CMB_1989 — Page 12

Purchase of Industrial Premises at Chai Wan

The Company has purchased floor space amounting to approximately 629 square metres, plus approximately 305 square metres of associated flat roof space, in a new industrial building in Chai Wan, in order to facilitate rationalisation of the spare parts stores.

Inland Lot 5532, Tsat Tse Mui Road, and Inland Lot 7178, King's Road, North Point

As already announced, approval has been given by the Town Planning Board of a Master Layout Plan for the redevelopment of the sites of Inland Lot 7178 (owned by Island Communication Enterprises Limited) and Inland Lot 5532 (owned by the Company). The redevelopment, amongst numerous other requirements, involves (1) a modification of the Crown Lease of IL. 7178 to permit commercial/residential use; (2) the acquisition from Government of part of the intervening public road (Tsat Tse Mui Road), (3) boundary alterations which will result from such acquisition and from surrender of portion of I.L. 5532 for the widening of Tanner Road, and (4) the provision of space required by Government for various public G.I.C. facilities.

Discussions have taken place with various Government Departments concerned, which were attended by the Company's representatives and solicitors, in regard to the appropriate Crown Land re-grant and modification documentation to give effect to the above requirements and the proposed redevelopment of the two sites according to the approved Master Layout Plan. Also, correspondence is being exchanged between Government and the Company but agreement has not yet been reached on the choice of alternative forms of documentation put forward and discussed by the parties.

Future Outlook

Our future plans provide for the introduction of bus services to new estates in Eastern and Southern Districts of Hong Kong Island, and the introduction of additional services through the Eastern Harbour Tunnel which opened to buses in September 1989.

The problem of road congestion is likely to be with us for a long time to come. The Government's Green Paper on Transport Policy recognises the problem and we must hope that Government will soon introduce measures to counter the detrimental effect that road congestion has on the reliability of our bus services and on the convenience of the passengers.

Appreciation

The two Directors appointed by the Governor under the Public Bus Services Ordinance were the Commissioner for Transport, Mr. James SO Yiu-cho, J.P. and the Deputy Secretary for Transport (Transport Services), Mrs. Alice LAI SIU Po-chun. On behalf of the shareholders and my fellow Directors I would like to record my appreciation of their participation in the decision-making process.

In conclusion, I would like to thank our loyal staff for their dedication and hard work during the year.

Hong Kong, 1st November, 1989

7

NGAN Shing-kwan Chairman