1999 — Page 57

Notes on the Accounts

Hong Kong Fery (H

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24. RETIREMENT SCHEMES

The latest actuarial valuation on the Outdoor Staff Retirement Fund was as at 31 December 1998.

The market value of its assets was HK$96.2 million, representing 108% of the scheme's vested

liabilities at that date.

The latest actuarial valuation on the Office Staff Retirement Fund was as at 31 December 1997.

The market value of its assets was HK$58.1 million, representing 131% of the scheme's vested

liabilities at that date.

The latest actuarial valuation on the Group Staff Retirement Fund was as at 30 September 1997.

The market value of its assets was HK$14.8 million, representing 244% of the scheme's vested

liabilities at that date.

There was no significant difference between the aggregate past service liabilities and the market

value of assets of the above schemes as at the above valuation dates.

The above actuarial valuations were prepared by qualified staff of Watson Wyatt Hong Kong

Limited, who are members of recognised actuarial bodies, using the Attained Age Method. The

actuarial bases used included investment yield, salary escalation, expected retirement age,

withdrawal rates and mortality rates.

25. CONTINGENT LIABILITIES

At 31 December 1999, there were contingent liabilities in respect of the following:

(a) A statement of claim was filed at the High Court of Hong Kong by the Secretary for Justice against The Hongkong and Yaumati Ferry Company Limited ("HYF"), a wholly-owned subsidiary of the Company, and the Company in November 1999 for the sum of approximately HK$55 million and other extra expenses in respect of a dispute over the reimbursement of certain costs incurred by the Hong Kong Government on the implementation of certain piling design to cater for the proposed redevelopment of the re-provided ferry piers in Central into new commercial and residential premises, which proposed redevelopment was not pursued due to high premium requested by the Lands Department. It is the Company's present intention based on legal advice to contest this claim. The directors are of the opinion that there are grounds for HYF and the Company to resist the claim. In addition, HYF and the Company are counterclaiming the Government for the sum of approximately HK$18 million, being costs relating to the redevelopment of the Central piers. Therefore, no provision for the claim or related legal cost has been made in the accounts.

(b) Guarantees given to banks by the Company in respect of banking facilities extended to

certain subsidiaries amounting to HK$801,285,000 (1998: HK$51,218,000).