CMB_1996 — Page 25

Notes on The Accounts (Continued)

1.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

(i) Deferred taxation

Deferred taxation is calculated under the liability method in respect of the taxation effect arising from all timing differences which are expected with reasonable probability to crystallise in the foreseeable future.

(i) Deferred profits

Profits from the sale of land and buildings to associated companies for development for resale and investment are deferred to the extent of the group's attributable interest in the associated companies. The deferred profits will be recognised and taken to profit and loss account as and when the properties are sold by the associated companies to third parties.

(k) Revenue recognition

(i) Fare receipts are recognised when the relevant bus services are provided.

(ii) Advertising revenue is recognised when the related advertisement or commercial appears before the public.

(iii) Interest income from bank deposits is accrued on a time proportion basis on the principal outstanding and at the rate applicable.

2. TURNOVER

Turnover comprises fares and other income from the operation of franchised motor buses by the group analysed as follows:

Fare receipts Advertising revenue

3. OPERATING PROFIT

Operating profit is arrived at after charging:-

1996

1995

$000's

$000's

752,195

762,718

21,365

22,715

773,560

785,433

The group

The company

1996

1995

1996

1995

$000's

$000's

$000's

$000's

Auditors' remuneration

Depreciation

1,239

1,170

1,111

1,020

29,955

31,483 29,955

31,483

Provision for employees' retirement schemes

28,245

27,924 28,245 27,924

Provision for insurance

21,417

27,289

21,417 27,289

Provision for major repairs to motor buses

7,140

5,608

7,140

5,608

Provision for obsolescence of stores and spare parts

892

3,755

892

3,755

Operating lease charges for land and buildings

219

368

219

368

Exchange loss

293

293

and after crediting:-

Interest income

Exchange gain

Income from listed investments

Dividend income from subsidiaries

21

44,928

55,749

15,719

17,272

73

73

89

79

118,187

Page 25Page 26

Notes on The Accounts (Continued)

4.

EXCEPTIONAL ITEM