CMB_1994 — Page 24

Notes on The Accounts (Continued)

9. INTEREST IN SUBSIDIARIES

Unlisted shares, at cost

Amount due from subsidiaries

Details of the subsidiaries are as follows:-

1994

1993

$000's

$000's

1,018,356

569,356

2,793

1,570

1,021,149

570,926

Name of company

Country of incorporation and operation

Issued ordinary share capital

Percentage

directly held

Principal

activity

Island Communication Enterprises Limited

Hong Kong

$185,073,024

100%

Investment holding

Heartwell Limited

Hong Kong

Communication Holdings Limited

British Virgin Islands

$90,000,020 $359,000,100

100%

Property holding

100%

Investment holding

10. INTEREST IN ASSOCIATED COMPANIES

Unlisted shares, at cost

Loans to associated companies

The group

1994

1993

$000's

$000's

1

588,052 402,944

588,053

402,945

Details of the associated companies, which are incorporated in the British Virgin Islands, are as follows:-

Name of

company

Swire and Island Communication

Developments Limited

("Swire and Island")

Island Land Development Limited

("Island Land")

Percentage of shares held

Non-voting dividend shares 100%

Ordinary shares - 40%

Ordinary shares - 50%

Principal activity

Property development for resale and investment

Property development for resale and

investment

Pursuant to a shareholders' agreement ("agreement") entered into between Swire and Island and its shareholders on 6th November, 1991, Swire and Island purchased for redevelopment purpose two plots of land respectively from the company and its subsidiary, Island Communication Enterprises Limited ("ICE") for a total consideration of $980 million. In accordance with the terms of the agreement, the cost of land together with any subsequent modification premium thereon are financed by interest free shareholders' loans in proportion to the shareholders' respective holding of ordinary shares. At 30th June, 1994, the amount of modification premium payable is still subject to negotiation with the Hong Kong Government.

The other shareholder has provided a guarantee to a bank in respect of a loan facility of $600 million extended to Swire and Island. ICE has provided an indemnity to the other shareholder for forty percent of this guarantee amounting to $240 million. At 30th June, 1994, the bank loan obtained by Swire and Island under this loan facility amounts to $118 million approximately.

Pursuant to a shareholders' agreement ("agreement") entered into between Island Land and its shareholders on 20th November, 1993, Island Land purchased for redevelopment purposes a plot of land from the company for a total consideration of $360 million. In accordance with the terms of the agreement, the cost of land together with any subsequent modification premium thereon are financed by an interest free shareholders' loan in proportion to the shareholders' respective holding of ordinary shares. At 30th June, 1994 the amount of modification premium payable is still subject to negotiation with the Hong Kong Government.

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