1990 — Page 50

SCHEME OF

CONTROL

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 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:

(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.

d 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

1990

1989

HK$'000

HK$'000

282,649

259,812

STATEMENT

282,649

259,812

Deduct:

FOR THE YEAR

Interest on Development Fund

ENDED 31ST

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

40,670

37,608

DECEMBER, 1990

241,979

222,204

Add:

Items not ranking for scheme of control

24,704

43,171

Profit attributable to Shareholders

266,683

265,375

48

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