (ii) is permitted to do so by an Extraordinary Resolution (as defined in the Agency Agreement) of the Holders, provided that nothing in this Condition 4(c) shall restrict the ability of the Issuer or the Guarantor to advance loans to any of their respective shareholders or shareholders of other subsidiaries of the Guarantor or otherwise invest in such shareholders or subsidiaries debt, howsoever issued or represented. (vi) Satisfaction of Arrears of Distribution by payment: The Issuer: (a) may satisfy any Arrears of Distribution (in whole or in part) at any time by giving notice of such election to the Holders (in accordance with Condition 14 (Notices)) and the Fiscal Agent not more than 20 nor less than 10 Business Days prior to the relevant payment date specified in such notice (which notice is irrevocable and shall oblige the Issuer to pay the relevant Arrears of Distribution on the payment date specified in such notice); and (b) in any event shall satisfy any outstanding Arrears of Distribution (in whole but not in part) on the earlier of (1) the date of redemption of the Securities in accordance with Condition 5(b) (Redemption and Purchase Redemption for tax reasons), 5(c) (Redemption and Purchase Redemption for accounting reasons) or 5(d) (Redemption and Purchase Redemption at the option of the Issuer); and (2) the date such amount becomes due under Condition 8 (Non-payment). Any partial payment of outstanding Arrears of Distribution by the Issuer shall be shared by the Holders of all outstanding Securities on a pro-rata basis. (vii) No default: Notwithstanding any other provision in these Conditions or in the Agency Agreement, the deferral of any Distribution payment in accordance with this Condition 4(c) shall not constitute a default for any purpose (including, without limitation, pursuant to Condition 8 (Non-payment)) on the part of the Issuer or the Guarantor. (viii) Definitions: For the purposes of these Conditions: Business Day means any day, excluding a Saturday and a Sunday, on which banks are open for general business (including dealings in foreign currencies) in Hong Kong and Singapore; HKFRS means Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants; and Junior Security means, in relation to the Issuer or the Guarantor, as the case may be, any class of its share capital qualifying as equity under HKFRS. 5. Redemption and Purchase (a) No fixed redemption date: The Securities are perpetual securities in respect of which there is no fixed redemption date and the Issuer shall (subject to the provisions of Condition 2 (Status of the Securities and the Guarantee of the

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Securities) and without prejudice to Condition 8 (Non-payment)), only have the right to redeem or purchase them in accordance with the following provisions of this Condition 5. (b) Redemption for tax reasons: The Securities may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days notice to the Holders, the Registrar and the Fiscal Agent (which notice shall be irrevocable) at their principal amount, together with Distribution accrued to the date fixed for redemption (including any Arrears of Distribution and any Additional Distribution Amount), if: (i) (A) the Issuer has or will become obliged to pay additional amounts as provided or referred to in Condition 7 (Taxation) as a result of any change in, or amendment to, the laws or regulations of the British Virgin Islands or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations (including a holding by a court of competent jurisdiction), which change or amendment becomes effective on or after 2 September 2011; and (B) such obligation cannot be avoided by the Issuer taking reasonable measures available to it; or (ii) (A) the Guarantor has or (if a demand was made under the Guarantee of the Securities) would become obliged to pay additional amounts as provided or referred to in Condition 7 (Taxation) or the Guarantee of the Securities, as the case may be, as a result of any change in, or amendment to, the laws or regulations of Hong Kong or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations (including a holding by a court of competent jurisdiction), which change or amendment becomes effective on or after 2 September 2011 and (B) such obligation cannot be avoided by the Guarantor taking reasonable measures available to it; provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer or the Guarantor would be obliged to pay such additional amounts if a payment in respect of the Securities were then due or (as the case may be) a demand under the Guarantee of the Securities were then made. Prior to the publication of any notice of redemption pursuant to this Condition 5(b), the Guarantor shall deliver or procure that there is delivered to the Fiscal Agent: (A) a certificate, signed by two directors of the Issuer, stating that the circumstances referred to in (i)(A) and (i)(B) above prevail and setting out the details of such circumstances or (as the case may be) a certificate signed by two directors of the Guarantor stating that the circumstances referred to in (ii)(A) and (ii)(B) above prevail and setting out details of such circumstances; and (B) an opinion of independent legal advisers of recognised standing to the effect that the Issuer or (as the case may be) the Guarantor has or will become obliged to pay such additional amounts as a result of such change or amendment. Upon the expiry of any such notice as is referred to in this Condition 5(b), the Issuer shall be bound to redeem the Securities in accordance with this Condition 5(b). 28

(c) Redemption for accounting reasons: The Securities may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days notice to the Holders (which notice shall be irrevocable) at their principal amount, together with Distribution accrued to the date fixed for redemption (including any Arrears of Distribution and any Additional Distribution Amount), if, as a result of any changes or amendments to HKFRS or any other accounting standards that may replace HKFRS for the purposes of the consolidated financial statements of the Guarantor (the Relevant Accounting Standard), the Securities and/or the Guarantee of the Securities must not or must no longer be recorded as equity of the Guarantor pursuant to the Relevant Accounting Standard. Prior to the publication of any notice of redemption pursuant to this Condition 5(c), the Guarantor shall deliver or procure that there is delivered to the Fiscal Agent: (A) a certificate, signed by two directors of the Guarantor, stating that the circumstances referred to above prevail and setting out the details of such circumstances; and (B) an opinion of the Guarantors independent auditors stating that the circumstances referred to above prevail and the date on which the relevant change or amendment to the Relevant Accounting Standard is due to take effect, provided, however that no notice of redemption may be given under this Condition 5(c) earlier than 90 days prior to the date on which the relevant change or amendment to the Relevant Accounting Standard is due to take effect in relation to the Issuer and/or the Guarantor. Upon the expiry of any such notice as is referred to in this Condition 5(c), the Issuer shall be bound to redeem the Securities in accordance with this Condition 5(c) provided that such date for redemption shall be no earlier than the last day before the date on which the Securities and/or the Guarantee of the Securities must not or must no longer be so recorded as equity of the Guarantor pursuant to the Relevant Accounting Standard. (d) Redemption at the option of the Issuer: The Securities may be redeemed at the option of the Issuer in whole, but not in part, on the Distribution Payment Date falling in September 2016 or any Distribution Payment Date thereafter (each, a Call Settlement Date) on the Issuers giving not less than 30 nor more than 60 days notice to the Holders (which notice shall be irrevocable and shall oblige the Issuer to redeem the Securities on the relevant Call Settlement Date at their principal amount plus Distribution accrued to such date (including any Arrears of Distribution and any Additional Distribution Amount)). (e) No other redemption: The Issuer shall not be entitled to redeem the Securities and shall have no obligation to make any payment of principal in respect of the Securities otherwise than as provided in Conditions 5(b) (Redemption and Purchase Redemption for tax reasons) to 5(d) (Redemption and Purchase Redemption at the option of the Issuer) above. (f) Purchase: The Issuer, the Guarantor or any of their respective subsidiaries may at any time purchase Securities in the open market or otherwise and at any price.

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(g) Cancellation: All Securities so redeemed or purchased by the Issuer or the Guarantor shall be cancelled and may not be reissued or resold. 6. Payments (a) Principal: Payments of principal shall be made in Singapore dollars by Singapore dollar cheque drawn on, or, upon application by a Holder of a Security to the Specified Office of the Fiscal Agent not later than the fifteenth day before the due date for any such payment, by transfer to a Singapore dollar account and (in the case of redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant Certificates at the Specified Office of any Paying Agent. (b) Distribution: Payments of Distribution (including any Arrears of Distribution and any Additional Distribution Amount) shall be made in Singapore dollars by Singapore dollar cheque drawn on, or, upon application by a Holder of a Security to the Specified Office of the Fiscal Agent not later than the fifteenth day before the due date for any such payment, by transfer to a Singapore dollar account and (in the case of Distribution payable on redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant Certificates at the Specified Office of any Paying Agent. (c) Payments subject to fiscal laws: All payments in respect of the Securities are subject in all cases to any applicable fiscal or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 7 (Taxation). No commissions or expenses shall be charged to the Holders in respect of such payments. (d) Payments on business days: Where payment is to be made by transfer to a Singapore dollar account, payment instructions (for value the due date, or, if the due date is not a business day, for value the next succeeding business day) will be initiated and, where payment is to be made by Singapore dollar cheque, the cheque will be mailed (i) (in the case of payments of principal and Distribution payable on redemption) on the later of the due date for payment and the day on which the relevant Certificate is surrendered (or, in the case of part payment only, endorsed) at the Specified Office of a Paying Agent and (ii) (in the case of payments of Distribution payable other than on redemption) on the due date for payment. A Holder of a Security shall not be entitled to any Distribution or other payment in respect of any delay in payment resulting from (A) the due date for a payment not being a business day or (B) a cheque mailed in accordance with this Condition 6 (Payments) arriving after the due date for payment or being lost in the mail. In this paragraph, business day means any day, other than a Saturday and a Sunday, on which banks are open for general business (including dealings in foreign currencies) in Singapore and, in the case of surrender (or, in the case of part payment only, endorsement) of a Certificate, in the place in which the Certificate is surrendered (or, as the case may be, endorsed). (e) Partial payments: If a Paying Agent makes a partial payment in respect of any Security, the Issuer shall procure that the amount and date of such payment are noted on the Register and, in the case of partial payment upon presentation of a Certificate, that a statement indicating the amount and the date of such payment is endorsed on the relevant Certificate.

30

(f) Record date: Each payment in respect of a Security will be made to the person shown as the Holder in the Register at the opening of business in the place of the Registrars Specified Office on the fifteenth day before the due date for such payment (the Record Date). Where payment in respect of a Security is to be made by cheque, the cheque will be mailed to the address shown as the address of the Holder in the Register at the opening of business on the relevant Record Date. 7. Taxation All payments of principal and Distribution (including any Arrears of Distribution and any Additional Distribution Amount) in respect of the Securities by or on behalf of the Issuer or the Guarantor shall be made free and clear of, and without withholding or deduction for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the British Virgin Islands or Hong Kong or any political subdivision thereof or any authority therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is as required by law. In that event the Issuer or (as the case may be) the Guarantor shall pay such additional amounts as will result in receipt by the Holders of such amounts after such withholding or deduction as would have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable in respect of any Security: (a) held by a Holder which is liable to such taxes, duties, assessments or governmental charges in respect of such Security by reason of its having some connection with the jurisdiction by which such taxes, duties, assessments or charges have been imposed, levied, collected, withheld or assessed other than the mere holding of the Security; or (b) where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, this Directive; or (c) held by a Holder who would have been able to avoid such withholding or deduction by arranging to receive the relevant payment through another Paying Agent in a member state of the European Union; or (d) where (in the case of a payment of principal or Distribution on redemption) the relevant Certificate is surrendered for payment more than 30 days after the Relevant Date except to the extent that the relevant Holder would have been entitled to such additional amounts if it had surrendered the relevant Certificate on the last day of such period of 30 days. In these Conditions, Relevant Date means whichever is the later of (1) the date on which the payment in question first becomes due and (2) if the full amount payable has not been received in Singapore by the Fiscal Agent on or prior to such due date, the date on which (the full amount having been so received) notice to that effect has been given to the Holders. Any reference in these Conditions to principal, Distribution, Arrears of Distribution or Additional Distribution Amount shall be deemed to include any additional amounts in respect of principal, Distribution, Arrears of Distribution or Additional Distribution

31

Amount (as the case may be) which may be payable under this Condition 7 (Taxation) or any undertaking given in addition to or in substitution of this Condition 7 (Taxation) pursuant to the Agency Agreement. If the Issuer or the Guarantor becomes subject at any time to any taxing jurisdiction other than the British Virgin Islands or Hong Kong, respectively, references in these Conditions to the British Virgin Islands or Hong Kong shall be construed as references to the British Virgin Islands or (as the case may be) Hong Kong and/or such other jurisdiction. 8. Non-payment (a) Non-payment when due: Notwithstanding any of the provisions below in this Condition 8, the right to institute Winding-Up (as defined in Condition 8(e) (Non-payment Definitions)) proceedings is limited to circumstances where payment has become due. In the case of any Distribution, such Distribution will not be due if the Issuer has elected to defer that Distribution in accordance with Condition 4(c) (Distribution Distribution Deferral). (b) Proceedings for Winding-Up: If (i) an order is made or an effective resolution is passed for the Winding-Up of the Issuer or the Guarantor or (ii) the Issuer or the Guarantor shall not make payment in respect of the Securities or the Guarantee of the Securities, as the case may be, for a period of ten days or more after the date on which such payment is due, the Issuer and the Guarantor shall be deemed to be in default under the Securities (in the case of the Issuer) and the Guarantee of the Securities (in the case of the Guarantor) and Holders holding not less than 10 per cent. of the aggregate principal amount of the outstanding Securities may institute proceedings for the Winding-Up of the Issuer, the Guarantor or both of them (as applicable) and/or prove in the Winding-Up of the Issuer, the Guarantor or both of them (as applicable) and/or claim in the liquidation of the Issuer, the Guarantor or both of them (as applicable) for such payment. (c) Enforcement: Without prejudice to Condition 8(b) (Non-payment Proceedings for Winding-Up), Holders holding not less than 10 per cent. of the aggregate principal amount of the outstanding Securities may without further notice to the Issuer and/or the Guarantor institute such proceedings against the Issuer, the Guarantor or both of them (as applicable) as it may think fit to enforce any term or condition binding on the Issuer and/or the Guarantor under the Securities or the Guarantee of the Securities (other than any payment obligation of the Issuer or the Guarantor under or arising from the Securities or the Guarantee of the Securities, including, without limitation, payment of any principal or premium or satisfaction of any Distributions (including any Arrears of Distribution and any Additional Distribution Amount) in respect of the Securities or the Guarantee of the Securities, including any damages awarded for breach of any obligations) and in no event shall the Issuer or the Guarantor, by virtue of the institution of any such proceedings, be obliged to pay any sum or sums, in cash or otherwise, sooner than the same would otherwise have been payable by it. (d) Extent of Holders remedy: No remedy against the Issuer or the Guarantor, other than as referred to in this Condition 8 (Non-payment), shall be available to the Holders, whether for the recovery of amounts owing in respect of the Securities or the Guarantee of the Securities or in respect of any breach by the Issuer or the Guarantor of any of its other obligations under or in respect of the Securities or the Guarantee of the Securities. 32

(e) Definitions: In these Conditions, Winding-Up means, with respect to the Issuer or the Guarantor, a final and effective order or resolution for the bankruptcy, winding up, liquidation, receivership or similar proceedings in respect of the Issuer or the Guarantor, as the case may be. 9. Prescription Claims for principal and Distribution on redemption shall become void unless the relevant Certificates are surrendered for payment within ten years of the appropriate Relevant Date. 10. Replacement of Certificates If any Certificate is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Registrar, subject to all applicable laws and stock exchange requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Issuer may reasonably require. Mutilated or defaced Certificates must be surrendered before replacements will be issued. 11. Agents In acting under the Agency Agreement and in connection with the Securities, the Agents act solely as agents of the Issuer and the Guarantor and do not assume any obligations towards or relationship of agency or trust for or with any of the Holders. The initial Agents and their initial Specified Offices are listed below. The Issuer and the Guarantor reserve the right at any time to vary or terminate the appointment of any Agent and to appoint a successor registrar, fiscal agent, Singapore paying agent, transfer agent and additional or successor paying agents and transfer agent; provided, however, that the Issuer and the Guarantor shall at all times maintain (a) a fiscal agent and a registrar; and (b) a paying agent in Singapore. Notice of any change in any of the Agents or in their Specified Offices shall promptly be given to the Holders. 12. Meetings of Holders; Modification (a) Meetings of Holders: The Agency Agreement contains provisions for convening meetings of Holders to consider matters relating to the Securities, including the modification of any provision of these Conditions or the Agency Agreement. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the Issuer and the Guarantor (acting together) and shall be convened by them upon the request in writing of Holders holding not less than one-tenth of the aggregate principal amount of the outstanding Securities. The quorum at any meeting convened to vote on an Extraordinary Resolution will be two or more persons holding or representing one more than half of the aggregate principal amount of the outstanding Securities or, at any adjourned meeting, two or more persons being or representing Holders of whatever the principal amount of the Securities held or represented; provided, however, that certain proposals of the Issuer and/or the Guarantor (including any proposal to change any date fixed for payment of principal or Distribution (including any Arrears of Distribution and any Additional Distribution Amount) in respect of the Securities, to reduce the amount 33

of principal or Distribution (including any Arrears of Distribution and any Additional Distribution Amount) payable on any date in respect of the Securities, to alter the method of calculating the amount of any payment in respect of the Securities or the date for any such payment, to change the currency of payments under the Securities, to amend the terms of the Guarantee of the Securities or to change the quorum requirements relating to meetings or the majority required to pass an Extraordinary Resolution (each, a Reserved Matter)) may only be sanctioned by an Extraordinary Resolution passed at a meeting of Holders at which two or more persons holding or representing not less than three-quarters or, at any adjourned meeting, one quarter of the aggregate principal amount of the outstanding Securities form a quorum. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Holders, whether present or not. In addition, a resolution in writing signed by or on behalf of Holders of not less than 90 per cent. of the aggregate principal amount of Securities for the time being outstanding will take effect as if it were an Extraordinary Resolution. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Holders. (b) Modification: The Securities, these Conditions, the Deed of Covenant, the Deed of Guarantee and the Master Depositary Services Agreement may be amended without the consent of the Holders to correct a manifest error. In addition, the parties to the Agency Agreement may agree to modify any provision thereof, but the Issuer shall not agree, without the consent of the Holders, to any such modification unless it is of a formal, minor or technical nature, it is made to correct a manifest error or it is, in the opinion of such parties, not materially prejudicial to the interests of the Holders. 13. Further Issues The Issuer may from time to time, without the consent of the Holders, create and issue further securities having the same terms and conditions as the Securities in all respects (or in all respects except for the first payment of Distribution) so as to form a single series with the Securities. 14. Notices Notices to the Holders will be sent to them by first class mail (or its equivalent) or (if posted to an overseas address) by airmail at their respective addresses on the Register. Any such notice shall be deemed to have been given on the fourth day after the date of mailing. Notices may, so long as the Global Certificate is held in its entirety on behalf of the Depository, be delivered to the Depository for communication by it to the holders of the Securities. Any such notice shall be deemed to have been given to the Noteholders on the seventh day after the day on which the said notice was given to the Depository. Notices to the holders of Securities shall also be given (so long as the Securities are listed on the Singapore Exchange Securities Trading Limited and the rules of such exchange so require) in a leading newspaper having general circulation Singapore (which is expected to be the Business Times).

34

15. Governing Law and Jurisdiction (a) Governing law: The Securities and any non-contractual obligations arising out of or in connection with the Securities are governed by, and construed in accordance with, Singapore law. (b) Jurisdiction: Each of the Issuer and the Guarantor has in the Agency Agreement (i) agreed for the benefit of the Holders that the courts of Singapore shall have exclusive jurisdiction to settle any dispute (a Dispute) arising out of or in connection with the Securities (including any non-contractual obligation arising out of or in connection with the Securities) and accordingly any legal action or proceedings arising out of or in connection with the Securities (Proceedings) may be brought in such courts; (ii) agreed that those courts are the most appropriate and convenient courts to settle any Dispute and irrevocably submits to the exclusive jurisdiction of such courts and, accordingly waives any objection to Proceedings in such courts whether on the ground of inappropriateness of venue or on the ground that Proceedings have been brought in an inconvenient forum; and (iii) designated a company in Singapore to accept service of any process on its behalf.

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Summary of provisions relating to the securities whilst in global form


The Global Certificate contains provisions which apply to the Securities whilst represented by the Global Certificate, some of which modify the effect of the Terms and Conditions of the Securities set out in the Information Memorandum. Terms defined in the Terms and Conditions of the Securities have the same meaning in the paragraphs below. The following is a summary of those provisions: Initial Issue of Securities Upon registration of the Securities in the name of CDP and delivery of the Global Certificate to CDP, CDP will credit each subscriber with a nominal amount of Securities equal to the nominal amount thereof for which it has subscribed and paid. Relationship of Accountholders with Clearing Systems Each of the persons shown in the records of CDP as the Holder represented by the Global Certificate must look solely to CDP for his share of each payment made by the Issuer to the Holder of the underlying Securities and in relation to all other rights arising under the Global Certificate, subject to and in accordance with the respective rules and procedures of CDP. Such persons shall have no claim directly against the Issuer in respect of payments due on the Securities for so long as the Securities are represented by the Global Certificate and such obligations of the Issuer will be discharged by payment to the Holder of the underlying Securities in respect of each amount so paid. Deposit and Exchange For so long as any of the Securities is represented by the Global Certificate and the Global Certificate is held by CDP, each person who is for the time being shown in the records of CDP as the holder of a particular principal amount of such Securities (in which regard any certificate or other document issued by CDP as to the principal amount of such Securities standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated by the Issuer, the Guarantor, the Fiscal Agent and all other agents of the Issuer or the Guarantor as the holder of such principal amount of Securities other than with respect to the payment of principal, distributions and any other amounts in respect of the Securities, for which purpose the holder of the Global Certificate shall be treated by the Issuer, the Guarantor, the Fiscal Agent and all other agents of the Issuer as the holder of such Securities in accordance with and subject to the terms of the Global Certificate. Securities which are represented by the Global Certificate will be transferable only in accordance with the rules and procedures for the time being of CDP. These provisions will not prevent the transfers of interests in the Securities within CDP whilst they are held on behalf of CDP, but will limit the circumstances in which the Securities may be withdrawn from CDP. The Global Certificate will become exchangeable in whole, but not in part, for individual certificates (Individual Certificates) if (i) upon a Winding-Up (as defined in Terms and conditions of the securities) of the Issuer or the Guarantor; (ii) CDP (or an alternative clearing system, as shall have been designated by the Issuer) is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise); (iii) CDP announces an intention to permanently cease business and no alternative

36

clearing system is available or (iv) CDP has notified the Issuer that it is unable or unwilling to act as depository for the Securities and to continue performing its duties and no alternative clearing system is available. Amendment to Conditions The Global Certificate contains provisions that apply to the Securities that they represent, some of which modify the effect of the Terms and Conditions of the Securities. The following is a summary of certain of those provisions: 1 Payments

All payments made in respect of Securities represented by the Global Certificate will be made to, or to the order of, the person whose name is entered on the Register at the close of business on the date falling five Business Days prior to the date for payment. 2 Meetings

The Holder represented by the Global Certificate shall (unless the Global Certificate represents only one of the Securities) be treated as being two persons for the purposes of any quorum requirements of a meeting of Holders and, at any such meeting, the Holder shall be treated as having one vote in respect of each integral currency unit of the currency of the Securities. All Holders are entitled to one vote in respect of each integral currency unit of the currency of the Securities comprising such Holders holding, whether or not represented by the Global Certificate. 3 Cancellation

Cancellation of any of the Securities that is required by the Terms and Conditions of the Securities to be cancelled (other than upon its redemption) will be effected by reduction in the nominal amount of the relevant Securities. 4 Issuers Option

Any option of the Issuer provided for in the Terms and Conditions of the Securities shall be exercised by the Issuer giving notice to the Holders within the time limits set out in and containing the information required by the Terms and Conditions of the Securities, except that the notice shall not be required to contain the serial numbers of Securities drawn in the case of a partial exercise of an option and accordingly no drawing of Securities shall be required. In the event that any option of the Issuer is exercised in respect of some but not all of the Securities, the rights of accountholders with a clearing system in respect of the Securities will be governed by the standard procedures of CDP. 5 Direct Rights in respect of Securities cleared through CDP

Upon the occurrence of an Exchange Event (as defined in the Global Certificate), a Holder represented by the Global Certificate cleared through CDP shall, without prejudice to any other rights which it may have and without the need for any further action on behalf of any person, automatically acquire against the Issuer all those rights which such Holder would have had if, immediately before the Relevant Time (i.e. the time specified in the Global Certificate at which the Global Certificate becomes exchangeable for Individual Certificates following the occurrence of an Exchange Event or the time when a notice is given by the Holder that he has elected for Direct Rights to arise in relation to the whole 37

or a stated part of the Global Certificate), it had been the holder and beneficial owner of duly executed and authenticated Individual Certificates, in respect of each Security represented by the Global Certificate which such Holder had credited to its Securities Account with CDP at the Relevant Time, including, but without limitation, the right to receive payments of principal, distribution and any other amounts due at any time in respect of such Individual Certificates, other than payments corresponding to any already made under the Global Certificate. 6 Notices

Notices may, so long as the Global Certificate is held in its entirety on behalf of the Depository, be delivered to the Depository for communication by it to the holders of the Securities. Any such notice shall be deemed to have been given to the Holders on the seventh day after the day on which the said notice was given to the Depository. Notices to the holders of Securities shall also be given (so long as the Securities are listed on the SGX-ST and the rules of such exchange so require) in a leading newspaper having general circulation in Singapore (which is expected to be the Business Times).

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Use of proceeds
The net proceeds from the offering of the Securities, after deducting underwriting commissions and expenses, are estimated to be approximately S$494 million. The entire amount of the net proceeds will be on-lent by the Issuer to the Guarantor and/or other members of the Group, which will use the net proceeds for general corporate funding purposes.

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Capitalisation and indebtedness


Capitalisation and Indebtedness of the Guarantor The following table sets out the consolidated capitalisation and indebtedness of the Guarantor as at 30 June 2011, together with a proforma position as if the Securities to be issued in this offering had been issued as at 30 June 2011. The historical (actual) information has been derived from the Guarantors unaudited published consolidated financial statements as at 30 June 2011, prepared in accordance with HKFRS.
As at 30 June 2011 Actual Adjusted(2) (in HK$ million)

Short-term loans Bank loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total short-term loans Long-term loans Bank loans. . . . . . . . . . Other loans . . . . . . . . . Total long term loans . ..................................... ..................................... ..................................... .....................................

11,069 4,268 15,337 11,550 5,591 17,141 32,478 1,158 9,331 286,799 297,288 329,766

11,069 4,268 15,337 11,550 5,591 17,141 32,478 1,158 9,331 286,799 3,227 300,515 332,993

Total Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shareholders funds Share capital . . . . . . . . . . . . . . . . . . . . . Share premium . . . . . . . . . . . . . . . . . . . Reserves. . . . . . . . . . . . . . . . . . . . . . . . . Securities to be issued in this offering . Total Shareholders funds and securities issued in this offering . . . . . . . . . . . . . Total Capitalisation
Note:
(1)

..... ..... ..... ..... to be .....

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

...................

......................................

(1) Total Capitalisation consists of total shareholders funds, securities to be issued in this offering and total borrowings. (2) Assuming the Securities to be issued in this offering in the total amount of S$500 million had been issued as at 30 June 2011 and an exchange rate of S$: HK$ of 1 : 6.4542 (as of 19 August 2011) has been used. (3) On 20 July 2011, a subsidiary of the Guarantor issued (i) guaranteed notes in an aggregate amount of S$180 million guaranteed by the Guarantor and (ii) guaranteed notes in an aggregate amount of S$320 million guaranteed by the Guarantor. These are not reflected in the above tables. Save as disclosed above, there has been no material change to the consolidated capitalisation and indebtedness of the Guarantor since 30 June 2011.

Capitalisation and Indebtedness of the Issuer As at the date of this Information Memorandum, the Issuer has no outstanding debt and is authorised to issue a maximum of 50,000 no par value shares of a single class. The Issuer has an issued and fully paid up share capital consisting of one share of US$1.00.

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Description of the Issuer Cheung Kong Bond Securities Limited


History and Introduction The Issuer was incorporated as a company with limited liability in the British Virgin Islands on 4 August 2011. The registered office of the Issuer is East Asia Chambers, P.O. Box 901, Road Town, Tortola, British Virgin Islands. The Issuer is an indirect wholly-owned subsidiary of the Guarantor and has no subsidiaries. Business Activity The Issuer was established to raise finance for the Guarantor and its subsidiaries. The Issuer has no material assets, and since its incorporation has not conducted and will not conduct any business, except relating to the offering, sale and issuance of indebtedness and the lending of the proceeds thereof to the Guarantor and/or members of the Group and any other activities in connection therewith. Debts and Capital Structure The issued and paid-up share capital of the Issuer is US$1.00 of one ordinary share. No part of the equity of the Issuer is listed or dealt on any stock exchange and no listing or permission to deal in such equity is being or is proposed to be sought. As of the date of this Information Memorandum, Issuer does not have any debt outstanding. Management The Guarantor, as the ultimate holding company of the Issuer, has appointed the following individuals to serve as directors of the Issuer:
Name Position

IP Tak Chuen, Edmond . . . . . . . . . . . . . . . . . . PAU Yee Wan, Ezra. . . . . . . . . . . . . . . . . . . . . CHAN Waichi, Richard . . . . . . . . . . . . . . . . . . WONG, James K . . . . . . . . . . . . . . . . . . . . . . . Christian Nicolas Roger SALBAING. . . . . . . . .

Director Director Director Director Director

Mr Ip Tak Chuen, Edmond and Ms Pau Yee Wan, Ezra are also directors of the Guarantor. The Issuer has no employees.

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Description of the Guarantor Cheung Kong (Holdings) Limited


History and Introduction The investment holding and project management businesses now carried on by the Guarantor were established in 1958 by Mr. Li Ka-shing, the Chairman of the Guarantor. The Guarantor was incorporated in June 1971 under the name Cheung Kong Real Estate Company Limited. It adopted its present name in August 1972 and became a public listed company in November 1972. In 1979, the Guarantor acquired a strategic stake of approximately 22.4 per cent. of the issued share capital of Hutchison Whampoa, a listed conglomerate which operates and invests in five core businesses: ports and related services; property and hotels; retail; energy and infrastructure, finance and investments and other operations; and telecommunications. As at the date of this Information Memorandum, the Guarantors shareholding in Hutchison Whampoa is approximately 49.9 per cent. As at 31 July 2011, the combined market capitalisation of the Cheung Kong Groups Hong Kong listed companies amounted to HK$934 billion. The Cheung Kong Group operates in 52 countries and employs about 250,000 staff worldwide. Members of the Cheung Kong Group include the Guarantor, Hutchison Whampoa Limited (Hutchison Whampoa) and Power Assets Holdings Limited (formerly known as Hongkong Electric Holdings Limited) (Power Assets), which are constituent stocks of the Hang Seng Index; Cheung Kong Infrastructure Holdings Limited (CKI), CK Life Sciences Intl., (Holdings) Inc., Hutchison Telecommunications Hong Kong Holdings Limited, Hutchison Harbour Ring Limited (HHR) and TOM Group Limited (TOM Group), which are companies listed on the Main Board of the SEHK.

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Group Structure

Cheung Kong (Holdings) Limited

49.97%

45.31% Hutchison Whampoa Limited 24.47%

12.23%

CK Life Sciences Intl., (Holdings) Inc.


1.08% 65.02% 81.53%1

TOM Group Limited 71.37%

Hutchison Telecommunications Hong Kong Holdings Limited

Cheung Kong Infrastructure Hutchison Harbour Ring Holdings Limited Limited

38.87%

Power Assets Holdings Limited (formerly known as Hongkong Electric Holdings Limited)
1

Post July 2011s equity placement Hutchison Whampoa Ltd.s holding in CKI was diluted to 81.53%

The above only features those listed companies of the Cheung Kong Group in Hong Kong. Those companies listed outside of Hong Kong are not depicted here.

