SCHEME OF CONTROL STATEMENT
FOR THE YEAR ENDED 31ST DECEMBER, 1988
The financial operations of the Company are governed by a profit control scheme, the main features of which are as follows:
a
b
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.
Any difference between the annual permitted return and the adjusted profit after taxation is to be transferred to or from a development fund.
C
The following are to be deducted from the permitted return:
d
() 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:
1988
1987
HK$'000
HK$'000
Profit for Control Scheme
Transfer from/(to) Development Fund
208,304
262,778
64,841
(15,88)
273,145
246,897
Deduct:
Interest on development fund
4,2:4
Interest at up to 8% p.a. on borrowed capital
39,340
36,527
233,805
206.156
Add:
Items not ranking for scheme of control
27,522
28.606
Profit Attributable to Shareholders
261,327
234.762
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