SCHEME OF CONTROL STATEMENT
FOR THE YEAR ENDED 31ST DECEMBER, 1987
The financial operations of the Company are governed by a profit control scheme, the main features of which are as follows:
a The annual permitted return of the Company is fixed at 16% of the average net fixed assets,
including spare parts and stores used for bus operations.
b
C
d
Any difference between the annual permitted return and the adjusted profit after taxation is to be transferred to or from a development fund.
The following are to be deducted from the permitted return:
(i)
a charge of 8% p.a. on the average balance of the development fund which is to be added to the development fund, and
(ii) interest up to a maximum of 8% p.a. on borrowed capital.
The operation of the scheme commenced on 1st September, 1975, and is subject to review by Government every two years.
The calculations shown below are in accordance with these agreements:
1987
1986
HK$'000
HK$'000
Profit for Control Scheme
Transfer (to)/from Development Fund
262,778
179,759
(15,881)
11,231
246.897
190,990
Deduct:
Interest on development fund
4.214
3,731
Interest at up to 8% p.a. on borrowed capital
36,527
24,618
206,156
162,641
Add:
Items not ranking for scheme of control
28,606
26,307
Profit before Extraordinary Item Attributable to Shareholders
234,762
188,948
47