CMB_1998 — Page 8

Report of the Directors

The directors have pleasure in submitting their annual report together with the audited statement of accounts for the year ended 30th June, 1998.

GROUP'S ACTIVITIES

The principal activities of the company and of the group are the operation of franchised public motor buses in Hong Kong and property development and investment. The principal activities of the subsidiaries are set out in note 9 on the accounts.

SUBSIDIARIES

Particulars of the subsidiaries at 30th June, 1998 are set out in note 9 on the accounts.

ASSOCIATED COMPANIES

Particulars of the associated companies at 30th June, 1998 are set out in note 10 on the accounts.

ACCOUNTS

The profit of the company and of the group for the year ended 30th June, 1998 and the state of affairs of the company and of the group at that date are set out in the accounts on pages 15 to 32.

A first interim dividend of HK$0.10 per share and a special dividend of HK$1.80 per share were paid on 31st March, 1998. A second interim dividend of HK$1.10 per share was paid on 29th October, 1998. The directors now recommend that a final dividend of HK$0.20 per share be paid in respect of the year ended 30th June, 1998, and a special dividend of HK$1.20 per share and that HK$10,000,000 be transferred to general reserve.

CHARITABLE DONATIONS

Donations made by the group during the year amounted to HK$6,000 (1997: HK$15,700).

FIXED ASSETS

Movements in fixed assets during the year are set out in note 8 on the accounts.

During the

DIRECTORS

year, the company has added 24 new buses to the company's bus fleet and has disposed of 91 old buses.

The directors during the year are given on page 2 and further information regarding directors is given on page 12.

Mr. James Y.C. So, C.B.E., J.P. has been appointed to be an independent non-executive director with effect from 1st December, 1998.

In accordance with articles 120A and 122 of the company's articles of association, Madam Ngan Kit-ling, Dr. Henry Ngan, Messrs. Liu Lit-mo, Fritz Helmreich and James Y.C. So retire from the board and, being eligible, offer themselves for re-election.

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