CMB_1988 — Page 24

Scheme of Control Statement

For The Year Ended 30th June, 1988

(Expressed in Hong Kong dollars)

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 15% of the average net fixed assets, including spare parts

and stores used for bus operations.

(b) 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:

(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.

(d) 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

$000's

$000's

Profit for control scheme

62,401

70,159

Transfer to development fund

(19,066)

(26,351)

43,335

43,808

Deduct:

Interest on development fund

(3,059)

(1,151)

Interest at up to 8% p.a. on borrowed capital

(249)

(742)

40,027

41,915

Add:

Items not ranking for scheme of control

7,493

3,807

Profit attributable to shareholders

47.520

45,722

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