1991 — Page 9

CHAIRMAN'S STATEMENT (CONTINUED)

BONUS ISSUE OF JUNE 1994 WARRANTS

Your Board also proposes a bonus issue of 1994 warrants on the basis of one June 1994 warrant for every ten existing shares to shareholders registered as such on the register of members of the Company on 16 April 1992. Each June 1994 warrant will entitle the holder to subscribe for shares of $1 each of the Company from 1 June 1992 to 30 June 1994 (both days inclusive) at an initial subscription price of $7.00 per share, subject to adjustment. The bonus issue of June 1994 warrants will be subject to approval at an Extraordinary General Meeting of the Company to be held immediately following the Company's Annual General Meeting and subject to listing of and permission to deal in the June 1994 warrants and any shares which may fall to be issued on exercise of the subscription rights under such warrants being granted or agreed to be granted by the Listing Committee of The Stock Exchange of Hong Kong Limited. A circular containing full details of the June 1994 warrants

and the bonus issue of shares as referred to above will be despatched to shareholders as soon as possible.

DIRECTORS AND EMPLOYEES

Due to advancement in age, Mr. Lau Chan Kwok retired from his position as Chairman of the Group with effect from 1 July 1991 and accepted invitation by the Board as Honorary Chairman.

Mr. Hayman Leung retired from his position as Managing Director on 31 December 1991, but continues to serve as a consultant and director. I would like to thank him for his contribution in the past.

Mr. Peter Wong Man Kong, J.P. has joined the Group as President and Chief Executive Officer as from 1 January 1992. Mr. Wong was invited to join the Board on 9 March 1992.

At the end of 1991, the Group employed 2,034 employees and I would like to express on behalf of the Board of Directors and the shareholders my hearty thanks to the staff for their good work during the year.

PROSPECTS

Your Group will continue the effort in improving ferry service and enhancing its efficiency and profitability. Income from the operation of the franchised service will remain unstable as profits will be adversely affected by the escalation in operating costs as well as the disruption resulting from the reclamation at western Kowloon and Central. Meanwhile, consideration will be given to other suitable investment opportunities. Wherever appropriate, the development of the air right of the ferry piers will be contemplated. With a sound financial base, your Group is well placed to capture investment opportunities as and when they arise.

In the absence of unforeseen circumstances, it is anticipated that the Group's profit will show a satisfactory growth in the coming year and the divdend for 1992 will not be less than 34 cents per share.

Colin K.Y. Lam

Chairman

Hong Kong, 9 March 1992

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