REPORT OF THE DIRECTORS
THE directors have pleasure in submitting to shareholders
their report and statement of accounts for the year ended 31st December, 1985.
Principal activities
The principal activity of the Company is investment holding and the activities of its principal subsidiary and associated companies are shown on pages 44 and 45.
Group profit
The consolidated profit and loss account is set out on page 31 and shows the Group profit for the year ended 31st December, 1985.
Dividends
An interim dividend at the rate of 35 cents per share was paid to the ordinary shareholders on 15th October, 1985 and the directors recommend the declaration of a final dividend at the rate of 70 cents per share payable on 29th May, 1986 to all persons registered as holders of ordinary shares on that date.
Reserves
Movements in the capital and revenue reserves of the Company and the Group during the year are set out in
note 9 on the accounts.
Charitable donations
Donations to charities by the Group during the year amounted to HK$572,000 (1984 -
―
HK$1,969,000).
Fixed assets
Particulars of the movements of fixed assets are set out in note 2 on the accounts.
Share capital
During the year (a) 173,111 ordinary shares of HK$1 each were issued on the exercise of the right to subscribe by holders of warrants which were issued with the 9% unsecured loan stock 1989/93 and (b) 10,431,000 ordinary shares of HK$1 each were issued as part consideration in respect of the acquisition by the Group of 100% interest in China Building, Central, Hong Kong. Under the provisions of Article 3(D), the Company redeemed 80,000,000 72% cumulative redeemable participating preference shares of HK$1 each (preference shares) on 31st December, 1985. In addition, on 22nd November, 1985, the Company redeemed 2,717,856 preference shares by private treaty.
Directors
The board of directors, as now constituted, is listed on page 2.
Mr J.A. Richardson resigned on 30th April, 1985. Messrs G.C. Magnus, C.Y.K. Lee and P.J. Wrangham retire by rotation under the provisions of Article 85 and, being eligible, offer themselves for re-election.
Messrs K.A. Miller and A.C. van der Linden were alternate directors during the year.
Interest in contracts
In October, 1985, an agreement was concluded with a third party whereby the Group acquired a 50% interest in Woodhall Company Limited, which owns a substantial part of China Building and, at that time, Mr Li Ka-shing granted an option to a subsidiary of the Company to acquire the remaining 50% interest owned by him on the same terms. In November, 1985, the subsidiary exercised this option and, under the terms of an agreement entered into between it and Mr Li, the total consideration of HK$258 million was satisfied part in cash and part by the issue of 4,706,000 ordinary shares of HK$1 each in the Company.
In October, 1985, the Company entered into an agreement with its associate, Hongkong Electric Holdings Limited, whereby Union Faith Company Limited, a company owned 50% by each of them, would make an offer for all the issued share capital of International City Holdings Limited. At the same time, Cheung Kong (Holdings) Limited irrevocably agreed to accept the offer in respect of its 30.7% holding in the equity of International City Holdings Limited.
In August, 1985, a subsidiary of the Company, Hutchison Properties Limited, entered into a contract for the sale of a property known as 6M Bowen Road/Horne Mansion (IL7729 and IL8222) to a subsidiary of Cheung
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HUTCHISON WHAMPOA LIMITED