1988 — Page 10

REPORT OF THE DIRECTORS

The directors have pleasure in submitting their report and audited accounts for the year ended 31 December 1988 to be presented at the annual general meeting to be held at Central Harbour Services Pier, 1st Floor, Pier Road, Hong Kong on 28 April 1989.

Ferry franchise

The Governor-in-Council has approved an application by the company to transfer its ferry franchise to a wholly-owned subsidiary company, The Hongkong and Yaumati Ferry Co. Ltd. (formerly known as Sealink Ferries Ltd.), with effect from 1 January 1989. The main purpose of the restructuring is to group the franchised and non-franchised ferry activities into a single corporate entity separated from other non-utility activities of the holding company.

The name of the company was changed to its present name on 1 January 1989 for the purpose of reflecting more accurately the present activities of the company.

Principal activities

The principal activities of the group are ferry operations and related business, trading and services, property investment and travel business. The turnover and contribution to operating profit of the principal activities of the group are as follows:-

TURNOVER

OPERATING PROFIT

1988

HK$ million

1987

HK$ million

1988

HK$ million

1987

HK$ million

Ferry operations

and related business

394.3

390.4

59.3

57.6

Trading and services

170.3

161.6

12.0

11.1

Property investment

35.7

31.0

30.1

26.7

Travel and others

74.0

53.3

2.0

2.2

Net interest income (charge)

0.2

(8.5)

674.3

636.3

103.6

89.1

No geographical analysis is shown as less than 10% of the group's turnover and profit is derived from activities outside Hong Kong.

Financial results and dividends

The results and dividends of the group for the year ended 31 December 1988 and the state of the company's and of the group's affairs at that date are set out in the accounts on pages 11 to 27.

Share capital

On 7 November 1988, the authorised share capital of the company was increased from HK$200,000,000 to HK$300,000,000 by the creation of an additional 100,000,000 ordinary shares of HK$1 each.

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