ACCOUNTS
45. Operating expenditure increased by 17.97% from $18,563,161 to $21,899,558 due to the continuing escalation in the cost of materials and higher salaries. Despite the increase in operating expenditure the gross operating profit improved from $3,572,713 to $6,979,957 whilst the net profit was $5.595,138 compared with $2,104,978 in the previous year. Funds, excluding interest, rose to $45,388,683 at the end of the year. percentage of net profit to gross revenue was 18.2 compared with 9 in the previous year.
Accumulated
The
46. The increase was attributable to the increase in passenger journeys resulting from the acquisition of additional rolling stock and natural growth, the operation of trains bringing oil from China, the introduction of higher passenger fares and the adoption of a commercial basis for calculating the subsidy on students' tickets. The increase also reflects a change in the system of computing the notional charges for mail conveyed to and from China and the imposition of a notional rent for godowns in respect of the General Post Office, both of which reflect the commercial value of the space utilized
47. New passenger fares, ranging from 40 cents to $3.80 for single journeys were approximately 35% higher than the old ones which had remained unchanged since 1947. The age limit for determining students fares was reduced from 18 years to 12 years for half-fares and from 21 years to 18 years for full- fares. Conveyance of mail was charged on the basis of capacity used instead of as previously on actual weight conveyed.
48. The accounts only reflect the impact of the new fare structure and the acquisition of rolling stock from the time of their introduction and do not represent the full impact of the new fares nor the full earning potential of the additional rolling stock.
49.
Additions to assets totalled $20,772,636 and include a diesel electric locomotive (delivered in March, 1974), 40 railway passenger coaches, power operated barriers at level crossings, treadle bells, to give an advance warning of the approach of a train, and a motor vehicle.
The Accounts and supporting data are published in Appendices I to VI of this Report.
MECHANICAL AND ELECTRICAL ENGINEERING
50. All locomotives, rolling stock, electrical and mechanical equipment, machinery and plant were maintained to a good standard during the year. Forty new Japanese coaches, comprising 11 first class and 29 ordinary class carriages, manufactured by the Kinki Sharyo Co. Ltd. of Japan were delivered to Hong Kong on 1st of August and 14th of September. They were put into service on 4th November, 1974 after modifications to overcome minor technical deficiencies.
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