The Sir Murray MacLehose Trust Fund Trustee’s Report
for the period of 1 April 2002 to 31 March 2003
The Sir Murray MacLehose Trust Fund was set up at the suggestion of non-official members of the then Executive and Legislative Councils to commemorate the distinguished service of Lord Murray MacLehose as Governor of Hong Kong from 1971 to 1982. The Sir Murray MacLehose Trust Fund Ordinance (Chapter 1118), enacted on 21 May 1982, provides for the establishment and administration of the Fund. Section 3 of the Ordinance stipulates that the Fund is to be used for the benefit of the people of Hong Kong at the sole discretion of the Chief Executive of the day.
2. While the Secretary for Home Affairs Incorporated is the trustee of the Fund, the accounting work is carried out by the Trust Funds, Temples and Cemeteries Joint Secretariat. The Director of Audit is appointed by the Chief Executive under Section 7(2) of the Ordinance as the auditor of the accounts of the Fund.
Investment of the Fund
3. Under Section 5(2) of the Ordinance, an investment advisory committee is appointed to give advice on the investment of the Fund. The members of the Committee as at 31 March 2003 were Mr Raymond Lai Wing-chueng (Chairman), Mr George Chan Wing-yau, Mr Francis Lau Siu-tsun and Ms Winnie Cheung Chi-woon. Schroder Investment Management (HK) Ltd has been appointed as Fund Manager since 1988 and is responsible for day-to-day financial arrangement of the Fund.
Grants from the Fund
4. Since the Fund’s inception in 1982, grants have been approved for 67 projects and the total amount approved was $66.69 million as at 31 March 2003. Out of the 67 approved projects, 14 projects have been completed. The remaining 53 projects, which were approved in January 2002, would be completed in 2005.
Accounts of the Fund
5. As at 31 March 2003, the capital of the Fund was $50,488,157 and the accumulated surplus of the Fund was $29,500,029. A copy of the audited Balance Sheet and Income and Expenditure Accounts for the year ending 31 March 2003 is at the Appendix.
( Patrick C P Ho )Secretary for Home Affairs Incorporated Trustee
MacLehose Fund
3 December 2003
Appendix
MACLEHOSE FUND
BALANCE SHEET AS AT 31 MARCH 2003
Note
/ 2003 / 2002$ / $
ASSETS
Investments / 3 / 74,765,844 / 74,664,729
Accounts receivable / 780,205 / 1,393,986
Time and call deposits / 4,398,854 / -
Cash at banks / 127,887 / 16,126,191
______/ ______
80,072,790 / 92,184,906
LIABILITIES
Accounts payable / 84,604 / 383,522
______/ ______
79,988,186
======/ 91,801,384
======
Representing:
ACCUMULATED FUND
Capital / 50,488,157 / 50,488,157
Accumulated surplus / 29,500,029 / 41,313,227
______/ ______
79,988,186
======/ 91,801,384
======
The accompanying notes 1 to 7 form part of these accounts.
(Patrick C P HO)
Secretary for Home Affairs Incorporated
Trustee
MacLehose Fund
3 December 2003
MACLEHOSE FUND
INCOME AND EXPENDITURE ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2003
Note
/ 2003 / 2002$ / $
INCOME
Dividends / 1,089,463 / 922,687Interest / 4 / 2,321,916 / 3,265,887
Profits on disposal of investments / - / 1,499,718
______/ ______
3,411,379 / 5,688,292
______/ ______
EXPENDITURE
Grants / 12,278,238 / -
Losses on disposal of investments / 5 / 1,119,908 / -
Provision for diminution in value of
investments / 1,446,446 / 1,802,746
Investment management fee and charges / 378,995 / 402,240
Exchange losses / 990 / 2,405
______/ ______
15,224,577 / 2,207,391
______/ ______
(DEFICIT)/SURPLUS FOR THE YEAR / (11,813,198)
======/ 3,480,901
======
The accompanying notes 1 to 7 form part of these accounts.
