Financial Statements & Report of the Auditors

Financial Statements & Report of the Auditors

Significant Accounting Policies =!"# a Statement of compliance These accounts have been prepared in accordance with all applicable Statements of Standard Accounting Practice ("SSAP") and Interpretations issued by the Hong Kong Society of Accountants, accounting principles generally accepted in Hong Kong and the requirements of the Hong Kong Export Credit Insurance Corporation Ordinance (Cap. 1115). A summary of the significant accounting policies adopted by the Corporation is set out below. b Basis of preparation of the accounts The measurement basis used in the preparation of the accounts is historical cost modified by the marking to market of certain investments in securities as explained in the accounting policies set out below. c Insurance funds The annual accounting basis has been adopted. The insurance funds comprise provision for unearned premiums and provision for claims. The results of each year are immediately transferred from the income and expenditure account to revenue reserves. (i) Provision for unearned premiums The relative proportion of retained premiums written in any financial year of the Corporation relating to the period of risk falling within the following financial year is carried forward as a provision for unearned premiums. (ii) Provision for claims Full provision is made for the estimated cost of claims intimated but not settled at the balance sheet date and for the estimated cost of claims incurred but not yet intimated by that date, after deducting reinsurers share. ~!!"#$%&'()&*+,-./0&'123!"#$%&'()*+#$,-./0123!"#$%%%&'(!"#$%&'()*!"#$%&'() Ä!"#!"#$%&'()*+,-!"#$!"#$%&'()* Å!!"#$%&'() *+,-./01234!"#$%&'()*+,-./01234516! EáF!"#$%&'!"#$%&'()!"#$%&!"#$%&'()*(+,-./0123!" EááF!!"#$%&'()*+,-.$%/&'(!"#$%&'()*+,-./012%34 50 d Contingency reserve and non-insurance reserve The Corporation is required to have adequate reserves to meet its obligations stipulated under section 12(3) of the Hong Kong Export Credit Insurance Corporation Ordinance (Cap. 1115), including the contingent liability to any unknown catastrophic claims that may arise from unexpired risks on contracts of insurance entered into by the Corporation. In addition, the Corporation considers it prudent to set aside an additional reserve for "non-insurance" purposes, to safeguard against unusually poor underwriting results or investment performance. Appropriate amounts, set aside for the above purposes, are disclosed as "contingency reserve" and "non-insurance reserve" respectively. Transfers to or from these reserves represent appropriations from revenue reserve, determined on the basis of criteria recommended by independent actuaries. e Investments (i) Historically, non-trading securities were stated in the balance sheet at market value. Surpluses arising on revaluation were credited on a portfolio basis to the income and expenditure account to the extent of any deficit arising on revaluation previously charged to the income and expenditure account and thereafter taken to the investment revaluation reserve; deficits arising on revaluation were firstly set off against any previous revaluation surpluses and thereafter charged to the income and expenditure account. Ç!"#$%&'("#$!"#$%&'()*+,-./01234567!"#$$$%&'#()*#+',-./01!"#$%&'(#)*+,-./01234!"#$%&'()*+,-.&/01234567!"#$%&'()*+,-./01234567!"#$%&'()*+,-.%/0123!"#$%&'()*+&"#$,-./0123!"#$%&'()*+, É EáF!"#$%!"#$%&'($)*+!"#$%&'()*+,!" #!"#$%&'()*+,-!./&'012!"#$%&'()*+,-"./012! EááF!"#$%&'()*+!"#!!"#$%&'()*+,-./!!"!"#$%&'(!"#$%&'()*

