CMB_1995 — Page 9

Report of the Directors (Continued)

(a)

The China Motor Bus Company Limited General Monthly Rated Staff Retirement Scheme

(i) The market value of the scheme assets as at 30th June, 1995 was HK$6,172,000.

(ii) The asset market valuation (includes present value of amortisation payments of solvency deficit) as a percentage of the

present value of past service liabilities was 79%.

(iii) The solvency basis funding deficiency in the scheme was HK$3,676,000 and the on-going funding basis deficiency excluding

the above solvency deficiency was HK$2,684,000.

(b) The China Motor Bus Company Limited Retirement Scheme

(i)

The market value of the scheme assets as at 30th June, 1995 was HK$80,306,000.

(ii) The asset market valuation (includes present value of amortisation payments of solvency deficit) as a percentage of the

present value of past service liabilities was 78%.

(iii) The solvency basis funding deficiency in the scheme was HK$62,951,000 and the on-going funding basis deficiency

excluding the above solvency deficiency was HK$39,649,000.

(c) The China Motor Bus Company Limited Senior Executives Retirement Scheme

(i)

The market value of the scheme assets as at 30th June, 1995 was HK$5,281,000.

(ii) The asset market valuation (includes the special one-time solvency payment) as a percentage of the present value of past

service liabilities was 95%.

(iii) The solvency basis funding deficiency in the scheme was HK$6,285,000 and the on-going funding basis deficiency excluding

the above solvency deficiency was HK$581,000.

COMMENTARY ON ANNUAL RESULTS

The operating profit of the group for the year under review increased to HK$122.2 million from HK$90.4 million in the previous year. This increase is partly due to the increase in bus fares in July 1994 the effect of which was partially offset by the decrease in the number of passengers carried during the year under review and the increase in cost due to inflationary pressures. There was an exceptional profit of HK$189.4 million for the year ended 30th June, 1995 which was derived from the sale of Aberdeen Inland Lot Nos. 338 and 339, a bus depot at Wong Chuk Hang Road, to a joint venture company which the group has a 50% shareholding.

At 30th June, 1995, the group had cash and cash equivalents of HK$862.8 million which were held in the form of short term deposits or cash at banks.

The group's annual results are further described in the Chairman's Statement on pages 8 to 9 of this annual report.

MAJOR CUSTOMERS AND SUPPLIERS

For the year ended 30th June, 1995

(a) the aggregate amount of turnover attributable to the group's five largest customers represented less than 30 per cent of the group's

total turnover; and

(b) the aggregate amount of purchases (not including the purchases of items which are of a capital nature) attributable to the group's

five largest suppliers represented approximately 57 per cent by value of the group's total purchases.

SUMMARY OF FINANCIAL DATA

A summary of the group's financial data for the last five years is shown on page 29.

AUDITORS

A resolution for the reappointment of KPMG Peat Marwick as auditors of the company is to be proposed at the forthcoming ordinary yearly meeting.

By order of the board

NGAN Shing-kwan Chairman

Hong Kong, 10th November, 1995

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