1989 — Page 12

REPORT OF THE DIRECTORS (Continued)

Mr. Edmond T. C. Lau relinquished his position as managing director of the company on 1 July 1989, but he continues to serve as a non-executive director of the company. Mr. Leung Hay Man took over as managing director on 1 July 1989. Mr. Dominic W. Wong resigned as a director of the company on 1 September 1989.

In accordance with article 101 of the company's articles of association, Messrs. Edmond T. C. Lau, Michael Y. L. Kan and Sir Kenneth P. F. Fung retire by rotation and, being eligible, offer themselves for re-election. Mr. Cheng Koon Sau and Mr. Li Ning retire under article 92 and, being eligible, offer themselves for re-election.

Interest in contracts

No contract 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.

None of the directors has a service contract with the company of more than one year's duration.

Arrangement to purchase shares or debentures

At no time during the year was the company or its subsidiaries a party to any arrangement 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

At the company's last annual general meeting, KPMG Peat Marwick were reappointed auditors of the company. A resolution for their reappointment as auditors at a fee to be agreed by the directors is to be proposed at the forthcoming annual general meeting.

On behalf of the board

Leung Hay Man Director

Colin K. Y. Lam Director

Hong Kong, 8 March 1990

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