Significant Accounting Policies =!"# (ii) With effect from 1 April 1999, non-trading securities are stated in the balance sheet at fair value. Changes in fair value are recognised in the investment revaluation reserve until the security is sold, collected, or otherwise disposed of, or until there is objective evidence that the security is impaired, at which time the relevant cumulative gain or loss is transferred from the investment revaluation reserve to the income and expenditure account. (iii) Transfers from the investment revaluation reserve to the income and expenditure account as a result of impairments are reversed when the circumstances and events that led to the impairment cease to exist and there is persuasive evidence that the new circumstances and events will persist for the forseeable future. (iv) Profits and losses on disposal of investments in securities are accounted for in the income and expenditure account as they arise. The profit or loss includes any amount previously held in the investment revaluation reserve in respect of that security. (v) The change in accounting policy was made to enable the Corporation to comply with SSAP 24 Accounting for investments in securities. The change in accounting policy has no effect on the Corporation s result and the net assets for both years ended 31 March 2000 and 1999 as there was no deficit arising on revaluation of the Corporation s investment in securities for both years which would have been charged to the income and expenditure account under the old accounting policy. EáááF!"#$%&'()*+,-!"#$!"#!"#$%&'()*!"#$%&'(#)*+,-./0123!"#!"#$%&'()*+,- EáîF!"#$%&'()*+,)-./$%0!"#$%&'()*+ EîF!"#$%&'()*+,-./0123#!"#$%&'()*+,'()-!!"#$%&'()*+,-./012345!!!"#$%%%"&'&( )*+,-!"#$ Ñ!"!"#$%&'()*+,-./012./345!"#$%&'()*+,!"-./012345!"#$%!"#$%&'(!")*+,-!"#$%&'()*+,-!". f Cash equivalents Cash equivalents are short-term, highly liquid investments which are readily convertible into known amounts of cash without notice and which were within three months of maturity when acquired. For the purposes of the cash flow statement, cash equivalents would also include advances from banks repayable within three months from the date of the advance. g Fixed assets Fixed assets are stated in the balance sheet at cost less accumulated depreciation. Assets costing HK$5,000 or less are expensed on acquisition. Depreciation is calculated to write off the cost of fixed assets over their anticipated useful lives on a straight line basis as follows: Office premises 40 years Computer hardware and software 3 years Motor vehicle 3 years Office machinery and furniture 5 years Office renovation 5 years h Leased assets Where assets are acquired under finance leases, the amounts representing the outright purchase price, which approximate the present value of the minimum lease payments, of such assets are included in fixed assets and the corresponding liabilities, net of finance charges, are recorded as obligations under finance leases. Depreciation is provided at rates which write off the cost of the assets in equal annual amounts over the estimated useful lives of the assets as set out in note (g) above. Finance charges implicit in the lease payments are charged to the income and expenditure account over the period of the leases so as to produce an approximately constant periodic rate of charge on the remaining balance of the obligations for each accounting period. Ö!!"#$%&'(&)*RIMMM=!"#$%&!"#$%&!'()*+,-./+01%!"#$%&'()*+,-!./0!"!"#!!"#$%! Ü!!"#$% &'()*+ &,-!"./01!"#$"%&'()*+,-./012345!"#$%&'()*+,-./0123456 Ö!"#$%&'()*(+,-./01#23!"#$%&'()*+!,-./012#345!"#$%&'()*+,-. á! EáF!!"#$%&'!()*$%+,-./!"# 51

