For the year ended 31 March 2002 Expressed in HK$'000
Note | 2002 | 2001 | ||
---|---|---|---|---|
Turnover | 3 | 405,641 | 430,186 | |
Operating costs | 4 | (310,999) | (342,418) | |
Profit from operations | 94,642 | 87,768 | ||
Other income | 5 | 15,945 | 25,109 | |
Finance cost | 6 | (3,467) | (7,353) | |
Profit before tax | 107,120 | 105,524 | ||
Taxation | 7 | (15,220) | (13,235) | |
Profit after tax | 91,900 | 92,289 | ||
Dividend | 8 | (27,570) | (27,687) | |
Rate of return on fixed assets | 9 | 26.6% | 25.7% | |
There were no recognised gains or losses other than the profit after tax for the year.
K.A. Salkeld, J.P.
Land Registrar and General Manager,
Land Registry Trading Fund
As at 31 March 2002 Expressed in HK$'000
Note | 2002 | 2001 | ||
---|---|---|---|---|
ASSETS | ||||
Non-current assets | ||||
Fixed assets | 10 | 353,141 | 360,329 | |
Current assets | ||||
Debtors and prepayments | 12,453 | 14,226 | ||
Amounts due from related parties | 11,535 | 5,211 | ||
Placements with banks | 416,820 | 371,440 | ||
Cash and bank balances | 2,185 | 829 | ||
442,993 | 391,706 | |||
Current liabilities | ||||
Deferred revenue | 11 | 2,592 | 3,464 | |
Short-term borrowings | 12 | 23,660 | 23,660 | |
Interest payable to Government | 1,751 | 4,342 | ||
Customers' deposits | 13 | 22,714 | 23,172 | |
Creditors | 3,210 | 3,489 | ||
Amounts due to related parties | 24,542 | 22,717 | ||
Tax payable | 7,411 | 1,150 | ||
85,880 | 81,994 | |||
Net current assets | 357,113 | 309,712 | ||
Total assets less current liabilities | 710,254 | 670,041 | ||
Non-current liabilities | ||||
Deferred tax | 14 | 2,897 | 3,237 | |
Government loan | 15 | 23,660 | 47,320 | |
NET ASSETS | 683,697 | 619,484 | ||
CAPITAL AND RESERVES | ||||
Trading fund capital | 16 | 118,300 | 118,300 | |
Retained earnings | 17 | 537,827 | 473,497 | |
Proposed dividend | 8 | 27,570 | 27,687 | |
683,697 | 619,484 | |||
For the year ended 31 March 2002 Expressed in HK$'000
Note | 2002 | 2001 | ||
---|---|---|---|---|
Operating activities | ||||
Profit from operations | 94,642 | 87,768 | ||
Depreciation and amortisation | 18,036 | 56,315 | ||
(Decrease)/Increase in deferred revenue | (872) | 400 | ||
Increase/(Decrease) in creditors and amounts due to related parties | 1,546 | (6,358) | ||
(Decrease) in customers' deposits | (458) | (542) | ||
(Increase)/Decrease in debtors and amounts due from related parties | (4,979) | 10,830 | ||
Net cash inflow from operating activities | 107,915 | 148,413 | ||
Returns on investments and servicing of finance | ||||
Rental received | 3,227 | 2,302 | ||
Interest received | 13,146 | 23,335 | ||
Interest paid | (6,058) | (8,546) | ||
Dividend paid | (27,687) | (28,714) | ||
Net cash outflow from returns on investments and servicing of finance | (17,372) | (11,623) | ||
Taxation | ||||
Profits tax paid | (9,299) | (37,705) | ||
Tax paid | (9,299) | (37,705) | ||
Investing activities | ||||
Net increase in placements with banks (other than cash equivalents) | (191,000) | (1,000) | ||
Capital projects | (10,848) | (11,413) | ||
Other assets | - | 8 | ||
Net cash outflow from investing activities | (201,848) | (12,405) | ||
Net cash (outflow)/ inflow before financing | (120,604) | 86,680 | ||
Financing | ||||
Loan repayments | 18 | (23,660) | (26,260) | |
Net cash outflow from financing | (23,660) | (26,260) | ||
(Decrease)/Increase in cash and cash equivalents | (144,264) | 60,420 | ||
Cash and cash equivalents at 1 April 2001 | 147,269 | 86,849 | ||
Cash and cash equivalents at 31 March 2002 | 19 | 3,005 | 147,269 | |
Notes on the Accounts
1. Status of the Land Registry Trading Fund
The Land Registry Trading Fund was established on 1 August 1993 under the Legislative Council Resolution passed on 30 June 1993 pursuant to sections 3, 4 and 6 of the Trading Funds Ordinance (Cap. 430). The Land Registry administers a land registration system by maintaining an up-to-date Land Register and provides its customers with services and facilities for searches of the Land Register and related land records. The Land Registry also processes applications for the incorporation of owners.
