CMB_1991 — Page 26

Scheme of Control Statement for the Year Ended 30th June, 1991

(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 the Government every two years.

The calculations shown below are in accordance with these agreements:

Profit /(loss) for control scheme

Transfer from development fund

1991

1990

$000's

$000's

41,551

(386)

4,862

49,828

46,413

49,442

Deduct :

Interest on development fund

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

46,413

49,442

Add:

Items not ranking for scheme of control

Profit attributable to shareholders

23

19,673

20,552

66,086

69,994