09:28 CROSS-HAR(HOLD)<00032> - Unusual price & volume movements The Stock Exchange has received a message from Cross-Harbour (Holdings) Limited which is reproduced as follows:- "This statement is made at the request of The Stock Exchange of Hong Kong Limited. We have noted the recent increases in the price and volume of the shares of the Company and wish to state that we are not aware of any reasons for such increase. Save as disclosed in our final result announcement dated 11 March 2005, we confirm that there are no negotiations or agreements relating to intended acquisitions or realizations which are discloseable under rule 13.23 of the Listing Rules, neither is the Board aware of any matter discloseable under the general obligation imposed by rule 13.09 of the Listing Rules, which is or may be of a price-sensitive nature. Made by the order of the Board of The Cross-Harbour (Holdings) Limited the directors of which individually and jointly accept responsibility for the accuracy of this statement. As the date hereof, the Board comprises the following members: Executive Directors: Mr. Cheung Chung Kiu (Chairman) Mr. Yeung Hin Chung, John (Managing Director) Mr. Yuen Wing Shing Mr. Wong Chi Keung Mr. Leung Wai Fai Ms. Tung Wai Lan, Iris Non-executive Director: Mr. Lee Ka Sze, Carmelo Independent Non-executive Directors : Mr. Wong Wai Kwong, David Mr. Wong Yat Fai Mr. Ng Kwok Fu By Order of the Board The Cross-Harbour (Holdings) Limited Yuen Wing Shing Director 22 March 2005" 3. Other operating income Year ended 31 December, 2004 2003 HK$'000 HK$'000 Included in other operating income are: Interest income from banks 177 70 Interest income from associates 3,295 820 Gain on disposal of investment properties 2,529 - ====== ====== 4. Impairment loss recognised in respect of property interests held for development Year ended 31 December, 2004 2003 HK$'000 HK$'000 Impairment loss for the year 183,381 - The Group through a wholly-owned subsidiary ("SPV") has a property interest held for development in Chenghai Royal Garden ("Development Project"). The site with an area of approximately 466,662 sq.m. (5,023, 150 sq. ft.) ("Land") is situated at the estuary of Xinjin River, Longhu District, Shantou, Guangdong Province, the People's Republic of China (" PRC"). Pursuant to a Contract for Pre-registration of Grant of State- owned Land Use Rights dated 5th August, 1992 ("Contract"), SPV has been granted a pre-registered land use rights of the Land by Shantou City Chenghai District Planning and State-owned Land Resources Bureau (" Chenghai Bureau"). The carrying amount of the Development Project as recorded by the Group ("Carrying Amount") is approximately HK$183.4 million (equivalent to RMB195.1million). Included in the Carrying Amount is a payment of approximately HK$49.8 million (equivalent to RMB53 million) to the Chenghai Bureau under the Contract ("Amount Paid"). After submitting the application for the land requisition to the Chenghai Bureau and upon the land use rights of the Land being granted, SPV has to make a final payment of approximately HK$23.4 million (equivalent to RMB24.9 million) ("Final Payment"). The deadline of application for the land requisition was 4th August, 1993 which had been extended four times at the request of SPV to 16th July, 2004 ("Deadline"). In view of the Deadline, the Group considered that, under the Contract, SPV may: (i) proceed to apply for the land requisition of the Land on or before the Deadline and settle the Final Payment; (ii) apply for an extension of the Deadline; or (iii) terminate the Contract and claim for a refund of approximately HK$ 46.2 million (equivalent to RMB49.1 million), being part of the Amount Paid ("Amount Claimed"). The Group considered that it was not the suitable time to proceed with the land requisition and determined to request an extension of time. SPV therefore delivered a letter dated 19th April, 2004 to the Chenghai Bureau to request for an extension of the Deadline but the Chenghai Bureau refused to receive the letter and advised that such request should be diverted to Shantou City Longhu District Planning and State-owned Land Resources Bureau ("Longhu Bureau") and their supervisory bureau, Shantou City Planning and State-owned Land Resources Bureau ("Shantou Bureau"), since the authority and administrative power over the Land had already been transferred to the Longhu Bureau by that time. SPV then delivered letters of the same request to the Longhu Bureau and the Shantou Bureau. Both bureaus however insisted that they would not consider the request either and advised SPV to go back to the Chenghai Bureau for resolving the matter. Given the insistence of the three bureaus in refusing SPV's request of extension, SPV sought advices and assistance from Shantou governmental authorities, but to no avail. In early July 2004, the Deadline became imminent and having considered that (i) extension of the Deadline is unlikely in view of the unexpected and undesirable replies from the bureaus; and (ii) the slowdown of the luxury residential market in Shantou, the Group determined not to proceed with the application of the land requisition and instead terminated the Contract and requested the Chenghai Bureau to refund the Amount Claimed. Between July 2004 and February 2005, SPV issued four letters of demand to the Chenghai Bureau to notify the termination of the Contract and requested a refund of the Amount Claimed. SPV received three reply letters by which the Chenghai Bureau denied its obligation for the refund on the allegation that the pre-registration relationship between the parties under the Contract still exists. The Chenghai Bureau suggested the following three alternatives for SPV's consideration: 1. SPV proceeds to apply for land requisition of the Land and settles the Final Payment pursuant to the Contract despite of the Deadline; or 2. SPV applies for a portion of the Land with area equivalent to the Amount Paid; or