09:18     KOWLOON DEV<00034> - Announcement (2)                               

      Kowloon Development Group as at 31 December, 2000     4,359,080         
                                                                              
    Movements arising during the period from 1 January, 2001 to 30 June,      
    2001   per the unaudited interim financial report for the six months      
    ended 30 June, 2001:                                                      
                                                                              
      Unaudited consolidated profit attributable to shareholders of           
        the Kowloon Development Group                       1,251,500         
                                                                              
      Revaluation deficit on investment properties          (2,924  )         
                                                                              
      Revaluation surplus on non-trading securities         387,656           
                                                                              
      Transfer from investment revaluation reserve to income statement upon   
        distribution of the shares in The Kowloon Motor Bus Holdings          
    Limited                                                 (1,128,145  )     
                                                                              
      Final dividends, in respect of the year ended 31 December, 2000,        
    approved and paid                                       (87,078  )        
                                                                              
      Special interim dividend in specie declared and distributed             
                                                            (1,354,550  )     
                                                                              
    Unaudited consolidated net tangible assets of the Kowloon Development     
      Group as at 30 June, 2001                             3,425,539         
                                                                              
    Interim dividend, in respect of the six months ended 30 June, 2001,       
      declared and paid after 30 June, 2001                 (19,351  )        
                                                                              
    Loss on disposal of investment properties after 30 June, 2001 (Note 1)    
                                                            (243,143  )       
                                                                              
    Revaluation deficit relating to the investment properties disposed        
    after 30 June, 2001  transferred to income statement (Note 1)  241,931    
                                                                              
    Net revaluation deficit arising from the property interests held by       
      the Kowloon Development Group as at 30 November, 2001 (Note 2)          
                                                            (337,548  )       
                                                                              
    Unaudited pro forma adjusted consolidated net tangible assets             
                                                            3,067,428         
                                                                              
    Unaudited pro forma adjusted consolidated net tangible assets per share   
      (based on 483,767,850 shares in issue as at 11 January, 2002) (HK$)     
                                                                    6.34      
                                                                              
    Notes:                                                                    
                                                                              
    1.  Details of the disposals were set out under note 15 headed "Post      
    balance sheet events" in the unaudited interim financial report of        
    Kowloon Development for the six months ended 30 June, 2001.               
                                                                              
    2.  The net deficit arising from revaluation of property interests held   
    by the Kowloon Development Group is based on the valuation carried out    
    by Vigers Hong Kong Limited on the Kowloon Development Group's property   
    interests as at 30 November, 2001, the report of which is set out in      
    appendix III to the composite offer document.                             
                                                                              
    In accordance with the accounting policy adopted by the Kowloon           
    Development Group, properties held for sale are stated at the lower of    
    cost and net realisable value, properties under development are stated    
    at cost including borrowing costs capitalised, less any provisions        
    considered necessary by the directors and properties held for self-use    
    are stated at cost less accumulated depreciation. Accordingly, the net    
    surplus arising from revaluation of these properties is not recognised    
    in the financial statements of the Kowloon Development Group.             
                                                                              
    The composite offer document also contains the unaudited pro forma        
    statement of adjusted consolidated assets and liabilities of Kowloon      
    Development Group prepared based on the audited financial statements of   
    Kowloon Development Group for the year ended 31 December, 2000 and the    
    unaudited interim financial report of Kowloon Development for the six     
    months ended 30 June, 2001 (the "Interim Financial Report") and           
    adjusted for the effects of the disposals of two investment properties    
    subsequent to 30 June, 2001 as referred to in note 15 of the Interim      
    Financial Report: