1985 — Page 7

Report of the Directors

The directors have pleasure in submitting to shareholders their annual report and audited statement of accounts for the year ended 31st December 1985.

Group Activities

The principal activities of the Company and its subsidiaries are ferry operations, property investment and development, general trading, travel, shipbuilding and repairs.

Accounts

The profit and changes in financial position. of the Group for the year ended 31st December 1985 and the state of the Company's and the Group's affairs at that date are set out in the accounts on pages 7 to 20.

An interim dividend of 5 cents per share was paid on 7th October 1985. The directors now recommend that a final dividend of 10 cents per share be declared in respect of the year ended 31st December 1985.

Charitable Donations

The Group's charitable donations paid during the year amounted to $2,800.

Fixed Assets

Movements in fixed assets during the year are set out in notes 9 and 10 on the accounts.

Share Capital And Reserves

Details of the increases in the authorised and issued share capital together with the movements in the reserves during the year are set out in notes 18 and 19 on the accounts.

Directors

The members of the Board of Directors serving at the date of this report are shown on page 1.

The Directors regret to report the death of Mr. Shum Wai Yau on 19th December 1985 and wish to acknowledge his valuable contribution to the Company since 1955. Mr. Dominic W. Wong was appointed on the 11th March 1986 to fill the casual vacancy.

In accordance with Articles 90 and 104 of the Company's Articles of Association, Mr. Lau Chan Kwok, Dr. Liu Yan Tak, Mr. Lee Pak Yiu and Sir Shiu Kin Tang retire from the board by rotation and, being eligible, offer themselves for re-election. Mr. Dominic W. Wong in accordance with Article 110 of the Company's Articles of Association retires from the board, and being eligible, offers himself for re-election.

No contracts of significance to which the Company or its subsidiaries was a party and in which a director of the Company had a material interest, subsisted at the end of the year or at any time during the year.

At no time during the year was the Company or its subsidiaries a party to any arrangements to enable the directors of the Company to acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate.

Auditors

Peat, Marwick, Mitchell & Co. retire and, being eligible, offer themselves for re- appointment.

Edmond T.C. Lau Managing Director

Shiu Kin Tang Director

Kenneth P.F. Fung Director

Hong Kong, 11th March, 1986

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