10:14 LCH BANK<01111> & LIU CHONG HING<00194>-Joint Announcement-4 As at the date of this announcement, LCH Insurance is a private company duly incorporated under the laws of Hong Kong having an authorised share capital of HK$50,000,000 divided into 50,000,000 ordinary shares of HK$1.00 each, all of which have been issued, are fully paid-up and are beneficially owned by LCH Investment. LCH Insurance is principally engaged in the business of underwriting insurance policies on fire, marine, theft, accident, motor car, workers' compensation, contractors' all risks, and shipment for import and export cargoes. It is also an agent for life insurance and staff retirement provident fund insurance. LCH Insurance is registered under the Insurance Companies Ordinance as an authorised insurer. The Adjusted Audited Net Asset Value of LCH Insurance as at 31 December 2004 amounted to approximately HK$95.9 million. For the year ended 31 December 2004, the audited net profit before and after taxation of LCH Insurance amounted to approximately HK$30.8 million and HK$25.9 million respectively. For the year ended 31 December 2003, the audited net profit before and after taxation of LCH Insurance amounted to approximately HK$29.4 million and HK$23.2 million respectively. III. REASONS FOR THE TRANSACTION LCH Investment is the Controlling Shareholder of LCH Bank, by virtue of its equity interest of approximately 45.46 per cent. of LCH Bank. LCH Investment is principally engaged in property investment, property development, property management, treasury investment, banking (through its investment in LCH Bank), insurance, trading and manufacturing, whereas LCH Bank is principally engaged in the provision of banking and related financial services. The purpose of the Transaction is to improve the operation efficiency of both LCH Bank and LCH Investment, and further provide a clear delineation of businesses between the two companies, such that the financial service-related businesses (including banking and insurance) will be centralised under LCH Bank. The grouping of LCH Insurance within LCH Bank will also expand the financial services provided by LCH Bank by encompassing insurance services under the banking group and create synergies for their existing businesses, improve efficiencies, and reduce operation and administration costs for both LCH Bank and LCH Insurance. In view of the synergies of the businesses and client bases of LCH Bank and LCH Insurance, the respective directors of LCH Investment and LCH Bank believe that the Transaction will benefit both LCH Bank and LCH Insurance in terms of shareholders' value, business development and corporate image. The net proceeds of approximately HK$211 million receivable by LCH Investment under the Transaction will be applied as to approximately HK$128 million for repayment of existing bank borrowings and as to approximately HK$83 million for development of LCH Investment's property projects. Based on the consideration for the Transaction and the Adjusted Audited Net Asset Value of LCH Insurance as at 31 December 2004 (assuming that such net asset value will remain unchanged as at the date of Completion), it is expected that LCH Investment will make an exceptional gain of approximately HK$63.3 million (subject to final audit) as a result of the disposal of LCH Insurance. The respective directors of LCH Investment and LCH Bank consider that the Transaction is made on normal commercial terms and is in the interests of both companies and their respective shareholders as a whole. IV. GENERAL