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Board of Directors The table below sets out the names of the current directors of the Guarantor and their current positions: Executive Directors
Name Position

LI Ka-shing . . . . . . . . . . . . . . . . . . . . . . . . . . . LI Tzar Kuoi, Victor . . . . . . . . . . . . . . . . . . . . . KAM Hing Lam . . . . . . . . . . . . . . . . . . . . . . . . IP Tak Chuen, Edmond . . . . . . . . . . . . . . . . . . CHUNG Sun Keung, Davy . . . . . . . . . . . . . . . . PAU Yee Wan, Ezra. . . . . . . . . . . . . . . . . . . . . WOO Chia Ching, Grace . . . . . . . . . . . . . . . . . CHIU Kwok Hung, Justin . . . . . . . . . . . . . . . . Non-executive Directors
Name

Chairman Managing Director and Deputy Chairman Deputy Managing Director Deputy Managing Director Executive Director Executive Director Executive Director Executive Director

Position

LEUNG Siu Hon . . . . . . . . . . . . . . . . . . . . . . . . FOK Kin-ning, Canning. . . . . . . . . . . . . . . . . . Frank John SIXT . . . . . . . . . . . . . . . . . . . . . . . CHOW Kun Chee, Roland . . . . . . . . . . . . . . . . George Colin MAGNUS. . . . . . . . . . . . . . . . . .

Non-executive Director Non-executive Director Non-executive Director Non-executive Director Non-executive Director

44

Independent Non-executive Directors


Name Position

KWOK Tun-li, Stanley . . . . . . . . . . . . . . . . . . . YEH Yuan Chang, Anthony . . . . . . . . . . . . . . Simon MURRAY. . . . . . . . . . . . . . . . . . . . . . . . CHOW Nin Mow, Albert . . . . . . . . . . . . . . . . . HUNG Siu-lin, Katherine. . . . . . . . . . . . . . . . . WONG Yick-ming, Rosanna . . . . . . . . . . . . . .

Independent Non-executive Director Independent Non-executive Director Independent Non-executive Director Independent Non-executive Director Independent Non-executive Director Independent Non-executive Director and Alternate Director to Simon MURRAY Independent Non-executive Director

CHEONG Ying Chew, Henry . . . . . . . . . . . . . .

The registered office of the Guarantor is 7th Floor, Cheung Kong Center, 2 Queens Road Central, Hong Kong, which is also the correspondence address of each of the directors of the Guarantor for the purpose of his or her directorship in the Guarantor. The Company Secretary of the Guarantor is Ms. Eirene YEUNG. Ownership and Capital Structure As of 30 June 2011, the Guarantor has an authorised share capital of HK$1,900 million consisting of 3,800 million ordinary shares of HK$0.50 each and an issued and fully paid up share capital of approximately HK$1,158 million consisting of approximately 2,316 million ordinary shares of HK$0.50 each. Business Strategy The Groups business strategy is to continue to: focus on property development in Hong Kong, Mainland China and overseas markets, particularly residential property developments featuring high quality design and construction to build on its reputation as a premier property developer in these markets; extend further its presence in property markets outside Hong Kong, with focused expansion in Mainland China, the United Kingdom and Singapore so as to increase its property portfolio with prime sites and quality projects, and to enhance the Groups established position and market share in these markets; maintain an on-going process of replenishing its land bank at low cost through direct purchases, site conversions and joint ventures with land owners; expand its quality portfolio of investment properties to enhance recurrent rental income; maintain a strategic investment holding in Hutchison Whampoa; and maintain a prudent policy on financial management.

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Principal Business The Group is engaged principally in property development and investment in Hong Kong and in different regions of the world, including Mainland China, the United Kingdom and Singapore and develops high quality and large-scale properties for sale and investment in the residential, retail, office, hotel and industrial sectors. The Groups high quality properties and after-sale services, complemented by flexible and market-responsive sales strategies, have been the cornerstone of the Groups success in property sales. Other major business activities of the Group in Hong Kong include property and project management, hotel and serviced suite operation and investment in securities. Through the Groups investment in Hutchison Whampoa, the Group is also involved in ports and related services; property and hotels; retail; energy and infrastructure, finance and investments and other operations; and telecommunications. Property Development The Groups property development process involves property acquisition, project design and management as well as sales and marketing. Each function is performed by a team of experienced professional staff headed by an executive director of the Guarantor. In addition to direct land purchases, the acquisition team is active in sourcing large scale and low-cost landbank through strategic co-operative joint ventures with a variety of land owners. On project management, each project has a designated project manager who is responsible for the construction work which is awarded to external contractors through a well-established tender process. The Groups projects are relatively large in size which provides economies of scale and enables the Group to have stronger bargaining power with contractors. On sales and marketing, the Group, with its involvement in a variety of businesses in Hong Kong, has the added advantage of a powerful intra-group marketing synergy achieved through cross-marketing and in-house marketing channels.

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The Groups schedule of major properties as at 31 December 2010 is summarised below: A. PROPERTIES FOR/UNDER DEVELOPMENT
Approx. Floor Area Attributable to the Group (sq. m.) 82,200 24,938 12,795 4,026 4,417 8,141 23,996 87,356 23,226 3,527 29,304 30,099 33,979 6,630 51,000 47,616 245,280 56,534 44,489 75,167 39,999 11,272 65,624 50.0% 783,268 55,396 119,156 36,331 237,401 16,484 8,213 85,670 March 2011 May 2011 June 2011 March 2012 June 2012 May 2013 June 2013 December 2013 December 2013 March 2014 June 2014 August 2014 September 2014 December 2014 March 2015 December 2012 December 2014 November 2015 December 2011 July 2012 April 2014 December 2011 June 2012 September 2011 June 2013 June 2011 June 2014 October 2011 March 2012 March 2013

Description Hong Kong Oceanaire, Ma On Shan . . . . Uptown, Hung Shui Kiu . . . . Meridian Hill, Kowloon Tong . Crown by the Sea, Tuen Mun . A site at Kowloon Tong . . . . A site at Mid-level . . . . . . . A site at Lai Chi Kok . . . . . .

Property Type

Groups Interest

Approx. Site Area (sq. m.)

Estimated Date of Completion

. . . . . . .

. . . . . . .

. . . . . . .

A site at Fung Yuen, Tai Po . . . . . A site at Kwai Chung . . . . . . . . A site at Hung Hom . . . . . . . . . A A A A site site site site at at at at Ho Man Tin . . Aberdeen. . . . Hung Hom Bay. North Point . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A site at Tseung Kwan O . . A site at Fung Yuen, Tai Po . A site at Yuen Long . . . . . A site at North District . . . Various sites at Yuen Long . Various sites at Tai Po . . . . Mainland China La Grande Ville, Beijing . . .

Residential Residential Residential Residential Residential Residential Residential/ Commercial Residential Residential Residential/ Commercial Residential Commercial Residential Residential/ Commercial Residential Agricultural Agricultural Agricultural Agricultural Agricultural Residential Residential Residential Residential Residential Residential Residential/ Commercial Residential/ Commercial Residential Residential/ Commercial Residential Residential/ Commercial Residential Residential Residential

100.0% 50.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 80.0% 100.0% 100.0% 100.0% 100.0% 100.0% 60.0% 100.0% 100.0% 100.0% 100.0%

16,440 16,292 4,265 1,220 4,174 1,018 2,844 126,290 4,645 543 7,326 2,006 7,551 723 10,200 70,277 799,977 168,637 195,561 12,400 565,401

land land land land land

. . . .

The Greenwich, Beijing . . . . . . . Shisanling, Beijing . . . . . . . . . . Regency Residence, Changchun . .

50.0% 50.0% 50.0%

173,809 256,327 116,020

Regency Park, Changchun . . . . . .

Noble Hills, Changsha . . . . . . . .

50.0%

469,796

Regency Park, Changzhou. . . . . .

50.0%

80,598

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Description Le Parc, Chengdu . . . . . . . . . .

Property Type Residential Residential Residential Residential Residential/ Commercial Residential Residential/ Commercial Residential Residential Residential Residential Residential/ Commercial Residential/ Commercial Residential Residential/ Commercial Residential/ Commercial Residential/ Commercial Residential Residential Residential Residential/ Commercial Residential/ Commercial Residential/ Commercial Residential/ Commercial Residential Residential/ Commercial Residential/ Commercial Commercial Commercial Commercial Residential/ Commercial Residential/ Commercial/Hotel Residential Residential/ Commercial

Groups Interest 50.0%

Approx. Site Area (sq. m.) 653,535

Approx. Floor Area Attributable to the Group (sq. m.) 57,174 113,831 105,501 111,878 590,787 55,935 28,458 58,678 88,754 44,143 87,736 71,520 1,467,265 137,567 75,684 125,769 25,310 15,367 196,658 126,130 500,347

Estimated Date of Completion January 2011 December 2011 December 2012 March 2014 June 2011 December 2011 December June 2013 December December December December 2013 December 2015 December 2011 June 2012 September 2012 June 2015 April 2011 February 2012 March 2013 June 2012 September 2013 March 2013 December 2012 December 2013 December 2015 September 2012 December 2013 December 2014 2012 2011 2012 2012

Regency Oasis, Chengdu . . . . . .

50.0%

352,698

Noble Hills, Chongqing . . . . . . . Cape Coral, Chongqing . . . . . . . Yangjiashan, Chongqing. . . . . . . Zhaomushan, Chongqing . . . . . . Wolong Bay, North, Dalian . . . . . Wolong Bay, South, Dalian . . . . . Laguna Verona, Dongguan . . . . .

50.0% 47.5% 47.5% 50.0% 50.0% 50.0% 49.9%

289,011 51,784 1,041,341 132,469 86,695 232,658 2,507,881

The Riverside and Metropolitan Plaza, Guangzhou . . . . . . . . . Yuhu Mingdi, Guangzhou . . . . . .

50.0% 40.0%

34,283 225,547

82,419 17,560 75,184

Cape Coral, Guangzhou . . . . . . .

50.0%

281,196

42,057 130,629 168,229 18,775 29,822 65,582 42,062 62,831 129,418 179,613

Zengcheng,Guangzhou . . . . . . . International Toys & Gifts Center, Guangzhou . . . . . . . . . . . . . Aotou, Daya Bay, Huizhou . . . . . Yinhuwan, Jiangmen . . . . . . . .

50.0% 30.0%

2,112,632 321,261

50.0% 45.0%

80,051 1,333,308

Yingtiandajie, Jianye District, Nanjing . . . . . . . . . . . . . . .

50.0%

119,500

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Description Xiaogangwan, Qingdao . . . . . . .

Property Type Residential/ Commercial Residential/ Commercial Residential/ Commercial Residential Residential Residential/ Commercial Residential Residential Commercial Commercial Residential/ Commercial/Hotel Residential Commercial Residential/ Commercial Commercial Commercial Residential/ Commercial Commercial Residential Residential Residential Residential/ Commercial Residential/ Commercial Residential/ Commercial Commercial Residential Residential/ Commercial/Hotel Residential/ Commercial Residential/ Commercial Residential/ Commercial Residential/ Commercial Residential Residential Residential/ Commercial

Groups Interest 45.0%

Approx. Site Area (sq. m.) 311,774

Approx. Floor Area Attributable to the Group (sq. m.) 94,527 339,017

Estimated Date of Completion September 2012 January 2011 June 2011 September 2012 December 2012 March 2013 March 2014 June 2012 April 2013 December 2013 March 2013 December 2013 June 2014 June 2014 June 2011 December 2011 June 2011 March 2012 May 2012 February 2013 March 2012 December 2011 March 2012 December 2011 June 2014 December 2015 December 2011 September 2013 December 2013 June 2015 December 2013

Regency Park, Shanghai . . . . . . . Regency Cove, Shanghai . . . . . . Nanhui Zhoupu, Shanghai . . . . .

50.0% 42.5% 42.5%

16,651 116,721 263,412

5,096 10,348 24,448 10,097 56,010 54,156 40,000 34,130 177,550 37,536 17,395 164,969 54,613 25,453 68,651 6,150 24,484 4,364 25,568 59,747 73,540 60,028 36,176 29,935 719,286 82,255 183,332 254,886 142,280

Lujiazui, Pudong, Shanghai . . . . . Zhen Ru Fu Zhong Xin, Putuo, Shanghai . . . . . . . . . . . . . . Zhao Xiang Town, Qing Pu District, Shanghai . . . . . . . . . . . . . . Xin Zha Road, Shanghai . . . . . . . Nanxiang, Jiading, Shanghai . . . . Century Link, Shanghai . . . . . . . Kerry Everbright City, Shanghai . . Century Place, Shenzhen . . . . . .

50.0% 29.4%

9,298 176,854

50.0% 30.0% 50.0% 25.0% 24.8% 40.0%

74,090 14,528 211,621 51,280 15,858 17,105

Le Sommet, Shenzhen . . . . . . . .

50.0%

174,838

Noble Hills, Shenzhen . . . . . . . . Metropolitan, Tianjin . . . . . . . .

50.0% 40.0%

85,183 19,617

Regency Cove, Wuhan . . . . . . . .

50.0%

770,590

Laopupian, Jianghan, Wuhan . . . . Hualou Jie, Jianghan, Wuhan . . . . The Greenwich, Xian. . . . . . . . .

50.0% 50.0% 50.0%

35,213 105,934 363,539

Qiao Island, Zhuhai . . . . . . . . . Cuilihu, Zhongshan . . . . . . . . .

50.0% 50.0%

199,996 109,263

55,371 62,909 28,569

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Description Overseas Marina Bay, Singapore. . . . . . . . The Vision, Singapore . . . . . . . . Land Parcel 761 at Upper Thomson Road, Singapore . . . . . . . . . . Lots Road & Chelsea Harbour, London, United Kingdom . . . . . Convoys Wharf, London, United Kingdom . . . . . . . . . . . . . .

Property Type

Groups Interest

Approx. Site Area (sq. m.)

Approx. Floor Area Attributable to the Group (sq. m.) 25,066 7,268 16,800 43,781 37,488 145,100

Estimated Date of Completion

Commercial Residential Residential Residential Residential/ Commercial Residential/ Commercial

16.7% 50.0% 100.0% 47.5% 50.0%

15,064 12,000 20,848 35,693 161,876

June 2012 July 2014 October 2013 January 2015

B. PROPERTIES IN WHICH THE GROUP HAS A DEVELOPMENT INTEREST


Approx. Floor Area Approx. of the Site Area Development (sq. m.) Hong Kong Le Prestige of LOHAS Park, Tseung Kwan O . . . . . . . . . . . . . . . Festival City, Tai Wai . . . . . . . . . Area 85, Tseung Kwan O . . . . . . Area 86, Tseung Kwan O (Package 3) . . . . . . . . . . . . . . . . . . MTR Tsuen Wan West Station. . . . A site at Lai Chi Kok Road/ Kweilin Street/Yee Kuk Street . . . . . . . Residential Residential Residential Residential Residential Residential Residential/ Commercial 31,490 70,597 19,480 13,587 23,742 3,339 (sq. m.) 101,470 82,686 113,211 97,400 128,544 113,064 29,259 March 2011 December 2012 December 2011 June 2013 June 2013 December 2013 June 2014

Description

Property Type

Estimated Date of Completion

C. PROPERTIES FOR INVESTMENT/OWN USE


Approx. Floor Area Attributable to the Group (sq. m.) 113,169 3,512 49,211 6,634 1,696 5,884 5,943 Medium Term Lease Long Lease Medium Lease Medium Lease Medium Lease Medium Lease Medium Lease Term Term Term Term Term

Description Hong Kong The Center (portion), Central . . . . United Centre (portion), Admiralty . . . . . . . . . . . . . . Kingswood Ginza, Tin Shui Wai . . Victoria Mall, Tsim Sha Tsui . . . . . Rambler Plaza, Tsing Yi . . . . . . . Rambler Garden Hotel, Tsing Yi . . Rambler Oasis Hotel, Tsing Yi . . . .

Property Type

Groups Interest

Approx. Site Area (sq. m.)

Lease Term

Commercial Commercial Commercial Commercial Commercial Hotel Hotel

100.0% 100.0% 98.5% 42.5% 30.0% 30.0% 30.0%

907 3,147 3,178

50

Description Harbour Plaza Resort City, Tin Shui Wai . . . . . . . . . . . . . . . . . Harbourview Horizon All-Suite Hotel, Hung Hom Bay . . . . . . . Harbourfront Horizon All-Suite Hotel, Hung Hom Bay . . . . . . . The Apex Horizon, Kwai Chung . . Harbour Plaza North Point . . . . . Horizon Suite Hotel at Tolo Harbour, Ma On Shan . . . . . . . Harbour Plaza Metropolis, Hung Hom . . . . . . . . . . . . . . . . . The Kowloon Hotel, Tsim Sha Tsui . Harbour Grand Hong Kong, North Point . . . . . . . . . . . . . . . . Harbour Plaza 8 Degrees, Kowloon City . . . . . . . . . . . . . . . . . 1881 Heritage, Tsim Sha Tsui . . . . Conic Investment Building, Hung Hom . . . . . . . . . . . . . . . . . 8 Tung Yuen Street, Yau Tong . . . Mainland China Sheraton Shenyang Lido Hotel, Shenyang . . . . . . . . . . . . . . Sheraton Chengdu Lido Hotel, Chengdu . . . . . . . . . . . . . . Harbour Plaza, Chongqing . . . . . Metropolitan Plaza, Chongqing . . Westgate Mall, Shanghai . . . . . . Kerry Everbright City, Shanghai . . Lido Place, Beijing . . . . . . . . . . Oriental Plaza, Beijing . . . . . . . . Notes:

Property Type Hotel Hotel Hotel Hotel Hotel Hotel Hotel Hotel Hotel Hotel Commercial/Hotel Industrial Godown

Groups Interest 98.5% 100.0% 100.0% 100.0% 60.9% 51.0% 50.0% 50.0% Development interest 100.0% 100.0% 100.0% 100.0%

Approx. Site Area (sq. m.) 9,940 20,364 7,825 8,000 6,816 3,153 12,289 2,108

Approx. Floor Area Attributable to the Group (sq. m.) 60,591 119,280 107,444 21,190 19,410 28,560 21,429 15,311 41,341 21,420 13,023 30,409 7,170

Lease Term Medium Term Lease Medium Term Lease Medium Term Lease Medium Term Lease Medium Term Lease Medium Term Lease Medium Term Lease Medium Term Lease Medium Term Lease Long Lease Medium Term Lease Medium Term Lease Medium Term Lease Medium Lease Medium Lease Medium Lease Medium Lease Medium Lease Medium Lease Medium Lease Medium Lease Term Term Term Term Term Term Term Term

Hotel Hotel Hotel Commercial Commercial Commercial/ Residential Commercial/Hotel/ Serviced apartment Commercial/Hotel/ Serviced apartment

99.0% 70.0% 50.0% 50.0% 30.0% 24.8% 40.0% 33.4%

14,449 4,615

81,180 39,445 25,872 70,212 30,640 19,832 67,090 191,232

1 Properties which are insignificant, including overseas properties, agricultural land and completed properties for sales, are not included. 2 Properties owned by listed and unlisted associates are not included. 3 For properties in which the Group has a development interest, other parties provide the land whilst the Group finances the construction costs and occasionally also the land costs, and is entitled to a share of the revenue/development profits/properties after completion in accordance with the terms and conditions of the joint development agreements.

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New Acquisitions, Joint Developments and other major events Hong Kong 1. In March 2011, a wholly-owned subsidiary of the Group was awarded a Government tender for the development at Yuen Long On Ning Road, Tai Kiu Road and Yuen Long On Lok Road, Yuen Long Town Lot No. 518. With an area of approximately 12,340 square metres, the site is planned for a commercial and residential development estimated to have a developable gross floor area of approximately 61,700 square metres. 2. In May 2011, a wholly-owned subsidiary of the Group successfully bid for Ngau Tam Mei, Yuen Long, Lot No. 2086 in D.D. 105 at a Government auction. With an area of approximately 23,480 square metres, the site is designated for a residential development estimated to have a developable gross floor area of approximately 9,392 square metres. 3. In June 2011, a wholly-owned subsidiary of the Group successfully bid for Borrett Road, Hong Kong, Inland Lot No. 8949 at a Government auction. With an area of approximately 10,488 square metres, the site is earmarked for a residential development estimated to have a developable gross floor area of approximately 40,440 square metres. 4. In June 2011, a wholly-owned subsidiary of the Group successfully bid for Ping Kwai Road, Ping Shan, Yuen Long, Lot No. 2129 in D.D. 121 at a Government auction. With an area of approximately 6,076 square metres, the site is planned for a residential development estimated to have a developable gross floor area of approximately 6,076 square metres. 5. In June 2011, a wholly-owned subsidiary of the Group was awarded a Government tender for the development at Lee Kung Street, Hung Hom, Hung Hom Inland Lot No. 556. With an area of approximately 1,299 square metres, the site is designated for a residential development estimated to have a developable gross floor area of approximately 9,740 square metres. 6. During the first half of 2011, the Group continued to pursue opportunities for acquisition of properties and agricultural land with potential for development. Some of the properties and agricultural land are under varying stages of design and planning applications. Mainland China and Overseas 1. In June 2011, an indirect 50/50 joint venture company of the Group and the Hutchison Group successfully bid for a piece of land with an area of approximately 158,892 square metres and a gross floor area of approximately 225,194 square metres at Bayi Reservoir, Gaoxin District, Changchun, the Mainland for residential and commercial purposes. 2. During the first half of 2011, the Group continued to focus on project development and the marketing of properties on the Mainland and overseas in a timely manner. Property Sales Turnover of property sales for the six months ended 30 June 2011, including share of property sales of jointly controlled entities (JCEs), was HK$24,118 million (30 June 2010 HK$18,644 million), an increase of HK$5,474 million when compared with the same period last year, and comprised mainly the sale of residential units of two property projects completed last year Festival City Phases 1 and 2 in Hong Kong and La Grande Ville Phase 1 in Beijing, and the sale of residential units of property projects completed 52

during the period, including Le Prime, Oceanaire and Uptown in Hong Kong, The Riverside Phase 3 in Guangzhou, Le Sommet Phase 3 in Shenzhen and Regency Oasis Phase 1A and Le Parc Phase 2B in Chengdu. Contribution from property sales, including share of results from JCEs, was HK$7,006 million (30 June 2010 HK$5,809 million), an increase of HK$1,197 million when compared with the same period the previous year. During the six months ended 30 June 2011, the government authorities in Hong Kong and the Mainland continued to introduce cooling measures to the overheated property markets, and property sales remained steady with demand in an inflationary environment. Contribution from property sales for the second half of 2011 will mainly be derived from the sale of the remaining units of Festival City Phases 1 and 2 and the sale of residential units of Meridian Hill in Hong Kong, The Greenwich Phase 1C in Beijing, Regency Park Phase 2 in Changchun, Century Place Phase 1 in Shenzhen, Le Parc Phase 3 in Chengdu, Tianjian Metropolitan Phase 2 in Tianjian and several other property projects scheduled for completion. During the six months ended 30 June 2011, sale/presale of residential units of various property projects in Hong Kong and the Mainland were progressing well, including Crown by the Sea in Hong Kong, which is scheduled for completion in 2012. Property Rental Turnover of the Groups property rental for the six months ended 30 June 2011 was HK$662 million (30 June 2010 HK$614 million), an increase of HK$48 million when compared with the same period last year, mainly due to an increase in rental rates generally. The Groups existing investment properties comprise mainly retail shopping malls and commercial office properties in Hong Kong which accounted for approximately 44 per cent. and 43 per cent. respectively of the turnover of the Groups property rental for the six months ended 30 June 2011. Contribution from the Groups property rental for the six months ended 30 June 2011 was HK$635 million (30 June 2010 HK$563 million), and contribution including share of results of JCEs was HK$919 million (30 June 2010 HK$912 million), an increase of HK$7 million when compared with the same period last year. During the six months ended 30 June 2011, strong retail sales in Hong Kong and growing business confidence pushed up rentals for shops at prime locations and office spaces in major business districts. In April 2011, Oriental Plaza in Beijing, of which the Group had a 33.4 per cent. interest, was listed on the SEHK through the setup of Hui Xian Real Estate Investment Trust and an initial public offering of units denominated in Renminbi, and the transaction made a contribution of HK$1,731 million to group profit for the six months ended 30 June 2011. As at 30 June 2011, the Group accounted for an increase in fair value of investment properties of HK$1,419 million (30 June 2010 HK$1,508 million) for the six months ended 30 June 2011 based on a professional valuation and shared an increase in fair value of investment properties of HK$514 million (30 June 2010 HK$1,779 million) of JCEs.

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Hotels and Serviced Suites Turnover of the Groups hotels and serviced suites for the six months ended 30 June 2011 was HK$1,151 million (30 June 2010 HK$928 million), an increase of HK$223 million when compared with the same period last year. The increase in turnover was mainly attributable to a growing number of Mainland visitor arrivals and improving consumer confidence. Contribution from the Groups hotels and serviced suites was HK$414 million for the six months ended 30 June 2011 (30 June 2010 HK$249 million) and contribution including share of results of JCEs was HK$545 million (30 June 2010 HK$351 million), an increase of HK$194 million when compared with the same period last year. During the six months ended 30 June 2011, most of the hotels and serviced suites owned by the Group and JCEs in Hong Kong and the Mainland achieved good occupancy and room rates, and satisfactory operating results were reported. With a positive economic outlook and growing inbound tourism, the Groups hotels and serviced suites will continue to strive for good performance. Property and Project Management Turnover of property and project management for the six months ended 30 June 2011 was HK$172 million (30 June 2010 HK$132 million), of which income from property management was HK$76 million (30 June 2010 HK$75 million), an increase of HK$1 million when compared with the same period last year, and income from project related services for the six months ended 30 June 2011 was HK$96 million (30 June 2010 HK$57 million), an increase of HK$39 million when compared with the same period last year. Contribution from property management was HK$50 million for the first six months ended 30 June 2011 (30 June 2010 HK$49 million), an increase of HK$1 million when compared with the same period last year, while project related services made a small contribution to group profit. The Group is committed to providing high quality services to properties under its management. As at 30 June 2011, the total floor area under the Groups property management was approximately 87 million square feet and this is expected to grow steadily following the gradual completion of the Groups property projects in the years ahead. Investment in Hutchison Whampoa Limited The Guarantor maintains approximately a 49.9 per cent. shareholding in Hutchison Whampoa, its major associated company. Hutchison Whampoa is a company incorporated in Hong Kong on 26 July 1977. Hutchison Whampoa is a Hong Kong-based multinational conglomerate whose securities are listed on the SEHK. The profit contribution from the Hutchison Group has been a significant part of the Guarantors recurrent income. The Hutchison Group operates five core business divisions in 52 countries: including ports and related services; property and hotels; retail; energy, infrastructure, finance & investments and other operations; and telecommunications. Significant developments in the Hutchison Groups business since 30 June 2011 are summarised below under Recent Developments.

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Ports and Related Services The Hutchison Group is one of the worlds largest privately-owned container terminal operators in terms of throughput handled. The Hutchison Group holds interests in 51 ports in 25 countries, including interests in container terminals operating in six of the ten busiest container ports in the world, and handled combined container throughput of 67.6 million, 65.3 million, 75.0 million and 36.4 million Twenty Foot Equivalent Units (TEUs) in 2008, 2009, 2010 and the six months ended 30 June 2011, respectively. The Hutchison Group has a 27.6 per cent. interest in Hutchison Port Holdings Trust (HPHT), a business trust listed in Singapore that holds and operates the Hutchison Groups interest in deep water container port businesses in the Pearl River Delta in the Guangdong province, which includes the following ports: Hong Kong, the third busiest container port in the world in 2010, where the Hutchison Group operates 14 of the 24 available container berths through Hongkong International Terminals Limited (HIT) and COSCO-HIT Terminals, a 50/50 joint venture between HIT and Cosco Pacific Limited, a subsidiary of China Ocean Shipping (Group) Company listed on the SEHK; and Yantian, Mainland China, where Hutchison holds interests in Yantian International Container Terminals. The Hutchison Group also has an 80 per cent. interest in Hutchison Ports Group Holdings Limited that holds and operates various ports including: Mainland China, other than in the Pearl River Delta in Guangdong province, where the Hutchison Group holds interests in Shanghai Container Terminals, Shanghai Pudong International Container Terminals, Shanghai Mingdong Container Terminals, and Ningbo Beilun International Container Terminal as well as other ports; the United Kingdom, where the Hutchison Group holds interests in Hutchison Ports (UK), which operates in the Port of Felixstowe, London Thamesport and Harwich International Port; the Netherlands, where the Hutchison Group holds interests in Europe Container Terminals in Rotterdam and Amsterdam Container Terminals in Amsterdam; Continental Europe, where the Hutchison Group holds interests in Terminal Catalunya in Spain, Gdynia Container Terminal in Poland, Taranto Container Terminal in Italy and the right to operate Container Terminal Frihamnen in Sweden; Indonesia, where the Hutchison Group holds interests in Jakarta International Container Terminal and Koja Container Terminal; Mexico, where the Hutchison Group holds interests in Internacional de Contenedores Asociados de Veracruz, which is located in Veracruz on the east coast as well as other port operations in Ensenada, Manzanillo and Lazaro Cardenas which are located on the west coast; Panama, where the Hutchison Group holds interests in Panama Ports Company, which operates terminals at Cristobal and Balboa ports, located near each end of the Panama Canal; the Bahamas, where the Hutchison Group holds interests in Freeport Container Port on Grand Bahama Island;

55

Argentina, where the Hutchison Group holds interests in Buenos Aires Container Terminal Services; Saudi Arabia, where the Hutchison Group holds interests in International Ports Services at Dammam; Australia, where the Hutchison Group holds interests in Brisbane Container Terminals at the Port of Brisbane and Sydney International Container Terminals at Port Botany; Tanzania, where the Hutchison Group holds interests in Tanzania International Container Terminal Services at Dares Salaam; Pakistan, where the Hutchison Group holds interests in Karachi International Container Terminal and South Asia Pakistan Terminals; Malaysia, where the Hutchison Group holds interests in Westports Malaysia at Port Klang; South Korea, where the Hutchison Group operates two terminals in Busan Port through Hutchison Korea Terminals, and a terminal in Gwangyang Port through Korea International Terminals; Thailand, where the Hutchison Group holds interests in Thai Laemchabang Terminal, Hutchison Laemchabang Terminal Limited and Laemchabang International Ro-Ro Terminal at Laem Chabang; Egypt, where the Hutchison Group holds interests in Alexandria International Container Terminals, which operates terminals at Alexandria and El Dekheila Ports; Oman, where the Hutchison Group holds interests in Oman International Container Terminal at the Port of Sohar, Oman; and Vietnam, where the Hutchison Group holds interests in Saigon International Terminals Vietnam in Ba Ria Vung Tau Province, in southern Vietnam. The Hutchison Group also has interests in other ports and port development projects, ship repair, salvage and towage operations in Hong Kong and inland container depot operations in Mainland China, as well as air cargo handling services at the Hong Kong International Airport. The ports and related services division contributed 9 per cent. of the Hutchison Groups turnover (including share of associate companies and JCEs) and 15 per cent. of earnings of the Hutchison Group before interest expenses and other finance costs, taxation and non-controlling interests, adjusted to exclude non-controlling shareholders share of earnings before interest expenses and other finance costs, taxation and non-controlling interests (EBIT) of the HPHT operations (including share of associates and JCEs) for the six months ended 30 June 2011. Property and Hotels The Hutchison Groups property and hotels division: holds, as of 31 December 2010, a rental portfolio of approximately 14.9 million square feet, principally in Hong Kong and also in Mainland China and the United Kingdom. These investment properties comprise mainly office space and also commercial, industrial and residential areas, the leasing of which is a significant contributor to the divisions turnover and EBIT;

56

manages investment properties and development activities for the Hutchison Group and certain of its associates and JCEs; acts as a developer of residential, commercial, office, hotel and recreational projects, principally in Mainland China and also in Hong Kong, Singapore and the United Kingdom. As of 30 June 2011, the Hutchison Group has an attributable landbank which can be developed into approximately 98 million square feet of mainly residential property, primarily in Mainland China; and has ownership interests in 12 hotels in Hong Kong, Mainland China and the Bahamas, of which seven are managed by its 50 per cent.-owned hotel management joint venture (which also manages three other hotels owned by the Group). The property and hotels division contributed 4 per cent. of the Hutchison Groups turnover (including share of associates and JCEs) and 18 per cent. of the Hutchison Groups EBIT (including share of associates and JCEs) for the six months ended 30 June 2011. Retail The Hutchison Groups retail division operates AS Watson, one of the worlds largest health and beauty retail groups in terms of number of stores, and an operator of major chains of luxury perfumery and cosmetic products stores, supermarkets and consumer electronics and electrical appliances stores. As of 30 June 2011, AS Watson has over 9,400 stores in 33 markets mainly in Europe, Hong Kong, Mainland China and other markets in Asia. AS Watson also manufactures and distributes water and beverage products in Hong Kong and Mainland China. The retail division contributed 36 per cent. of the Hutchison Groups turnover (including share of associates and JCEs) and 15 per cent. of the Hutchison Groups EBIT (including share of associates and JCEs) for the six months ended 30 June 2011. Energy, Infrastructure, Finance & Investments and Other Operations Cheung Kong Infrastructure The Hutchison Group currently has an 81.53 per cent. interest in CKI, one of the largest publicly listed infrastructure companies in Hong Kong, with principal operations in Hong Kong, Mainland China, the United Kingdom, Australia, New Zealand and Canada. CKIs major interests are: a 38.9 per cent. interest in Power Assets, a listed company in Hong Kong that, through a wholly-owned subsidiary, The Hongkong Electric Company, Limited, generates, transmits and is the sole distributor of electricity to Hong Kong Island and Lamma Island; together with Power Assets, a 51 per cent. interest (CKI: 23.07 per cent.; Power Assets: 27.93 per cent.) in ETSA Utilities, the primary electricity distributor in the State of South Australia; Powercor Australia Limited (Powercor), one of the largest electricity distributors in the State of Victoria; and CitiPower I Pty Ltd (CitiPower), another major electricity distributor in the State of Victoria; together with Power Assets, an 80 per cent. interest (CKI: 40 per cent.; Power Assets: 40 per cent.) in UK Power Networks Holdings Limited (UK Power Networks), which owns and operates three regulated electricity distribution networks in the United 57

Kingdom that cover London, the South East England and the East of England. UK Power Networks also carries on certain non-regulated electricity distribution business in the United Kingdom, including a commercial contract to distribute electricity to a number of privately owned sites; together with Power Assets, an 88.4 per cent. interest (CKI: 47.1 per cent.; Power Assets: 41.3 per cent.) in Northern Gas Networks Holdings Limited (Northern Gas), which distributes gas to homes and businesses from the Scottish borders to South Yorkshire; together with Power Assets, a 100 per cent. interest (on a 50/50 basis) in Electricity First Limited, which owns a 50 per cent. interest in Seabank Power Limited (Seabank Power). Seabank Power owns the Seabank Power Station located near Bristol in England, which comprises two combined-cycle gas turbine generation units with an aggregate capacity of approximately 1,140 megawatts; together with Power Assets, a 100 per cent. interest (on a 50/50 basis) in Stanley Power Inc., which owns a 100 per cent. interest in Meridian Cogeneration Plant and a 49.99 per cent. interest in TransAlta Cogeneration, L.P.. Meridian Cogeneration Plant is a natural gas-fired cogeneration plant with an installed capacity of 220 megawatts. TransAlta Cogeneration, L.P. owns interests in several electricity generation plants in Canada; together with Power Assets, a 100 per cent. interest (on a 50/50 basis) in Wellington Electricity Distribution Network, which supplies electricity to the city of Wellington, the capital of New Zealand, and extends to Porirua and Hutt Valley regions of New Zealand, with a system length of over 4,592 kilometres; interests in joint ventures that own and operate approximately 400 kilometres of toll roads and bridges in Mainland China; various interests in an infrastructure materials business that produces cement, concrete, asphalt and aggregates mainly in Hong Kong and Mainland China; a 4.75 per cent. interest in Southern Water Group, a regulated business supplying water to more than one million households and waste water services to more than two million households across Sussex, Kent, Hampshire and the Isle of Wight in the United Kingdom; an 8.53 per cent. interest in the Spark Infrastructure Group, a utility infrastructure group listed on the Australian Securities Exchange, which holds a 49 per cent. interest in ETSA Utilities, Powercor and CitiPower; a 19.51 per cent. interest in Envestra Limited, one of the largest listed natural gas distribution companies in Australia, which owns about 21,000 kilometres of natural gas distribution networks and 1,000 kilometres of transmission pipelines, serving over one million customers in South Australia, Victoria, Queensland, New South Wales and the Northern Territory; and a 49 per cent. interest in AquaTower Pty Ltd in Victoria, Australia, the exclusive potable water supplier which provides potable water for four regional towns. CKI contributed 5.6 per cent. of the Hutchison Groups turnover (including share of associates and JCEs) in 2010 (7 per cent. for the six months ended 30 June 2011) and 18.2 per cent. of the Hutchison Groups EBIT (including share of associates and JCEs) in 2010 (28 per cent. for the six months ended 30 June 2011). 58

Husky Energy The Hutchison Group currently holds a 33.52 per cent. interest in Husky Energy Inc. (Husky Energy), an integrated international energy and energy-related company incorporated in Canada and listed on the Toronto Stock Exchange. Husky Energy ranks among Canadas largest petroleum companies in terms of production and the value of its asset base. Husky Energys operating activities are divided into three segments: the upstream segment, which includes the exploration, development and production of crude oil, bitumen, natural gas liquids and natural gas from assets located in Canada (mainly Western Canada and offshore along the East Coast of Canada), the United States, offshore from Mainland China, Indonesia and Greenland; the midstream segment comprising pipeline transportation, natural gas storage, heavy oil processing, thermal/electric cogeneration and marketing of crude oil, natural gas, natural gas liquids, sulphur and petroleum coke; and the downstream segment, which includes heavy oil upgrading, the refining, marketing and distribution of gasoline, aviation fuel, diesel, asphalt, ethanol and ancillary products and services across Western Canada and Ontario and refining and marketing of refined petroleum products in the United States. Husky Energy contributed 13.9 per cent. of the Hutchison Groups turnover (including share of associates and JCEs) in 2010 (18 per cent. for the six months ended 30 June 2011) and 6.6 per cent. of the Hutchison Groups EBIT (including share of associates and JCEs) in 2010 (22 per cent. for the six months ended 30 June 2011). Finance and Investments The Hutchison Group receives substantial income from its finance and investments division, which is responsible for the management of the Hutchison Groups cash deposits, liquid assets held in managed funds and other investments. The Hutchison Group operates a central cash management system for all of its subsidiaries, except for listed subsidiaries and certain overseas entities conducting businesses in non-Hong Kong or non-U.S. dollar currencies. Income from this division includes interest income, dividends from equity investments, profits and losses from sale of securities and foreign exchange gains and losses of non-Hong Kong dollar denominated liquid assets. The interest expense and finance costs related to the Hutchison Groups various operating businesses are not attributed to this division but are borne by the operating businesses. The finance & investments division contributed 0.6 per cent. of the Hutchison Groups turnover (including share of associates and JCEs) in 2010 (0.5 per cent. for the six months ended 30 June 2011) and 2.5 per cent. of the Hutchison Groups EBIT (including share of associates and JCEs) in 2010 (1 per cent. for the six months ended 30 June 2011). Other Operations The Hutchison Groups share of the results of Hutchison Whampoa (China), Hutchison E-Commerce operations, listed subsidiary HHR and listed associate company TOM Group are reported under this division. Hutchison Whampoa (China) operates various manufacturing, service and distribution joint ventures in Mainland China, Hong Kong, the United Kingdom and France, and also has an investment in Hutchison China MediTech Limited. (Chi-Med), a 70.9 per

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cent.-owned subsidiary listed on the Alternative Investment Market of the London Stock Exchange. Chi-Med manufactures, distributes and sells healthcare and traditional Chinese medical and pharmaceutical and consumer products. The Hutchison Group has a 71.4 per cent. interest in HHR, a listed company in Hong Kong that holds certain investment properties in Mainland China. The Hutchison Group has a 24.5 per cent. interest in TOM Group, a leading Chinese-language media group in Mainland China and listed on the SEHK. It has diverse business interests in five key areas: internet, e-commerce, publishing, outdoor media and television and entertainment. This division contributed 2.1 per cent. of the Hutchison Groups turnover (including share of associates and JCEs) in 2010 (2 per cent. for the six months ended 30 June 2011) and its losses before interest expenses and taxation (LBIT) of HK$342 million in 2010 (HK$236 million for the six months ended 30 June 2011) represented negative 0.7 per cent. of the Hutchison Groups EBIT (including share of associates and JCEs) in 2010 (negative 1 per cent. of the Hutchison Groups EBIT in the first half of 2011). Telecommunications The Hutchison Group is a leading worldwide operator of mobile telecommunications networks. The telecommunications division currently consists of an approximate 65 per cent. interest in Hutchison Telecommunications Hong Kong Holdings Limited (HTHKH) which is listed on the Main Board of the SEHK, a 100 per cent. interest in Hutchison Asia Telecommunications Limited (HAT), which holds interest in various unlisted telecommunications operations in South East Asia and also the 3 Group, comprising unlisted 3G businesses in various countries in Europe and an approximate 87.9 per cent. interest in Hutchison Telecommunications (Australia) Limited (HTAL) listed on the Australian Securities Exchange. HTHKH, which was listed on the SEHK in May 2009, holds Hutchisons interests in 2G and 3G mobile operations in Hong Kong and Macau, as well as the fixed-line business in Hong Kong. HTHKH contributed 3.0 per cent. of the Hutchison Groups turnover (including share of associates and JCEs) in 2010 (3 per cent. for the six months ended 30 June 2011) and 2.3 per cent. of the Hutchison Groups EBIT (including share of associates and JCEs) in 2010 (3 per cent. for the six months ended 30 June 2011). HAT, a wholly-owned unlisted subsidiary, holds the Hutchison Groups start-up operations in Indonesia and Vietnam, as well as mobile operations in Sri Lanka. HAT contributed 0.8 per cent. of the Hutchison Groups turnover (including share of associates and JCEs) in 2010 (1 per cent. for the six months ended 30 June 2011) and its EBIT of HK$2,688 million (HK$1,011 million for the six months ended 30 June 2011) represented 5.8 per cent. of the Hutchison Groups EBIT (including share of associates and JCEs) in 2010 (negative 4 per cent. of the Hutchison Groups EBIT (including share of associates and JCEs) for the six months ended 30 June 2011). The 3 Group comprises 3G businesses in Italy, the United Kingdom, Sweden, Denmark, Austria and Ireland in Europe, offering 3G services under the brand name 3, and also in Australia. As of 3 August 2011, including the 3G customers of HTHKH, the Hutchison Group had over 30.2 million 3G customers worldwide. In Italy, 3 Italia S.p.A. serviced a customer base of over 9.1 million as of 3 August 2011.

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In the United Kingdom, Hutchison 3G UK serviced a customer base of over 7.5 million as of 3 August 2011. In Sweden and Denmark, Hi3G Access AB had a combined Scandinavian customer base of approximately 2 million as of 3 August 2011. In Austria, Hutchison 3G Austria GmbH (together with its wholly-owned subsidiary Netco 3G GmbH, 3 Austria) serviced a customer base of over 1.2 million as of 3 August 2011. In Ireland, Hutchison 3G Ireland Limited (3 Ireland) serviced a customer base of over 709,000 as of 3 August 2011. In Australia, Vodafone Hutchison Australia Pty Ltd (VHA), of which HTAL holds a 50 per cent. interest, serviced an active customer base of over 7.1 million as of 3 August 2011. The 3 Group contributed 19.7 per cent. of the Hutchison Groups turnover (including share of associates and JCEs) in 2010 (20 per cent. for the six months ended 30 June 2011) and 6.3 per cent. of the Hutchison Groups EBIT (including share of associates and JCEs) in 2010 (3 per cent. for the six months ended 30 June 2011). Recent Developments Energy, Infrastructure, Finance & Investments and Other Operations In June 2011, Husky Energy closed its C$1 billion bought-deal public offering of common shares and its C$200 million on current private placement. A total of approximately 37 million common shares were issued for the public offering and a total of approximately 7 million common shares were issued for the private placement. Subsequent to the issuance, the Hutchison Groups interest in Husky Energy was reduced and the Hutchison Group currently holds 33.52 per cent. In July 2011, CKI raised approximately HK$3,411 million by issuing 84.5 million new shares. Following the issue, the Hutchison Groups interest in CKI reduced from 84.58 per cent. to 81.53 per cent. In August 2011, a consortium led by CKI offered to acquire Northumbrian Water plc, a company listed on the London Stock Exchange, which operates water and sewage businesses in England and Wales, for 2,411.6 million (approximately HK$30,916.7 million). CKI sold its 100 per cent. interest in Cambridge Water plc for compliance with relevant merger rules in the United Kingdom. Financial Management The Group maintains a conservative approach on foreign exchange exposure management. As at 30 June 2011, approximately 91.7 per cent. of the Groups borrowings were in HK$ and US$ with the balance in S$, mainly for the purpose of financing projects outside Hong Kong. The Group derives its revenue mainly in HK$, cash balances and marketable securities are maintained mainly in HK$ or US$, and the Group ensures that its exposure to fluctuations in foreign exchange rates is minimised. The Groups borrowings are principally on a floating rate basis and where appropriate, swaps are arranged to convert the rates and related terms of the fixed rate bonds and notes issued to a floating rate basis. 61

At times of interest rate or exchange rate uncertainty or volatility and where appropriate, hedging instruments including swaps and forwards are used by the Group to manage its exposure to interest rate and foreign exchange rate fluctuations. As at 30 June 2011, the Groups bonds and notes, bank loans and other loans amounted to HK$6.4 billion, HK$22.6 billion and HK$3.4 billion respectively, and the Groups total borrowings were HK$32.4 billion, a decrease of HK$4.7 billion from the end of last year. The maturity profile is spread over a period of nine years, with HK$15.3 billion repayable within one year, HK$15.3 billion within two to five years and HK$1.8 billion beyond five years. The Groups net debt to net total capital ratio at 30 June 2011 was approximately 3.4 per cent. Net debt is arrived at by deducting bank balances and deposits from the Groups total borrowings and net total capital is the aggregate of total equity and net debt. With cash and marketable securities in hand as well as available banking facilities, the Groups liquidity position remains strong and the Group has sufficient financial resources to satisfy its commitments and working capital requirements. Employees As at 30 June 2011, the Group employed approximately 9,600 employees for its principal businesses.

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Exchange rates
The following table presents, for the periods indicated, exchange rate information relating to the conversion of Singapore dollars into Hong Kong dollars. The Issuer is providing this information solely for the convenience of investors. The Issuer makes no representation that the Singapore dollars or Hong Kong dollars amounts set forth herein or referred to elsewhere in this Information Memorandum could have been, or could be, converted into Hong Kong dollars or Singapore dollars, as the case may be, at the rates indicated, at any particular rates, or at all.
Exchange Rate Period Period End Average (HKD per S$) Low High

2006 . . . . . . . . . . . . . . . . . . . . . . . 2007 . . . . . . . . . . . . . . . . . . . . . . . 2008 . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . 2011 January. . . . . . . . . . . . . . . . . . . . February . . . . . . . . . . . . . . . . . . . March . . . . . . . . . . . . . . . . . . . . April . . . . . . . . . . . . . . . . . . . . . May . . . . . . . . . . . . . . . . . . . . . . June . . . . . . . . . . . . . . . . . . . . . . July . . . . . . . . . . . . . . . . . . . . . . . August (up to 19 August 2011)

. . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . . . .

5.0705 5.4306 5.3905 5.5245 6.0388 6.0908 6.1229 6.1706 6.3510 6.3018 6.3403 6.4784 6.4542

4.8925 5.1808 5.5138 5.3357 5.7050 6.0486 6.1060 6.1457 6.2362 6.2765 6.3111 6.4067 6.4412

4.6931 5.0549 5.0627 4.9838 5.4613 5.9891 6.0757 6.0827 6.1613 6.2217 6.2740 6.3333 6.3914

5.0705 5.4306 5.7873 5.6176 6.0434 6.0908 6.1291 6.1843 6.3510 6.3535 6.3403 6.4819 6.4882

Source: The Federal Reserve H.10 Foreign Exchange Rate Releases (http://www.federalreserve.gov/releases/H10/ default.htm)

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Clearing and settlement


Introduction Clearance of the Securities will be effected through an electronic book-entry clearance and settlement system for the trading of debt securities (Depository System) maintained by CDP. CDP, a wholly-owned subsidiary of Singapore Exchange Limited, is incorporated under the laws of Singapore and acts as a depository and clearing organisation. CDP holds securities for its accountholders and facilitates the clearance and settlement of securities transactions between accountholders through electronic book-entry changes in the securities accounts maintained by such accountholders with CDP. Clearance and Settlement under the Depository System The entire issue of the Securities is to be held by CDP in the form of the Global Certificate for persons holding the Securities in securities accounts with CDP (Depositors). Delivery and transfer of Securities between Depositors is by electronic book-entries in records of CDP only, as reflected in the securities accounts of Depositors. Although CDP encourages settlement on the third business day following the trade date of debt securities, market participants may mutually agree on a different settlement period if necessary. Settlement of over-the-counter trades in the Securities through the Depository System may only be effected through certain corporate depositors (Depository Agents) approved by CDP under the Companies Act, Chapter 50 of Singapore to maintain securities sub-accounts and to hold the Securities in such securities sub-accounts for themselves and their clients. Accordingly, Securities for which trade settlement is to be effected through the Depository System must be held in securities sub-accounts with Depository Agents. Depositors holding the Securities in direct securities accounts with CDP, and who wish to trade Securities through the Depository System, must transfer the Securities to be traded from such direct securities accounts to a securities sub-account with a Depository Agent for trade settlement. General CDP is not involved in money settlement between Depository Agents (or any other persons) as CDP is not a counterparty in the settlement of trades of debt securities. However, CDP will make payment of interest and repayment of principal on behalf of issuers of debt securities. Although CDP has established procedures to facilitate transfer of interests in the Securities in global form among Depositors, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Issuer, the Guarantor, the Fiscal Agent or any other agent will have the responsibility for the performance by CDP of its obligations under the rules and procedures governing its operations.

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Taxation
The statements below are general in nature and are based on current tax laws in Singapore, British Virgin Islands, Hong Kong and administrative guidelines issued by the relevant authorities in force as at the date of this Information Memorandum and are subject to any changes in such laws or administrative guidelines, or the interpretation of those laws or guidelines, occurring after such date, which changes could be made on a retroactive basis. These laws and guidelines are also subject to various interpretations and the relevant tax authorities or the courts may later disagree with the explanations or conclusions set out below. Neither these statements nor any other statements in this Information Memorandum are intended or are to be regarded as advice on the tax position of any holder of the Securities or of any person acquiring, selling or otherwise dealing with the Securities or on any tax implications arising from the acquisition, sale or other dealings in respect of the Securities. The statements made herein do not purport to be a comprehensive nor exhaustive description of all the tax considerations that may be relevant to a decision to subscribe for, purchase, own or dispose of the Securities and do not purport to deal with the tax consequences applicable to all categories of investors, some of which may be subject to special rules or tax rates. The statements should not be regarded as advice on the tax position of any person and should be treated with appropriate caution. Prospective holders of the Securities are advised to consult their own professional tax advisers as to the tax consequences of the acquisition, ownership of or disposal of the Securities, including, in particular, the effect of any foreign, state or local tax laws to which they are subject. It is emphasised that none of the Issuer, the Guarantor, the Joint Lead Managers or any other persons involved in the issue and offer of the Securities accepts responsibility for any tax effects or liabilities resulting from the subscription for, purchase, holding or disposal of the Securities. British Virgin Islands As the Issuer is incorporated under the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands, (i) payment of principal and interest in respect of the Securities will not be subject to taxation in the British Virgin Islands, (ii) no withholding tax will be required to be deducted by the Issuer on such payments to any holder of the Securities, and (iii) the Securities will not be liable to stamp duty in the British Virgin Islands. Gains derived from the sale of the Securities by persons who are not otherwise liable to British Virgin Islands income tax will not be subject to British Virgin Islands income tax. A holder of the Securities who is a non-resident of the British Virgin Islands will not be subject to estate or gift taxes with respect to the Securities. Singapore The following discussion is also based upon the assumption that the Issuer is not tax resident in Singapore for Singapore income tax purposes. General Individual Taxpayers An individual is a tax resident in Singapore in a year of assessment if in the preceding year he was physically present in Singapore or exercised an employment in Singapore (other than as a director of a company) for 183 days or more or if he resides in Singapore. 65

Individual taxpayers who are Singapore tax residents are subject to Singapore income tax on income accruing in or derived from Singapore, subject to certain exceptions. All foreign-sourced income received in Singapore on or after 1 January 2004 by a Singapore tax resident individual (except for income received through a partnership in Singapore) is exempt from Singapore income tax if the Comptroller of Income Tax in Singapore (Comptroller) is satisfied that the tax exemption would be beneficial to the individual. Foreign-sourced income received or deemed received in Singapore by an individual not resident in Singapore is exempt from Singapore income tax. A Singapore tax resident individual is taxed at progressive rates ranging from 0% to 20% for the years of assessment 2011 and 2012 (that is, in respect of income earned during the calendar year or other basis period ending in 2010 and 2011 respectively). Non-resident individuals, subject to certain exceptions, are subject to Singapore income tax on income accruing in or derived from Singapore at the rate of 20% for the years of assessment 2011 and 2012. Corporate Taxpayers A company is tax resident in Singapore if the control and management of its business is exercised in Singapore. Corporate taxpayers who are Singapore tax residents are subject to Singapore income tax on income accruing in or derived from Singapore and, subject to certain exceptions, on foreign-sourced income received or deemed to be received in Singapore. Foreign-sourced income in the form of dividends, branch profits and service income received or deemed to be received in Singapore by Singapore tax resident companies on or after 1 June 2003 are exempt from tax if certain prescribed conditions are met, including the following: (i) such income is subject to tax of a similar character to income tax (by whatever name called) under the law of the territory from which such income is received; and (ii) at the time the income is received in Singapore, the highest rate of tax of a similar character to income tax (by whatever name called) levied under the law of the territory from which the income is received on any gains or profits from any trade or business carried on by any company in that territory at that time is not less than 15%. Certain concessions and clarifications have also been announced by the Inland Revenue Authority of Singapore (IRAS) with respect to such conditions. Non-resident corporate taxpayers, with certain exceptions, are subject to Singapore income tax on income accruing in or derived from Singapore, and on foreign-sourced income received or deemed to be received in Singapore. The corporate tax rate in Singapore is 17% with effect from the year of assessment 2010. In addition, three-quarters of up to the first S$10,000, and one-half of up to the next S$290,000, of a companys chargeable income otherwise subject to normal taxation is exempt from corporate tax. New companies will also, subject to certain conditions, be eligible for full tax exemption on the first S$100,000 and 50% tax exemption on the next S$200,000 of normal chargeable income a year for each of the companys first three consecutive years of assessment.

66

Application for Tax Ruling An advance tax ruling will be requested from the IRAS (the Tax Ruling) to confirm, amongst other things, whether Holders of the Securities may enjoy the tax concessions available for qualifying debt securities, provided that the other conditions for the qualifying debt securities scheme (as elaborated upon further below) are satisfied. If, on the other hand, the IRAS rules that the Holders are not eligible for the tax concessions under the qualifying debt securities scheme, the tax treatment to Holders may differ and the Distributions would be taxable when received or deemed received in Singapore (or if the Securities are held as part of a trade or business carried out in Singapore, as and when the Distributions are derived), unless otherwise exempted. If IRAS rules that the Distributions (including Arrears of Distribution and/or Additional Distribution Amounts) or any part thereof are not eligible for tax benefits for qualifying debt securities, investors and Holders should consult their own accounting and tax advisers regarding the Singapore income tax consequences of their acquisition, holding and disposal of the Securities. Interest and Other Payments on Debt Securities The disclosure below is on the assumption that: (i) the IRAS rules, amongst other things, that Holders of the Securities may enjoy the tax concessions available for qualifying debt securities; and (ii) the issue of the Securities is jointly lead-managed by J.P. Morgan (S.E.A.) Limited and DBS Bank Ltd (each of which is a Financial Sector Incentive (Bond Market) Company, as defined in the Income Tax Act, Chapter 134 of Singapore (the Income Tax Act)). Subject to certain prescribed conditions having been fulfilled (including the furnishing by the Issuer, or such other persons as the Comptroller may direct, of a return on debt securities in respect of the Securities within such period as the Comptroller may specify and such other particulars in connection with the Securities as the Comptroller may require to the Comptroller and the Monetary Authority of Singapore(MAS)), interest, discount income (not including discount income arising from secondary trading), prepayment fee, redemption premium and break cost (collectively, the Qualifying Income) from the Securities which are paid by the Issuer and which are derived by any company or a body of persons (as defined in the Income Tax Act) in Singapore is subject to income tax at a concessionary rate of 10% (with the exception of certain entities which have been granted the relevant Financial Sector Incentives which may be taxed at different rates). However, notwithstanding the foregoing: (I) if during the primary launch of the Securities, the Securities are issued to fewer than four persons and 50% or more of the issue of the Securities is beneficially held or funded, directly or indirectly, by related parties of the Issuer, the Securities would not qualify as qualifying debt securities; and (II) even though the Securities are qualifying debt securities, if, at any time during the tenure of the Securities, 50% or more of the issue of the Securities is held beneficially or funded, directly or indirectly, by any related party(ies) of the Issuer, Qualifying Income derived from the Securities held by: (aa)any related party of the Issuer; or 67

(bb)any other person where the funds used by such person to acquire the Securities are obtained, directly or indirectly, from any related party of the Issuer, shall not be eligible for the concessionary rate of tax as described above. The term related party, in relation to a person, means any other person who, directly or indirectly, controls that person, or is controlled, directly or indirectly, by that person, or where he and that other person, directly or indirectly, are under the control of a common person. The terms prepayment fee, redemption premium and break cost are defined in the Income Tax Act as follows: prepayment fee, in relation to debt securities and qualifying debt securities, means any fee payable by the issuer of the securities on the early redemption of the securities, the amount of which is determined by the terms of the issuance of the securities; redemption premium, in relation to debt securities and qualifying debt securities, means any premium payable by the issuer of the securities on the redemption of the securities upon their maturity; and break cost, in relation to debt securities and qualifying debt securities, means any fee payable by the issuer of the securities on the early redemption of the securities, the amount of which is determined by any loss or liability incurred by the holder of the securities in connection with such redemption. References to prepayment fee, redemption premium and break cost in this Singapore tax disclosure have the same meaning as defined in the Income Tax Act. Where any interest, discount income (not including discount income arising from secondary trading), prepayment fee, redemption premium or break cost is derived from the Securities by any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, the tax exemption otherwise available to such non-resident person for qualifying debt securities (subject to certain conditions) under the Income Tax Act shall not apply if such non-resident person acquires the Securities using the funds and profits of such non-resident persons operation through a permanent establishment in Singapore. Any person whose interest, discount income, prepayment fee, redemption premium or break cost derived from the Securities is not exempt from Singapore income tax shall include such income in a return of income made under the Income Tax Act. Please note that only Distributions are payable on the Securities, and the Securities will not participate in the earnings of the Issuer. Accordingly, Distributions on the Securities may be taxable in the hands of Holders of the Securities in the year the Distributions are due to them, irrespective of whether the Issuer has paid the Distributions due to them or not. In view of the above, in the event that the Distributions are not payable, or not payable in full, on any Distribution Payment Date due to any deferral in accordance with the terms and conditions of the Securities, Holders of the Securities should consult their professional advisers with respect to the tax consequences to them (including as to whether they may have any tax liability on any amount of Distributions which are not payable or not payable in full). 68

Capital Gains Any gains considered to be in the nature of capital made from the sale of the Securities will not be taxable in Singapore. However, there are no specific laws or regulations which deal with the characterisation of capital gains and hence, gains derived by any person from the sale of the Securities may be construed to be of an income nature and subject to Singapore income tax, especially if they arise from activities which the Comptroller would regard as carrying on a trade or business in Singapore. Holders of the Securities who are adopting Singapore Financial Reporting Standard 39 Financial Instruments: Recognition and Measurement (FRS 39) may, for Singapore income tax purposes be required to recognise gains or losses (not being gains or losses in the nature of capital) on the Securities, irrespective of disposal, in accordance with FRS 39. Please see the section below on Adoption of FRS 39 Treatment for Singapore Income Tax Purposes. Adoption of FRS 39 Treatment for Singapore Income Tax Purposes The IRAS has issued a circular entitled Income Tax Implications Arising from the Adoption of FRS 39 Financial Instruments: Recognition and Measurement (the FRS 39 Circular). Legislative amendments to give legislative effect to the FRS 39 Circular have been enacted in Section 34A of the Income Tax Act. The FRS 39 Circular and Section 34A of the Income Tax Act generally apply, subject to certain opt-out provisions, to taxpayers who are required to comply with FRS 39 for financial reporting purposes. Holders of the Securities who may be subject to the tax treatment under the FRS 39 Circular and Section 34A of the Income Tax Act should consult their own accounting and tax advisers regarding the Singapore income tax consequences of their acquisition, holding or disposal of the Securities. Estate Duty Singapore estate duty has been abolished with respect to all deaths occurring on or after 15 February 2008. Hong Kong Withholding tax No withholding tax in Hong Kong is payable on payments of principal or Distributions in respect of the Securities. Profits tax Hong Kong profits tax is charged on every person carrying on a trade, profession or business in Hong Kong in respect of assessable profits arising in or derived from Hong Kong from such trade, profession or business. Under the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) (the Inland Revenue Ordinance) as it is currently applied, Hong Kong profits tax may be charged on revenue profits arising on the sale, disposal or redemption of the Securities where such sale, disposal or redemption is or forms part of a trade, profession or business carried on in Hong Kong. 69

Distribution on the Securities will be subject to Hong Kong profits tax where such Distribution is received by or accrues to: (a) a financial institution (as defined in the Inland Revenue Ordinance) and arises through or from the carrying on by the financial institution of its business in Hong Kong; or (b) a corporation carrying on a trade, profession or business in Hong Kong where such Distribution is derived from Hong Kong; or (c) a person, other than a corporation, carrying on a trade, profession or business in Hong Kong where such Distribution is derived from Hong Kong and is in respect of the funds of that trade, profession or business. Stamp duty No Hong Kong stamp duty will be chargeable upon the issue or transfer of a Security. EU Savings Tax Directive The EU has adopted a Directive regarding the taxation of savings income. The Directive requires Member States to provide to the tax authorities of other Member States details of payments of interest and other similar income paid by a person to an individual or to certain other persons in another Member State, except that Austria and Luxembourg may instead impose a withholding system for a transitional period (subject to a procedure whereby, on meeting certain conditions, the beneficial owner of the interest or other income may request that no tax be withheld) unless during such period they elect otherwise. The European Commission has proposed certain amendments to the Directive, which may, if implemented, amend or broaden the scope of the requirements described above.

