1996 — Page 95

Consolidated Cash Flow Statement

In 1996, the net cash inflow from bus operations of the Group was HK$1,181 million (1995 - HK$970 million). Total dividends paid to Shareholders during the year amounted to HK$375 million (1995 - HK$331 million). Payments for capital investment and repayment of bank loans amounted to HK$843 million and HK$127 million respectively.

The consolidated cash flow statement of the Group for the year ended 31 December 1996 is set out on pages 45 and 46 of this report.

Liquidity and Financial Resources

At 31 December 1996, the total borrowings of the Group amounted to HK$517 million, representing an increase of HK$79 million as compared with 1995. The gearing ratio, representing the ratio of long term bank loans to the total share capital and reserves of the Group, also increased from 0.2 in 1995 to 0.22 in 1996. As a result of the increase in total borrowings, the finance charge for the year was increased by 8.3 per cent to HK$31.3 million as compared with HK$28.9 million in 1995. At 31 December 1996, cash and deposits at bank of the Group amounted to HK$475 million.

At 31 December 1996, the Group had stand-by credit facilities totalling HK$130 million and GBP 1 million. Bank loans and overdraft at the year end amounted to HK$517 million, of which HK$81 million is secured on the Group's undertakings to execute legal mortgages to certain banks in the event of default of the Group's obligations under the respective loan agreements. The maturity profile of the long term bank loans of the Group is set out in Note 18 to the accounts on page 60 of this report.

Capital Expenditure and Commitment

Capital expenditure incurred by the Group during the year amounted to HK$859 million. The breakdown of the capital expenditure incurred is shown in Note 9(a) to the accounts on page 53 of this report.

Capital commitments outstanding and not provided for in the accounts of the Group at 31 December 1996 amounted to HK$989 million. Of these, HK$890 million was in respect to purchase of buses and other vehicles, HK$62 million was for the improvement of depot facilities and HK$37 million was for the purchase of other fixed assets. At 31 December 1996, the Group had on order 419 air- conditioned double-deck buses to be delivered in 1997. The commitments are to be financed by bank loans and the working capital of the Group.

Capital Expenditure (HK$ million)

900

800

700

600

500

400

388

318

300

200

100

0

551

487

859

92 93 94

95 96

Buildings

Others

Buses & other motor vehicles

22

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