2. 1 2004 Annual Results Announcement “Solid Foundation, Record Results” 28 February 2005

3. 2 Key Market Statistics Market Performance

4. 3 2004 Outperformed 2003 on Both Income and Costs

5. 4 Solid Foundation Leading to Record Profit Since Merger

6. 5 Income Surged in line with Market Activity

7. 6 2004 Investment Income

8. 7 Cost Control Reaping Benefits

9. 8 Effect of Changes in Accounting Policies Following Adoption of New Accounting Standards

10. 9 Second Half Vs First Half

11. 10 2005 Key Initiatives – Becoming a Mainland Partner Strengthen relationships with the Mainland u Continue to reinforce Hong Kong as the premier international capital formation centre for the Mainland; u Work with our Mainland counterparts to establish a framework for the simultaneous listing of A and H shares; u Develop and promote existing and new Mainland- related products

12. 11 2005 Key Initiatives – Building a Quality Market Strengthen market infrastructure u Consolidate the networks for major market systems; u Upgrade the host capacity of major market systems and conduct a comprehensive review of the AMS/3 satellite applications; u Support the Government’s drive to develop a scripless market model in Hong Kong

13. 12 2005 Key Initiatives – Building a Quality Market Improve market liquidity and efficiency u Narrow the minimum trading spreads u Discuss with SFC to introduce measures that permit higher flexibility on position limits in trading derivatives u Refurbish the Trading Hall u Amend Main Board Listing Rules to require Main Board issuers to publish a short notification announcement in newspapers instead of the full announcement

14. 13 2005 Key Initiatives – Building a Quality Market Strengthen market regulation u Review the listing decision-making structure; u Review the operation and regulatory policy of GEM; u Support the establishment of statutory listing requirements and a more regulatory framework for the accounting industry; u Improve the efficiency of listing applications and IPO vetting processes; u Further efforts to improve corporate governance and effective quality management after listing

15. 14 Thank you