70

Subscription and sale


The Issuer and the Guarantor have entered into a subscription agreement with the Joint Lead Managers dated 2 September 2011 (the Subscription Agreement), pursuant to which and subject to certain conditions contained therein, the Issuer agreed to sell to the Joint Lead Managers, and the Joint Lead Managers agreed to subscribe and pay for, or to procure subscribers to subscribe and pay for, the aggregate principal amount of the Securities, and the Guarantor agreed, unconditionally and irrevocably on a subordinated basis to guarantee the Securities. The Subscription Agreement provides that each of the Issuer and the Guarantor will indemnify each of the Joint Lead Managers against certain liabilities in connection with the offer and sale of the Securities. The Subscription Agreement provides that the obligations of the Joint Lead Managers are subject to certain conditions precedent, and entitle the Joint Lead Managers to terminate it in certain circumstances prior to payment being made to the Issuer. The Joint Lead Managers and certain of their respective affiliates may have performed certain investment banking and advisory services for the Guarantor and/or its affiliates from time to time for which it has received customary fees and expenses and may, from time to time, engage in transactions with and perform services for the Guarantor and/or its affiliates in the ordinary course of their business. The Joint Lead Managers or certain of their respective affiliates may purchase the Securities and be allocated the Securities for asset management and/or proprietary purposes but not with a view to distribution. The Joint Lead Managers or their respective affiliates may purchase the Securities for their own account and enter into transactions, including credit derivatives, such as asset swaps, repackaging and credit default swaps relating to the Securities and/or other securities of the Issuer or the Guarantors or their respective subsidiaries or associates at the same time as the offer and sale of the Securities or in secondary market transactions. Such transactions would be carried out as bilateral trades with selected counterparties and separately from any existing sale or resale of the Securities to which this Information Memorandum relates (notwithstanding that such selected counterparties may also be purchasers of the Securities). The distribution of this Information Memorandum or any offering material and the offering, sale or delivery of the Securities is restricted by law in certain jurisdictions. Therefore, persons who may come into possession of this Information Memorandum or any offering material are advised to consult with their own legal advisers as to what restrictions may be applicable to them and to observe such restrictions. This Information Memorandum may not be used for the purpose of an offer or invitation in any circumstances in which such offer or invitation is not authorised. General No action has been or will be taken in any jurisdiction by the Issuer, the Guarantor or the Joint Lead Managers that would permit a public offering of the Securities, or possession or distribution of this Information Memorandum or any other offering or publicity material relating to the Securities, in any country or jurisdiction where action for that purpose is required.

71

United States The Securities and the Guarantee of the Securities have not been and will not be registered under the Securities Act and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Joint Lead Managers have represented that they have not offered or sold, and have agreed that they will not offer or sell, any Securities and the Guarantee of the Securities constituting part of its allotment within the United States except in accordance with Rule 903 of Regulation S under the Securities Act. Accordingly, neither they nor their respective affiliates, nor any persons acting on their behalf have engaged or will engage in any directed selling efforts with respect to the Securities and the Guarantee of the Securities. Terms used in this paragraph have the meanings given to them by Regulation S under the Securities Act. United Kingdom Each of the Joint Lead Managers has represented and agreed that: (1) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the FSMA)) received by it in connection with the issue or sale of any Securities in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer or the Guarantor; and (2) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom. Hong Kong Each of the Joint Lead Managers has represented, warranted and agreed that (i) it has not offered or sold and will not offer or sell in Hong Kong or elsewhere, by means of any document or otherwise, any Securities other than (a) to professional investors as defined in the SFO and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a prospectus as defined in the Companies Ordinance and which do not constitute an offer to the public within the meaning of that Ordinance; and (ii) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Securities, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong or otherwise is or contains an invitation to the public (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Securities which are or are intended to be disposed of only to professional investors as defined in the SFO and any rules made under that Ordinance. Singapore Each of the Joint Lead Managers has acknowledged that this Information Memorandum has not been registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Chapter 289 of Singapore (the SFA) and accordingly, the Securities may not be offered or sold, nor may the Securities be the subject of an invitation for subscription or purchase, nor may this Information Memorandum or any 72

other document or material in connection with the offer or sale, or invitation for subscription or purchase of the Securities be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (a) to an institutional investor (as defined in Section 4A of the SFA) pursuant to Section 274 of the SFA, (b) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to an offer referred to in Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. This Information Memorandum has not been registered as a prospectus with the Monetary Authority of Singapore under the SFA and accordingly, the Securities may not be offered or sold, nor may the Securities be the subject of an invitation for subscription or purchase, nor may this Information Memorandum or any other document or material in connection with the offer or sale, or invitation for subscription or purchase of the Securities be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (a) to an institutional investor (as defined in Section 4A of the SFA) pursuant to Section 274 of the SFA, (b) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to an offer referred to in Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the Securities are acquired by persons who are relevant persons specified in Section 276 of the SFA, namely: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, the securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries rights and interest (howsoever described) in that trust shall not be transferred within 6 months after that corporation or that trust has acquired the Securities pursuant to an offer made under Section 275 of the SFA except: (1) to an institutional investor (under Section 274 of the SFA) or to a relevant person as defined in Section 275(2) of the SFA, or any person pursuant to an offer that is made on terms that such securities of that corporation or such rights or interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets and further for corporations, in accordance with the conditions specified in Section 275(1A) of the SFA; (2) where no consideration is or will be given for the transfer; (3) where the transfer is by operation of law; or (4) as specified in Section 276(7) of the SFA.

73

Japan The Securities have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Law No. 25 of 1948, as amended) (the FIEA) and, accordingly, each of the Joint Lead Managers has represented and agreed that it will not offer or sell any Securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (as defined under Item 5, Paragraph 1, Article 6 of the Foreign Exchange and Foreign Trade Control Law of Japan (Law No. 228 of 1949, as amended)) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements of or otherwise in compliance with the FIEA and all applicable laws, regulations and material guidelines of Japan.

74

General information
1. Clearing Systems: The Securities will be cleared through CDP. 2. Listing of Securities: Approval in-principle has been obtained from the SGX-ST for the listing and quotation of the Securities on the SGX-ST. The SGX-ST assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports contained herein. Admission to the Official List of the SGX-ST and listing and quotation of the Securities on the SGX-ST is not to be taken as an indication of the merits of the Issuer, the Guarantor, their respective subsidiaries or associated companies or the Securities. The Issuer has undertaken, or will undertake, to the SGX-ST, among others, for so long as the Securities are listed on the SGX-ST and the rules of the SGX-ST so require, it will appoint and maintain a paying agent in Singapore in the event that the Global Certificate is exchanged for Individual Certificates. As at the Closing Date, the Issuer and Guarantor will appoint and maintain a paying agent in Singapore. In addition, in the event that a Global Certificate is exchanged for Individual Certificates in definitive form, an announcement of such exchange shall be made by or on behalf of the Issuer through the SGX-ST and such announcement will include all material information with respect to the delivery of the definitive certificates, including details of the paying agent in Singapore. 3. Authorisations: The Issuer and the Guarantor have obtained all necessary consents, approvals and authorisations in Singapore and Hong Kong in connection with the issue and performance of the Securities. The issue of the Securities was approved by the resolution of the Board of Directors of Issuer dated as of 25 August 2011. The granting of the Guarantees of the Securities by the Guarantor was approved by the resolution of the Board of Directors of the Guarantor dated as of 25 August 2011. 4. No Material Adverse Change: There has been no adverse change, or any development reasonably likely to involve an adverse change in the condition (financial or otherwise) or general affairs of the Issuer, the Guarantor or the Group since 31 December 2010 that is material in the context of the issue and Guarantee of the Securities. 5. Litigation: Neither the Guarantor, the Issuer nor any of their subsidiaries is involved in any litigation or arbitration proceedings or any regulatory investigations relating to claims or amounts which are material in the context of the issue of the Securities or the Guarantee of the Securities nor, so far as the Issuer or the Guarantor is aware, is any such litigation or arbitration proceeding pending or threatened. 6. Available Documents: Copies of the Guarantors annual reports for the years ended 31 December 2009 and 2010 and interim report for the six months ended 30 June 2011 and copies of the Deed of Covenant, Deed of Guarantee, the Agency Agreement and the Master Depository Services Agreement dated 9 September 2011 made between the Issuer and CDP will be available for inspection by the Holders from the Issue Date, at the specified office of the Paying Agents during normal business hours, so long as any of the Securities is outstanding. 7. Financial Statements: The Issuer has not published or arranged audit on, and does not propose to publish or arrange audit on, any of its accounts since it is not required to do so under the laws of the British Virgin Islands. However, the Issuer is required to keep such accounts and records as the directors consider necessary or desirable in order to reflect the financial position of the Issuer.

75

Deloitte Touche Tohmatsu have audited and rendered an unqualified audit report on the financial statements of the Guarantor for each of the three financial years ended 31 December 2008, 31 December 2009 and 31 December 2010, and each has given and has not withdrawn their consent to the issue of this Information Memorandum with the inclusion in it of their reports in the form and context in which they are included.

76

Index to financial statements


Page

Unaudited Published Consolidated Financial Statements of the Guarantor for the six months ended 30 June 2011 Consolidated Income Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Condensed Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . Notes to the Consolidated Interim Financial Statements . . . . . . . . . . . . . . . . . . . . . . Audited Consolidated Financial Statements of the Guarantor for the 31 December 2010 Independent Auditors Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Income Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statement of Comprehensive Income . . . . . . . . . . . . . . . Consolidated Statement of Financial Position . . . . . . . . . . . . . . . . . . . Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . Audited Consolidated Financial Statements of the Guarantor for the 31 December 2009 Independent Auditors Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Income Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statement of Comprehensive Income . . . . . . . . . . . . . . . Consolidated Statement of Financial Position . . . . . . . . . . . . . . . . . . . Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . year ended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . .

. . . . . .

F-3 F-4 F-5 F-6 F-7 F-8

. . . . . . .

. . . . . . .

F-15 F-16 F-17 F-18 F-20 F-21 F-23

year ended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-58 F-59 F-60 F-61 F-63 F-64 F-66

F-1

Unaudited published consolidated financial statements of the Guarantor for the six months ended 30 June 2011

F-2

Interim Report 2011

35

Interim Financial Statements

Consolidated Income Statement


For the six months ended 30th June, 2011 (Unaudited) 2011 2010 (Restated) HK$ Million HK$ Million 22,418 3,685 (2) 26,103 22,418 497 (14,646) (706) (130) (199) (218) (15,899) 2,948 1,419 11,383 23,284 (3) (4) 34,667 (1,350) 33,317 17,244 3,074 20,318 17,244 394 (11,553) (581) (101) (200) (154) (12,589) 3,382 1,508 9,939 3,238 13,177 (605) 12,572

Note Group turnover Share of property sales of jointly controlled entities Turnover Group turnover Investment and other income Operating costs Property and related costs Salaries and related expenses Interest and other finance costs Depreciation Other expenses Share of net profit of jointly controlled entities Increase in fair value of investment properties Operating profit Share of net profit of associates Profit before taxation Taxation Profit for the period Profit attributable to Shareholders of the Company Non-controlling interests

33,259 58 33,317

12,343 229 12,572 HK$5.33

Earnings per share

(6)

HK$14.36

F-3

36

CHEUNG KONG (HOLDINGS) LIMITED

Interim Financial Statements (continued)

Consolidated Statement of Comprehensive Income


For the six months ended 30th June, 2011 (Unaudited) 2011 2010 (Restated) HK$ Million HK$ Million Profit for the period Other comprehensive income Exchange gain on translation of financial statements of foreign operations Investments available for sale Loss in fair value Gain in fair value transferred to income statement upon disposal Impairment transferred to income statement Share of other comprehensive loss of jointly controlled entities and unlisted associates Total comprehensive income for the period Total comprehensive income attributable to Shareholders of the Company Non-controlling interests 33,317 179 (409) (21) 385 (63) 33,388 12,572

43 (49) (65) (58) 12,443

33,326 62 33,388

12,213 230 12,443

F-4

Interim Report 2011

37

Consolidated Statement of Financial Position


As at 30th June, 2011 (Unaudited) 30/6/2011 HK$ Million Non-current assets Fixed assets Investment properties Associates Jointly controlled entities Investments available for sale Long term loan receivables 10,196 22,589 176,861 42,272 11,173 392 263,483 Current assets Stock of properties Debtors, deposits and prepayments Investments held for trading Derivative financial instruments Bank balances and deposits Current liabilities Bank and other loans Creditors and accruals Loan from joint development partner Derivative financial instruments Provision for taxation Net current assets Total assets less current liabilities Non-current liabilities Bank and other loans Deferred tax liabilities 68,620 2,758 290 141 21,847 93,656 15,337 20,495 560 1,799 55,465 318,948 17,141 820 17,961 Net assets Representing: Share capital Share premium Reserves Shareholders funds Non-controlling interests Total equity 300,987 (Restated) 31/12/2010 HK$ Million 10,399 21,170 156,369 39,497 9,282 357 237,074 65,679 2,459 258 334 25,147 93,877 13,127 18,298 2,000 647 633 59,172 296,246 22,027 761 22,788 273,458

1,158 9,331 286,799 297,288 3,699 300,987

1,158 9,331 259,148 269,637 3,821 273,458

F-5

38

CHEUNG KONG (HOLDINGS) LIMITED

Interim Financial Statements (continued)

Consolidated Statement of Changes in Equity


For the six months ended 30th June, 2011
Shareholders Funds (Restated/ Share capital, Investment Non- unaudited) premium and revaluation Exchange Retained controlling Total reserve(1) reserve reserve profits Total interests Equity HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million
Balance at 1st January, 2010, as previously reported Prior year adjustments (note 1) Balance at 1st January, 2010, as restated Profit for the period Other comprehensive income Exchange gain on translation of financial statements of foreign operations Loss in fair value of investments available for sale Gain in fair value of investments available for sale transferred to income statement upon disposal Share of other comprehensive income/(loss) of jointly controlled entities and unlisted associates Total comprehensive income for the period Change in non-controlling interests Dividend paid to non-controlling interests Dividend paid to shareholders of the Company 2009 final dividend HK$2.20 per share Balance at 30th June, 2010 Balance at 1st January, 2011, as previously reported Prior year adjustments (note 1) Balance at 1st January, 2011, as restated Profit for the period Other comprehensive income Exchange gain on translation of financial statements of foreign operations Loss in fair value of investments available for sale Gain in fair value of investments available for sale transferred to income statement upon disposal Impairment of investments available for sale transferred to income statement Share of other comprehensive loss of jointly controlled entities and unlisted associates Total comprehensive income for the period Change in non-controlling interests Dividend paid to non-controlling interests Dividend paid to shareholders of the Company 2010 final dividend HK$2.45 per share Balance at 30th June, 2011 10,834 10,834 10,834 10,834 10,834 10,834 1,681 1,681 (49) (65) 20 (94) 1,587 3,165 3,165 (409) (21) 385 (60) (105) 3,060 3,370 1 3,371 42 (78) (36) 3,335 4,266 4,266 175 (3) 172 4,438 227,207 3,583 230,790 12,343 12,343 (5,096) 238,037 247,431 3,941 251,372 33,259 33,259 (5,675) 278,956 243,092 3,584 246,676 12,343 42 (49) (65) (58) 12,213 (5,096) 253,793 265,696 3,941 269,637 33,259 175 (409) (21) 385 (63) 33,326 (5,675) 297,288 3,805 6 3,811 229 1 230 (507) (115) 3,419 3,815 6 3,821 58 4 62 (123) (61) 3,699 246,897 3,590 250,487 12,572 43 (49) (65) (58) 12,443 (507) (115) (5,096) 257,212 269,511 3,947 273,458 33,317 179 (409) (21) 385 (63) 33,388 (123) (61) (5,675) 300,987

(1)

Share capital, premium and reserve comprise share capital of HK$1,158 million, share premium of HK$9,331 million and capital reserve of HK$345 million.

F-6

Interim Report 2011

39

Condensed Consolidated Statement of Cash Flows


For the six months ended 30th June, 2011 (Unaudited) 2011 2010 HK$ Million HK$ Million Net cash from operating activities Net cash used in investing activities Net cash from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1st January Cash and cash equivalents at 30th June 2,580 (756) (5,124) (3,300) 25,147 21,847 7,054 (268) 204 6,990 11,423 18,413

F-7

40

CHEUNG KONG (HOLDINGS) LIMITED

Interim Financial Statements (continued)

Notes to Interim Financial Statements


1. Basis of preparation
The interim financial statements have been prepared in accordance with Hong Kong Accounting Standard (HKAS) 34 Interim Financial Reporting. The principal accounting policies used in the preparation of the interim financial statements are consistent with those used in the financial statements for the year ended 31st December, 2010, except for the change described below. The Hong Kong Institute of Certified Public Accountants has issued a number of new and revised Hong Kong Financial Reporting Standards (HKFRSs). For those HKFRSs which are effective for accounting periods beginning on 1st January, 2011, the adoption has no significant impact on the Groups results and financial position. The Group and its listed associate, Hutchison Whampoa Limited (Hutchison), have also adopted HKAS 12 (Amendments) Deferred Tax: Recovery of Underlying Assets, which will be effective for accounting periods beginning on 1st January, 2012, in the preparation of the interim financial statements. In prior years, deferred tax was provided on the basis that the carrying amounts of investment properties would be recovered through use. Following the adoption of HKAS 12 (Amendments), deferred tax is provided on the basis that the carrying amounts of the investment properties will be recovered through sale except that the basis of recovery through use will continue to apply to those investment properties which are depreciable and are held with an objective to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. This change in accounting policy has been applied retrospectively. The impact of the said change in accounting policy, and the Groups share of its impact on Hutchisons interim financial statements as well as Hutchisons restatement of its interim results for the comparative period following its adoption of a new accounting policy in the second half of 2010, have effects on the interim financial statements as follows: Six months ended 30th June 2011 2010 HK$ Million HK$ Million Increase in share of net profit of jointly controlled entities Increase/(decrease) in share of net profit of associates Decrease in taxation Increase in profit attributable to shareholders of the Company Increase in earnings per share 15 7 230 252 HK$0.11 234 (61) 247 420 HK$0.18

F-8

Interim Report 2011

41

1.

Basis of preparation (continued)


30/6/2011 HK$ Million Increase in associates Increase in jointly controlled entities Decrease in deferred tax liabilities Increase in net assets Increase in retained profits Increase in exchange reserve Increase in non-controlling interests Increase in total equity 2,259 84 1,859 4,202 4,193 3 6 4,202 31/12/2010 HK$ Million 2,252 66 1,629 3,947 3,941 6 3,947

For the other HKFRSs which are not yet effective, the Group is in the process of assessing their impact on the Groups results and financial position.

2.

Turnover and contribution


Turnover of the Group by operating activities for the period is as follows: Six months ended 30th June 2011 2010 HK$ Million HK$ Million Property sales Property rental Hotels and serviced suites Property and project management Group turnover Share of property sales of jointly controlled entities Turnover 20,433 662 1,151 172 22,418 3,685 26,103 15,570 614 928 132 17,244 3,074 20,318

Turnover of jointly controlled entities (save for proceeds from property sales shared by the Group) and turnover of listed and unlisted associates are not included.

F-9

42

CHEUNG KONG (HOLDINGS) LIMITED

Interim Financial Statements (continued)

2.

Turnover and contribution (continued)


During the period, turnover of the Groups operating activities outside Hong Kong (including property sales of jointly controlled entities) accounted for approximately 17% (2010 18%) of the turnover and was derived from the following locations: Six months ended 30th June 2011 2010 HK$ Million HK$ Million The Mainland Singapore 4,398 4,398 Profit contribution by operating activities for the period is as follows:
Six months ended 30th June Company and subsidiaries Jointly controlled entities 2011 2010 2011 2010 HK$ Million HK$ Million HK$ Million

2,617 1,052 3,669

2010 (Restated) HK$ Million HK$ Million HK$ Million

Total 2011

Property sales Property rental Hotels and serviced suites Property and project management

5,796 635 414 59 6,904

4,145 563 249 55 5,012

1,210 284 131 1,625

1,664 349 102 2,115

7,006 919 545 59 8,529 421 (130) 1,419 514 1,731 308 (1,350) (1,292) (58) 10,092

5,809 912 351 55 7,127 350 (101) 1,508 1,779 67 (605) (736) (229) 9,160 3,161 22 12,343

Investment and finance Interest and other finance costs Increase in fair value of investment properties Subsidiaries Jointly controlled entities Surplus on loss of control of indirect interest in jointly controlled entities Others Taxation Company and subsidiaries Jointly controlled entities Profit attributable to non-controlling interests Share of net profit of listed associates Hutchison Whampoa Limited CK Life Sciences Intl., (Holdings) Inc. Profit attributable to shareholders of the Company

23,130 37 33,259

F-10

Interim Report 2011

43

3.

Profit before taxation


Six months ended 30th June 2011 2010 HK$ Million HK$ Million Profit before taxation is arrived at after charging/(crediting): Interest and other finance costs Less: Amount capitalised Costs of properties sold Impairment of investments available for sale Gain on disposal of investments available for sale (Gain)/loss on investments held for trading

223 (93) 130 13,428 385 (21) (35)

153 (52) 101 10,660 (65) 102

4.

Taxation
Six months ended 30th June 2011 2010 HK$ Million HK$ Million Current tax Hong Kong profits tax Tax outside Hong Kong Deferred tax 1,123 168 59 1,350 533 19 53 605

Hong Kong profits tax has been provided for at the rate of 16.5% (2010 16.5%) on the estimated assessable profits for the period. Tax outside Hong Kong has been provided for at the local enacted rates on the estimated assessable profits of the individual company concerned. Deferred tax has been provided on temporary differences based on the applicable enacted rates.

5.

Interim dividend
The interim dividend declared by the Directors is as follows: Six months ended 30th June 2011 2010 HK$ Million HK$ Million HK$0.53 (2010 HK$0.50) per share 1,228 1,158

F-11

44

CHEUNG KONG (HOLDINGS) LIMITED

Interim Financial Statements (continued)

6.

Earnings per share


The calculation of earnings per share is based on profit attributable to shareholders of the Company and on 2,316,164,338 shares (2010 2,316,164,338 shares) in issue during the period.

7.

Ageing analyses of trade debtors and trade creditors


The Groups trade debtors mainly comprise receivables for sale of properties and rental. Sales terms vary for each property project and are determined with reference to the prevailing market conditions. Sale of properties are normally completed when the sale prices are fully paid and deferred payment terms are sometimes offered to purchasers at a premium. Rentals are payable in advance by tenants. Ageing analysis of the Groups trade debtors at the period/year end date is as follows: 30/6/2011 HK$ Million Current to one month Two to three months Over three months 362 41 13 416 31/12/2010 HK$ Million 817 22 8 847

Ageing analysis of the Groups trade creditors at the period/year end date is as follows: 30/6/2011 HK$ Million Current to one month Two to three months Over three months 13,660 23 23 13,706 31/12/2010 HK$ Million 500 32 25 557

F-12

Interim Report 2011

45

8.

Related party transactions


During the period and in the ordinary course of business, the Group undertook various joint venture projects with related parties, including the Chairman, Mr. Li Ka-shing, and Hutchison Whampoa Limited, on normal commercial terms. Advances were made to/received from and guarantees were provided for these joint venture projects on a pro rata basis. At the interim period end date, advances made to associates and jointly controlled entities amounted to HK$486 million and HK$9,548 million respectively, commitments for advances to jointly controlled entities amounted to HK$509 million, and guarantees provided by the Group for bank loans utilised by jointly controlled entities amounted to HK$1,607 million. Other than the aforementioned, there were no other significant related party transactions requiring disclosure in the interim financial statements.

9.

Review of interim financial statements


The interim financial statements are unaudited, but have been reviewed by the Audit Committee.

F-13

Audited consolidated financial statements of the Guarantor for the year ended 31 December 2010

F-14

Annual Report 2010

137

Independent Auditors Report

TO THE MEMBERS OF CHEUNG KONG (HOLDINGS) LIMITED (incorporated in Hong Kong with limited liability) We have audited the consolidated financial statements of Cheung Kong (Holdings) Limited (the Company) and its subsidiaries (collectively referred to as the Group) set out on pages 96 to 136, which comprise the consolidated and Company statements of financial position as at 31st December, 2010, and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Directors responsibility for the consolidated financial statements


The directors of the Company are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit and to report our opinion solely to you, as a body, in accordance with section 141 of the Hong Kong Companies Ordinance, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and true and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors of the Company, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the consolidated financial statements give a true and fair view of the state of affairs of the Company and of the Group as at 31st December, 2010 and of the Groups profit and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in accordance with the Hong Kong Companies Ordinance.

DELOITTE TOUCHE TOHMATSU Certified Public Accountants Hong Kong, 29th March, 2011

F-15

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CHEUNG KONG (HOLDINGS) LIMITED

Consolidated Income Statement


For the year ended 31st December, 2010

2010 Note Group turnover Share of property sales of jointly controlled entities Turnover Group turnover Investment and other income Operating costs Property and related costs Salaries and related expenses Interest and other finance costs Depreciation Other expenses (3) $ Million 23,983 8,880 32,863 23,983 1,308 (15,113) (1,254) (222) (398) (336) (17,323) 8,183 1,737 17,888 10,237 (4) (5) 28,125 (1,324) 26,801

2009 (Restated) $ Million 17,702 6,591 24,293 17,702 2,614 (10,314) (1,032) (233) (349) (323) (12,251) 2,734 3,857 14,656 7,028 21,684 (1,644) 20,040

Share of net profit of jointly controlled entities Increase in fair value of investment properties Operating profit Share of net profit of associates Profit before taxation Taxation Profit for the year Profit attributable to Shareholders of the Company Non-controlling interests

(6)

26,478 323 26,801

19,618 422 20,040 $8.47

Earnings per share

(7)

$11.43

F-16

Annual Report 2010

97

Consolidated Statement of Comprehensive Income


For the year ended 31st December, 2010

2010 $ Million Profit for the year Other comprehensive income Exchange gain on translation of financial statements of foreign operations Investments available for sale Gain in fair value Gain in fair value transferred to income statement upon disposal Impairment transferred to income statement Share of other comprehensive income of jointly controlled entities and unlisted associates Total comprehensive income for the year Total comprehensive income attributable to Shareholders of the Company Non-controlling interests 26,801 279 1,550 (242) 112 687 29,187

2009 (Restated) $ Million 20,040 1 3,250 (121) 665 461 24,296

28,858 329 29,187

23,873 423 24,296

F-17

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CHEUNG KONG (HOLDINGS) LIMITED

Consolidated Statement of Financial Position


As at 31st December, 2010

31/12/2010 Note Non-current assets Fixed assets Investment properties Associates Jointly controlled entities Investments available for sale Long term loan receivables (8) (9) (11) (12) (13) $ Million 10,399 21,170 154,117 39,431 9,282 357 234,756 Current assets Stock of properties Debtors, deposits and prepayments Investments held for trading Derivative financial instruments Bank balances and deposits Current liabilities Bank and other loans Creditors and accruals Loan from joint development partner Derivative financial instruments Provision for taxation Net current assets Total assets less current liabilities Non-current liabilities Bank and other loans Loan from joint development partner Deferred tax liabilities (17) (19) (20) (14) (15) (16) 65,679 2,459 258 334 25,147 93,877 (17) (18) (19) 13,127 18,298 2,000 647 633 59,172 293,928 22,027 2,390 24,417 Net assets Representing: Share capital Share premium Reserves Shareholders funds Non-controlling interests Total equity 269,511

31/12/2009 (Restated) $ Million 10,696 19,433 147,542 32,591 7,026 444 217,732 62,999 2,799 1,927 83 11,423 79,231 7,210 12,078 2,000 460 1,028 56,455 274,187 25,279 2,011 27,290 246,897

1/1/2009 (Restated) $ Million 11,624 15,670 144,738 29,391 4,678 1,093 207,194 64,273 3,904 858 22 7,173 76,230 8,991 6,940 2,000 872 768 56,659 263,853 31,258 2,000 1,359 34,617 229,236

(21)

1,158 9,331 255,207 265,696 3,815 269,511

1,158 9,331 232,603 243,092 3,805 246,897

1,158 9,331 214,405 224,894 4,342 229,236

Li Ka-shing Director

Ip Tak Chuen, Edmond Director

F-18

Annual Report 2010

99

Statement of Financial Position


As at 31st December, 2010

Note Non-current assets Fixed assets Subsidiaries Associates Jointly controlled entities Long term loan receivables (8) (10) (11) (12)

31/12/2010 $ Million 5 31,858 50 720 1 32,634

31/12/2009 $ Million 7 31,554 50 721 2 32,334 3 269 16 288 164 4 120 32,454

Current assets Stock of properties Debtors, deposits and prepayments Bank balances and deposits

(14) (15)

3 60 275 338

Current liabilities Creditors and accruals Provision for taxation Net current assets Net assets Representing: Share capital Share premium Reserves Total equity

(18)

217 121 32,755

(21) (22)

1,158 9,331 22,266 32,755

1,158 9,331 21,965 32,454

Li Ka-shing Director

Ip Tak Chuen, Edmond Director

F-19

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CHEUNG KONG (HOLDINGS) LIMITED

Consolidated Statement of Changes in Equity


For the year ended 31st December, 2010

Shareholders Funds Share capital, Investment premium and revaluation reserve reserve (1) $ Million $ Million Balance at 1st January, 2009, as previously reported Prior year adjustments (note 2) Balance at 1st January, 2009 as restated Profit for the year Other comprehensive income Exchange gain on translation of financial statements of foreign operations Gain in fair value of investments available for sale Gain in fair value of investments available for sale transferred to income statement upon disposal Impairment of investments available for sale transferred to income statement Share of other comprehensive income of jointly controlled entities and unlisted associates Total comprehensive income for the year Change in non-controlling interests Dividend paid to non-controlling interests Dividend paid to shareholders of the Company 2008 final dividend $1.95 per share 2009 interim dividend $0.50 per share Balance at 31st December, 2009 Balance at 1st January, 2010, as previously reported Prior year adjustments (note 2) Balance at 1st January, 2010, as restated Profit for the year Other comprehensive income Exchange gain on translation of financial statements of foreign operations Gain in fair value of investments available for sale Gain in fair value of investments available for sale transferred to income statement upon disposal Impairment of investments available for sale transferred to income statement Share of other comprehensive income of jointly controlled entities and unlisted associates Total comprehensive income for the year Change in non-controlling interests Dividend paid to non-controlling interests Dividend paid to shareholders of the Company 2009 final dividend $2.20 per share 2010 interim dividend $0.50 per share Balance at 31st December, 2010 10,834 10,834 (2,228) (2,228) Exchange reserve $ Million 3,024 3,024 Retained profits $ Million 213,503 (239) 213,264 19,618 Noncontrolling Total interests $ Million $ Million 225,133 (239) 224,894 19,618 4,342 4,342 422 (Restated) Total Equity $ Million 229,475 (239) 229,236 20,040

10,834 10,834 10,834

3,249 (121) 665 116 3,909 1,681 1,681 1,681

1 345 346 3,370 3,370 3,370

19,618 (4,517) (1,158) 227,207 227,714 (507) 227,207 26,478

1 3,249 (121) 665 461 23,873 (4,517) (1,158) 243,092 243,599 (507) 243,092 26,478

1 423 (711) (249) 3,805 3,805 3,805 323

1 3,250 (121) 665 461 24,296 (711) (249) (4,517) (1,158) 246,897 247,404 (507) 246,897 26,801

10,834

1,549 (242) 112 65 1,484 3,165

274 622 896 4,266

26,478 (5,096) (1,158) 247,431

274 1,549 (242) 112 687 28,858 (5,096) (1,158) 265,696

5 1 329 (170) (149) 3,815

279 1,550 (242) 112 687 29,187 (170) (149) (5,096) (1,158) 269,511

(1) Share capital, premium and reserve comprise share capital of $1,158 million, share premium of $9,331 million and capital reserve of $345 million.

