Chairman’s Report

I am pleased to report that, although we had beenexpecting poor results for this half year because of slow growthin the world economy, the company has performed verysatisfactorily.Operating profits for this first half are in fact verymuch (19) with those for the corresponding (20) last year.Profits reached £l 15 million before tax, compared with £l 16.3million last year. Much of our success in the last six months can be (21) to the fact that all ourmajor construction projects remained on schedule. Particularly pleasing was the early (22)of amajor building contract in Canada.

The company has made good progress with the initiatives announced at the Annual GeneralMeeting. The majority of shareholders (23) the Board’s decision to sell the company’s loss-makingengineering (24). It was the Board’s belief that the company would (25) most benefit by (26) itsresources on the expansion of its construction activities. Negotiations with a potential buyer beganin February and are now at a critical (27).However, we feel that we are not as yet in a (28) tocomment on what the outcome is likely to be.

In June, we made a successful (29) for the Renishaw Construction Company of Hong KongSAR, in order to give us greater (30) to markets in South East Asia. We still have sufficientresources to pursue our growth (31) and are at present (32) several other business opportunitieswhich, like Renishaw Construction, would (33) new markets to us.

19.A in order B on track C in line D on target

20.A session B term C season D period

21.A attributed B referred C assigned D designated

22.A termination B ending C completion D finalising

23.A confirmed B maintained C agreed D supported

24.A portion B component C sector D division

25.A have B gain C find D earn

26.A focusing B directing C pointing D strengthening

27.A height B step C edge D stage

28.A condition B point C position D capacity

29.A request B price C demand D bid

30.A access B approach C admission D entrance

31.A strategy B process C promotion D system

32.A inquiring B deliberating C exploring D searching

33.A send B open C provide D give