Notes on The Accounts (Continued)
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(i) Operating leases
Payments under operating leases are charged to the profit and loss account on a straight line basis over the periods of the respective leases.
(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.
Future deferred tax benefits are not recognised unless their realisation is assured beyond reasonable doubt.
(k) 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.
(1) 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. (iv) Dividend income from listed investments is recognised when the share price of the investments goes ex-
ex-dividend.
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:-
1998
1997
$000's
$000's
844,723
814,881
15,094
18,148
859,817
833,029
The group
The company
1998
1997
1998
1997
$000's
$000's
$000's $000's
Auditors' remuneration
1,548
1,333
1,390 1,195
Depreciation
38,801
34,761
38,801
34,761
Provision for employees' retirement schemes
23,548
71,699
23,548
71,699
Provision for major repairs to motor buses
6,195
6,195
Provision for obsolescence of stores and spare parts
21,533
2,423
21,533
2,423
Operating lease charges for land and buildings
303
214
303
214
and after crediting:-
Provision for insurance written back
Interest income
Exchange gain
Dividend income from listed investments Dividend income from a subsidiary
33,456
164,454
7,947 50,381
33,456 13,631
7.947 11,938
614 96
362
614
362
29
138,805 231,341
22
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