Significant Accounting Policies =!"# i Revenue recognition (i) Premiums Premiums are recognised in the period in which the amount is determined, which is generally the period in which the risk commenced. (ii) Dividend income Dividend income from equity shares is recognised when the share price of the investment goes ex-dividend. (iii) Interest income Interest income on deposits is accrued on a time proportion basis on the principal outstanding and at the rate applicable. Interest income on bonds is accrued on a time proportion basis on the face value outstanding and at the rate applicable. j Translation of foreign currencies Foreign currency transactions during the year are translated into Hong Kong dollars at the exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date have been translated into Hong Kong dollars at the approximate market rates of exchange ruling at the balance sheet date. All exchange gains and losses, whether realised or unrealised, are dealt with in the income and expenditure account. k Financial instruments Forward foreign exchange contracts are entered into for hedging against investments denominated in the respective foreign currencies and are valued at their fair value at the balance sheet date. Gains and losses on these contracts are recognized in the income and expenditure account during the period the related hedged investments are disposed of. Valuation differences arising on the outstanding contracts at the balance sheet date are included in investment revaluation reserve. l Related parties For the purposes of these accounts, parties are considered to be related to the Corporation if the Corporation has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operation decisions, or vice versa, or where the Corporation and the party are subject to common control or common significant influence. Related parties may be individuals or entities. EááF!!"#$%&'()*!+, EáááF!"#$%&' ()*+,-./0!"#$%!"#!"#$%&'()*+,!"#$% à!!"#$%#$& '()*+,-./!"+01!"#$%&'()*+,-./012*34!"#$%&'(%&)*+,-./01 â!!"#$%& '()*+,-+./0123%!"#$%&'()*+,-./0123$45!"#$%&'()*+,-&./012345!"#$%&'()*+,-./0123456!"#$ ä!"!"#$%&'()*+,-+./01234,5!"#$%&'()*+,-./012!"!"#!$%&'"(&')*+,-./012!"#$%&'()*+,-./01234#01!"#$%&'()*+,-$)*+,-.(/0!"# 52

Balance Sheet =!" As at 31 March 2000!"!#!"#$% Note 2000($) 1999($) Assets Fixed assets - Office premises!=j=!" (3) 14,355,000 15,007,500 - Plant and equipment J=!" (3) 3,983,370 4,041,732 Investments (4) 495,492,887 363,386,985 Insurance and other receivables!"#$% (5) 15,425,252 23,578,374 Bank deposits maturing in more than three months!"#$%&'()*+,- 35,000,000 74,500,000 Cash and cash equivalents!"# (13)(d) 47,568,860 15,856,924 Total assets 611,825,369 496,371,515 Equity and Liabilities!" Capital and reserves!" Capital (1) 20,000,000 20,000,000 Contingency reserve!"#$ (8) 313,622,000 265,516,500 Non-insurance reserve!"# (8) 56,311,957 57,222,385 Investment revaluation reserve!"#$ (8) 37,221,066 12,618,198 Revenue reserve!" (8) 116,851,446 88,528,821 544,006,469 443,885,904 Liabilities Provision for claims! (9) 40,660,672 33,153,417 Insurance and other payables!"#$% (6) 21,708,107 13,968,810 Unearned premiums!"#$% (10) 5,293,000 5,053,000 Obligations under finance leases!"# (11) 157,121 310,384 67,818,900 52,485,611 Total equity and liabilities!"#$ 611,825,369 496,371,515 Approved : 23 May 2000 Thomas Yiu, JP - Commissioner == The accounting policies on pages 50 to 52 =RM= =RO=!"#$%=RT= and the notes on pages 57 to 63 form =SP=!"#$%&'() part of these accounts. 53

