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HK Electric Investments
FINANCIAL REVIEW
(Continued)
In determining the distribution amount, the Company Board has taken into account
the Group’s financial performance achieved during the period under review and its
stable cashflow from operations, and consider it appropriate to adjust the distributable
income for the six months ended 30 June 2016, as calculated pursuant to the Trust
Deed, by the above discretionary item, pursuant to clause 14.1(c) of the Trust Deed.
Note:
(a)
Pursuant to clause 1.1 of the Trust Deed, “Adjustments” includes, but not limited to (i) transfers to/
from the Tariff Stabilisation Fund and the Rate Reduction Reserve under the Scheme of Control; (ii)
unrealised revaluation gains/losses, including impairment provisions and reversals of impairment
provisions; (iii) impairment of goodwill/recognition of negative goodwill; (iv) material non-cash
gains/losses; (v) costs of any public offering of Share Stapled Units that are expensed through the
consolidated statement of profit or loss but are funded by proceeds from the issuance of such Share
Stapled Units; (vi) depreciation and amortisation; (vii) tax charges as shown in the consolidated
statement of profit or loss; and (viii) net finance income/costs as shown in the consolidated statement
of profit or loss.
(b)
The Trustee-Manager Board has confirmed, in accordance with the Trust Deed, that (i) the auditors
of the Trust Group have reviewed and verified the Trustee-Manager’s calculation of the above
distribution entitlement per SSU and (ii) having made all reasonable enquiries, immediately after
making the above distribution to the registered unit holders of the Trust, the Trustee-Manager will be
able to fulfill, from the Trust Property (as defined in the Trust Deed), the liabilities of the Trust as they
fall due.
Capital Expenditure, Liquidity and Financial Resources
Capital expenditure during the period amounted to HK$962 million (2015: HK$656
million), which was primarily funded by cash from operations. Total exter nal
borrowings outstanding at 30 June 2016 were HK$40,960 million (31 December 2015:
HK$47,217 million), comprising unsecured bank loans and debt securities in issue. In
addition, the Trust Group at 30 June 2016 had undrawn committed bank facilities of
HK$1,050 million (31 December 2015: HK$1,000 million) and bank deposits and cash
of HK$307 million (31 December 2015: HK$6,157 million).
Treasury Policy, Financing Activities, Capital and Debt Structure
The Trust Group manages its financial risks in accordance with guidelines laid down
in its treasury policy which is designed to manage the Trust Group’s currency, interest
rate and counterparty risks. Surplus funds, which arise mainly from provision for
capital expenditure to be incurred and from electricity bill collection, are placed on
short term deposits denominated in Hong Kong dollars. The Trust Group aims to
ensure that adequate financial resources are available for refinancing and business
growth whilst maintaining a prudent capital structure.