1987 — Page 51

SCHEME OF CONTROL STATEMENT

FOR THE YEAR ENDED 31ST DECEMBER, 1987

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 16% of the average net fixed assets,

including spare parts and stores used for bus operations.

b

C

d

Any difference between the annual permitted return and the adjusted profit after taxation is to be transferred to or from a development fund.

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.

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:

1987

1986

HK$'000

HK$'000

Profit for Control Scheme

Transfer (to)/from Development Fund

262,778

179,759

(15,881)

11,231

246.897

190,990

Deduct:

Interest on development fund

4.214

3,731

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

36,527

24,618

206,156

162,641

Add:

Items not ranking for scheme of control

28,606

26,307

Profit before Extraordinary Item Attributable to Shareholders

234,762

188,948

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