Statement of Income and Expenditure =!" For the year ended 31 March 2000!!!"#$#%!"#$% Note 2000($) 1999($) Turnover (2) 122,027,780 111,258,782 Premiums ceded to reinsurers!"#"$% (45,560,252) (42,621,066) Less: Reinsurers commission!"#$ 16,933,347 13,969,067 (28,626,905) (28,651,999) 93,400,875 82,606,783 Increase in unearned premiums!"#$%&' (240,000) (324,000) 93,160,875 82,282,783 Less : Gross claims! 56,729,628 77,190,023 Reinsurers' share!"#$ (25,415,967) (36,097,134) 31,313,661 41,092,889 Gross recoveries!"# (10,770,834) (12,980,472) Reinsurers share!"#$ 4,867,297 5,877,507 (5,903,537) (7,102,965) 25,410,124 33,989,924 67,750,751 48,292,859 Other income! Policy fees!" 5,000 209,000 Profit on disposals of fixed assets!"#$% 164,264 15,984 Sundry income! 688,606 280,915 857,870 505,899 Less : Operating expenses! Staff costs! 37,395,089 35,739,439 Economic and status information!"#$ 7,606,491 8,109,984 Office management!" 3,562,382 4,566,786 Depreciation of fixed assets!"# (3) 3,689,752 3,482,397 Public relations! 2,601,390 3,162,982 Insurance and professional fees!"#$% 994,671 1,065,246 Human resources management!"# 638,715 788,733 Travelling 530,223 617,936 Bad debt provision! 119,443 139,576 Finance lease interest!"# 31,671 55,205 57,169,827 57,728,284 Underwriting result for the year!"#$ 11,438,794 (8,929,526) Investment income! 65,619,452 28,263,441 Less : Investment expenses! (1,540,549) (1,248,574) Net investment income!" (12) 64,078,903 27,014,867 Result for the year!"#$ (8) 75,517,697 18,085,341 54

Statement of Recognised Gains and Losses =!"#$%&'() For the year ended 31 March 2000!!!"#$#%!"#$% Note 2000($) 1999($) Net gains not recognised in the statement!"#$%&'(")*+ of income and expenditure Surplus on revaluation of investments in securities! (8) 30,555,205 12,958,108 30,555,205 12,958,108 Result for the year!"#$ 75,517,697 18,085,341 Revaluation surplus transferred to income ~åç=éñééåçáíìêé=~ååçìåí=çå=çáëéçë~ä of investments in securities for the year!"#!"#$%&'()*+, (8) (5,952,337) (6,023,423) SVIRSRIPSM NOIMSNIVNU Total recognised gains!"#$ NMMINOMIRSR ORIMOMIMOS 55

Cash Flow Statement =!" For the year ended 31 March 2000!!!"#$#%!"#$% Note 2000($) 1999($) Net cash inflow / (outflow) from operating activities!"#$% / (13)(a) 35,345,209 (24,555,887)!"# Returns on investments! Interest received from short term deposits!"#$% 5,184,107 8,460,104 Interest and dividends received from investments!"#$" 1,307,520 2,208,371 Interest element of finance lease rentals! "#$ (31,671) (55,205) Net cash inflow from returns on investments!"#$%&' 6,459,956 10,613,270 Investing activities! Placement of time deposits!"# (41,000,000) (72,500,000) Maturity of time deposits!" 80,500,000 64,000,000 Purchase of fixed assets!"# (1,624,750) (1,867,388) Proceeds on disposal of fixed assets!"#$% 184,784 15,984 Placement of funds with investment managers!"#$! (50,000,000) - Proceeds on disposal of investments!"# 2,000,000 9,415,100 Net cash outflow from investing activities!"#$%&' (9,939,966) (936,304) Net cash inflow / (outflow) before financing!"#l!"# 31,865,199 (14,878,921) Financing Capital element of finance lease rentals! "# (13)(b) (153,263) (217,878) Increase / (Decrease) in cash and cash equivalents!"#$%=l! 31,711,936 (15,096,799) Cash and cash equivalents at beginning of the year!"!#$% 15,856,924 30,953,723 Cash and cash equivalents at end of the year!"!#$% (13)(d) 47,568,860 15,856,924 56

