chairman s statement FINANCIAL HIGHLIGHTS STRATEGIES AHEAD

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1 8 chairman s statement On behalf of the Board of Directors, I am pleased to present the Annual Re p o rt and Financial Statements of Hong Leong Properties Berhad Group for the financial ye a r ended 30 June FINANCIAL HIGHLIGHTS We recorded a loss after tax and minority interest of RM57.7 million for the year ended 30 June 2000, compared to the profit after tax and minority interest of RM34.9 million achieved in the previous corresponding period. Included in the loss a fter tax and minority interest of RM57.7 million were exc e ptional items of RM88.0 million, primarily resulting from the write down of our hotel assets to market value in the financial year. We recorded a turnover of RM255.8 million, a decrease of 16.2 percent from the RM305.2 million recorded in the previous corresponding period. Our net tangible assets decreased to RM677.4 million as at 30 June 2000, from RM747.8 million in the previous year. STRATEGIES AHEAD Our a s s et transformation st ra te g i e s as described in detail last year can be summarised as fo l l ows: to restructure our asset port folio by focusing our resourc e s on assets which will generate optimal and sustainable long term shareholders return whilst disposing non-core assets with minimal yield. In the past year, our s h o rt to medium term transformation strategies to realign our asset port folio have commenced with the acquisition of two pieces of immediate development pot e n t i a l land of 230 acres and 800 acres respective l y, in Rawang. These purchases we r e

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3 p r o p e r t y d e v e l o p m e n t 9 partially funded by the trading of one of our investment properties which is also in line with our transformation strategies of trading our property inve s t m e n t p o rt folio to generate cash flow for investment opportunities. As with other planned p u rchases, the purchase of the land in Rawang will help ensure the consta n t availability of affo rdable and prime development land to generate continuous r eturns for our shareholders. Concurrently, we are actively marketing to reduce our l ow yielding landbank in order to focus our resources on assets which will generate maximum and recurring returns for our shareholders. In addition to the above asset transformation strategies, we have also tapped on the strengths of information technology to transform our business processes as well as the products offe red to our custo m e rs. Our strategy in the transfo r m a t i o n of our business processes is two-fold: firstly, we are using information technology to elevate our business to an e-enabled organisation with the hosting of our interactive website: MyStorey.com. In essence, MyStorey.com is a fully equipped, intelligent, virtual marketing office which emp owers our customers with direct access to all our products and services, seven days a we e k, twenty four hours a day, in way s that are uniquely convenient to them. Secondly, and more importantly, we have invested in leading-edge Internet and d a tabase technologies to provide MySt o r e y.com with a superior Customer Relationship Management system that will provide exc e ptional personalised customer service to our existing and prospective customers. Not only will our customers be able to eventually purchase properties and other services via MyStorey.com, but they will also be able to track the status of their transactions and communicate any questions they may have instantaneously to our sales staff. Opposite page: The Emerald This page: The Botanica, Bukit Rahman Putra (top) Homestead at Pantai Sepang Putra (left) Castilla, Bukit Rahman Putra (right)

4 p r o p e r t y d e v e l o p m e n t 10 Thus, MySt o r e y.com will provide us with a comp et i t i ve edge against our comp et i t o r s in terms of personalised and superior customer service while increasing the cost effectiveness of our business processes. Simultaneously, it will also increase the productivity and efficiency of our sales fo rce and equip them with the necessary tools to face the challenges ahead. Our plans for MySt o r e y.com will not stop at offering only our products and serv i c e s to our customers. We are constantly on the lookout for exciting opportunities to e ventually develop MySt o r e y.com into a full fledged Internet portal which will turn our website into an information rich centre, delivering quality products, serv i c e s and information to all Internet users, thereby not only enhancing our productivity, efficiency and cost effectiveness, but also enhancing our customer base. While MyStorey.com will e-enable our business processes, we have embarked on a concept called Online Lifestyle that will change the way our customers work, live, play and learn. Where practicable, our future developments will be equipped with high-speed, secure, always-connected Internet access, thus creating e-communities that offer a multitude of high technology features for the modern family and emphasising an e-community atmosphere where e-relationships, e-shopping and e-learning abound. Our intelligent residences will be multimedia system ready which will enable new world services such as on-line games and entertainment, interactive education, shopping, messaging and home automation to be available twenty four hours a day. Meanwhile, our office buildings will embody the Online L i festyle concept by being equipped with the latest in high-speed communications infrastructure that will enable our tenants to fully enjoy fast, secure and reliable access to the Internet in order for them to stay competitive in today s market.

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6 p r o p e r t y d e v e l o p m e n t 11 Coming to our P ro p e rty Development Division, our focus continues to be market d r i ven, i.e., on affo rdable housing, which is evident in our 7,100 acre Pantai Sepang Putra integrated township project. With the first of our bungalows due to be handed over in October this ye a r, we will witness the 1,500 acre Lake District, being the first phase of Pantai Sepang Putra, come to life. We have also had considerable success with our Orc h a rd and Homestead lots which have been designed to provide the ideal we e kend retreat for the entire family. In the meantime, plans are already in progress to develop the 400 acre University Precinct in tandem with the recent donation of 100 acres of land to New Era College. We are confid e n t that with the progress made to date, Pantai Sepang Putra will offer our residents a lifestyle that combines ideal living, wo rking, educational and recreational environments. Now in the fourth year of development, our Precinct 8 township located within the Putrajaya Federal Administrative Centre saw the first of its residents move in early this ye a r. Truly a world class development, Precinct 8 offers eve rything requ i r e d for today s lifestyle - from elegant yet functionally designed homes with high-tech features, natural garden-like environment, a unique lake-side promenade, smart schools to superior infrastructure. Once fully developed, Precinct 8 will be the neighbourhood for families to live, grow and learn in. 3 KiaPeng, our prestigious residential development strategically located in the h e a rt of the Golden Triangle was launched last year to great acclaim from discerning investors. It is a low-density development of only 139 exclusive units which offers its residents a host of choice facilities whether for business or pleasure. Clad in Brazilian red capoa bonito granite, 3 KiaPeng is an investment of immense potential as well as a home of undeniable luxury. Opposite page: Government Apartments, Precinct 8, Putrajaya (top) 3 KiaPeng (middle) This page: Bungalows, Pantai Sepang Putra (top) Semi-detached Houses, Precinct 8, Putrajaya (left), Orchard lot, Pantai Sepang Putra (right)