MACLEHOSE FUND
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2003
Capital$ / Accumulated surplus
$ / Total
$
Balance at 1 April 2001 / 50,488,157 / 37,832,326 / 88,320,483
Surplus for the year 2001-02 / - / 3,480,901 / 3,480,901
______/ ______/ ______
Balance at 31 March 2002 / 50,488,157 / 41,313,227 / 91,801,384
Deficit for the year 2002-03 / - / (11,813,198) / (11,813,198)
______/ ______/ ______
Balance at 31 March 2003 / 50,488,157
======/ 29,500,029
======/ 79,988,186
======
The accompanying notes 1 to 7 form part of these accounts.
MACLEHOSE FUND
NOTES TO THE ACCOUNTS
1. GENERAL
The MacLehose Fund accounts are prepared in accordance with section 7(1) of the Sir Murray MacLehose Trust Fund Ordinance (Cap. 1118). The Fund was established in 1982 for the benefit of the people of Hong Kong and is applied in such manner as the Chief Executive in his sole discretion may direct in accordance with section 3 of the Sir Murray MacLehose Trust Fund Ordinance.
2. ACCOUNTING POLICIES
a. The accounts are prepared on an accrual basis.
b. Investments are listed equity securities and debt securities. Listed equity securities are intended to be held on a continuing basis and they are stated in the balance sheet at cost less provision for any permanent diminution in value. Listed debt securities are intended to be held-to-maturity and they are stated in the balance sheet at amortised cost (i.e. cost adjusted for the amortisation of premiums and accretion of discounts on purchase of debt securities over the periods to redemption) less irrecoverable amounts. The cost of investments includes all expenses relating to the purchase of investments such as commission, brokerage, stamp duty and transaction levy.
c. The amortised premiums and accreted discounts on purchase of debt securities are grouped under interest income.
d. Profits/losses on disposal of investments are accounted for in the Income and Expenditure Account. For foreign investments, the profits and losses are arrived at by comparing the sales proceeds in Hong Kong dollars against the carrying value in Hong Kong dollars adjusted for any corresponding cumulative amortisation of premiums and accretion of discounts.
- 2 -
e. Amounts in foreign currencies are translated into Hong Kong dollars as follows:
Investments
At the rates of exchange ruling at the dates of the transactions.
Deposit balances
At mid-point between selling and buying telegraphic transfer rates quoted by the Hong Kong Association of Banks on the last working day of the financial year.
Income and expenses
At the rates of exchange ruling at the dates of the transactions.
All exchange differences are dealt with in the Income and Expenditure Account.
f. Interest income is recognised on an accrual basis. Dividend income is accounted for on actual receipt.
2003 / 2002$ / $
3. INVESTMENTS
Equities – at cost / 29,205,291 / 33,623,545
Less: Provision for diminution in value / (1,446,446) / (1,802,746)
27,758,845 / 31,820,799
Bonds – at cost / 47,054,227 / 42,641,295
Less: Provision for amortisation of premiums/
accretion of discounts / (47,228) / 202,635
47,006,999 / 42,843,930
______/ ______
74,765,844
======/ 74,664,729
======
Market value of the investments:
Equities / 26,703,207 / 35,022,528
Bonds / 47,837,505 / 43,461,467
______/ ______
74,540,712 / 78,483,995
======/ ======
- 3 -
$ / $
4. INTEREST
Interest on time and call deposits / 185,156 / 500,885
Interest on bonds / 2,307,195 / 2,846,081
Less: Amortised premiums / (170,435) / (81,079)
2,136,760 / 2,765,002
______/ ______
2,321,916 / 3,265,887
======/ ======
5. LOSSES ON DISPOSAL OF INVESTMENTS
2003 / 2002$ / $
Profits on disposal of debt securities / 59,893 / 64,506
(Losses)/profits on disposal of equity securities / (1,179,801) / 1,435,212
______/ ______
(Losses)/profits on disposal of investments / (1,119,908) / 1,499,718
======/ ======
The profits on disposal of debt securities include $49,397 being profits from the sale of two debt securities, with the total amortised cost of $8,015,582, before maturity. The sale of the two debt securities was required to meet the payment of grants.
6. COMMITMENTS
As at 31 March 2003, the financial commitments for approved grants pending for payment were $790,731 (2002: $15,190,000).
7. ADOPTION OF NEW ACCOUNTING STANDARD IN HONG KONG
A statement of changes in equity is presented as a separate component of the statement of the accounts in order to comply with the new requirements of Statement of Standard Accounting Practice 1 (revised) “Presentation of financial statements”.