Notes on the Accounts =!!"#$% 1 Capital The capital of the Corporation is wholly provided by the Government of the Hong Kong Special Administrative Region under section 19 of the Hong Kong Export Credit Insurance Corporation Ordinance (Cap. 1115) N===!"#$%&'()*)+,-.$%/012!"#$%&'"()))*+,(-.!/01 2 Turnover O The principal activities of the Corporation are the transactions of export credit insurance. Turnover represents gross premiums written during the year in the ordinary course of business, net of discounts and returns.!"#$%&'()*+',-!"#$%&'()*+,-./012 34!"#$% 3 Fixed assets P! Computer Office Office hardware and Motor machinery and Office premises software vehicle furniture renovation Total!"EAF!"#!EAF EAF!"EAF!EAF EAF Cost : Balance at 1 April 1999!"#$% 26,100,000 7,929,166 516,891 2,581,592 3,546,112 40,673,761 Additions - 2,790,322-175,138 33,950 2,999,410 Disposals - (912,652) - (51,300) - (963,952) Balance at 31 March 2000 26,100,000 9,806,836 516,891 2,705,430 3,580,062 42,709,219 Accumulated depreciation :!" Balance at 1 April 1999!"#$% 11,092,500 6,243,013 516,891 1,871,364 1,900,761 21,624,529 Charge for the year!" 652,500 1,997,668-323,572 716,012 3,689,752 Written back on disposal! - (912,652) - (30,780) - (943,432) Balance at 31 March 2000!"!#$%&' 11,745,000 7,328,029 516,891 2,164,156 2,616,773 24,370,849 Net book value :!" At 31 March 2000!"#"$%& 14,355,000 2,478,807-541,274 963,289 18,338,370 At 31 March 1999!"#"$% 15,007,500 1,686,153-710,228 1,645,351 19,049,232 Note : The net book value of fixed assets of the Corporation includes an amount of $114,900 (1999 : $177,200) in respect of assets held under finance leases. Depreciation and finance lease charges allocated to the income and expenditure account for the year amounted to $62,300 (1999 : $227,959) and $31,671(1999 : $55,205) respectively. The lease-hold land of the Corporation's office premises is situated in Hong Kong and held under a long-term lease. =!"#$%&'()*+",-./0"#=NNQIVMM=!!!"#NTTIOMM=!"#$%&'()*+,-./0123456=SOIPMM=!!!"#OOTIVRV= =PNISTN=!!!"#RRIOMR=!"#$%&'()*+,-./012345()6789: 57

Notes on the Accounts(continued) =!!"#$% 4 Investments Q 2000($) 1999($) (a) Non-trading securities - debt securities E~F==!"#$%&"# Listed ====== In Hong Kong ========== 15,391,500 5,865,000 Outside Hong Kong ========== 59,618,244 43,751,289 75,009,744 49,616,289 Unlisted ====== 179,721,139 178,387,832 (b) Non-trading securities - equity securities EÄF==!"#$%&"# Listed ====== In Hong Kong ========== 66,675,251 15,425,274 Outside Hong Kong ========== 130,538,923 81,447,401 197,214,174 96,872,675 (c) Deposits with investment managers EÅF==!"#$% 43,547,830 38,510,189 TOTAL 495,492,887 363,386,985 Investments expected to be held for!"# - within one year =J=! 173,955,830 117,420,338 - more than one year =J=! 321,537,057 245,966,647 495,492,887 363,386,985 5 Insurance and other receivables R!"#$% Debtors and prepayments!"# 10,664,549 11,237,799 Interest and dividend receivable!"#! 4,760,703 5,242,952 Amounts due from reinsurers!"#$ - 7,097,623 15,425,252 23,578,374 Insurance and other receivables expected to be recovered!"#$%&' - within one year J=!"# 15,140,239 23,293,451 - more than one year J=!"#$ 284,923 284,923 15,425,162 23,578,374 6 Insurance and other payables S!"#$% Premium deposits!" 13,373,279 11,648,508 Amounts due to reinsurers!"#$ 5,189,973 - Other creditors and accrued charges!"# $%& 3,035,355 2,320,302 Policy fees received in advance!"#$ 109,500-21,708,107 13,968,810 Insurance and other payables expected to be settled!"#$%&' - within one year J=!"# 8,426,957 2,330,010 - more than one year J=!"#$ 13,281,150 11,638,800 21,708,107 13,968,810 58

