1988 — Page 55

SCHEME OF CONTROL STATEMENT

FOR THE YEAR ENDED 31ST DECEMBER, 1988

The financial operations of the Company are governed by a profit control scheme, the main features of which are as follows:

a

b

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.

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:

d

() 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:

1988

1987

HK$'000

HK$'000

Profit for Control Scheme

Transfer from/(to) Development Fund

208,304

262,778

64,841

(15,88)

273,145

246,897

Deduct:

Interest on development fund

4,2:4

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

39,340

36,527

233,805

206.156

Add:

Items not ranking for scheme of control

27,522

28.606

Profit Attributable to Shareholders

261,327

234.762

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