2. Accounting policies
(a) | Basis of accounting The accounts have been prepared in accordance with accounting principles generally accepted in Hong Kong. | ||||
(b) | Fixed assets
| ||||
(c) | Depreciation and amortisation | ||||
Depreciation |
(i) | Depreciation is provided on a straight-line basis calculated to write off the cost of assets less residual value over their estimated useful lives. The annual rates of depreciation used are :
| ||||||||
(ii) | Land is regarded as a non-depreciating asset. |
Amortisation
| |
(d) | Deferred tax Provision is made for deferred tax in respect of all material timing differences attributable to accelerated depreciation allowances on fixed assets except where it is considered that no liability will crystallise in the foreseeable future. |
(e) | Revenue recognition Revenue is recognised as services are provided. Interest income is recognised on an accrual basis. |
(f) | Related parties The Land Registry Trading Fund is a separate accounting entity within the Government of the Hong Kong Special Administrative Region established under the Trading Funds Ordinance (Cap. 430). During the year, the Land Registry Trading Fund has entered into transactions with various related parties, including Government bureaux and departments, trading funds and financially autonomous bodies controlled or significantly influenced by the Government, in the ordinary course of its business. |
(g) | Cash equivalents
|
3. Turnover
2002 | 2001 | ||
---|---|---|---|
Registration of documents | 215,670 | 233,870 | |
Search | 75,496 | 80,214 | |
Copying | 58,158 | 61,866 | |
Reports on title | 42,867 | 42,951 | |
Owners incorporation | 7,580 | 6,833 | |
Others | 5,870 | 4,452 | |
405,641 | 430,186 | ||
4. Operating costs
2002 | 2001 | ||
---|---|---|---|
Staff costs | 223,176 | 220,642 | |
General operating expenses | 21,261 | 20,198 | |
Computer service charges | 22,754 | 20,030 | |
Rental and management charges | 23,809 | 23,747 | |
Central administration overheads | 1,568 | 1,137 | |
Depreciation and amortisation | 18,036 | 56,315 | |
Audit fees | 395 | 349 | |
310,999 | 342,418 | ||
5. Other income
2002 | 2001 | ||
---|---|---|---|
Rental income from Government | 3,227 | 2,302 | |
Bank deposits interest | 12,718 | 22,807 | |
15,945 | 25,109 | ||
6. Finance cost
2002 | 2001 | ||
---|---|---|---|
Interest on Government loans | 3,467 | 7,353 | |
7. Taxation
Notional profits tax is provided at the rate of 16% (2001 : 16%). A payment in lieu of profits tax calculated on the basis of the provisions of the Inland Revenue Ordinance (Cap. 112) will be made to the Government. Provision is made for deferred tax in respect of all material timing differences attributable to accelerated depreciation allowances on fixed assets except where it is considered that no liability will crystallise in the foreseeable future.
2002 | 2001 | ||
---|---|---|---|
Notional profits tax | 15,560 | 19,459 | |
Under-provision in previous year | - | 144 | |
Deferred tax for the year Capital allowances less than related depreciation charge | (340) | (6,368) | |
Taxation for the year | 15,220 | 13,235 | |
8.Dividend
A dividend of $27.570 million being 30% of the profit after tax is proposed for the year ended 31 March 2002 (2001 : $27.687 million).
9. Rate of return on fixed assets
This is calculated as a percentage of operating profit and interest income after taxation to Average Net Fixed Assets (ANFA). The Land Registry Trading Fund is expected to meet a target return of 10% per annum on ANFA as determined by the Financial Secretary.
10. Fixed assets
Land and Buildings | Computer Systems | Equipment, Furniture and Fittings | Office Car | Set- up | Total | |
---|---|---|---|---|---|---|
Cost or Valuation | | | | | | |
At 1 April 2001 | 350,000 | 364,568 | 23,059 | 192 | 3,800 | 741,619 |
Additions/(Adjustment) | - | 10,848 | - | - | - | 10,848 |
At 31 March 2002 | 350,000 | 375,416 | 23,059 | 192 | 3,800 | 752,467 |
Aggregate Depreciation/mortisation | ||||||
At 1 April 2001 | 29,525 | 327,270 | 20,628 | 67 | 3,800 | 381,290 |
Charge for the year | 3,851 | 12,341 | 1,806 | 38 | - | 18,036 |
At 31 March 2002 | 33,376 | 339,611 | 22,434 | 105 | 3,800 | 399,326 |
Net Book Value | ||||||
At 31 March 2002 | 316,624 | 35,805 | 625 | 87 | - | 353,141 |
At 31 March 2001 | 320,475 | 37,298 | 2,431 | 125 | - | 360,329 |
11. Deferred revenue
This represents outstanding search tickets and subscription fees/other service charges received in advance of which services have not yet been rendered.