Notes on the Accounts(continued) =!"#$%! 7 Obligations under forward contracts The Corporation enters into forward exchange contracts to hedge certain investments denominated in foreign currencies (principally Pound sterling, US dollar and Japanese yen). The Hong Kong Dollar equivalent amount of forward exchange contracts entered into by the Corporation outstanding at 31 March 2000 is $4,548,551 (1999 : $12,038,704). T!"#!"#$%&'()*+,-./0123456!"#$%&'()*+,-./00012324!"#$%&'()*+,-./-0=QIRQUIRRN!!!"#NOIMPUITMQ 8 Reserves U=== Investment Nonrevaluation Contingency insurance Revenue reserve reserve reserve reserve Total!! EAF EAF EAF!"EAF EAF! Balance at 1 April 1998 =!"# 5,683,513 249,909,000 48,532,690 94,740,675 398,865,878 Result for the year!"#$ - - - 18,085,341 18,085,341 Net change in value of investments!"#$% 12,958,108 - - - 12,958,108 Transfer to income and expenditure account on disposal of!"#$% investments!"#$% (6,023,423) - - - (6,023,423) Transfer from revenue reserve!"#$ - 15,607,500 8,689,695 (24,297,195) -!" Balance at 31 March 1999!"# 12,618,198 265,516,500 57,222,385 88,528,821 423,885,904 Balance at 1 April 1999!"#$% 12,618,198 265,516,500 57,222,385 88,528,821 423,885,904 Result for the year!"#$ - - - 75,517,697 75,517,697 Net change in value of investments!"#$% 30,555,205 - - - 30,555,205 Transfer to income and expenditure account on disposal of!"#$% investments!"#$% (5,952,337) - - - (5,952,337) Transfer from / (to) revenue reserve!" - 48,105,500 (910,428) (47,195,072) -!" Balance at 31 March 2000!"# 37,221,066 313,622,000 56,311,957 116,851,446 524,006,469 59

Notes on the Accounts(continued) =!!"#$% 9 Provision for claims V! 2000 1999 Buyer Country risks risks Total Total!EAF =!EAF =EAF EAF (a) Provision for claims intimated E~F!" Gross provision at 1 April!"#$% 14,419,849-14,419,849 26,771,784 Claims paid against provision!"#$%& (7,844,373) - (7,844,373) (16,204,570) 6,575,476-6,575,476 10,567,214 Provision no longer required written back!"#$%&' (5,114,170) - (5,114,170) (10,395,037) 1,461,306-1,461,306 172,177 Transfer from provision for claims not yet intimated!"#$%& 2,158,326-2,158,326-3,619,632-3,619,632 172,177 Provision made during the year!" 4,089,257-4,089,257 14,247,672 Gross provision at 31 March!"#$%&' 7,708,889-7,708,889 14,419,849 Reinsurers' share!"#$ (3,469,000) - (3,469,000) (6,488,932) Net provision at 31 March (A)!"#$%&'^ 4,239,889-4,239,889 7,930,917 (b) Provision for claims not yet intimated EÄF!" Gross provision at 1 April!"#$%& 38,950,000 3,800,000 42,750,000 41,095,553 Claims paid against provision!"#$%& (15,935,704) - (15,935,704) (35,338,697) 23,014,296 3,800,000 26,814,296 5,756,856 Provision no longer required written back!"#$%&' - (1,750,000) (1,750,000) (4,006,856) 23,014,296 2,050,000 25,064,296 1,750,000 Transfer to provision for claims intimated!"#$%& (2,158,326) - (2,158,326) - 20,855,970 2,050,000 22,905,970 1,750,000 Provision made during the year!" 38,000,000 2,000,000 40,000,000 41,000,000 Gross provision at 31 March!"#$%& 58,855,970 4,050,000 62,905,970 42,750,000 Reinsurers' share!"#$ (26,485,187) - (26,485,187) (17,527,500) Net provision at 31 March (B)!"#$%&'_ 32,370,783 4,050,000 36,420,783 25,222,500 (c) Total net provision EÅF!"#$ at 31 March (A) + (B) ^H_ 36,610,672 4,050,000 40,660,672 33,153,417 (d) Amounts of provision expected to be EÇF!"#$%& settled after more than 1 year ==== Gross provision! 7,242,000 2,000,000 9,242,000 5,235,000 Reinsurers' share!"#$ (3,258,900) - (3,258,900) (1,433,250) Net provision expected to be settled after!"#$%&'() more than one year === 3,983,100 2,000,000 5,983,100 3,801,750 60