F-20

Annual Report 2010

101

Consolidated Statement of Cash Flows


For the year ended 31st December, 2010

Note Operating activities Cash generated from operations Investment in/advance to jointly controlled entities Dividend/repayment from jointly controlled entities Dividend from associates Dividend from investments in securities Interest received Dividend paid to shareholders of the Company Dividend paid to non-controlling interests Profits tax paid Net cash from operating activities Investing activities Investment in/advance to associates Repayment from associates Disposal of associates Investment in/advance to jointly controlled entities Dividend/repayment from jointly controlled entities Purchase of investments available for sale Disposal/redemption of investments available for sale Addition of investment properties Disposal of investment properties Addition of fixed assets Net cash from investing activities Financing activities Borrowing of bank and other loans Repayment of bank and other loans Decrease in funding from non-controlling interests Interest and other finance costs paid Net cash from/(used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 1st January Cash and cash equivalents at 31st December (b) (a)

2010 $ Million 13,765 (2,636) 1,198 3,722 243 155 (6,254) (149) (1,376) 8,668 14 (474) 4,424 (1,314) 601 (29) (144) 3,078 9,474 (7,025) (170) (301) 1,978 13,724 11,423 25,147

2009 $ Million 16,010 (1,221) 1,413 3,717 249 228 (5,675) (249) (713) 13,759 (12) 14 489 (535) (595) 1,545 (242) 1,722 (711) 1,675 6,463 (16,337) (711) (599) (11,184) 4,250 7,173 11,423

F-21

102

CHEUNG KONG (HOLDINGS) LIMITED

Consolidated Statement of Cash Flows (continued)

Notes: (a) Cash generated from operations 2010 $ Million Profit before taxation Interest income Interest and other finance costs Dividend income from investments in securities Share of net profit of jointly controlled entities Share of net profit of associates Profit on disposal of associates Increase in fair value of investment properties Decrease in long term loan receivables (Gain)/loss on investments available for sale Gain on disposal of investment properties Depreciation Exchange difference and other items Changes in working capital Decrease in investments held for trading (Increase)/decrease in stock of properties Increase in customers deposits received Decrease in debtors, deposits and prepayments Increase in derivative financial instruments Increase in creditors and accruals 28,125 (173) 222 (234) (8,183) (10,237) (1,737) 76 (130) 398 (114) 5,752 1,669 (2,299) 4,960 394 (64) 1,092 13,765 (b) Cash and cash equivalents 2010 $ Million Bank balances and deposits 25,147 2009 $ Million 11,423 2009 (Restated) $ Million 21,684 (216) 233 (295) (2,734) (7,028) (952) (3,857) 660 544 (350) 349 122 7,850 12 1,541 4,990 1,069 (473) 711 16,010

F-22

Annual Report 2010

103

Notes to Financial Statements


1. General Information
The Company is a limited liability company incorporated in Hong Kong and its shares are listed on The Stock Exchange of Hong Kong Limited. The address of the registered office and other corporate information are set out on page 144 of the annual report.

2. Principal Accounting Policies


(a) Basis of preparation
The financial statements have been prepared in accordance with generally accepted accounting principles in Hong Kong and comply with the Hong Kong Financial Reporting Standards (HKFRSs). The financial statements are prepared under the historical cost convention except that investments in securities, investment properties and derivative financial instruments, as set out in notes 2(f), 2(h) and 2(l) respectively, are stated at fair values. The Hong Kong Institute of Certified Public Accountants has issued a number of new and revised HKFRSs. For the HKFRSs which are effective for accounting periods beginning on 1st January, 2010, the adoption has no significant impact on the Groups results and financial position; and for the following HKFRSs which are not yet effective, the Group is in the process of assessing their impact on the Groups results and financial position. Effective for the year ending 31st December, 2011: HKAS 24 (Revised) HKAS 32 (Amendment) HKFRSs (Amendments) HK(IFRIC)-Int 14 (Amendment) HK(IFRIC)-Int 19 Related Party Disclosures Classification of Rights Issues Improvements to HKFRSs Prepayments of a Minimum Funding Requirement Extinguishing Financial Liabilities with Equity Instruments

Effective for the year ending 31st December, 2012: HKAS 12 (Amendments) HKFRS 7 (Amendments) Deferred Tax: Recovery of Underlying Assets Disclosures Transfers of Financial Assets

Effective for the year ending 31st December, 2013: HKFRS 9 Financial Instruments

F-23

104

CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

2. Principal Accounting Policies

(continued)

(a) Basis of preparation (continued)


During the year, the Groups listed associate, Hutchison Whampoa Limited, adopted certain revised HKFRSs prospectively and also adopted its listed associates new accounting policy with retrospective effect, which had impacts on its opening balance of shareholders funds and current years profit attributable to shareholders. The Groups share of the impact has the following effects on the financial statements: Year ended 31st December 2010 $ Million Decrease in share of net profit of associates Decrease in profit attributable to shareholders of the Company Decrease in earnings per share (465) (465) $(0.20) 2009 $ Million (268) (268) $(0.12)

31/12/2010 $ Million Decrease in associates Decrease in net assets Decrease in retained profits Decrease in total equity (972) (972) (972) (972)

31/12/2009 $ Million (507) (507) (507) (507)

1/1/2009 $ Million (239) (239) (239) (239)

(b) Consolidation
The consolidated financial statements of the Group include the financial statements of the Company and of all its direct and indirect subsidiaries made up to 31st December, and also incorporate the Groups interests in jointly controlled entities and associates on the basis set out in note (2)(d) and note (2)(e) respectively. Results of subsidiaries, jointly controlled entities and associates acquired or disposed of during the year are included as from their effective dates of acquisition to the end of the year or up to the dates of disposal as the case may be. Goodwill on acquisition of subsidiaries is carried at cost and reviewed for impairment annually. Impairment, if any, is charged to income statement.

(c) Subsidiaries
Investments in subsidiaries are carried at cost less provision for impairment where appropriate.

F-24

Annual Report 2010

105

2. Principal Accounting Policies


(d) Jointly controlled entities

(continued)

A jointly controlled entity is an entity in which the Group has a long term equity interest and of which its financial and operating policies are under contractual arrangements jointly controlled by the Group and other parties. Investments in jointly controlled entities are carried in the consolidated financial statements at cost plus the Groups share of their post-acquisition results less dividends received and provision for impairment. Results of jointly controlled entities are incorporated in the consolidated financial statements to the extent of the Groups share of their comprehensive income calculated from their financial statements made up to 31st December.

(e) Associates
An associate is an entity, other than a subsidiary or a jointly controlled entity, in which the Group has a long term equity interest and has significant influence over its management. Investments in associates are carried in the consolidated financial statements at cost plus the Groups share of their post-acquisition results less dividends received and provision for impairment. Results of associates are incorporated in the consolidated financial statements to the extent of the Groups share of their comprehensive income calculated from their financial statements made up to 31st December and losses of associates in excess of the Groups interests in the associates are not recognised unless the Group has incurred legal or constructive obligations.

(f)

Investments in securities
Investments which are not subsidiaries, jointly controlled entities or associates are classified as either investments held for trading or investments available for sale, and are stated at fair value. Purchases and sales of investments in securities are accounted for on a trade date basis. For investments held for trading, changes in fair value are included in income statement; and for investments available for sale, changes in fair value are recognised in other comprehensive income and transferred to income statement upon disposal. For equity securities available for sale where there are significant or prolonged declines in fair value below costs and for debt securities available for sale where there are observable evidences that the debt securities cannot be recovered in full, impairment is charged to income statement and is not reversible unless increase in fair value of the debt securities in a subsequent period can be objectively related to events occurring after the impairment is recognised.

(g) Fixed assets


Fixed assets, including hotel and serviced suite properties held for operation, are stated at cost less depreciation and provision for impairment. Leasehold land is amortised over the remaining term of the lease on a straight-line basis. Buildings are depreciated at annual rates of 2% to 4% on the costs of the respective buildings. Other fixed assets are depreciated on a straight-line basis at annual rates of 5% to 331/3% based on their respective estimated useful lives.

F-25

106

CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

2. Principal Accounting Policies


(h) Investment properties

(continued)

Investment properties, which are held for rental, are stated at fair value. Investment properties under development are stated at fair value when their fair values become reliably determinable or upon completion of their construction, whichever is the earlier, otherwise at cost less provision for impairment. Changes in fair value are included in income statement.

(i)

Loan receivables
Loan receivables are non-derivative financial assets with fixed or determinable payments. Loan receivables are recognised initially at fair value and subsequently carried at amortised cost using the effective interest method less provision for impairment.

(j)

Stock of properties
Stock of properties are stated at the lower of cost and net realisable value. Net realisable value is determined by reference to sale proceeds received after the year end date less selling expenses, or by management estimates based on prevailing market condition. Costs of properties include acquisition costs, development expenditure, interest and other direct costs attributable to such properties. The carrying values of properties held by subsidiaries are adjusted in the consolidated financial statements to reflect the Groups actual acquisition costs where appropriate.

(k) Debtors
Debtors are recognised initially at fair value and subsequently carried at amortised cost less provision for impairment.

(l)

Derivative financial instruments


Derivative financial instruments, which are used for investment and financial purposes, are stated at fair value. Changes in fair value of derivative financial instruments that are designated and qualify as fair value hedges are included in income statement, together with any changes in fair value of the hedged assets or liabilities that are attributable to the hedged risk. Changes in fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in income statement.

(m) Bank and other loans


Bank and other loans are recognised initially at fair value and subsequently carried at amortised cost.

(n) Creditors
Creditors are recognised initially at fair value and subsequently carried at amortised cost.

F-26

Annual Report 2010

107

2. Principal Accounting Policies


(o) Revenue recognition

(continued)

When properties under development are sold, income is recognised when the property development is completed with the relevant occupation permit issued by the Authorities and the significant risks and rewards of the properties are passed to the purchasers. Payments received from purchasers prior to this stage are recorded as customers deposits received. Rental income is recognised on a straight-line basis over the term of the lease. Income from property and project management is recognised when services are rendered. Revenue from hotel and serviced suite operation is recognised upon provision of services. Interest income is recognised on a time proportion basis using the effective interest method; and dividend income is recognised when the right to receive payment is certain.

(p) Foreign exchange


Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the year end date. Transactions during the year are converted at the rates of exchange ruling at the transaction dates. Exchange differences are included in income statement. For translation of the financial statements of subsidiaries, jointly controlled entities and associates denominated in foreign currencies into presentation currency of the Company, assets and liabilities are translated at exchange rates prevailing at the year end date and results are translated at the average rates of exchange during the year, and if the average rates are not reasonable approximations of the exchange rates at the transaction dates, then the exchange rates at the transaction dates are used. Exchange differences are recognised in other comprehensive income.

(q) Taxation
Hong Kong profits tax is provided for, using the enacted rate at the year end date, on the estimated assessable profits less available tax relief for losses brought forward of each individual company comprising the Group. Tax outside Hong Kong is provided for, using the local enacted rates at the year end date, on the estimated assessable profits of the individual company concerned. Deferred tax liabilities are provided in full, based on the applicable enacted rates, on all temporary differences between the carrying amounts of assets and liabilities and their tax bases, and deferred tax assets are recognised, based on the applicable enacted rates, to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences and unused tax losses can be utilised.

(r)

Borrowing costs
Borrowing costs are charged to income statement in the year in which they are incurred unless they are capitalised as being directly attributable to the acquisition and development of properties which necessarily take a substantial period of time to complete.

F-27

108

CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

3. Turnover and Contribution


The principal activities of the Group are property development and investment, hotel and serviced suite operation, property and project management and investment in securities. Turnover of Group activities comprises proceeds from property sales, gross rental income, revenue from hotel and serviced suite operation and income from property and project management. In addition, the Group also accounts for its proportionate share of proceeds from property sales of jointly controlled entities as turnover. Turnover of jointly controlled entities (save for proceeds from property sales shared by the Group) and turnover of listed and unlisted associates are not included. Turnover of the Group by operating activities for the year is as follows: 2010 $ Million Property sales Property rental Hotels and serviced suites Property and project management Group turnover Share of property sales of jointly controlled entities Turnover 20,417 1,264 2,037 265 23,983 8,880 32,863 2009 $ Million 14,922 1,155 1,399 226 17,702 6,591 24,293

During the year, turnover of the Groups operating activities outside Hong Kong (including property sales of jointly controlled entities) accounted for approximately 29% (2009 27%) of the turnover and was derived from the following locations: 2010 $ Million The Mainland Singapore 8,545 1,052 9,597 2009 $ Million 6,676 2 6,678

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109

3. Turnover and Contribution

(continued)

Profit contribution by operating activities for the year is as follows: Company and Jointly controlled subsidiaries entities Total 2010 2009 2010 2009 2010 2009 $ Million $ Million $ Million $ Million $ Million $ Million Property sales Property rental Hotels and serviced suites Property and project management 5,631 1,131 617 115 7,494 5,501 1,062 360 109 7,032 3,271 686 235 4,192 2,895 677 157 3,729 8,902 1,817 852 115 11,686 1,147 (222) 1,737 4,733 2,210 180 (1,324) (3,452) (323) 16,372 Share of net profit of listed associates Hutchison Whampoa Limited CK Life Sciences Intl., (Holdings) Inc. Profit attributable to shareholders of the Company 10,011 95 26,478 8,396 1,739 517 109 10,761 1,411 (233) 3,857 693 218 (1,644) (1,918) (422) 12,723 6,810 85 19,618

Investment and finance Interest and other finance costs Increase in fair value of investment properties Subsidiaries Jointly controlled entities Profit on disposal of indirect interest in jointly controlled entity Others Taxation Company and subsidiaries Jointly controlled entities Profit attributable to non-controlling interests

F-29

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

4. Profit before Taxation


2010 $ Million Profit before taxation is arrived at after charging: Interest and other finance costs Bank loans and other loans repayable within 5 years Other loans not repayable within 5 years Gain on loan hedging 2009 $ Million

452 81 (176) 357 (135) 222

576 54 (134) 496 (263) 233 101 10 56 167 (9) 158 6 8,901 665 160

Less: Amount capitalised (see note (a))

Directors emoluments (see note (b)) Salaries, allowances and benefits in kind Pension scheme contribution Discretionary bonus

105 10 68 183 (10) 173

Less: Amount paid back

Auditors remuneration Costs of properties sold Impairment of investments available for sale Operating lease charges properties and after crediting: Net rental income Interest income from banks Interest income from loan receivables Interest income from jointly controlled entities/associates Income from listed investments in securities Dividend income from equity securities Interest income from debt securities Income from unlisted investments in securities Dividend income from equity securities Interest income from debt securities Exchange difference Gain on investments held for trading Gain on disposal of investments available for sale Gain on disposal of investment properties Profit on disposal of associates
Notes: (a)

7 13,515 112 175

1,213 34 47 65 232 9 2 16 213 84 242

1,138 21 100 68 293 2 26 (57) 455 121 350 952

Interest was capitalised to property development projects at an average annual rate of approximately 1% (2009 1.25%) during the year.

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111

4. Profit before Taxation


(b)

(continued)

Directors emoluments comprised payments to the Companys directors (including the five highest paid individuals in the Group) in connection with the management of the affairs of the Group. The independent non-executive directors receive an annual directors fee of $120,000 (2009 $120,000) each; and for those acting as members of the Audit Committee and/or Remuneration Committee, additional annual fee of $130,000 (2009 $130,000) each is paid for the former and $60,000 (2009 $60,000) each is paid for the latter. The emoluments of the Companys directors, excluding emoluments received by them from the Groups associates, are as follows: Salaries, Allowances Pension Inducement or Director and Benefits Scheme Discretionary Compensation Fees in Kind Contribution Bonus Fee $ Million $ Million $ Million $ Million $ Million Li Ka-shing (1) Li Tzar Kuoi, Victor (2) Kam Hing Lam (3) Ip Tak Chuen, Edmond (4) Chung Sun Keung, Davy Pau Yee Wan, Ezra Woo Chia Ching, Grace Chiu Kwok Hung, Justin Leung Siu Hon Fok Kin-ning, Canning Frank John Sixt Chow Kun Chee, Roland George Colin Magnus Kwok Tun-li, Stanley Yeh Yuan Chang, Anthony Simon Murray Chow Nin Mow, Albert Hung Siu-lin, Katherine Wong Yick-ming, Rosanna Cheong Ying Chew, Henry Kwan Chiu Yin, Robert Total for the year 2010 Total for the year 2009 (1) 0.01 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.31 0.12 0.12 0.12 0.25 0.18 0.25 2.80 2.92 34.44 16.81 13.78 8.56 9.71 9.71 8.70 101.71 97.87 3.44 1.68 1.37 0.85 0.97 0.97 0.87 10.15 9.76 12.61 0.60 6.67 12.73 10.06 12.72 12.87 68.26 56.56

2010 Total $ Million 0.01 50.61 19.21 21.94 22.26 20.86 23.52 22.56 0.12 0.12 0.12 0.12 0.12 0.31 0.12 0.12 0.12 0.25 0.18 0.25 182.92

2009 Total $ Million 0.01 46.86 18.41 20.26 19.79 18.77 21.00 19.94 0.12 0.12 0.12 0.12 0.12 0.31 0.12 0.12 0.12 0.25 0.18 0.25 0.12

167.11

Other than a directors fee of $5,000, no other remuneration was paid to the Chairman, Mr. Li Kashing. The amount of directors fee shown above is a result of rounding. The directors fee of $50,000 received by Mr. Li Ka-shing from Hutchison Whampoa Limited was paid back to the Company. Part of the directors emoluments in the sum of $3,720,000 received by Mr. Li Tzar Kuoi, Victor from the Hutchison Whampoa Group and the directors fee of $75,000 received by him from CK Life Sciences Intl., (Holdings) Inc. were paid back to the Company. Part of the directors emoluments in the sum of $1,572,000 received by Mr. Kam Hing Lam from the Hutchison Whampoa Group and the directors emoluments of $1,825,000 received by him from CK Life Sciences Intl., (Holdings) Inc. were paid back to the Company. Part of the directors emoluments in the sum of $1,875,000 received by Mr. Ip Tak Chuen, Edmond from Cheung Kong Infrastructure Holdings Limited and the directors fee of $75,000 received by him from CK Life Sciences Intl., (Holdings) Inc. were paid back to the Company.

(2)

(3)

(4)

F-31

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

5. Taxation
2010 $ Million Current tax Hong Kong profits tax Tax outside Hong Kong Deferred tax 904 41 379 1,324 2009 $ Million 961 31 652 1,644

Hong Kong profits tax has been provided for at the rate of 16.5% (2009 16.5%) on the estimated assessable profits for the year and operating profit (after adjusting for share of taxation of jointly controlled entities) is reconciled with taxation as follows: 2010 $ Million Adjusted operating profit at Hong Kong tax rate of 16.5% (2009 16.5%) Effect of tax rate differences at locations outside Hong Kong Profit on disposal of indirect interest in jointly controlled entity Profit on disposal of associates Dividend income Increase in fair value of investment properties Profit on disposal of properties held for rental Net effect of tax losses and deductible temporary differences utilised/not recognised Net effect of non-assessable/deductible items Others 3,521 1,844 (365) (27) (7) (156) (60) 26 4,776 (3,452) 1,324 2009 $ Million 2,735 1,157 (157) (34) (28) (57) (41) (4) (9) 3,562 (1,918) 1,644

Less: Share of taxation of jointly controlled entities

6. Profit Attributable to Shareholders of the Company


Profit attributable to shareholders of the Company dealt with in the income statement of the Company is $6,555 million (2009 $6,372 million) and dividends paid and proposed for the year by the Company are as follows: 2010 $ Million Interim dividend paid at $0.50 (2009 $0.50) per share Final dividend proposed at $2.45 (2009 $2.20) per share 1,158 5,675 6,833 2009 $ Million 1,158 5,096 6,254

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113

7. Earnings Per Share


The calculation of earnings per share is based on profit attributable to shareholders of the Company and on 2,316,164,338 shares (2009 2,316,164,338 shares) in issue during the year.

8. Fixed Assets
Hotels and Land and serviced suites buildings in in outside Hong Kong Hong Kong Hong Kong $ Million $ Million $ Million 934 (934) 934 10,679 184 10,863 8 10,871 1,676 195 1,871 223 2,094 8,777 8,992 9,003 1,546 2 12 1,560 53 9 1,622 274 35 309 11 36 356 1,266 1,251 1,272

Group Cost At 1st January, 2009 Translation difference Additions/transfers Disposals At 31st December, 2009 Translation difference Additions/transfers Disposals At 31st December, 2010 Accumulated depreciation/provisions At 1st January, 2009 Translation difference Depreciation Disposals At 31st December, 2009 Translation difference Depreciation Disposals At 31st December, 2010 Net book value At 31st December, 2010 At 31st December, 2009 At 1st January, 2009 At the year end date: (a)

Other assets $ Million 1,217 1 159 (16) 1,361 11 42 (20) 1,394 802 1 119 (14) 908 9 139 (18) 1,038 356 453 415

Total $ Million 14,376 3 (579) (16) 13,784 64 59 (20) 13,887 2,752 1 349 (14) 3,088 20 398 (18) 3,488 10,399 10,696 11,624

certain properties in Hong Kong with aggregate carrying value of $8,225 million (2009 $8,437 million) and certain properties outside Hong Kong with aggregate carrying value of $1,266 million (2009 $1,251 million) were held under medium term leases, all other properties were held under long leases; and certain hotel properties with aggregate carrying value of $750 million (2009 $736 million) were pledged to secure bank loan facilities.

(b)

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

8. Fixed Assets

(continued) Other assets

Company Cost At 1st January Additions Disposals At 31st December Accumulated depreciation At 1st January Depreciation Disposals At 31st December Net book value at 31st December

31/12/2010 $ Million 186 2 (1) 187 179 4 (1) 182 5

31/12/2009 $ Million 191 2 (7) 186 180 5 (6) 179 7

9. Investment Properties
Group 31/12/2010 $ Million Investment properties in Hong Kong At 1st January Additions Transfer from land and buildings Disposals Increase in fair value 19,433 1,737 21,170 At the year end date: (a) investment properties have been revalued by DTZ Debenham Tie Leung Limited, independent professional valuers, on a market value basis, which has taken into account comparable market transactions and net income derived from existing tenancies with due allowance for reversionary income potential; investment properties with aggregate carrying value of $20,585 million (2009 $18,900 million) and $585 million (2009 $533 million) were held under medium term leases and long leases respectively; and gross rental income and direct operating expenses of investment properties during the year amounted to $1,140 million (2009 $1,051 million) and $41 million (2009 $16 million) respectively. 31/12/2009 $ Million 15,670 358 934 (1,386) 3,857 19,433 1/1/2009 $ Million 15,497 39 134 15,670

(b)

(c)

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115

10. Subsidiaries
Company 31/12/2010 $ Million Unlisted investments in subsidiaries Amounts due from subsidiaries Amounts due to subsidiaries 2,071 30,059 (272) 31,858 Particulars regarding the principal subsidiaries are set out in Appendix I. 31/12/2009 $ Million 2,071 30,302 (819) 31,554

11. Associates
31/12/2010 $ Million Listed investments in associates Unlisted investments in associates Share of results less dividends Amounts due from associates 28,132 93 125,706 153,931 186 154,117 Market value of investments in associates listed in Hong Kong 172,725 115,735 84,288 Group 31/12/2009 $ Million 28,132 93 119,117 147,342 200 147,542 1/1/2009 $ Million 28,712 81 115,734 144,527 211 144,738 Company 31/12/2010 31/12/2009 $ Million $ Million 50 50 50 50 50 50

Particulars regarding the principal associates are set out in Appendix II. Extracts of financial statements of Hutchison Whampoa Limited and CK Life Sciences Intl., (Holdings) Inc., listed associates, are set out in Appendix IV and Appendix V respectively.

F-35

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

12. Jointly Controlled Entities


31/12/2010 $ Million Unlisted investments in jointly controlled entities Share of results less dividends Amounts due from jointly controlled entities 10,578 16,480 27,058 12,373 39,431 Group 31/12/2009 $ Million 8,908 11,146 20,054 12,537 32,591 1/1/2009 $ Million 8,787 8,576 17,363 12,028 29,391 Company 31/12/2010 31/12/2009 $ Million $ Million 720 720 721 721

Particulars regarding the principal jointly controlled entities are set out in Appendix III. The aggregate amounts of non-current assets, current assets, current liabilities and non-current liabilities at the year end date, and the aggregate amounts of income and expenses for the year related to the Groups interests in jointly controlled entities are as follows: 2010 $ Million Non-current assets Current assets Current liabilities Non-current liabilities Income Expenses 23,839 39,183 (11,048) (10,742) 18,301 (10,232) 2009 $ Million 18,762 34,093 (9,108) (9,499) 9,764 (5,115)

13. Investments Available for Sale


Group 31/12/2010 $ Million Listed investments Equity securities listed in Hong Kong Equity securities listed outside Hong Kong Debt securities listed outside Hong Kong 3,833 4,628 116 8,577 Unlisted investments Equity securities Debt securities 107 598 705 9,282 31/12/2009 $ Million 2,654 3,624 6,278 119 629 748 7,026 1/1/2009 $ Million 1,748 2,437 4,185 72 421 493 4,678

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117

14. Stock of Properties


31/12/2010 $ Million Properties for/under development Joint development projects Properties for sale 28,443 35,512 1,724 65,679 Group 31/12/2009 $ Million 17,340 38,250 7,409 62,999 1/1/2009 $ Million 27,835 34,785 1,653 64,273 Company 31/12/2010 31/12/2009 $ Million $ Million 3 3 3 3

At the year end date, properties for/under development and joint development projects amounting to $37,155 million (2009 $32,670 million) were not scheduled for completion within twelve months.

15. Debtors, Deposits and Prepayments


31/12/2010 $ Million Trade debtors Loan receivables Deposits, prepayments and others 847 559 1,053 2,459 Group 31/12/2009 $ Million 526 1,202 1,071 2,799 1/1/2009 $ Million 1,207 2,001 696 3,904 Company 31/12/2010 31/12/2009 $ Million $ Million 60 60 269 269

The Groups trade debtors mainly comprise receivables for sale of properties and rental. Sales terms vary for each property project and are determined with reference to the prevailing market conditions. Sale of properties are normally completed when the sale prices are fully paid and deferred payment terms are sometimes offered to purchasers at a premium. Rentals are payable in advance by tenants. At the year end date, loan receivables included mortgage loans amounting to $188 million (2009 $278 million) which were pledged to secure the financing bank loans. Ageing analysis of the Groups trade debtors at the year end date is as follows: 2010 $ Million Current to one month Two to three months Over three months 817 22 8 847 2009 $ Million 491 27 8 526

F-37

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

16. Investments Held for Trading


Group 31/12/2010 $ Million Listed investments Equity securities listed in Hong Kong Equity securities listed outside Hong Kong Unlisted investments Debt securities 87 171 258 258 31/12/2009 $ Million 829 1,045 1,874 53 1,927 1/1/2009 $ Million 121 692 813 45 858

17. Bank and Other Loans


Group 31/12/2010 $ Million Bank loans repayable within 1 year after 1 year but not exceeding 2 years after 2 years but not exceeding 5 years 9,225 10,315 6,249 25,789 Other loans repayable within 1 year after 1 year but not exceeding 2 years after 2 years but not exceeding 5 years after 5 years 3,902 3,513 1,950 9,365 35,154 13,127 22,027 31/12/2009 $ Million 4,421 9,035 9,813 23,269 2,789 3,731 1,550 1,150 9,220 32,489 7,210 25,279 1/1/2009 $ Million 7,613 5,997 16,168 29,778 1,378 2,909 5,034 1,150 10,471 40,249 8,991 31,258

Less: Amounts classified under current liabilities Amounts classified under non-current liabilities

In 2008, the Group entered into a transaction with a financial institution whereby, for a total consideration of $2.1 billion, certain equity securities listed outside Hong Kong held by the Group were transferred to the other party at an inception price together with put options exercisable at 200% of the inception price at the end of a three-year period. It is expected that the price of the transferred equity securities is not likely to rise above the 200% level of the inception price within the three-year period and the put options will be exercised. Hence, the Group remains exposed to the risk of price fluctuation of the transferred equity securities below the 200% level of the inception price. Therefore, the total consideration received has been accounted for as a loan and amortised at an annual rate of 2.7% approximately, and the transferred equity securities have remained as the Groups investments available for sale and included in note (13).

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Annual Report 2010

119

17. Bank and Other Loans


At the year end date: (a)

(continued)

the amortised cost of the total consideration received and the carrying value of the transferred equity securities mentioned above were $2,190 million (2009 $2,127 million) and $1,831 million (2009 $1,508 million) respectively; bank loans amounting to $225 million (2009 $357 million) were secured by certain assets of the Group; other loans included fixed rate bonds and notes issued by wholly owned subsidiaries and guaranteed by the Company as follows: (i) issued by Cheung Kong Bond Finance Limited in Hong Kong: HK$500,000,000 4.4% due April 2015 (issued in 2005) HK$150,000,000 5.1% due April 2016 (issued in 2006) HK$500,000,000 3.18% due May 2011 (issued in 2008) HK$800,000,000 3.48% due April 2013 (issued in 2008) HK$500,000,000 3.9% due May 2013 (issued in 2008) HK$500,000,000 4.88% due August 2018 (issued in 2008) issued by Joynote Ltd and listed on the Singapore Stock Exchange: SGD200,000,000 3.76% due October 2011 (issued in 2006) SGD225,000,000 2.25% due November 2015 (issued in 2010) issued by Cheung Kong Finance (MTN) Limited in Hong Kong: HK$500,000,000 4.3% due January 2020 (issued in 2010) HK$500,000,000 4.35% due January 2020 (issued in 2010) HK$300,000,000 3.9% due April 2020 (issued in 2010)

(b)

(c)

(ii)

(iii)

and, where appropriate, swaps had been arranged to convert the rates and the related terms of the fixed rate bonds and notes to a floating rate basis. The aggregate fair value of the derivative financial instruments used for hedging purposes amounted to a net asset of $295 million (2009 $689 million); (d) bank and other loans, where appropriate after hedging, approximated their fair value and carried interest at effective rates generally based on inter-bank offered rate of the relevant currency plus a margin of approximately 1% per annum.

F-39

120

CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

18. Creditors and Accruals


31/12/2010 $ Million Trade creditors Accruals and other creditors Customers deposits received 557 4,671 13,070 18,298 Group 31/12/2009 $ Million 444 3,582 8,052 12,078 1/1/2009 $ Million 388 3,490 3,062 6,940 Company 31/12/2010 31/12/2009 $ Million $ Million 217 217 164 164

Ageing analysis of the Groups trade creditors at the year end date is as follows: 2010 $ Million Current to one month Two to three months Over three months 500 32 25 557 2009 $ Million 365 40 39 444

19. Loan from Joint Development Partner


Pursuant to the terms of a joint development project, the Group obtained a loan of $4,000 million from the joint development partner in 2006 to finance the payment of land premium of the joint development project. The loan is repayable by two equal instalments, of which the first instalment was repaid on 31st December, 2009 and the second instalment is repayable upon completion of phase 2 (or on 31st December, 2011, whichever is earlier) of the joint development project.

20. Deferred Tax Liabilities


At the year end date: (a) the Groups deferred tax liabilities amounting to $761 million (2009 $664 million) and $1,629 million (2009 $1,347 million) were provided on temporary differences arising from accelerated tax depreciation and changes in fair value of investment properties respectively; and the Groups tax losses and deductible temporary differences amounting to $2,652 million (2009 $3,322 million), of which $53 million (2009 $53 million) expire within 5 years, were not recognised.

(b)

21. Share Capital


31/12/2010 No. of shares Authorised: Shares of $0.5 each Issued and fully paid: Shares of $0.5 each 3,800,000,000 2,316,164,338 31/12/2009 No. of shares 3,800,000,000 2,316,164,338 Company 1/1/2009 31/12/2010 No. of shares $ Million 3,800,000,000 2,316,164,338 1,900 1,158 31/12/2009 $ Million 1,900 1,158 1/1/2009 $ Million 1,900 1,158

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121

22. Reserves
Capital reserve $ Million At 1st January Profit for the year Dividend paid At 31st December 199 199 Company Retained 31/12/2010 profits Total $ Million $ Million 21,766 6,555 (6,254) 22,067 21,965 6,555 (6,254) 22,266 31/12/2009 Total $ Million 21,268 6,372 (5,675) 21,965

The Companys reserves available for distribution to shareholders of the Company, including the proposed final dividend, amounted to $22,067 million (2009 $21,766 million). Proposed final dividend for 2009 was approved by shareholders of the Company on 27th May, 2010 and paid on 1st June, 2010.