2002 | 2001 | ||
---|---|---|---|
Search tickets | 604 | 612 | |
Subscription fees/other service charges | 1,988 | 2,852 | |
Balance at 31 March 2002 | 2,592 | 3,464 | |
12. Short-term borrowings
2002 | 2001 | ||
---|---|---|---|
Government loan repayable within one year at 31 March 2002(see also note 15) | |||
Set-up loan | 23,660 | 23,660 | |
13. Customers' deposits
2002 | 2001 | ||
---|---|---|---|
Direct Access Services customers | 21,562 | 22,172 | |
Government departments | 1,152 | 1,000 | |
Balance at 31 March 2002 | 22,714 | 23,172 | |
14. Deferred tax
2002 | 2001 | ||
---|---|---|---|
Balance at 1 April 2001 | 3,237 | 9,605 | |
Transfer to current taxation | (340) | (6,368) | |
Balance at 31 March 2002 | 2,897 | 3,237 | |
15. Government loan
2002 | 2001 | ||
---|---|---|---|
Government loan repayable after one year at 31 March 2002 | 23,660 | 47,320 | |
A set-up loan of $236.6 million from the Capital Investment Fund was made in accordance with the resolution passed by the Legislative Council on 30 June 1993 to finance part of initial assets valued at $354.9 million appropriated to the Land Registry Trading Fund effective from 1 August 1993. The loan is repayable in ten equal annual instalments of 23.66 million starting from 1 August 1994. The ninth instalment due to be payable on 1 August 2002 is shown under short-term borrowings. The balance of $23.66 million shown under this item represents the balance of the loan after the ninth instalment.
A further loan facility of $160.7 million from the Capital Investment Fund was approved by the Finance Committee on 16 July 1993 to finance the capital projects under development and initial years' working capital of the Land Registry Trading Fund. The project/working capital loan was to be drawn as and when necessary during the four year period between 1993-94 and 1996-97 with a repayment period of five years. So far, only a drawdown of $13 million was made on 1 August 1995 and was fully repaid on 1 August 2000. On 21 February 1997, the Finance Committee approved an extension of the drawdown period of the estimated undrawn balance ($115 million) of the existing loan facility from 31 March 1997 to 31 March 2001. The drawdown period has now expired and no further extension of the loan facility has been made.
Interests for both loans are paid on the amount outstanding at the average of the best lending rates quoted by the continuing members of the Committee of the Hong Kong Association of Banks.
16. Trading fund capital
This represents the Government's investment in the Land Registry Trading Fund.
2002 | 2001 | ||
---|---|---|---|
Balance at 1 April 2001 | 118,300 | 118,300 | |
Addition | - | - | |
Balance at 31 March 2002 | 118,300 | 118,300 | |
17. Retained earnings
2002 | 2001 | ||
---|---|---|---|
Balance at 1 April 2001 | 473,497 | 408,895 | |
Profit for the year | 91,900 | 92,289 | |
565,397 | 501,184 | ||
Proposed dividend | (27,570) | (27,687) | |
Balance at 31 March 2002 | 537,827 | 473,497 | |
18. Analysis of changes in financing during the year
Government loan (including short-term borrowings) | |||
2002 | 2001 | ||
Balance at 1 April 2001 | 70,980 | 97,240 | |
Cash outflow from financing | (23,660) | (26,260) | |
Balance at 31 March 2002 | 47,320 | 70,980 | |
19. Analysis of the balances of cash and cash equivalents at end of year
2002 | 2001 | |||
---|---|---|---|---|
Cash and bank balances | 2,185 | 829 | ||
Placements with banks (cash equivalents portion) | 820 | 146,440 | ||
3,005 | 147,269 | |||
20. Related party transactions
Apart from those separately disclosed in the accounts, the other material related party transactions for the year are summarised as follows :- | ||
(a) | Services provided to related parties included registration of land documents, search of land registers and records, supply of copies of land records and reports on title. The total revenue derived from these services amounted to $78 million (2001 : $80 million). This amount is included in Turnover under note 3. | |
(b) | Services received from related parties included computer services, accommodation, central administration and auditing. The total cost incurred on these services amounted to $40 million (2001 : $37 million). This amount is included in Operating Costs under note 4. | |
Charging for services rendered to or received from related parties was on the same basis, that is, at the rates payable by the general public for services which were also available to the public or on a full cost recovery basis for services which were available only to related parties. |
21. Capital commitments
At 31 March 2002, the Land Registry Trading Fund had capital commitments, so far as not provided for in the financial statements, as follows :
2002 | 2001 | |||
---|---|---|---|---|
Contracted for | 21,900 | - | ||
Authorised but not contracted for | 149,600 | 209,000 | ||
171,500 | 209,000 | |||
22. Operating lease commitments
At 31 March 2002, the total future minimum lease payments under operating leases of the Land Registry Trading Fund are payable as follows :
Land and Buildings | 2002 | 2001 | ||
---|---|---|---|---|
Operating leases which expire: | ||||
within one year | 454 | 5,975 | ||
in the second to fifth years inclusive | 14,738 | 17,729 | ||
over five years | - | - | ||
15,192 | 23,704 | |||
23. Comparative figures
Certain comparative figures have been reclassified to conform to the current year's presentation.