Notes on the Accounts(continued) 帳項附註 ( 續 ) (以港元為單位) 10 Unearned premiums 10 未完成責任保險費 2000($) 1999($) Gross unearned premiums at 31 March 三月三十一日未完成責任保險費總額 8,264,000 7,894,000 Reinsurers' share 再保者所佔份數 (2,971,000) (2,841,000) Net unearned premiums at 31 March 三月三十一日未完成責任保險費淨額 5,293,000 5,053,000 Note : All of the unearned premiums $5,293,000 (1999 : $5,053,000) are expected to be earned within one year. 附註 : 全部未完成責任保險費 5,293,000 元 ( 一九九九年.. 5,053,000 元 ) 預期會在一年內賺取 11 Obligations under finance leases 11 融資租賃承擔 At 31 March, the Corporation had obligations under 於三月三十一日, 本局根據 finance leases payable as follows : 融資租賃需作出付款的承擔如下 : Within 1 year 於一年內到期 91,800 185,003 After 1 year but within 5 years 於一年後但五年內到期 93,150 184,950 184,950 369,953 Finance charges relating to future periods 未來期間的融資費用 (27,829) (59,569) 157,121 310,384 Note : The amount of obligations under finance leases expected to be settled within one year is $72,615 (1999: $153,263) 附註 : 根據融資租賃預期需於一年內償還的數額為 72,615 元 ( 一九九九年.. 153,263 元 ) 12 Net investment income 12 淨投資收入 Investment income : 投資收入 : Interest on bonds 債 利息 15,200,813 17,037,776 Interest on deposits 存款利息 6,500,388 10,086,743 Profit / (loss) on sales of investments 出售投資收益 /(虧損) 43,431,636 (2,655,630) Net exchange (loss)/gain 兌(損失) / 收益淨額 (2,049,330) 2,197,662 Dividend income 股息收入 2,384,221 1,551,374 Sundry income 雜項收入 151,724 45,516 65,619,452 28,263,441 Less : Investment expenses : 減 : 投資支出 : Fund Management fees 基金管理費 1,433,510 1,221,575 Sundry expenses 雜項支出 107,039 26,999 1,540,549 1,248,574 Net investment income 淨投資收入 64,078,903 27,014,867 Note : The full receipt of interest earned from deposits is dependent upon the deposits not being uplifted before maturity. 附註 : 存款期滿前不提取者方能獲得全部利息 61