23. Operating Lease


Analysis of future minimum lease income receivable by the Group under non-cancellable operating leases, mainly on 2 to 3 year terms, for property rental at the year end date is as follows: Group 2010 2009 $ Million $ Million Future minimum lease income receivable not later than 1 year later than 1 year but not later than 5 years later than 5 years 1,058 789 1,847 979 911 2 1,892

Analysis of future minimum lease charges payable by the Group and the Company under non-cancellable operating leases at the year end date are as follows: Group 2010 2009 $ Million $ Million Future minimum lease charges payable not later than 1 year later than 1 year but not later than 5 years 122 35 157 142 86 228 Company 2010 2009 $ Million $ Million 72 2 74 107 71 178

F-41

122

CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

24. Segment Information


Depreciation for the year analysed by operating activities is as follows: 2010 $ Million Hotels and serviced suites Property and project management 370 15 385 13 398 2009 $ Million 323 15 338 11 349

Others

25. Commitments and Contingent Liabilities


At the year end date: (a) the Group had capital commitments as follows: (i) contracted but not provided for fixed assets $13 million (2009 $27 million) jointly controlled entities $632 million (2009 $1,086 million) (ii) authorised but not contracted for fixed assets $15 million (2009 $16 million) the Groups share of capital commitments of the jointly controlled entities were as follows: (i) contracted but not provided for $386 million (2009 $643 million) (ii) authorised but not contracted for $2,727 million (2009 $3,024 million) the minimum share of revenue/profit guaranteed by the Company to be received by other partners of joint development projects amounted to $636 million (2009 $1,398 million); and the Company provided guarantees for loan financing as follows: (i) bank and other loans utilised by subsidiaries $34,578 million (2009 $31,882 million) (ii) loan from joint development partner to a subsidiary $2,000 million (2009 $2,000 million) (iii) bank loans utilised by jointly controlled entities $49 million (2009 $50 million) (iv) bank loans utilised by investee company $286 million (2009 $283 million) and certain subsidiaries provided guarantees for bank loans utilised by jointly controlled entities amounted to $1,481 million (2009 $1,555 million).

(b)

(c)

(d)

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123

26. Employees Pension Schemes


The principal employees pension schemes operated by the Group, including the occupational retirement schemes and the mandatory provident fund schemes, are defined contribution schemes. For occupational retirement schemes, contributions are made by either the employer only or both the employer and the employees at rates ranging from approximately 5% to 10% of the employees salary. For mandatory provident fund schemes, contributions are made by both the employer and the employees at 5% each of the employees relevant monthly income which is capped at $20,000. During the year, the Groups costs incurred on employees pension schemes were $101 million (2009 $92 million) and forfeited contributions in the amount of $4 million (2009 $3 million) were used to reduce current years contributions.

27. Related Party Transactions


During the year and in the ordinary course of business, the Group undertook various joint venture projects with related parties, including the Chairman, Mr. Li Ka-shing, and Hutchison Whampoa Limited, on normal commercial terms. Advances were made to/received from and guarantees were provided for these joint venture projects on a pro rata basis. Advances made by the Group at the year end date were disclosed as amount due from associates and jointly controlled entities in notes (11) and (12). Guarantees provided by the Group for bank loans utilised by jointly controlled entities at the year end date were disclosed in note (25). Other than the aforementioned, there were no other significant related party transactions requiring disclosure in the financial statements.

28. Financial Risks and Management


Financial assets and financial liabilities of the Group include investments in securities, cash balances maintained for liquidity, loan and other receivables, bank and other loan borrowings, and derivative financial instruments for investment and financial purposes. The Groups treasury policies and how the management manages to mitigate the risks associated with these financial assets and financial liabilities are described below:

(a) Treasury policies


The Group maintains a conservative approach on foreign exchange exposure management. At the year end date, approximately 85.7% of the Groups borrowings were in HK$ with the balance in US$ and SGD, mainly for the purpose of financing projects outside Hong Kong. The Group derives its revenue mainly in HK$, cash balances and marketable securities are maintained mainly in HK$ or US$, and the Group ensures that its exposure to fluctuations in foreign exchange rates is minimised.

F-43

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

28. Financial Risks and Management


(a) Treasury policies (continued)

(continued)

The Groups borrowings are principally on a floating rate basis and where appropriate, swaps are arranged to convert the rates and related terms of the fixed rate bonds and notes issued to a floating rate basis. At times of interest rate or exchange rate uncertainty or volatility and when appropriate, hedging instruments including swaps and forwards are used by the Group in the management of exposure to interest rate and foreign exchange rate fluctuations.

(b) Risk management


Loan receivables normally carry interest at rates with reference to banks lending rates and are secured by collaterals including charge on assets and guarantees. Trade debtors include mainly receivables arising from sale and lease of properties to the public. The Group has legal right to claim repossession of the properties in the event of default by purchasers/tenants. At the year end date, overdue loan receivables and trade debtors amounted to less than 1% of the Groups net assets and regular review and follow-up actions are carried out on the overdue amounts to minimise exposures to credit risk. Cash balances maintained for liquidity are placed with a number of major banks. Investments in securities and transactions involving derivative financial instruments are generally limited to issuers and counter-parties with sound credit. Investments in securities and derivative financial instruments are stated at fair value. Fair values are determined based on quoted market price, otherwise, with reference to professional valuations and/ or estimations that take into account assumptions and estimates on factors affecting the value of these financial instruments and change of such assumptions and estimates to reasonably possible alternatives would not have material effect on the Groups result for the year and financial position at the year end date. An analysis of these financial assets and financial liabilities of the Group based on the degree to which their fair values are observable and grouped into Levels 1 to 3 is as follows: Level 1 Level 2 Level 3 : : : unadjusted quoted prices in active markets for identical assets or liabilities value inputs, other than quoted prices, that are observable either directly or indirectly value inputs that are not based on observable market data

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125

28. Financial Risks and Management


(b) Risk management (continued)

(continued)

Level 1 $ Million At 31st December, 2010 Financial assets Investments available for sale Equity securities Debt securities Investments held for trading Equity securities Derivative financial instruments

Level 2 $ Million

Level 3 $ Million

Total $ Million

8,461 116 258 8,835

14 598 334 946

93 93

8,568 714 258 334 9,874

Financial liabilities Derivative financial instruments At 31st December, 2009 Financial assets Investments available for sale Equity securities Debt securities Investments held for trading Equity securities Debt securities Derivative financial instruments

(647)

(647)

6,278 1,874 8,152

13 629 53 83 778 (460)

106 106

6,397 629 1,874 53 83 9,036 (460)

Financial liabilities Derivative financial instruments

F-45

126

CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

28. Financial Risks and Management


(b) Risk management (continued)

(continued)

The movement of Level 3 fair value measurement of equity securities available for sale during the year was as follows: 2010 $ Million Fair value at 1st January Purchases Impairment recognised in income statement as a charge to investment and other income Gain in fair value recognised in other comprehensive income Fair value at 31st December 106 32 (48) 3 93 2009 $ Million 61 40 5 106

The exposure to price changes is managed by closely monitoring the changes in market conditions that may have an impact on the market prices or factors affecting the value of these financial instruments. If the fair value of the investments in securities and derivative financial instruments was 5% higher/lower at the year end date, the Groups investment revaluation reserve would increase/ decrease by approximately $441 million (2009 $231 million) and the Groups profit for the year would increase/decrease by approximately $49 million (2009 $234 million). The Groups borrowings are subject to interest rate fluctuation. It is estimated that an increase/ decrease of 1% in interest rates would increase/decrease the Groups finance costs for the year by approximately $316 million (2009 $304 million), assuming the change in interest rates had been applied to the Groups bank and other loans at the year end date which were kept constant throughout the year, and the amount of finance costs capitalised would increase/decrease by approximately $119 million (2009 $161 million) based on the proportion of finance costs capitalised during the year.

(c) Liquidity management


The Group monitors its liquidity requirements on a short to medium term basis and arranges refinancing of the Groups borrowings when appropriate. With cash and marketable securities in hand as well as available banking facilities, the Groups liquidity position remains strong and the Group has sufficient financial resources to satisfy its commitments and working capital requirements. The contractual undiscounted cash flows (including interest payments, after hedging where appropriate, computed at rates current at the year end date) of the Groups borrowings by contractual maturities at the year end date are as follows: 2010 $ Million Within 1 year After 1 year but not exceeding 2 years After 2 years but not exceeding 5 years After 5 years 15,455 10,503 10,039 2,016 38,013 2009 $ Million 9,402 13,012 11,501 1,164 35,079

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127

29. Capital Management


The Group manages its capital to ensure that it will be able to continue as a going concern while maximising returns to the shareholders of the Company through the optimisation of debt and equity balance. The capital structure of the Group consists of debt, which includes the borrowings disclosed in notes (17) and (19), bank balances and deposits and shareholders funds, comprising share capital, share premium and reserves as disclosed in the statement of financial position. The Group reviews its capital structure on a regular basis and maintains a low gearing ratio determined as the proportion of the Groups net borrowings (after deducting bank balances and deposits) to shareholders funds. The gearing ratio at the year end date is as follows: 2010 $ Million Bank and other loans Loan from joint development partner Total borrowings Less: Bank balances and deposits Net borrowings Shareholders funds Gearing ratio 35,154 2,000 37,154 (25,147) 12,007 265,696 4.5% 2009 $ Million 32,489 2,000 34,489 (11,423) 23,066 243,092 9.5%

30. Approval of Financial Statements


The financial statements reported in Hong Kong dollars and set out on pages 96 to 136 were approved by the board of directors on 29th March, 2011.

F-47

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CHEUNG KONG (HOLDINGS) LIMITED

Principal Subsidiaries
Appendix I
The Directors are of the opinion that a complete list of the particulars of all the subsidiaries will be of excessive length and therefore the following list contains only the particulars of the subsidiaries which materially affect the results or assets of the Group. All the companies listed below were incorporated in Hong Kong except otherwise stated. Issued Ordinary Effective percentage Share Capital held by the Company Nominal Value Directly Indirectly US$ 10,000 55.06

Name AMTD Group Company Limited (British Virgin Islands) Bermington Investment Limited Biro Investment Limited Bradford Investments Limited Chaview Holdings Limited (British Virgin Islands) Cheer Good Limited Cheung Kong Bond Finance Limited (Cayman Islands) Cheung Kong Finance Company Limited Cheung Kong Finance (MTN) Limited (Cayman Islands) Cheung Kong Holdings (China) Limited Cheung Kong Investment Company Limited Cheung Kong Property Development Limited Citybase Property Management Limited East City Investments Limited East Leader Investments Limited Fantastic State Limited Flying Snow Limited Focus Eagle Investments Limited (British Virgin Islands) Garbo Field Limited Glass Bead Limited (British Virgin Islands) Global Coin Limited Goodwell Property Management Limited Grandwood Investments Limited Harbour Grand Hong Kong Limited Harbour Plaza 8 Degrees Limited iMarkets Limited Joynote Ltd (Singapore) Kingsmark Investments Limited Luxury Green Development Pte. Ltd. (Singapore)

Principal Activities Financial planning, mortgage servicing & corporate insurance Hotels & serviced suites Property development Property development Investment holding Property development Finance Finance Finance Investment holding in the Mainland projects Investment holding Project management Property management Property development Property development Property development Property investment Investment holding Property development Property investment Property investment Property management Property development Hotels & serviced suites Hotels & serviced suites Provider of electronic trading platform Finance Property development & investment Property development

HK$ HK$ HK$ US$ HK$ US$

2 10,000 1 1 1 1 100

100 100 80 100 100 100

HK$ 2,500,000 US$ 1,000 HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ US$ 2 20 2 100,000 1 2 2 2 1

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 54.83 100 100 100

HK$ 2 US$ 1 HK$ 2 HK$ 100,000 HK$ 1 HK$ 2 HK$ 2 HK$ 30,000,000 SGD HK$ 2 1

SGD 1,000,000

F-48

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129

Name Megawin International Limited (British Virgin Islands) Mutual Luck Investment Limited New Accord Limited New City Investments Limited New Harbour Investments Limited New Profit Resources Limited New Vision Development Limited Oxford Investments Limited Pako Wise Limited Pearl Wisdom Limited Perfect Idea Limited Pofield Investments Limited (British Virgin Islands) Queensway Investments Limited Rainbow Elite Investments Limited Randash Investment Limited Regent Land Investments Limited Rich Asia Investments Limited Romefield Limited (British Virgin Islands) Ruby Star Enterprises Limited Ruperta Limited (British Virgin Islands) Sai Ling Realty Limited Sino China Enterprises Limited The Center (Holdings) Limited (British Virgin Islands) Tin Shui Wai Development Limited Tony Investments Limited Total Win Group Limited (British Virgin Islands) Towerich Limited Union Art Investment Limited Volly Best Investment Limited Wealth Pine Investment Limited Wide Global Investment Limited Winchesto Finance Company Limited Yick Ho Limited

Issued Ordinary Effective percentage Share Capital held by the Company Nominal Value Directly Indirectly US$ 1 HK$ 30,000 HK$ 1 HK$ 1 HK$ 1 HK$ 2 HK$ 1 HK$ 2 HK$ 2 HK$ 2 HK$ 20 US$ 1 HK$ 1 HK$ 1 HK$ 110 HK$ 1 HK$ 1,000,000 US$ 1 HK$ 1 US$ 1 HK$ 10,000 HK$ 2 US$ 1 HK$ 1,000 HK$ 1 US$ 1 HK$ 2 HK$ 1 HK$ 1 HK$ 1 HK$ 2 HK$ 15,000,000 HK$ 6,000,000 100 60 100 100 100 98.47 100 100 100 100 100 100 85 100 60.9 100 85 100 100 100 100 100 100 98.47 100 100 51 100 90 85 100 100 100

Principal Activities Property development Property development Property development Property development Property development Property development Property development Property development Property investment Hotels & serviced suites Property development Property investment Property development Property development Hotels & serviced suites Property development Property development Investment holding Property development Investment holding Property development Hotels & serviced suites Property investment Property investment Property development Investment holding Hotels & serviced suites Property development Property development Property development Property development Finance Investment in hotel projects

The principal area of operation of the above companies were in Hong Kong except the following: Name Cheung Kong Holdings (China) Limited Joynote Ltd Luxury Green Development Pte. Ltd. Megawin International Limited Yick Ho Limited Area of Operation The Mainland Singapore Singapore The Mainland The Mainland

F-49

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CHEUNG KONG (HOLDINGS) LIMITED

Principal Associates
Appendix II
The Directors are of the opinion that a complete list of the particulars of all the associates will be of excessive length and therefore the following list contains only the particulars of the associates which materially affect the results or assets of the Group. All the companies listed below were incorporated in Hong Kong except otherwise stated. Effective percentage of Issued Ordinary Share Capital held by the Company Directly Indirectly 50 45.3

Name CEF Holdings Limited CK Life Sciences Intl., (Holdings) Inc. (Cayman Islands)

Principal Activities Investment holding Research & development, manufacturing, commercialisation, marketing & selling of environmental & human health products & investments Hotel management Investment holding & power generation Ports & related services, property & hotels, retail, energy, infrastructure, telecommunications, finance, investments & others Radio broadcasting

Harbour Plaza Hotel Management (International) Limited (British Virgin Islands) Hong Kong Concord Holdings Limited Hutchison Whampoa Limited

50 40 49.9

Metro Broadcast Corporation Limited

50

The principal area of operation of the above companies were in Hong Kong except the following: Name Hong Kong Concord Holdings Limited Area of Operation The Mainland

F-50

Annual Report 2010

131

Principal Jointly Controlled Entities


Appendix III
The Directors are of the opinion that a complete list of the particulars of all the jointly controlled entities will be of excessive length and therefore the following list contains only the particulars of the jointly controlled entities which materially affect the results or assets of the Group. All the jointly controlled entities below were incorporated in Hong Kong except otherwise stated. Effective percentage of Ownership Interest held by the Company Directly Indirectly 50 50 50 50 50 50 50 47.5 47.5 50 50 50 49 50 50 50 50 50 50 50 25 33.4 50 42.5 25 50 50 50 50

Name Afford Limited Bayswater Developments Limited (British Virgin Islands) Beright Investments Limited (British Virgin Islands) Billion Rise Limited (British Virgin Islands) Chesgold Limited Cheung Wo Enterprises Limited (British Virgin Islands) Choicewide Group Limited (British Virgin Islands) Circadian (CH) Limited (The United Kingdom) Circadian Limited (The United Kingdom) Clayton Power Enterprises Limited Cosmos Wide International Limited Dragon Beauty International Limited Elegant Wealth Investment Limited Extreme Selection Investments Limited (British Virgin Islands) Forton Investment Limited Gislingham Limited (British Virgin Islands) Glory Sense Limited Golden Castle Management Limited (British Virgin Islands) Harbour Plaza Metropolis Limited (British Virgin Islands) Hildon Development Limited Hong Kong Shanghai Development Co Ltd (Samoa) Hui Xian Investment Limited Hutchison Whampoa Properties (Chengdu) Limited (The Mainland) Konorus Investment Limited Mapleleaf Developments Limited (British Virgin Islands) Mighty General Limited Montoya (HK) Limited New China Sheen Limited New China Target Limited

Principal Activities Property development Property development & investment Property development Property development Property investment Property investment Investment in property project Property development Property development Property development Property development Property development Property development Property development Property Property Property Property development development development development

Hotels & serviced suites Property development Property development & investment Investment in property project Property development Property Property Property Property Property Property investment development development development development development

F-51

132

CHEUNG KONG (HOLDINGS) LIMITED

Principal Jointly Controlled Entities (continued)

Name Shanklin Developments Limited (British Virgin Islands) Sky Island Limited (British Virgin Islands) Smart Rainbow Limited (British Virgin Islands) Swayfield Limited (British Virgin Islands) True Ample Developments Limited (British Virgin Islands) Willpower Developments Limited (British Virgin Islands) Zealand Limited (British Virgin Islands)

Effective percentage of Ownership Interest held by the Company Directly Indirectly 50 50 50 30 50 50 50

Principal Activities Property development Property development Hotels & serviced suites Property investment Property development Property development Property development

The principal area of operation of the above jointly controlled entities were in Hong Kong except the following: Name Afford Limited Bayswater Developments Limited Beright Investments Limited Billion Rise Limited Chesgold Limited Cheung Wo Enterprises Limited Choicewide Group Limited Circadian (CH) Limited Circadian Limited Elegant Wealth Investment Limited Extreme Selection Investments Limited Forton Investment Limited Gislingham Limited Glory Sense Limited Golden Castle Management Limited Hildon Development Limited Hong Kong Shanghai Development Co Ltd Hui Xian Investment Limited Hutchison Whampoa Properties (Chengdu) Limited Mapleleaf Developments Limited Mighty General Limited Montoya (HK) Limited New China Sheen Limited New China Target Limited Shanklin Developments Limited Sky Island Limited True Ample Developments Limited Willpower Developments Limited Zealand Limited Area of Operation The Mainland The Mainland The Mainland Singapore The Mainland The Mainland Singapore The United Kingdom The United Kingdom The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland

F-52

Annual Report 2010

133

Extracts of Financial Statements of Hutchison Whampoa Limited


Appendix IV
Extracts of the 2010 published financial statements of Hutchison Whampoa Limited, a listed associate, are set out below.

Consolidated Income Statement


For the year ended 31st December, 2010 As restated 2009 $ Million 208,808 (74,275) (28,309) (16,544) (16,258) (60,769) 1,117 12,472 5,390 3,677 35,309 (9,613) 25,696 (4,588) 92 21,200

2010 $ Million Company and subsidiary companies: Revenue Cost of inventories sold Staff costs Telecommunications customer acquisition costs Depreciation and amortisation Other operating expenses Change in fair value of investment properties Profit on disposal of investments Share of profits less losses after tax of: Associated companies Jointly controlled entities Interest and other finance costs Profit before tax Current tax charge Deferred tax credit (charge) Profit after tax Allocated as: Profit attributable to non-controlling interests and holders of perpetual capital securities Profit attributable to ordinary shareholders of the Company 209,180 (78,321) (28,768) (16,013) (14,932) (50,456) 855 6,469 9,382 37,396 (8,476) 28,920 (2,493) (847) 25,580

(5,542) 20,038

(7,569) 13,631

F-53

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CHEUNG KONG (HOLDINGS) LIMITED

Extracts of Financial Statements of Hutchison Whampoa Limited (continued)

Consolidated Statement of Financial Position


At 31st December, 2010 As restated 31/12/2009 $ Million As restated 1/1/2009 $ Million

31/12/2010 $ Million ASSETS Non-current assets Fixed assets Investment properties Leasehold land Telecommunications licences Goodwill Brand names and other rights Associated companies Interests in joint ventures Deferred tax assets Other non-current assets Liquid funds and other listed investments Current assets Cash and cash equivalents Trade and other receivables Inventories Current liabilities Trade and other payables Bank and other debts Current tax liabilities

167,851 43,240 27,561 68,333 27,332 12,865 105,528 54,032 14,105 9,131 24,585 554,563 91,652 57,229 17,733 166,614 80,889 23,122 2,900 106,911

176,192 42,323 29,191 70,750 28,858 7,351 83,716 51,568 14,657 5,286 23,213 533,105 92,521 48,146 16,593 157,260 73,029 17,589 3,249 93,867 63,393 596,498 242,851 13,424 13,355 2,436 4,520 276,586 319,912 1,066 281,433 282,499 37,413 319,912

178,143 41,282 29,848 72,175 30,436 10,486 76,045 45,865 13,248 8,904 30,735 537,167 57,286 54,767 18,528 130,581 82,599 23,945 1,274 107,818 22,763 559,930 234,141 13,348 13,616 2,541 4,586 268,232 291,698 1,066 258,820 259,886 31,812 291,698

Net current assets Total assets less current liabilities Non-current liabilities Bank and other debts Interest bearing loans from non-controlling shareholders Deferred tax liabilities Pension obligations Other non-current liabilities

59,703 614,266 228,134 13,493 14,290 1,702 3,945 261,564

Net assets CAPITAL AND RESERVES Share capital Perpetual capital securities Reserves Total ordinary shareholders funds and perpetual capital securities Non-controlling interests Total equity

352,702 1,066 15,600 292,831 309,497 43,205 352,702

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Annual Report 2010

135

Extracts of Financial Statements of CK Life Sciences Intl., (Holdings) Inc.


Appendix V
Extracts of the 2010 published financial statements of CK Life Sciences Intl., (Holdings) Inc., a listed associate, are set out below.

Consolidated Income Statement


For the year ended 31st December, 2010 2010 $000 2009 $000 (Restated) 2,678,889 (1,839,133) 839,756 292,345 (310,077) (35,037) (47,808) (494,466) (18,110) (11,272) 215,331 (29,271) 186,060

Turnover Cost of sales

2,694,204 (1,872,152) 822,052 263,226 (337,265) (21,876) (44,861) (439,597) (17,421) 8 224,266 (25,597) 198,669

Other income, gains and losses Staff costs Depreciation Amortisation of intangible assets Other expenses Finance costs Share of results of associates Profit before taxation Taxation Profit for the year Attributable to: Shareholders of the Company Non-controlling interests

208,551 (9,882) 198,669

187,098 (1,038) 186,060

F-55

136

CHEUNG KONG (HOLDINGS) LIMITED

Extracts of Financial Statements of CK Life Sciences Intl., (Holdings) Inc. (continued)

Consolidated Statement of Financial Position


As at 31st December, 2010 31/12/2010 $000 Non-current assets Property, plant and equipment Intangible assets Interests in associates Convertible debentures issued by an associate Available-for-sale investments Investments at fair value through profit or loss Deferred taxation Long-term receivables Time deposits Current assets Debt investment Investments at fair value through profit or loss Derivative financial instruments Tax recoverable Inventories Receivables and prepayments Deposits with financial institutions Time deposits Bank balances and deposits Current liabilities Payables and accruals Derivative financial instruments Bank overdrafts Bank loans Finance lease obligations Taxation 31/12/2009 $000 (Restated) 470,684 3,972,183 17,842 150,101 192,839 21,056 38,580 4,863,285 163,171 2,633 762 425,921 805,906 636,895 2,035,288 (621,545) (23,087) (385) (580) (48,695) (694,292) 1,340,996 6,204,281 (1,061,300) (807) (34,333) (31,273) (1,127,713) 5,076,568 961,107 3,944,251 4,905,358 171,210 5,076,568 1/1/2009 $000 (Restated) 444,877 3,722,997 44,472 58,885 209,343 58,430 19,076 4,558,080 59,474 139,351 15,780 3,629 463,711 615,195 44,952 303,554 1,645,646 (588,995) (99,398) (7,445) (494) (19,945) (716,277) 929,369 5,487,449 (1,045,675) (1,108) (25,907) (29,887) (1,102,577) 4,384,872 961,107 3,309,661 4,270,768 114,104 4,384,872

523,312 4,019,236 18,489 310,041 206,014 23,196 19,984 93,480 5,213,752 163,000 508,603 872,654 55,309 575,209 2,174,775 (543,123) (24,692) (1,067,956) (1,003) (65,293) (1,702,067)

Net current assets Total assets less current liabilities Non-current liabilities Bank loans Finance lease obligations Loans from non-controlling shareholders Deferred taxation

472,708 5,686,460 (399) (36,531) (27,077) (64,007)

Total net assets Capital and reserves Share capital Share premium and reserves Equity attributable to shareholders of the Company Non-controlling interests Total equity

5,622,453 961,107 4,550,419 5,511,526 110,927 5,622,453

F-56

Audited consolidated financial statements of the Guarantor for the year ended 31 December 2009

F-57

Annual Report 2009

133

Independent Auditors Report

TO THE MEMBERS OF CHEUNG KONG (HOLDINGS) LIMITED (incorporated in Hong Kong with limited liability) We have audited the consolidated financial statements of Cheung Kong (Holdings) Limited (the Company) and its subsidiaries (collectively referred to as the Group) set out on pages 92 to 132, which comprise the consolidated and Company statements of financial position as at 31st December, 2009, and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors responsibility for the consolidated financial statements


The directors of the Company are responsible for the preparation and the true and fair presentation of these consolidated financial statements in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the Hong Kong Companies Ordinance. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and the true and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit and to report our opinion solely to you, as a body, in accordance with section 141 of the Hong Kong Companies Ordinance and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and true and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the consolidated financial statements give a true and fair view of the state of affairs of the Company and of the Group as at 31st December, 2009 and of the Groups profit and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in accordance with the Hong Kong Companies Ordinance.

DELOITTE TOUCHE TOHMATSU Certified Public Accountants Hong Kong 30th March, 2010

F-58

92

CHEUNG KONG (HOLDINGS) LIMITED

Consolidated Income Statement


For the year ended 31st December, 2009

2009 Note Group turnover Share of property sales of jointly controlled entities Turnover Group turnover Investment and other income Operating costs Property and related costs Salaries and related expenses Interest and other finance costs Other expenses (3) $ Million 17,702 6,591 24,293 17,702 2,614 (10,314) (1,032) (233) (672) (12,251) 2,734 3,857 14,656 7,296 (4) (5) 21,952 (1,644) 20,308 (422) (6) (7) 19,886 $8.59

2008 (Restated) $ Million 12,856 3,580 16,436 12,856 466 (6,035) (944) (454) (498) (7,931) 2,355 134 7,880 6,209 14,089 (859) 13,230 (201) 13,029 $5.63

Share of net profit of jointly controlled entities Increase in fair value of investment properties Operating profit Share of net profit of associates Profit before taxation Taxation Profit for the year Profit attributable to minority interests Profit attributable to shareholders Earnings per share

F-59

Annual Report 2009

93

Consolidated Statement of Comprehensive Income


For the year ended 31st December, 2009

2009 $ Million Profit for the year Other comprehensive income Exchange gain on translation of financial statements of foreign operations Investments available for sale Gain/(loss) in fair value Gain in fair value transferred to income statement upon disposal Impairment transferred to income statement Share of other comprehensive income of jointly controlled entities and unlisted associates Total comprehensive income for the year Total comprehensive income attributable to Shareholders Minority interests 20,308 1 3,250 (121) 665 461 24,564

2008 $ Million 13,230 159 (6,582) (1,174) 1,139 581 7,353

24,141 423 24,564

7,147 206 7,353

F-60

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CHEUNG KONG (HOLDINGS) LIMITED

Consolidated Statement of Financial Position


As at 31st December, 2009

31/12/2009 Note Non-current assets Fixed assets Investment properties Associates Jointly controlled entities Investments available for sale Long term loan receivables (8) (9) (11) (12) (13) $ Million 10,696 19,433 148,049 32,591 7,026 444 218,239 Current assets Stock of properties Debtors, deposits and prepayments Investments held for trading Derivative financial instruments Bank balances and deposits Current liabilities Bank and other loans Creditors and accruals Loan from joint development partner Derivative financial instruments Provision for taxation Net current assets Total assets less current liabilities Non-current liabilities Bank and other loans Loan from joint development partner Deferred tax liabilities (17) (19) (20) (14) (15) (16) 62,999 2,799 1,927 83 11,423 79,231 (17) (18) (19) 7,210 12,078 2,000 460 1,028 56,455 274,694 25,279 2,011 27,290 Net assets Representing: Share capital Share premium Reserves Shareholders funds Minority interests Total equity 247,404

31/12/2008 (Restated) $ Million 11,624 15,670 144,977 29,391 4,678 1,093 207,433 64,273 3,904 858 22 7,173 76,230 8,991 6,940 2,000 872 768 56,659 264,092 31,258 2,000 1,359 34,617 229,475

1/1/2008 (Restated) $ Million 10,560 15,497 142,567 23,614 10,060 956 203,254 59,959 4,066 1,439 294 5,609 71,367 8,872 8,430 437 860 52,768 256,022 23,655 4,000 1,300 28,955 227,067

(21)

1,158 9,331 233,110 243,599 3,805 247,404

1,158 9,331 214,644 225,133 4,342 229,475

1,158 9,331 213,172 223,661 3,406 227,067

Li Ka-shing Director

Ip Tak Chuen, Edmond Director

F-61

Annual Report 2009

95

Statement of Financial Position


As at 31st December, 2009

Note Non-current assets Fixed assets Subsidiaries Associates Jointly controlled entities Long term loan receivables (8) (10) (11) (12)

31/12/2009 $ Million 7 31,554 50 721 2 32,334

31/12/2008 $ Million 11 30,549 50 462 2 31,074 3 99 722 824 141 683 31,757

Current assets Stock of properties Debtors, deposits and prepayments Bank balances and deposits

(14) (15)

3 269 16 288

Current liabilities Creditors and accruals Provision for taxation Net current assets Net assets Representing: Share capital Share premium Reserves Total equity

(18)

164 4 120 32,454

(21) (22)

1,158 9,331 21,965 32,454

1,158 9,331 21,268 31,757

Li Ka-shing Director

Ip Tak Chuen, Edmond Director

F-62

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CHEUNG KONG (HOLDINGS) LIMITED

Consolidated Statement of Changes in Equity


For the year ended 31st December, 2009

Shareholders Funds Share capital, Investment premium and revaluation reserve (1) reserve $ Million $ Million Balance at 1st January, 2008, as previously reported Prior year adjustments (note 2) Balance at 1st January, 2008, as restated Profit for the year Other comprehensive income Exchange gain on translation of financial statements of foreign operations Loss in fair value of investments available for sale Gain in fair value of investments available for sale transferred to income statement upon disposal Impairment of investments available for sale transferred to income statement Share of other comprehensive income of jointly controlled entities and unlisted associates Total comprehensive income for the year Change in minority interests Dividend paid to minorities Dividend paid to shareholders 2007 final dividend $1.95 per share 2008 interim dividend $0.50 per share Balance at 31st December, 2008 Balance at 1st January, 2009, as previously reported Prior year adjustments (note 2) Balance at 1st January, 2009, as restated Profit for the year Other comprehensive income Exchange gain on translation of financial statements of foreign operations Gain in fair value of investments available for sale Gain in fair value of investments available for sale transferred to income statement upon disposal Impairment of investments available for sale transferred to income statement Share of other comprehensive income of jointly controlled entities and unlisted associates Total comprehensive income for the year Change in minority interests Dividend paid to minorities Dividend paid to shareholders 2008 final dividend $1.95 per share 2009 interim dividend $0.50 per share Balance at 31st December, 2009 10,834 10,834 4,427 4,427 Exchange reserve $ Million 2,251 2,251 Retained profits $ Million 209,691 (3,542) 206,149 13,029 Minority interests $ Million 3,406 3,406 201 (Restated) Total Equity $ Million 230,609 (3,542) 227,067 13,230

Total $ Million 227,203 (3,542) 223,661 13,029

10,834 10,834 10,834

(6,579) (1,174) 1,139 (41) (6,655) (2,228) (2,228) (2,228)

151 622 773 3,024 3,024 3,024

13,029 (4,517) (1,158) 213,503 219,534 (6,031) 213,503 19,886

151 (6,579) (1,174) 1,139 581 7,147 (4,517) (1,158) 225,133 231,164 (6,031) 225,133 19,886

8 (3) 206 907 (177) 4,342 4,342 4,342 422

159 (6,582) (1,174) 1,139 581 7,353 907 (177) (4,517) (1,158) 229,475 235,506 (6,031) 229,475 20,308

10,834

3,249 (121) 665 116 3,909 1,681

1 345 346 3,370

19,886 (4,517) (1,158) 227,714

1 3,249 (121) 665 461 24,141 (4,517) (1,158) 243,599

1 423 (711) (249) 3,805

1 3,250 (121) 665 461 24,564 (711) (249) (4,517) (1,158) 247,404

(1) Share capital, premium and reserve comprise share capital of $1,158 million, share premium of $9,331 million and capital reserve of $345 million.

