1999 — Page 39

Notes on the Accounts

Hong Kong Ferry (Holdings) Co. Ltd.

1. PRINCIPAL ACCOUNTING POLICIES

(p) Borrowing costs

Borrowing costs are expensed in the profit and loss account in the period in which they are

incurred, except to the extent that they are capitalised as being directly attributable to the

acquisition, construction or production of an asset which necessarily takes a substantial period

of time to get ready for its intended use or sale.

(q) Related parties

For the purposes of these accounts, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or entities.

(r) Cash equivalents

Cash equivalents are short-term, highly liquid investments which are readily convertible into known amounts of cash without notice and which were within three months of maturity when acquired. For the purposes of the cash flow statement, cash equivalents would also include advances from banks repayable within three months from the date of the advance.

2. TURNOVER

Group turnover represents gross income from sales and services provided to third parties, analysed

as follows:

1999

1998

HK$'000

HKS'000

Ferry operations and related businesses

357,466

600,967

Property development and investment

259,820

83,825

Trading and services

143,042

151.796

Travel and others

128,895

127,005

889,223

963,593

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