Notes on the Accounts(continued) =!"#$%! 13 Notes on the cash flow statement NP!"#$ E~F oéåçååáäá~íáçå=çñ=êéëìäí=ñçê=íüé=óé~ê=íç=åéí E~F!" Å~ëÜ=áåÑäçï=L=EçìíÑäçïF=Ñêçã=çéÉê~íáåÖ=~ÅíáîáíáÉë!L=!!"#$% 2000($) 1999($) Result for the year!"#$ 75,517,697 18,085,341 Investment income! (64,078,903) (27,014,867) Fund management fees!"# (1,362,752) (1,202,242) Depreciation of fixed assets!"# 3,689,752 3,482,397 Profit on disposals of fixed assets!"#$% =(164,264) (15,984) Finance lease interest 31,671 55,205 Increase in unearned premiums!"#$%&' 240,000 324,000 Decrease / (Increase) in insurance and other receivables!"#$%&'=l! 7,670,874 (6,385,059) Increase / (Decrease) in insurance and other payables!"#$%&'=l! 6,293,879 (4,639,560) Increase / (Decrease) in provision for claims!"#=l! 7,507,255 (7,245,118) Net cash inflow / (outflow) from operating activities!"#$l= 35,345,209 (24,555,887) (b) Analysis of changes in financing during the year EÄF!"#$% Finance lease obligations!"# Balance at 1 April!"# 310,383 396,761 Inception of finance lease contracts!"#$%& - 131,500 Cashflow from financing!"# (153,263) (217,878) Balance at 31 March!"#$ 157,120 310,383 (c) Analysis of changes in cash and cash equivalents and EÅF!"!#$ other liquid investments during the year!"#$%! Cash and Other liquid cash equivalents investments Total Total!"#$A!"#$A A A Balance at 1 April!"# 15,856,924 74,500,000 90,356,924 96,953,723 Net cash inflow!"# 31,711,936-31,711,936 (15,096,799) Placement of time deposits!"# - 41,000,000 41,000,000 72,500,000 Maturity of time deposits!" - (80,500,000) (80,500,000) (64,000,000) Balance at 31 March!"#$ 47,568,860 35,000,000 82,568,860 90,356,924 (d) Analysis of the balances of cash and cash EÇF!"!# equivalents and other liquid investments at the end of the year!"#$!"# Cash at bank and in hand!"#$ 2,568,860 56,924 Short term deposits maturing within 3 months!"#$%&' 45,000,000 15,800,000 47,568,860 15,856,924!"#$% Short term deposits maturing in 3-12 months!"#$% 35,000,000 74,500,000 82,568,860 90,356,924 62

Notes on the Accounts(continued) =!"#$%! 14 Taxation NQ The results of the Corporation are not subject to taxation by virtue of section 27 of the Hong Kong Export Credit Insurance Corporation Ordinance (Cap. 1115).!"#$%&'()*+,-!".+/0001!"#$%&'()*+,-./01 15 Material related parties transaction The Corporation is wholly owned by the Government of Hong Kong Special Administrative Region ("HKSAR"). During the year, the Corporation ceased to administer the Credit Guarantee Scheme ("the Scheme") on behalf of the HKSAR. As a result, no expenses were incurred by the Corporation in respect of the Scheme (1999: $843,759) which were subsequently reimbursed by the HKSAR. 16 Maximum liability The maximum liability of the Corporation at 31 March 2000 in respect of policies in force amounted to $8,464,150,000 (1999: $7,036,303,000). The maximum liability the Corporation is permitted to undertake as determined by the Legislative Council under section 23 of the Hong Kong Export Credit Insurance Corporation Ordinance (Cap. 1115) at 31 March 2000 is $10,000,000,000 (1999: $10,000,000,000). 17 Comparative figures The presentation and classification of items in the accounts have been changed due to the adoption of the requirements of SSAP 1 (revised) "Presentation of financial statements". Additional line items have been included on the face of the income and expenditure account and the balance sheet as required by SSAP 1 (revised), such as investment income and expenses, and bank deposits maturing in more than three months. Comparative figures have been reclassified to conform with the current year's presentation. NR!"#!"#$%&'&()*+,-./012 #!"#$%&'()*+,-./0123!"###$%UQPITRV= NS!"!"""#$%$&'()*+,-./01!"#$%= UIQSQINRMIMMM=!!!"# TIMPSIPMPIMMM=!"#$%&'()*+,-./!"#$% &'''()*&+,-./01!"#$%&'(=NMIMMMIMMMIMMM=!! NMIMMMIMMMIMMM= NT!!"#$%&'()*+,-./01234'56!"#$%&'(') *+,-./01!"#$%&'()*+,-./0123456!"#$%&'()*+,-./0123456!"#$%&'()*+,-./0123456!"#$%&' 63