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97

Consolidated Statement of Cash Flows


For the year ended 31st December, 2009

Note Operating activities Cash generated from operations Investment in/advance to jointly controlled entities Dividend/repayment from jointly controlled entities Dividend from associates Dividend from investments in securities Interest received Dividend paid to shareholders Dividend paid to minorities Profits tax paid Net cash from/(used in) operating activities Investing activities Investment in/advance to associates Repayment from associates Disposal of associates Investment in/advance to jointly controlled entities Purchase of investments available for sale Disposal/redemption of investments available for sale Addition of investment properties Disposal of investment properties Addition of fixed assets Net cash from/(used in) investing activities Financing activities Borrowing of bank and other loans Repayment of bank and other loans Increase/(decrease) in funding from minorities Interest and other finance costs paid Net cash from/(used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 1st January Cash and cash equivalents at 31st December (b) (a)

2009 $ Million 16,010 (1,221) 1,413 3,717 249 228 (5,675) (249) (713) 13,759 (12) 14 489 (535) (595) 1,545 (242) 1,722 (711) 1,675 6,463 (16,337) (711) (599) (11,184) 4,250 7,173 11,423

2008 $ Million 661 (2,887) 519 3,725 751 406 (5,675) (177) (914) (3,591) (54) 140 (586) (4,373) 3,379 (25) (898) (2,417) 15,911 (8,204) 907 (1,042) 7,572 1,564 5,609 7,173

F-64

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CHEUNG KONG (HOLDINGS) LIMITED

Consolidated Statement of Cash Flows (continued)

Notes: (a) Cash generated from operations 2009 $ Million Profit before taxation Interest income Interest and other finance costs Dividend income from investments in securities Share of net profit of jointly controlled entities Share of net profit of associates Profit on disposal of associates Increase in fair value of investment properties (Increase)/decrease in long term loan receivables (Gain)/loss on investments available for sale Gain on disposal of investment properties Depreciation Exchange difference and other items Decrease in investments held for trading (Increase)/decrease in stock of properties Increase in customers deposits received Decrease in debtors, deposits and prepayments (Increase)/decrease in derivative financial instruments Increase/(decrease) in creditors and accruals Changes in working capital 21,952 (216) 233 (295) (2,734) (7,296) (952) (3,857) 660 544 (350) 349 122 12 1,541 4,990 1,069 (473) 711 7,850 16,010 (b) Cash and cash equivalents 2009 $ Million Bank balances and deposits 11,423 2008 $ Million 7,173 2008 (Restated) $ Million 14,089 (400) 454 (762) (2,355) (6,209) (134) (254) (35) 284 (53) 581 (3,601) 1,521 82 707 (3,254) (3,964) 661

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Notes to Financial Statements


1. General Information
The Company is a limited liability company incorporated in Hong Kong and its shares are listed on The Stock Exchange of Hong Kong Limited. The address of the registered office and other corporate information are set out on page 140 of the annual report.

2. Principal Accounting Policies


(a) Basis of preparation
The financial statements have been prepared in accordance with generally accepted accounting principles in Hong Kong and comply with the Hong Kong Financial Reporting Standards (HKFRSs). The financial statements are prepared under the historical cost convention except that investments in securities, investment properties and derivative financial instruments, as set out in notes 2(f), 2(h) and 2(l) respectively, are stated at fair values. The Hong Kong Institute of Certified Public Accountants has issued a number of new and revised HKFRSs. The adoption of the HKFRSs which are effective for accounting periods beginning on 1st January, 2009 has resulted in the following change in the Groups accounting policies. In prior years, investment property under development was classified as land and buildings and carried at cost less provision for impairment. Following the adoption of amendments to HKAS 16 Property, Plant and Equipment and HKAS 40 Investment Property, investment property under development is classified as investment property and stated at fair value when its fair value becomes reliably determinable or upon completion of its construction, whichever is the earlier. The change in accounting policy has been applied prospectively from 1st January, 2009 and has no material impact on the Groups results and financial position. The adoption of the HKFRSs has also resulted in changes in the presentation of the financial statements and certain comparative figures have been restated to conform with the current years presentation. During the year, Hutchison Whampoa Limited, a listed associate, had changes in accounting policies which have material effects on its profit attributable to shareholders and opening balance of shareholders funds. The Groups share of the effects of these changes has the following impact on the financial statements: Year ended 31st December 2009 $ Million Increase/(decrease) in share of net profit of associates Increase/(decrease) in profit attributable to shareholders Increase/(decrease) in earnings per share 479 479 $0.21 2008 $ Million (2,489) (2,489) $(1.07)

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

2. Principal Accounting Policies

(continued)

(a) Basis of preparation (continued)


31/12/2009 $ Million Decrease in associates Decrease in net assets Decrease in retained profits at 1st January Increase/(decrease) in profit for the year Decrease in total equity (5,552) (5,552) (6,031) 479 (5,552) 31/12/2008 $ Million (6,031) (6,031) (3,542) (2,489) (6,031) 1/1/2008 $ Million (3,542) (3,542) (3,542) (3,542)

For the following HKFRSs which are not yet effective, the Group is in the process of assessing their impact on the Groups results and financial position. Effective for the year ending 31st December, 2010: HKAS 27 (Revised) HKAS 39 (Amendment) HKFRSs (Amendments) HKFRS 2 (Amendments) HKFRS 3 (Revised) HK(IFRIC)-Int 17 HK-Int 4 (Amendment) Consolidated and Separate Financial Statements Eligible Hedged Items Improvements to HKFRSs Group Cash-settled Share-based Payment Transactions Business Combinations Distributions of Non-cash Assets to Owners Leases Determination of the Length of Lease Term in respect of Hong Kong Land Leases

Effective for the year ending 31st December, 2011: HKAS 24 (Revised) HKAS 32 (Amendment) HK(IFRIC)-Int 14 (Amendment) HK(IFRIC)-Int 19 Related Party Disclosures Classification of Rights Issues Prepayments of a Minimum Funding Requirement Extinguishing Financial Liabilities with Equity Instruments

Effective for the year ending 31st December, 2013: HKFRS 9 Financial Instruments

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2. Principal Accounting Policies


(b) Consolidation

(continued)

The consolidated financial statements of the Group include the financial statements of the Company and of all its direct and indirect subsidiaries made up to 31st December, and also incorporate the Groups interests in jointly controlled entities and associates on the basis set out in note (2)(d) and note (2)(e) respectively. Results of subsidiaries, jointly controlled entities and associates acquired or disposed of during the year are included as from their effective dates of acquisition to the end of the year or up to the dates of disposal as the case may be. Goodwill on acquisition of subsidiaries and associates is carried at cost and reviewed for impairment annually. Impairment, if any, is charged to income statement.

(c) Subsidiaries
Investments in subsidiaries are carried at cost less provision for impairment where appropriate.

(d) Jointly controlled entities


A jointly controlled entity is an entity in which the Group has a long term equity interest and of which its financial and operating policies are under contractual arrangements jointly controlled by the Group and other parties. Investments in jointly controlled entities are carried in the consolidated financial statements at cost plus the Groups share of their post-acquisition results less dividends received and provision for impairment. Results of jointly controlled entities are incorporated in the consolidated financial statements to the extent of the Groups share of their comprehensive income calculated from their financial statements made up to 31st December.

(e) Associates
An associate is an entity, other than a subsidiary or a jointly controlled entity, in which the Group has a long term equity interest and has significant influence over its management. Investments in associates are carried in the consolidated financial statements at cost plus the Groups share of their post-acquisition results less dividends received and provision for impairment. Results of associates are incorporated in the consolidated financial statements to the extent of the Groups share of their comprehensive income calculated from their financial statements made up to 31st December and losses of associates in excess of the Groups interests in the associates are not recognised unless the Group has incurred legal or constructive obligations.

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Notes to Financial Statements (continued)

2. Principal Accounting Policies


(f) Investments in securities

(continued)

Investments which are not subsidiaries, jointly controlled entities or associates are classified as either investments held for trading or investments available for sale, and are stated at fair value. Purchases and sales of investments in securities are accounted for on a trade date basis. For investments held for trading, changes in fair value are included in income statement; and for investments available for sale, changes in fair value are recognised in other comprehensive income and transferred to income statement upon disposal. For equity securities available for sale where there are significant or prolonged declines in fair value below costs and for debt securities available for sale where there are observable evidences that the debt securities cannot be recovered in full, impairment is charged to income statement and is not reversible unless increase in fair value of the debt securities in a subsequent period can be objectively related to events occurring after the impairment is recognised.

(g) Fixed assets


Fixed assets, including hotel and serviced suite properties held for operation, are stated at cost less depreciation and provision for impairment. Leasehold land is amortised over the remaining term of the lease on a straight-line basis. Buildings are depreciated at annual rates of 2% to 4% on the costs of the respective buildings. Other fixed assets are depreciated on a straight-line basis at annual rates of 5% to 331/3% based on their respective estimated useful lives.

(h) Investment properties


Investment properties, which are held for rental, are stated at fair value. Investment properties under development are stated at fair value when their fair values become reliably determinable or upon completion of their construction, whichever is the earlier, otherwise at cost less provision for impairment. Changes in fair value are included in income statement.

(i)

Loan receivables
Loan receivables are non-derivative financial assets with fixed or determinable payments. Loan receivables are recognised initially at fair value and subsequently carried at amortised cost using the effective interest method less provision for impairment.

(j)

Stock of properties
Stock of properties are stated at the lower of cost and net realisable value. Net realisable value is determined by reference to sale proceeds received after the year end date less selling expenses, or by management estimates based on prevailing market condition. Costs of properties include acquisition costs, development expenditure, interest and other direct costs attributable to such properties. The carrying values of properties held by subsidiaries are adjusted in the consolidated financial statements to reflect the Groups actual acquisition costs where appropriate.

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2. Principal Accounting Policies


(k) Debtors

(continued)

Debtors are recognised initially at fair value and subsequently carried at amortised cost less provision for impairment.

(l)

Derivative financial instruments


Derivative financial instruments, which are used for investment and financial purposes, are stated at fair value. Changes in fair value of derivative financial instruments that are designated and qualify as fair value hedges are included in income statement, together with any changes in fair value of the hedged assets or liabilities that are attributable to the hedged risk. Changes in fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in income statement.

(m) Bank and other loans


Bank and other loans are recognised initially at fair value and subsequently carried at amortised cost.

(n) Creditors
Creditors are recognised initially at fair value and subsequently carried at amortised cost.

(o) Revenue recognition


When properties under development are sold, income is recognised when the property development is completed with the relevant occupation permit issued by the Authorities and the significant risks and rewards of the properties are passed to the purchasers. Payments received from purchasers prior to this stage are recorded as customers deposits received. Rental income is recognised on a straight-line basis over the term of the lease. Income from property and project management is recognised when services are rendered. Revenue from hotel and serviced suite operation is recognised upon provision of services. Interest income is recognised on a time proportion basis using the effective interest method; and dividend income is recognised when the right to receive payment is certain.

(p) Foreign exchange


Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the year end date. Transactions during the year are converted at the rates of exchange ruling at the transaction dates. Exchange differences are included in income statement. For translation of the financial statements of subsidiaries, jointly controlled entities and associates denominated in foreign currencies into presentation currency of the Company, assets and liabilities are translated at exchange rates prevailing at the year end date and results are translated at the average rates of exchange during the year, and if the average rates are not reasonable approximations of the exchange rates at the transaction dates, then the exchange rates at the transaction dates are used. Exchange differences are recognised in other comprehensive income and transferred to income statement upon disposal.

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

2. Principal Accounting Policies


(q) Taxation

(continued)

Hong Kong profits tax is provided for, using the enacted rate at the year end date, on the estimated assessable profits less available tax relief for losses brought forward of each individual company comprising the Group. Overseas tax is provided for, using the local enacted rates at the year end date, on the estimated assessable profits of the individual company concerned. Deferred tax liabilities are provided in full, based on the applicable enacted rates, on all temporary differences between the carrying amounts of assets and liabilities and their tax bases, and deferred tax assets are recognised, based on the applicable enacted rates, to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences and unused tax losses can be utilised.

(r)

Borrowing costs
Borrowing costs are charged to income statement in the year in which they are incurred unless they are capitalised as being directly attributable to the acquisition and development of properties which necessarily take a substantial period of time to complete.

3. Turnover and Contribution


The principal activities of the Group are property development and investment, hotel and serviced suite operation, property and project management and investment in securities. Turnover of Group activities comprises proceeds from property sales, gross rental income, revenue from hotel and serviced suite operation and income from property and project management. In addition, the Group also accounts for its proportionate share of proceeds from property sales of jointly controlled entities as turnover. Turnover of jointly controlled entities (save for proceeds from property sales shared by the Group) and turnover of listed and unlisted associates are not included. Turnover of the Group by operating activities for the year is as follows: 2009 $ Million Property sales Property rental Hotels and serviced suites Property and project management Group turnover Share of property sales of jointly controlled entities Turnover 14,922 1,155 1,399 226 17,702 6,591 24,293 2008 $ Million 10,309 945 1,383 219 12,856 3,580 16,436

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3. Turnover and Contribution

(continued)

During the year, turnover of the Groups operating activities outside Hong Kong (including property sales of jointly controlled entities) accounted for approximately 27% (2008 23%) of the turnover and was derived from the following locations: 2009 $ Million The Mainland Singapore 6,676 2 6,678 Profit contribution by operating activities for the year is as follows: Company and Jointly controlled subsidiaries entities Total 2009 2008 2009 2008 2009 2008 $ Million $ Million $ Million $ Million $ Million $ Million Property sales Property rental Hotels and serviced suites Property and project management 5,501 1,062 360 109 7,032 Investment and finance Interest and other finance costs Increase in fair value of investment properties Subsidiaries Jointly controlled entities Others Taxation Company and subsidiaries Jointly controlled entities Profit attributable to minority interests 4,466 829 470 104 5,869 2,895 677 157 3,729 2,081 620 340 3,041 8,396 1,739 517 109 10,761 1,411 (233) 3,857 693 218 (1,644) (1,918) (422) 12,723 Share of net profit/(loss) of major listed associates Hutchison Whampoa Limited CK Life Sciences Intl., (Holdings) Inc. Profit attributable to shareholders 7,078 85 19,886 6,547 1,449 810 104 8,910 268 (454) 134 467 30 (859) (1,445) (201) 6,850 6,336 (157) 13,029 2008 $ Million 3,783 10 3,793

F-72

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

4. Profit before Taxation


2009 $ Million Profit before taxation is arrived at after charging: Interest and other finance costs Bank loans and other loans repayable within 5 years Other loans not repayable within 5 years Gain on loan hedging 2008 $ Million

576 54 (134) 496 (263) 233

1,088 39 (50) 1,077 (623) 454 101 10 50 161 (9) 152 6 5,324 284 1,139 96

Less: Amount capitalised (see note (a))

Directors emoluments (see note (b)) Salaries, allowances and benefits in kind Pension scheme contribution Discretionary bonus

101 10 56 167 (9) 158

Less: Amount paid back

Auditors remuneration Costs of properties sold Depreciation Impairment of investments available for sale Operating lease charges properties and after crediting: Net rental income Interest income from banks Interest income from loan receivables Interest income from jointly controlled entities/associates Income from listed investments in securities Dividend income from equity securities Income from unlisted investments in securities Dividend income from equity securities Interest income from debt securities Gain on disposal of investments available for sale Gain/(loss) on investments held for trading Gain on disposal of investment properties Profit on disposal of associates
Notes: (a)

6 8,901 349 665 160

1,138 21 100 68 293 2 26 121 455 350 952

920 84 150 96 753 9 69 1,174 (752)

Interest was capitalised to property development projects at an average annual rate of approximately 1.25% (2008 3.5%) during the year.

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107

4. Profit before Taxation


(b)

(continued)

Directors emoluments comprised payments to the Companys directors (including the five highest paid individuals in the Group) in connection with the management of the affairs of the Group. The independent non-executive directors receive an annual directors fee of $120,000 (2008 $120,000) each; and for those acting as members of the Audit Committee and/or Remuneration Committee, additional annual fee of $130,000 (2008 $130,000) each is paid for the former and $60,000 (2008 $60,000) each is paid for the latter. The emoluments of the Companys directors, excluding emoluments received by them from the Groups associates, are as follows: Salaries, Allowances Pension Inducement or Director and Benefits Scheme Discretionary Compensation Fees in Kind Contribution Bonus Fee $ Million $ Million $ Million $ Million $ Million Li Ka-shing (1) Li Tzar Kuoi, Victor (2) Kam Hing Lam (3) Ip Tak Chuen, Edmond (4) Chung Sun Keung, Davy Pau Yee Wan, Ezra Woo Chia Ching, Grace Chiu Kwok Hung, Justin Leung Siu Hon Fok Kin-ning, Canning Frank John Sixt Chow Kun Chee, Roland George Colin Magnus Kwok Tun-li, Stanley Yeh Yuan Chang, Anthony Simon Murray Chow Nin Mow, Albert Hung Siu-lin, Katherine Wong Yick-ming, Rosanna Cheong Ying Chew, Henry Kwan Chiu Yin, Robert Total for the year 2009 Total for the year 2008 (1) 0.01 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.31 0.12 0.12 0.12 0.25 0.18 0.25 0.12 2.92 2.92 33.13 16.17 13.27 8.24 9.34 9.34 8.38 97.87 97.79 3.31 1.62 1.32 0.82 0.93 0.93 0.83 9.76 9.76 10.30 0.50 5.55 10.61 8.38 10.61 10.61 56.56 50.31

2009 Total $ Million 0.01 46.86 18.41 20.26 19.79 18.77 21.00 19.94 0.12 0.12 0.12 0.12 0.12 0.31 0.12 0.12 0.12 0.25 0.18 0.25 0.12 167.11

2008 Total $ Million 0.01 45.63 18.35 19.65 18.62 17.85 19.83 18.77 0.12 0.12 0.12 0.12 0.12 0.31 0.12 0.12 0.12 0.25 0.18 0.25 0.12

160.78

Other than a directors fee of $5,000, no other remuneration was paid to the Chairman, Mr. Li Ka-shing. The amount of directors fee shown above is a result of rounding. The directors fee of $50,000 received by Mr. Li Ka-shing from Hutchison Whampoa Limited was paid back to the Company. Part of the directors emoluments in the sum of $3,720,000 received by Mr. Li Tzar Kuoi, Victor from the Hutchison Whampoa Group and the directors fee of $75,000 received by him from CK Life Sciences Intl., (Holdings) Inc. were paid back to the Company. Part of the directors emoluments in the sum of $1,572,000 received by Mr. Kam Hing Lam from the Hutchison Whampoa Group and the directors emoluments of $1,575,000 received by him from CK Life Sciences Intl., (Holdings) Inc. were paid back to the Company. Part of the directors emoluments in the sum of $1,875,000 received by Mr. Ip Tak Chuen, Edmond from Cheung Kong Infrastructure Holdings Limited and the directors fee of $75,000 received by him from CK Life Sciences Intl., (Holdings) Inc. were paid back to the Company.

(2)

(3)

(4)

F-74

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

5. Taxation
2009 $ Million Hong Kong profits tax Overseas tax Deferred tax 961 31 652 1,644 2008 $ Million 793 7 59 859

Hong Kong profits tax has been provided for at the rate of 16.5% (2008 16.5%) on the estimated assessable profits for the year and operating profit (after adjusting for share of taxation of jointly controlled entities) is reconciled with taxation as follows: 2009 $ Million Adjusted operating profit at Hong Kong tax rate of 16.5% (2008 16.5%) Effect of tax rate differences at overseas locations Effect of tax rate changes at overseas locations on deferred tax liabilities Effect of tax rate changes in Hong Kong on deferred tax liabilities Profit on disposal of associates Dividend income Increase in fair value of investment properties Profit on disposal of properties held for rental Net effect of tax losses and deductible temporary differences utilised/not recognised Net effect of non-assessable/deductible items Others 2,735 1,157 (157) (34) (28) (57) (41) (4) (9) 3,562 (1,918) 1,644 2008 $ Million 1,539 871 (2) (84) (101) (1) (17) (50) 158 (9) 2,304 (1,445) 859

Less: Share of taxation of jointly controlled entities

6. Profit Attributable to Shareholders


Profit attributable to shareholders dealt with in the income statement of the Company is $6,372 million (2008 $5,951 million) and dividends paid and proposed for the year by the Company are as follows: 2009 $ Million Interim dividend paid at $0.50 (2008-$0.50) per share Final dividend proposed at $2.20 (2008-$1.95) per share 1,158 5,096 6,254 2008 $ Million 1,158 4,517 5,675

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109

7. Earnings Per Share


The calculation of earnings per share is based on profit attributable to shareholders and on 2,316,164,338 shares (2008 2,316,164,338 shares) in issue during the year.

8. Fixed Assets
Hotels and Land and serviced suites buildings in in outside Hong Kong Hong Kong Hong Kong $ Million $ Million $ Million 640 294 934 (934) 934 640 9,865 814 10,679 184 10,863 1,519 157 1,676 195 1,871 8,992 9,003 8,346 1,451 89 6 1,546 2 12 1,560 226 14 34 274 35 309 1,251 1,272 1,225

Group Cost At 1st January, 2008 Translation difference Additions/transfers Disposals At 31st December, 2008 Translation difference Additions/transfers Disposals At 31st December, 2009 Accumulated depreciation/provisions At 1st January, 2008 Translation difference Depreciation Disposals At 31st December, 2008 Translation difference Depreciation Disposals At 31st December, 2009 Net book value At 31st December, 2009 At 31st December, 2008 At 1st January, 2008 At the year end date: (a)

Other assets $ Million 1,059 15 157 (14) 1,217 1 159 (16) 1,361 710 12 93 (13) 802 1 119 (14) 908 453 415 349

Total $ Million 13,015 104 1,271 (14) 14,376 3 (579) (16) 13,784 2,455 26 284 (13) 2,752 1 349 (14) 3,088 10,696 11,624 10,560

certain properties in Hong Kong with aggregate carrying value of $8,437 million (2008 $9,598 million) and certain properties outside Hong Kong with aggregate carrying value of $1,251 million (2008 $1,272 million) were held under medium term leases, all other properties were held under long leases; and certain hotel properties with aggregate carrying value of $736 million (2008 $748 million) were pledged to secure bank loan facilities.

(b)

F-76

110

CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

8. Fixed Assets

(continued) Other assets

Company Cost At 1st January Additions Disposals At 31st December Accumulated depreciation At 1st January Depreciation Disposals At 31st December Net book value at 31st December

31/12/2009 $ Million 191 2 (7) 186 180 5 (6) 179 7

31/12/2008 $ Million 189 5 (3) 191 177 6 (3) 180 11

9. Investment Properties
Group 31/12/2009 $ Million Investment properties in Hong Kong At 1st January Additions Transfer from land and buildings Disposals Increase in fair value 15,670 358 934 (1,386) 3,857 19,433 At the year end date: (a) investment properties have been revalued by DTZ Debenham Tie Leung Limited, independent professional valuers, on a market value basis, which has taken into account comparable market transactions and net income derived from existing tenancies with due allowance for reversionary income potential; investment properties with aggregate carrying value of $18,900 million (2008 $15,060 million) and $533 million (2008 $610 million) were held under medium term leases and long leases respectively; and gross rental income and direct operating expenses of investment properties during the year amounted to $1,051 million (2008 $813 million) and $16 million (2008 $14 million) respectively. 31/12/2008 $ Million 15,497 39 134 15,670 1/1/2008 $ Million 15,497 15,497

(b)

(c)

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111

10. Subsidiaries
Company 31/12/2009 $ Million Unlisted investments in subsidiaries Amounts due from subsidiaries Amounts due to subsidiaries 2,071 30,302 (819) 31,554 Particulars regarding the principal subsidiaries are set out in Appendix I. 31/12/2008 $ Million 2,071 30,146 (1,668) 30,549

11. Associates
31/12/2009 $ Million Listed investments in associates Unlisted investments in associates Share of results less dividends 28,132 93 119,624 147,849 200 148,049 Market value of investments in associates listed in Hong Kong Group 31/12/2008 $ Million 28,712 81 115,973 144,766 211 144,977 1/1/2008 $ Million 28,676 83 113,491 142,250 317 142,567 Company 31/12/2009 31/12/2008 $ Million $ Million 50 50 50 50 50 50

Amounts due from associates

115,735

84,288

192,562

Particulars regarding the principal associates are set out in Appendix II. Extracts of financial statements of Hutchison Whampoa Limited and CK Life Sciences Intl., (Holdings) Inc., listed associates, are set out in Appendix IV and Appendix V respectively.

F-78

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

12. Jointly Controlled Entities


31/12/2009 $ Million Unlisted investments in jointly controlled entities Share of results less dividends Amounts due from jointly controlled entities 8,908 11,146 20,054 12,537 32,591 Group 31/12/2008 $ Million 8,787 8,576 17,363 12,028 29,391 1/1/2008 $ Million 6,380 5,688 12,068 11,546 23,614 Company 31/12/2009 31/12/2008 $ Million $ Million 721 721 462 462

Particulars regarding the principal jointly controlled entities are set out in Appendix III. The aggregate amounts of non-current assets, current assets, current liabilities and non-current liabilities at the year end date, and the aggregate amounts of income and expenses for the year related to the Groups interests in jointly controlled entities are as follows: 2009 $ Million Non-current assets Current assets Current liabilities Non-current liabilities Income Expenses 18,762 34,093 (9,108) (9,499) 9,764 (5,115) 2008 $ Million 18,041 28,314 (7,364) (8,136) 6,515 (2,671)

13. Investments Available for Sale


Group 31/12/2009 $ Million Listed investments Equity securities listed in Hong Kong Equity securities listed overseas 2,654 3,624 6,278 Unlisted investments Equity securities Debt securities 119 629 748 7,026 31/12/2008 $ Million 1,748 2,437 4,185 72 421 493 4,678 1/1/2008 $ Million 7,082 2,316 9,398 92 570 662 10,060

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113

14. Stock of Properties


31/12/2009 $ Million Properties for/under development Joint development projects Properties for sale 17,340 38,250 7,409 62,999 Group 31/12/2008 $ Million 27,835 34,785 1,653 64,273 1/1/2008 $ Million 25,952 29,364 4,643 59,959 Company 31/12/2009 31/12/2008 $ Million $ Million 3 3 3 3

At the year end date, properties for/under development and joint development projects amounting to $32,670 million (2008 $39,325 million) were not scheduled for completion within twelve months.

15. Debtors, Deposits and Prepayments


31/12/2009 $ Million Trade debtors Loan receivables Deposits, prepayments and others 526 1,202 1,071 2,799 Group 31/12/2008 $ Million 1,207 2,001 696 3,904 1/1/2008 $ Million 1,429 1,855 782 4,066 Company 31/12/2009 31/12/2008 $ Million $ Million 269 269 99 99

The Groups trade debtors mainly comprise receivables for sale of properties and rental. Sales terms vary for each property project and are determined with reference to the prevailing market conditions. Sale of properties are normally completed when the sale prices are fully paid and deferred payment terms are sometimes offered to purchasers at a premium. Rentals are payable in advance by tenants. At the year end date, loan receivables included mortgage loans amounting to $278 million (2008 $349 million) which were pledged to secure the financing bank loans. Ageing analysis of the Groups trade debtors at the year end date is as follows: 2009 $ Million Current to one month Two to three months Over three months 491 27 8 526 2008 $ Million 1,181 20 6 1,207

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CHEUNG KONG (HOLDINGS) LIMITED

Notes to Financial Statements (continued)

16. Investments Held for Trading


Group 31/12/2009 $ Million Listed investments Equity securities listed in Hong Kong Equity securities listed overseas Unlisted investments Debt securities 829 1,045 1,874 53 1,927 31/12/2008 $ Million 121 692 813 45 858 1/1/2008 $ Million 363 196 559 880 1,439

17. Bank and Other Loans


Group 31/12/2009 $ Million Bank loans repayable within 1 year after 1 year but not exceeding 2 years after 2 years but not exceeding 5 years 4,421 9,035 9,813 23,269 Other loans repayable within 1 year after 1 year but not exceeding 2 years after 2 years but not exceeding 5 years after 5 years 2,789 3,731 1,550 1,150 9,220 32,489 7,210 25,279 31/12/2008 $ Million 7,613 5,997 16,168 29,778 1,378 2,909 5,034 1,150 10,471 40,249 8,991 31,258 1/1/2008 $ Million 6,172 4,170 13,445 23,787 2,700 1,382 4,008 650 8,740 32,527 8,872 23,655

Less: Amounts classified under current liabilities Amounts classified under non-current liabilities

In 2008, the Group entered into a transaction with a financial institution whereby, for a total consideration of $2.1 billion, certain overseas listed equity securities held by the Group were transferred to the other party at an inception price together with put options exercisable at 200% of the inception price at the end of a three-year period. It is expected that the price of the transferred equity securities is not likely to rise above the 200% level of the inception price within the three-year period and the put options will be exercised. Hence, the Group remains exposed to the risk of price fluctuation of the transferred equity securities below the 200% level of the inception price. Therefore, the total consideration received has been accounted for as a loan and amortised at an annual rate of 2.7% approximately, and the transferred equity securities have remained as the Groups investments available for sale and included in note (13).

