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Hong Kong Ferry (Holdings) Co. Ltd.

Report of the Directors

SUBSTANTIAL SHAREHOLDERS

4 These 108,588,090 shares are duplicated in the interests described in Notes 1, 2 and 3. Rimmer (Cayman) Limited as trustee of a discretionary trust holds a majority of units in a unit trust ("Unit Trust"). Hopkins (Cayman) Limited as trustee of the Unit Trust owns all the issued ordinary shares which carry the voting rights in the share capital of HD.

5

Dr. Lee Shau Kee beneficially owns all the issued share capital of Rimmer (Cayman) Limited and Hopkins (Cayman) Limited. By virtue of the SDI Ordinance, Dr. Lee Shau Kee is taken to be interested in these

108,588,090 shares which include the shares described in Notes 1, 2, 3 and 4.

DIRECTORS

The directors during the financial year and up to the date of this Report were:

Executive directors

Mr. Colin K. Y. Lam (Chairman)

Mr. Li Ning

Non-executive directors

Mr. Lau Chan Kwok

Mr. Edmond T. C. Lau

Mr. Eddie Y. C. Lau

Dr. Lee Shau Kee

Mr. Leung Hay Man

Mr. Peter M. K. Wong

(retired on 5 May 1999)

Independent non-executive directors

Sir Kenneth P. F. Fung

(resigned on 17 March 2000)

Mr. Norman H. C. Ho

Mr. Michael Y. L. Kan

Dr. Alex S. C. Wu

In accordance with Article 103(A) of the Company's Articles of Association, Mr. Colin K.Y. Lam, Dr. Lee Shau Kee, Mr. Leung Hay Man and Dr. Alex S.C. Wu retire by rotation and are eligible for

re-election.

The non-executive directors have not been appointed for specific terms and they are subject to retirement by rotation and re-election at the Annual General Meeting of the Company in accordance with the Company's Articles of Association.

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Report of the Directors