1987 — Page 41

NOTES ON THE ACCOUNTS

I ACCOUNTING POLICIES

a Translation of foreign currencies

Foreign currency loans for purchases of buses and equipment are stated at the contracted rates of exchange. With this exception, foreign currency balances at the year end are translated into Hong Kong dollars at approximately the rates of exchange ruling at the balance sheet date and foreign currency transactions during the year are translated into Hong Kong dollars at the rates ruling at the transaction dates. Differences on foreign currency translation are taken to the profit and loss account.

b Spare parts and stores

Spare parts and stores are valued at cost less provision.

c Depreciation

Depreciation is provided at rates calculated to write off the cost or valuation of fixed assets over their estimated useful lives as follows:—

Land held on long leases with unexpired term

in excess of 50 years

Buildings

Buses and other motor vehicles

Plant and machinery, lifts, fixtures and equipment Tools

Terminal shelters

2 TURNOVER

Nil

Equal instalments over the period

of the lease, excluding any

renewal period

10% p.a. on cost

10% p.a. on cost

50% p.a. on reducing balance

10% p.a. on cost

Turnover comprises fares and other income from the operation of franchised public buses by the Company.

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