NOTES TO THE ACCOUNTS
1. Legal Entity
The Council was incorporated in 1966 under The Hong Kong Trade Development Council Ordinance.
2. Principal Accounting Policies
a) Net Yield from Ad Valorem Levy
In accordance with the existing funding arrangement between the Council and the Government, an appropriation in an amount equivalent to the yield from the Ad Valorem Levy on imports and exports of the previous year, less full collection costs, will be made available by the Government to the Council for the current year; and in the event that such sum is inadequate to meet the Council's activities, the Government will support the provision of additional funds out of the levy on re-exports, on a priority basis, subject to force majeure.
The amount of Net Yield from Ad Valorem Levy of HKD394.73m paid to the Council for the financial year 1990/91 was after deducting the collection charges at HKD4.69 per declaration. Of the payment of HKD394.73m, HKD12.96m was budgeted for Trade Related Activities such as Subvention to Hong Kong Shippers' Council, Hong Kong/Japan Business Co-operation Committee and Government Relations Services and the balance of HKD381.77m for the activities directly under the Council including the approved provisions for acquisition of the following capital assets:-
i) HKD17.87m to finance extra cost required for construction of the office building "Hong Kong Centre" in
New York and replacement of furniture and fittings; and
ii) HKD18.48m for acquisition of an office premises in Frankfurt;
The approved provisions for acquisition of capital assets and interest income arising therefrom on the available fund are dealt with in the Income and Expenditure Account and are transferred to Other Specific Funds Account (Note 10).
In the accounts for the year ended 31st March 1989, the Council received from Government the supplementary provisions of net yield from Ad Valorem Levy to fund the acquisition of office premises and operating assets and the provisions were dealt with and disclosed as deferred credits. The Council is of the view that a clearer presentation of the affairs of the Council would result from the presentation of these supplementary provisions as other specific funds. Similarly, the net hire income arising from rental of operating assets acquired under the supplementary provisions were previously dealt with in the Income and Expenditure Account and then appropriated into the assets replacement fund. The assets replacement fund is now disclosed as the Exhibition Services Fund Account and the income and expenses arising from the operation of operating assets are directly dealt with in the Exhibition Services Fund Account. These changes of presentation have been retrospectively applied and have no effect on the excess of income over expenditure transferred to General Fund as previously disclosed.
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