CMB_2001 — Page 8

Report of the Directors (Continued)

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

The company periodically repurchases its ordinary shares when they are significantly undervalued in order to enhance shareholder. value. During the year, the company repurchased a total of 365,200 ordinary shares of the company on The Stock Exchange of Hong Kong Limited, details of which are shown in note 17 on the accounts. All of these ordinary shares had been cancelled by the company upon repurchase.

Save as aforesaid, the company and its subsidiaries had not purchased, sold or redeemed any of the company's listed securities

during the

year.

SHARE CAPITAL

Particulars of the movements in the share capital of the company during the year are set out in note 17 on the accounts.

EMPLOYEES' RETIREMENT SCHEMES

During the

year, the company operated three separate non-contributory defined benefit retirement schemes, namely, "China Motor Bus General Monthly Rated Staff Retirement Scheme", "China Motor Bus Retirement Scheme" and "China Motor Bus Senior Executive Retirement Scheme" for its monthly rated staff, daily rated staff and senior executives respectively. All three schemes are formally established under trust and registered with the Registrar of Occupational Retirement Schemes. The assets of the schemes are held by an independent trustee, HSBC International Trustee Limited. The members' benefits are determined based on their final remuneration and length of service. The company's contributions to the schemes are made in accordance with the recommendations of independent actuaries who carry out actuarial valuations of the schemes at regular intervals, currently annually, and charged to the profit and loss account. The company's contributions to the schemes during the year were made in accordance with the recommendations of the independent actuaries. The total retirement scheme costs for the year for the three schemes amounted to HK$Nil.

Effective 5th October, 2000, China Motor Bus Retirement Scheme was wound up and its assets and liabilities were transferred to China Motor Bus General Monthly Rated Staff Retirement Scheme. The affected staff continue to accrue the same rate of benefits under the China Motor Bus General Monthly Rated Staff Retirement Scheme.

The actuarial valuation of the two schemes as at 30th June, 2001 showed that there were sufficient assets in each of the two schemes to cover the on-going liabilities of the schemes. The actuary of these schemes is Watson Wyatt Hong Kong Limited. In the actuarial valuations, the aggregate cost valuation method was used. The major assumptions used in these valuations were: Investment Return and Salary Escalation at 8% per annum; Normal Retirement Age 65; Age related withdrawal rates. Other relevant information extracted from the valuations pertaining to these schemes is set out below:-

China Motor Bus General Monthly Rated Staff Retirement Scheme

(a)

(i)

(ii)

The market value of the scheme assets as at 30th June, 2001 was HK$2,449,000. The on-going funding level of the scheme was 164%.

(b)

(iii) The on-going basis funding surplus in the scheme was HK$959,000.

China Motor Bus Senior Executive Retirement Scheme

(i)

(ii)

The market value of the scheme assets as at 30th June, 2001 was HK$10,273,000. The on-going funding level of the scheme was 120%.

(iii) The on-going basis funding surplus in the scheme was HK$1,695,000.

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