1991 — Page 54

SCHEME OF CONTROL STATEMENT

FOR THE YEAR ENDED 31ST DECEMBER, 1991

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:

50

1991

1990

HK'000

HK'000

Profit subject to Control Scheme

348,644

282,649

Transfer to Development Fund

29,427

Annual Permitted Return

319,217

282,649

Deduct:

Interest on development fund

1,177

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

35,199

40,670

282,841

241,979

Add:

Items not ranking for scheme of control

15,474

24,704

Profit attributable to Shareholders

298,315

266,683