1989 — Page 52

SCHEME OF CONTROL STATEMENT

FOR THE YEAR ENDED 31ST DECEMBER, 1989

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

a

b

d

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.

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:

Profit for Control Scheme

Transfer from Development Fund

1989

1988

HK$'000

HK$'000

259,812

208,304

64,841

259,812

273.145

Deduct:

Interest on development fund

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

37,608

39,340

222,204

233,805

Add:

Items not ranking for scheme of control

43,171

27,522

Profit Attributable to Shareholders

265,375

261,327

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