SCHEME OF CONTROL STATEMENT
FOR THE YEAR ENDED 31ST DECEMBER, 1989
The financial operations of the Company are governed by a profit control scheme, the main features of which are as follows:
a
b
d
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.
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:
Profit for Control Scheme
Transfer from Development Fund
1989
1988
HK$'000
HK$'000
259,812
208,304
64,841
259,812
273.145
Deduct:
Interest on development fund
Interest at up to 8% p.a. on borrowed capital
37,608
39,340
222,204
233,805
Add:
Items not ranking for scheme of control
43,171
27,522
Profit Attributable to Shareholders
265,375
261,327
48