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17. Bank and Other Loans


At the year end date: (a)

(continued)

the amortised cost of the total consideration received and the carrying value of the transferred equity securities mentioned above were $2,127 million (2008 $2,069 million) and $1,508 million (2008 $975 million) respectively; bank loans amounting to $357 million (2008 $482 million) were secured by certain assets of the Group; other loans included fixed rate bonds and notes issued by wholly owned subsidiaries and guaranteed by the Company as follows: (i) issued by Cheung Kong Finance Cayman Limited and listed on the Luxembourg Stock Exchange: HK$ 300,000,000 8.38% due January 2010 (issued in 2000) issued by Cheung Kong Bond Finance Limited in Hong Kong: HK$ 500,000,000 4.4% due April 2015 (issued in 2005) HK$ 150,000,000 5.1% due April 2016 (issued in 2006) HK$ 500,000,000 3.18% due May 2011 (issued in 2008) HK$ 800,000,000 3.48% due April 2013 (issued in 2008) HK$ 500,000,000 3.9% due May 2013 (issued in 2008) HK$ 500,000,000 4.88% due August 2018 (issued in 2008) issued by Joynote Ltd and listed on the Singapore Stock Exchange: SGD 200,000,000 3.76% due October 2011 (issued in 2006) issued by Cheung Kong Finance Japan Limited in Japan: JPY 31,500,000,000 0.95% due August 2010 (issued in 2005)

(b)

(c)

(ii)

(iii)

(iv)

and swaps arrangements were in place to convert the rates and the related terms of the fixed rate bonds and notes to a floating rate basis and Japanese Yen to US$. The aggregate fair value of the derivative financial instruments used for hedging purposes amounted to a net asset of $689 million (2008 $877 million); (d) after hedging where appropriate, bank and other loans approximated their fair value and carried interest at effective rates generally based on inter-bank offered rate of the relevant currency plus a margin of approximately 1% per annum.

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Notes to Financial Statements (continued)

18. Creditors and Accruals


31/12/2009 $ Million Trade creditors Accruals and other creditors Customers deposits received 444 3,582 8,052 12,078 Group 31/12/2008 $ Million 388 3,490 3,062 6,940 1/1/2008 $ Million 3,239 3,650 1,541 8,430 Company 31/12/2009 31/12/2008 $ Million $ Million 164 164 141 141

Ageing analysis of the Groups trade creditors at the year end date is as follows: 2009 $ Million Current to one month Two to three months Over three months 365 40 39 444 2008 $ Million 349 25 14 388

19. Loan from Joint Development Partner


Pursuant to the terms of a joint development project, the Group obtained a loan of $4,000 million from the joint development partner in 2006 to finance the payment of land premium of the joint development project. The loan is repayable by two equal instalments, of which the first instalment has been repaid on 31st December, 2009 and the second instalment is repayable upon completion of phase 2 (or on 31st December, 2011, whichever is earlier) of the joint development project.

20. Deferred Tax Liabilities


At the year end date: (a) the Groups deferred tax liabilities amounting to $664 million (2008 $598 million) and $1,347 million (2008 $761 million) were provided on temporary differences arising from accelerated tax depreciation and changes in fair value of investment properties respectively; and the Groups tax losses and deductible temporary differences amounting to $3,322 million (2008 $3,411 million), of which $53 million (2008 $96 million) expire within 5 years, were not recognised.

(b)

21. Share Capital


31/12/2009 No. of shares Authorised: Shares of $0.5 each Issued and fully paid: Shares of $0.5 each 3,800,000,000 2,316,164,338 31/12/2008 No. of shares 3,800,000,000 2,316,164,338 Company 1/1/2008 31/12/2009 No. of shares $ Million 3,800,000,000 2,316,164,338 1,900 1,158 31/12/2008 $ Million 1,900 1,158 1/1/2008 $ Million 1,900 1,158

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22. Reserves
Capital reserve $ Million At 1st January Profit for the year Dividend paid At 31st December 199 199 Company Retained 31/12/2009 profits Total $ Million $ Million 21,069 6,372 (5,675) 21,766 21,268 6,372 (5,675) 21,965 31/12/2008 Total $ Million 20,992 5,951 (5,675) 21,268

The Companys reserves available for distribution to shareholders, including the proposed final dividend, amounted to $21,766 million (2008 $21,069 million). Proposed final dividend for 2008 was approved by shareholders on 21st May, 2009 and paid on 26th May, 2009.

23. Operating Lease


Analysis of future minimum lease income receivable by the Group under non-cancellable operating leases, mainly on 2 to 3 year terms, for property rental at the year end date is as follows: Group 2009 $ Million Future minimum lease income receivable not later than 1 year later than 1 year but not later than 5 years later than 5 years 979 911 2 1,892 2008 $ Million 787 590 4 1,381

Analysis of future minimum lease charges payable by the Group and the Company under non-cancellable operating leases at the year end date are as follows: Group 2009 2008 $ Million $ Million Future minimum lease charges payable not later than 1 year later than 1 year but not later than 5 years 142 86 228 136 203 339 Company 2009 2008 $ Million $ Million 107 71 178 108 178 286

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Notes to Financial Statements (continued)

24. Segment Information


Assets and liabilities of the Group analysed by operating activities are as follows: Company and subsidiaries $ Million At 31st December, 2009 Property development Property investment Hotels and serviced suites Property and project management Total segment assets/(liabilities) Investments in listed associates Cash and investments in securities Bank and other loans Other assets/(liabilities) Total assets/(liabilities) At 31st December, 2008 Property development Property investment Hotels and serviced suites Property and project management Total segment assets/(liabilities) Investments in listed associates Cash and investments in securities Bank and other loans Other assets/(liabilities) Total assets/(liabilities) 69,034 19,464 10,900 255 Jointly controlled entities $ Million 18,875 10,263 3,386

Assets $ Million 87,909 29,727 14,286 255 132,177 147,021 14,917 3,355 297,470

Liabilities $ Million (12,094) (503) (529) (90) (13,216) (32,489) (4,361) (50,066)

67,310 16,640 10,837 177

14,905 10,914 3,473

82,215 27,554 14,310 177 124,256 144,143 10,680 4,584 283,663

(8,663) (320) (895) (62) (9,940) (40,249) (3,999) (54,188)

At the year end date, the Groups non-current segment assets, mainly comprising investment properties and hotels and serviced suites, are located as follows: Company and Jointly controlled subsidiaries entities Total 2009 2008 2009 2008 2009 2008 $ Million $ Million $ Million $ Million $ Million $ Million Hong Kong The Mainland Singapore United Kingdom 28,777 1,314 30,091 25,931 1,322 27,253 2,540 12,976 2,635 153 18,304 2,585 13,261 1,865 139 17,850 31,317 14,290 2,635 153 48,395 28,516 14,583 1,865 139 45,103

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24. Segment Information

(continued)

Depreciation and additions to non-current segment assets during the year, analysed by operating activities, are as follows: Additions to non-current segment assets 2009 2008 $ Million $ Million 357 320 28 705 8 713 319 932 9 1,260 50 1,310

Depreciation 2009 2008 $ Million $ Million Property investment Hotels and serviced suites Property and project management 323 15 338 11 349 261 13 274 10 284

Others

25. Commitments and Contingent Liabilities


At the year end date: (a) the Group had capital commitments as follows: (i) contracted but not provided for fixed assets $27 million (2008 $353 million) jointly controlled entities $1,086 million (2008 $1,447 million) others Nil (2008 $91 million) (ii) authorised but not contracted for fixed assets $16 million (2008 $12 million) the Groups share of capital commitments of the jointly controlled entities were as follows: (i) contracted but not provided for $643 million (2008 $838 million) (ii) authorised but not contracted for $3,024 million (2008 $3,780 million) the minimum share of revenue/profit guaranteed by the Company to be received by other partners of joint development projects amounted to $1,398 million (2008 $1,410 million); and the Company provided guarantees for loan financing as follows: (i) bank and other loans utilised by subsidiaries $31,882 million (2008 $39,056 million) (ii) loan from joint development partner to a subsidiary $2,000 million (2008 $4,000 million) (iii) bank loans utilised by jointly controlled entities $50 million (2008 $45 million) (iv) bank loans utilised by investee company $283 million (2008 Nil) and certain subsidiaries provided guarantees for bank loans utilised by jointly controlled entities amounted to $1,555 million (2008 $1,489 million).

(b)

(c)

(d)

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Notes to Financial Statements (continued)

26. Employees Pension Schemes


The principal employees pension schemes operated by the Group, including the occupational retirement schemes and the mandatory provident fund schemes, are defined contribution schemes. For occupational retirement schemes, contributions are made by either the employer only or both the employer and the employees at rates ranging from approximately 5% to 10% of the employees salary. For mandatory provident fund schemes, contributions are made by both the employer and the employees at 5% each of the employees relevant monthly income which is capped at $20,000. During the year, the Groups costs incurred on employees pension schemes were $92 million (2008 $85 million) and forfeited contributions in the amount of $3 million (2008 $4 million) were used to reduce current years contributions.

27. Related Party Transactions


During the year and in the ordinary course of business, the Group undertook various joint venture projects with related parties, including the Chairman, Mr. Li Ka-shing, and Hutchison Whampoa Limited, on normal commercial terms. Advances were made to/received from and guarantees were provided for these joint venture projects on a pro rata basis. Advances made by the Group at the year end date were disclosed as amount due from associates and jointly controlled entities in notes (11) and (12). Guarantees provided by the Group for bank loans utilised by jointly controlled entities at the year end date were disclosed in note (25). Other than the aforementioned, there were no other significant related party transactions requiring disclosure in the financial statements.

28. Financial Risks and Management


Financial assets and financial liabilities of the Group include investments in securities, cash balances maintained for liquidity, loan and other receivables, bank and other loan borrowings, and derivative financial instruments for investment and financial purposes. The Groups treasury policies and how the management manages to mitigate the risks associated with these financial assets and financial liabilities are described below:

(a) Treasury policies


The Group maintains a conservative approach on foreign exchange exposure management. At the year end date, approximately 81.7% of the Groups borrowings were in HK$ with the balance in US$ (or swapped into US$) and SGD mainly for the purpose of financing projects outside Hong Kong. The Group derives its revenue mainly in HK$, cash balances and marketable securities are maintained mainly in HK$ or US$, and the Group ensures that its exposure to fluctuations in foreign exchange rates is minimised. The Groups borrowings are principally on a floating rate basis. The fixed rate bonds and notes issued by the Group have associated swaps arrangements in place to convert the rates and related terms to a floating rate basis. When appropriate and at times of interest rate or exchange rate uncertainty or volatility, hedging instruments including swaps and forwards are used by the Group in the management of exposure to interest rate and foreign exchange rate fluctuations.

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28. Financial Risks and Management


(b) Risk management

(continued)

Loan receivables normally carry interest at rates with reference to banks lending rates and are secured by collaterals including charge on assets and guarantees. Trade debtors include mainly receivables arising from sale and lease of properties to the public. The Group has legal right to claim repossession of the properties in the event of default by purchasers/tenants. At the year end date, overdue loan receivables and trade debtors amounted to less than 1% of the Groups net assets and regular review and follow-up actions are carried out on the overdue amounts to minimise exposures to credit risk. Cash balances maintained for liquidity are placed with a number of major banks. Investments in securities and transactions involving derivative financial instruments are generally limited to issuers and counter-parties with sound credit. Investments in securities and derivative financial instruments are stated at fair value. Fair values are determined based on quoted market price, otherwise, with reference to professional valuations and/ or estimations that take into account assumptions and estimates on factors affecting the value of these financial instruments and change of such assumptions and estimates to reasonably possible alternatives would not have material effect on the Groups result for the year and financial position at the year end date. An analysis of these financial assets and financial liabilities of the Group based on the degree to which their fair values are observable and grouped into Levels 1 to 3 is as follows: Level 1 Level 2 Level 3 : : : unadjusted quoted prices in active markets for identical assets or liabilities value inputs, other than quoted prices, that are observable either directly or indirectly value inputs that are not based on observable market data 31/12/2009 Total $ Million

Level 1 $ Million Financial assets Investments available for sale Equity securities Debt securities Investments held for trading Equity securities Debt securities Derivative financial instruments

Level 2 $ Million

Level 3 $ Million

6,278 1,874 8,152

13 629 53 83 778

106 106

6,397 629 1,874 53 83 9,036

Financial liabilities Derivative financial instruments

(460)

(460)

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Notes to Financial Statements (continued)

28. Financial Risks and Management


(b) Risk management (continued)

(continued)

The movement of Level 3 fair value measurement of equity securities available for sale during the year was as follows: $ Million Fair value at 1st January, 2009 Purchases Gain in fair value recognised in other comprehensive income Fair value at 31st December, 2009 61 40 5 106

The exposure to price changes is managed by closely monitoring the changes in market conditions that may have an impact on the market prices or factors affecting the value of these financial instruments. If the fair value of the investments in securities and derivative financial instruments was 5% higher/lower at the year end date, the Groups investment revaluation reserve would increase/ decrease by approximately $231 million (2008 $210 million) and the Groups profit for the year would increase/decrease by approximately $234 million (2008 $109 million). The Groups borrowings are subject to interest rate fluctuation. It is estimated that an increase/ decrease of 1% in interest rates would increase/decrease the Groups finance costs for the year by approximately $304 million (2008 $382 million), assuming the change in interest rates had been applied to the Groups bank and other loans at the year end date which were kept constant throughout the year, and the amount of finance costs capitalised would increase/decrease by approximately $161 million (2008 $221 million) based on the proportion of finance costs capitalised during the year.

(c) Liquidity management


The Group monitors its liquidity requirements on a short to medium term basis and arranges refinancing of the Groups borrowings when appropriate. With cash and marketable securities in hand, as well as available banking facilities, the Groups liquidity position remains strong and the Group has sufficient financial resources to satisfy its commitments and working capital requirements. The contractual undiscounted cash flows (including interest payments, after hedging where appropriate, computed at rates current at the year end date) of the Groups borrowings by contractual maturities at the year end date are as follows: 2009 $ Million Within 1 year After 1 year but not exceeding 2 years After 2 years but not exceeding 5 years After 5 years 9,402 13,012 11,501 1,164 35,079 2008 $ Million 11,939 9,567 24,007 1,254 46,767

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29. Capital Management


The Group manages its capital to ensure that it will be able to continue as a going concern while maximising returns to its shareholders through the optimisation of debt and equity balance. The capital structure of the Group consists of debt, which includes the borrowings disclosed in notes (17) and (19), bank balances and deposits and shareholders fund, comprising share capital, share premium and reserves as disclosed in the statement of financial position. The Group reviews its capital structure on a regular basis and maintains a low gearing ratio determined as the proportion of the Groups net borrowings (after deducting bank balances and deposits) to shareholders fund. The gearing ratio at the year end date is as follows: 2009 $ Million Bank and other loans Loan from joint development partner Total borrowings Less: Bank balances and deposits Net borrowings Shareholders fund Gearing ratio 32,489 2,000 34,489 (11,423) 23,066 243,599 9.5% 2008 $ Million 40,249 4,000 44,249 (7,173) 37,076 225,133 16.5%

30. Approval of Financial Statements


The financial statements reported in Hong Kong dollars and set out on pages 92 to 132 were approved by the board of directors on 30th March, 2010.

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Principal Subsidiaries
Appendix I
The Directors are of the opinion that a complete list of the particulars of all the subsidiaries will be of excessive length and therefore the following list contains only the particulars of the subsidiaries which materially affect the results or assets of the Group. All the companies listed below were incorporated in Hong Kong except otherwise stated. Issued Ordinary Effective percentage Share Capital held by the Company Nominal Value Directly Indirectly US$ 10,000 44.90

Name AMTD Group Company Limited (British Virgin Islands) Bermington Investment Limited Biro Investment Limited Chaview Holdings Limited (British Virgin Islands) Cheer Good Limited Cheung Kong Bond Finance Limited (Cayman Islands) Cheung Kong Finance Cayman Limited (Cayman Islands) Cheung Kong Finance Company Limited Cheung Kong Finance Japan Limited (Cayman Islands) Cheung Kong Finance (MTN) Limited (Cayman Islands) Cheung Kong Holdings (China) Limited Cheung Kong Investment Company Limited Cheung Kong Property Development Limited Citybase Property Management Limited City Investments Limited Diamond Jubilee Investment Limited East City Investments Limited East Leader Investments Limited Fantastic State Limited Flying Snow Limited Focus Eagle Investments Limited (British Virgin Islands) Garbo Field Limited Glass Bead Limited (British Virgin Islands) Global Coin Limited Goodwell Property Management Limited Harbour Grand Hong Kong Limited Harbour Plaza 8 Degrees Limited iMarkets Limited Joynote Ltd (Singapore) Kingsmark Investments Limited

Principal Activities Financial planning, mortgage servicing & corporate insurance Hotels & serviced suites Property development Investment holding Property development Finance Finance Finance Finance Finance Investment holding in the Mainland projects Investment holding Project management Property management Property development Property development Property development Property development Property development Property investment Investment holding Property development Property investment Property investment Property management Hotels & serviced suites Hotels & serviced suites Provider of electronic trading platform Finance Property development & investment

HK$ HK$ US$ HK$ US$ US$

2 10,000 1 1 1 1,000 100

100 100 100 100 100 100

HK$ 2,500,000 US$ 1 US$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ US$ 1,000 2 20 2 100,000 1 1 1 2 2 2 1

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 54.83 100 100

HK$ 2 US$ 1 HK$ 2 HK$ 100,000 HK$ 2 HK$ 2 HK$ 30,000,000 SGD HK$ 2 1

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Name Luxury Green Development Pte. Ltd. (Singapore) Megawin International Limited (British Virgin Islands) Metrofond Limited Mutual Luck Investment Limited New Accord Limited New City Investments Limited New Profit Resources Limited New Vision Development Limited Pako Wise Limited Pearl Wisdom Limited Perfect Idea Limited Pofield Investments Limited (British Virgin Islands) Queensway Investments Limited Rainbow Elite Investments Limited Randash Investment Limited Regent Land Investments Limited Rich Asia Investments Limited Romefield Limited (British Virgin Islands) Ruby Star Enterprises Limited Sai Ling Realty Limited Sino China Enterprises Limited The Center (Holdings) Limited (British Virgin Islands) Tin Shui Wai Development Limited Tony Investments Limited Total Win Group Limited (British Virgin Islands) Towerich Limited Union Art Investment Limited Volly Best Investment Limited Wealth Pine Investment Limited Winchesto Finance Company Limited Yick Ho Limited

Issued Ordinary Effective percentage Share Capital held by the Company Nominal Value Directly Indirectly SGD US$ 1 1 100 100 100 60 100 100 98.47 100 100 100 100 100 85 100 60.9 100 85 100 100 100 100 100 98.47 100 100 51 100 90 85 100 100

Principal Activities Property development Property development Property development Property development Property development Property development Property development Property development Property investment Hotels & serviced suites Property development Property investment Property development Property development Hotels & serviced suites Property development Property development Investment holding Property development Property development Hotels & serviced suites Property investment Property investment Property development Investment holding Hotels & serviced suites Property development Property development Property development Finance Investment in hotel projects

HK$ 2 HK$ 30,000 HK$ 1 HK$ 1 HK$ 2 HK$ 1 HK$ 2 HK$ 2 HK$ 20 US$ 1 HK$ 1 HK$ 1 HK$ 110 HK$ 1 HK$ 1,000,000 US$ 1 HK$ 1 HK$ 10,000 HK$ 2 US$ 1 HK$ 1,000 HK$ 1 US$ 1 HK$ 2 HK$ 1 HK$ 1 HK$ 1 HK$ 15,000,000 HK$ 6,000,000

The principal area of operation of the above companies were in Hong Kong except the following: Name Cheung Kong Finance Cayman Limited Cheung Kong Finance Japan Limited Cheung Kong Holdings (China) Limited Joynote Ltd Luxury Green Development Pte. Ltd. Megawin International Limited Yick Ho Limited Area of Operation Europe Japan The Mainland Singapore Singapore The Mainland The Mainland

F-92

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CHEUNG KONG (HOLDINGS) LIMITED

Principal Associates
Appendix II
The Directors are of the opinion that a complete list of the particulars of all the associates will be of excessive length and therefore the following list contains only the particulars of the associates which materially affect the results or assets of the Group. All the companies listed below were incorporated in Hong Kong except otherwise stated. Effective percentage of Issued Ordinary Share Capital held by the Company Directly Indirectly 50 45.3

Name CEF Holdings Limited CK Life Sciences Intl., (Holdings) Inc. (Cayman Islands)

Principal Activities Investment holding Research & development, manufacturing, commercialisation, marketing & selling of environmental & human health products & investments Hotel management Investment holding & power generation Ports & related services, property & hotels, retail, energy, infrastructure, telecommunications, finance, investments & others Radio broadcasting

Harbour Plaza Hotel Management (International) Limited (British Virgin Islands) Hong Kong Concord Holdings Limited Hutchison Whampoa Limited

50 40 49.9

Metro Broadcast Corporation Limited

50

The principal area of operation of the above companies were in Hong Kong except the following: Name Hong Kong Concord Holdings Limited Area of Operation The Mainland

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127

Principal Jointly Controlled Entities


Appendix III
The Directors are of the opinion that a complete list of the particulars of all the jointly controlled entities will be of excessive length and therefore the following list contains only the particulars of the jointly controlled entities which materially affect the results or assets of the Group. All the jointly controlled entities below were incorporated in Hong Kong except otherwise stated. Effective percentage of Ownership Interest held by the Company Directly Indirectly 50 50 50 50 50 50 50 47.5 47.5 50 50 50 49 50 50 50 50 50 50 50 25 33.4 50 42.5 25 50 50 50 50

Name Afford Limited Bayswater Developments Limited (British Virgin Islands) Beright Investments Limited (British Virgin Islands) Billion Rise Limited (British Virgin Islands) Chesgold Limited Cheung Wo Enterprises Limited (British Virgin Islands) Choicewide Group Limited (British Virgin Islands) Circadian (CH) Limited (The United Kingdom) Circadian Limited (The United Kingdom) Clayton Power Enterprises Limited Cosmos Wide International Limited Dragon Beauty International Limited Elegant Wealth Investment Limited Extreme Selection Investments Limited (British Virgin Islands) Forton Investment Limited Gislingham Limited (British Virgin Islands) Glory Sense Limited Golden Castle Management Limited (British Virgin Islands) Harbour Plaza Metropolis Limited (British Virgin Islands) Hildon Development Limited Hong Kong Shanghai Development Co Ltd (Samoa) Hui Xian Investment Limited Hutchison Whampoa Properties (Chengdu) Limited (The Mainland) Konorus Investment Limited Mapleleaf Developments Limited (British Virgin Islands) Mighty General Limited Montoya (HK) Limited New China Sheen Limited New China Target Limited

Principal Activities Property development Property development & investment Property development Property development Property investment Property investment Investment in property project Property development Property development Property development Property development Property development Property development Property development Property Property Property Property development development development development

Hotels & serviced suites Property development Property development & investment Investment in property project Property development Property Property Property Property Property Property investment development development development development development

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Principal Jointly Controlled Entities (continued)

Name Shanklin Developments Limited (British Virgin Islands) Sky Island Limited (British Virgin Islands) Smart Rainbow Limited (British Virgin Islands) Swayfield Limited (British Virgin Islands) True Ample Developments Limited (British Virgin Islands) Willpower Developments Limited (British Virgin Islands) Zealand Limited (British Virgin Islands)

Effective percentage of Ownership Interest held by the Company Directly Indirectly 50 50 50 30 50 50 50

Principal Activities Property development Property development Hotels & serviced suites Property investment Property development Property development Property development

The principal area of operation of the above jointly controlled entities were in Hong Kong except the following: Name Afford Limited Bayswater Developments Limited Beright Investments Limited Billion Rise Limited Chesgold Limited Cheung Wo Enterprises Limited Choicewide Group Limited Circadian (CH) Limited Circadian Limited Elegant Wealth Investment Limited Extreme Selection Investments Limited Forton Investment Limited Gislingham Limited Glory Sense Limited Golden Castle Management Limited Hildon Development Limited Hong Kong Shanghai Development Co Ltd Hui Xian Investment Limited Hutchison Whampoa Properties (Chengdu) Limited Mapleleaf Developments Limited Mighty General Limited Montoya (HK) Limited New China Sheen Limited New China Target Limited Shanklin Developments Limited Sky Island Limited True Ample Developments Limited Willpower Developments Limited Zealand Limited Area of Operation The Mainland The Mainland The Mainland Singapore The Mainland The Mainland Singapore The United Kingdom The United Kingdom The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland The Mainland

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129

Extracts of Financial Statements of Hutchison Whampoa Limited


Appendix IV
Extracts of the 2009 published financial statements of Hutchison Whampoa Limited, a listed associate, are set out below.

Consolidated Income Statement


For the year ended 31st December, 2009 As restated 2008 $ Million 235,478 (77,172) (31,929) (22,926) (24,876) (66,001) 672 3,458 12,522 5,286 3,122 37,634 (17,286) 20,348 (3,443) 2,576 19,481 (6,800) 12,681

2009 $ Million Company and subsidiary companies: Revenue Cost of inventories sold Staff costs Telecommunications customer acquisition costs Depreciation and amortisation Other operating expenses Change in fair value of investment properties Profit on disposal of investments and others Share of profits less losses after tax of: Associated companies before profit on disposal of investments and others Jointly controlled entities Associated companys profit on disposal of an investment and others 208,808 (74,275) (28,309) (16,544) (16,258) (60,769) 1,117 12,472 5,927 3,677 35,846 (9,613) 26,233 (4,588) 92 21,737 (7,569) 14,168

Interest and other finance costs Profit before tax Current tax charge Deferred tax credit Profit after tax Allocated as: Profit attributable to minority interests Profit attributable to shareholders of the Company

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Extracts of Financial Statements of Hutchison Whampoa Limited (continued)

Consolidated Statement of Financial Position


At 31st December, 2009 As restated 31/12/2008 $ Million As restated 1/1/2008 $ Million

31/12/2009 $ Million ASSETS Non-current assets Fixed assets Investment properties Leasehold land Telecommunications licences Goodwill Brand names and other rights Associated companies Interests in joint ventures Deferred tax assets Other non-current assets Liquid funds and other listed investments Current assets Cash and cash equivalents Trade and other receivables Inventories Current liabilities Trade and other payables Bank and other debts Current tax liabilities

171,399 42,323 33,984 70,750 28,858 7,351 84,748 51,568 14,657 5,286 23,213 534,137 92,521 48,146 16,593 157,260 73,029 17,589 3,249 93,867

173,246 41,282 34,745 72,175 30,436 10,486 76,478 45,865 13,248 8,904 30,735 537,600 57,286 54,767 18,528 130,581 82,599 23,945 1,274 107,818 22,763 560,363 234,141 13,348 13,616 2,541 4,586 268,232 292,131 1,066 259,253 260,319 31,812 292,131

181,342 43,680 36,272 91,897 31,573 10,901 75,545 39,725 17,619 5,082 69,192 602,828 111,307 55,374 20,999 187,680 90,141 50,255 2,336 142,732 44,948 647,776 260,086 12,508 17,957 1,468 5,929 297,948 349,828 1,066 300,803 301,869 47,959 349,828

Net current assets Total assets less current liabilities Non-current liabilities Bank and other debts Interest bearing loans from minority shareholders Deferred tax liabilities Pension obligations Other non-current liabilities

63,393 597,530 242,851 13,424 13,355 2,436 4,520 276,586

Net assets CAPITAL AND RESERVES Share capital Reserves Total shareholders funds Minority interests Total equity

320,944 1,066 282,465 283,531 37,413 320,944

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Extracts of Financial Statements of CK Life Sciences Intl., (Holdings) Inc.


Appendix V
Extracts of the 2009 published financial statements of CK Life Sciences Intl., (Holdings) Inc., a listed associate, are set out below.

Consolidated Income Statement


For the year ended 31st December, 2009 2009 $000 Turnover Cost of sales 2,678,889 (1,839,133) 839,756 292,345 (310,077) (34,724) (47,808) (494,779) (18,110) (11,272) 215,331 (29,271) 186,060 2008 $000 2,991,797 (2,084,217) 907,580 (275,863) (344,459) (31,876) (50,412) (442,233) (11,420) (66,982) (9,878) (325,543) (27,540) (353,083)

Other income, gains and losses Staff costs Depreciation Amortisation of intangible assets Other expenses Revaluation deficit on building Finance costs Share of results of associates Profit/(loss) before taxation Taxation Profit/(loss) for the year Attributable to: Equity holders of the Company Minority interests

187,098 (1,038) 186,060

(351,768) (1,315) (353,083)

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Extracts of Financial Statements of CK Life Sciences Intl., (Holdings) Inc. (continued)

Consolidated Statement of Financial Position


As at 31st December, 2009 2009 $000 Non-current assets Property, plant and equipment Prepaid lease for land Intangible assets Interests in associates Convertible debentures issued by an associate Available-for-sale investments Investments at fair value through profit or loss Deferred taxation Long-term receivables 458,923 11,761 3,972,183 17,842 150,101 192,839 21,056 38,580 4,863,285 Current assets Debt investment Investments at fair value through profit or loss Derivative financial instruments Tax recoverable Inventories Receivables and prepayments Deposits with financial institutions Bank balances and deposits 163,171 2,633 762 425,921 805,906 636,895 2,035,288 Current liabilities Payables and accruals Derivative financial instruments Bank overdrafts Finance lease obligations Taxation (621,545) (23,087) (385) (580) (48,695) (694,292) Net current assets Total assets less current liabilities Non-current liabilities Bank loans Finance lease obligations Loan from a minority shareholder Deferred taxation 1,340,996 6,204,281 (1,061,300) (807) (34,333) (31,273) (1,127,713) Total net assets Capital and reserves Share capital Share premium and reserves Equity attributable to equity holders of the Company Share option reserve of a subsidiary Minority interests Total equity 5,076,568 961,107 3,944,251 4,905,358 55 171,155 5,076,568 2008 $000 432,803 12,074 3,722,997 44,472 58,885 209,343 58,430 19,076 4,558,080 59,474 139,351 15,780 3,629 463,711 615,195 44,952 303,554 1,645,646 (588,995) (99,398) (7,445) (494) (19,945) (716,277) 929,369 5,487,449 (1,045,675) (1,108) (25,907) (29,887) (1,102,577) 4,384,872 961,107 3,309,661 4,270,768 114,104 4,384,872

F-99

ISSUER Cheung Kong Bond Securities Limited East Asia Chambers P.O. Box 901 Road Town Tortola British Virgin Islands GUARANTOR Cheung Kong (Holdings) Limited 7th Floor, Cheung Kong Center 2 Queens Road Central Hong Kong JOINT LEAD MANAGERS DBS Bank Ltd. 6 Shenton Way #35-00 DBS Building Tower One Singapore 068809 J.P. Morgan (S.E.A.) Limited 17th Floor, Capital Tower 168 Robinson Road Singapore 068912

AUDITORS OF THE GUARANTOR Deloitte Touche Tohmatsu Certified Public Accountants 35/F One Pacific Place 88 Queensway Hong Kong FISCAL AGENT, PAYING AGENT AND TRANSFER AGENT Deutsche Bank AG, Hong Kong Branch Level 52 International Commerce Center 1 Austin Road West Kowloon Hong Kong SINGAPORE PAYING-AGENT REGISTRAR

Deutsche Bank AG, Singapore Branch One Raffles Quay #17-00 South Tower Singapore 048583 LEGAL ADVISERS

Deutsche Bank Luxembourg S.A. 2 Boulevard Kourad Adenauer L1115 Luxembourg

To the Issuer as to British Virgin Islands law Maples and Calder 53rd Floor, The Center 99 Queens Road Central Hong Kong

To the Guarantor as to Hong Kong law Baker & McKenzie 23rd Floor, One Pacific Place 88 Queensway Hong Kong

To the Issuer and the Guarantor as to Singapore law Allen & Gledhill LLP One Marina Boulevard #28-00 Singapore 018989

To the Joint Lead Managers as to Hong Kong law Clifford Chance 28th Floor Jardine House One Connaught Place Central Hong Kong

To the Joint Lead Managers as to Singapore law Clifford Chance Pte Ltd One George Street 19th Floor Singapore 049145

Printed by EQUITY FINANCIAL PRESS LIMITED 11083314