Hong Kong Regulations

GRANT SCHOOLS PROVIDENT FUND RULES - RULE 11

Reserve fund

(Past version on 01/07/1997).
(Past version on 30/06/1997).

Adaptation amendments retroactively made - see 55 of 2000 s. 3

(1) A reserve fund shall be maintained, to which shall be-

   (a)  credited each year-

        (i)    the proceeds of any realization upon sale or maturity of any
               investment during the year in so far as such proceeds exceed
               the value of such investment carried in the books of the fund
               at the time of such sale or maturity;

        (ii)   the net amount of any Government donation and DSS school
               donation (if any), including any dividend earned thereby,
               standing to the credit of any contributor to whom, under rule
               13, such donation is not payable; (L.N. 78 of 2000)

        (iii)  such proportion of the income derived from investments and
               deposits as the board may think fit; and

        (iv)   any gain arising from the revaluation of investments of the
               fund as at 31 August of any year; and (L.N. 162 of 1996)

   (b)  debited each year-

        (i)    any loss incurred upon sale or maturity during the year of any
               investment having regard to the value of such investment
               carried in the books of the fund at the time of such sale or
               maturity;

        (ii)   such outgoings or losses incurred by the fund as the Chief
               Executive may in special circumstances authorize or direct in
               writing; and (L.N. 162 of 1996; 55 of 2000 s. 3)

        (iii)  any loss arising from the revaluation of investments of the
               fund as at 31 August of any year. (L.N. 162 of 1996)

(2) Where in any year the credit balance of the reserve fund, after crediting
all the items specified in paragraph (1)(a), is less than the total of all the
debits specified in paragraph (1)(b), an amount representing such difference
shall be debited to the income and  expenditure account and credited to the
reserve fund.

(3) Where in any year, after crediting and debiting all the items specified in
paragraph (1), there is a credit balance in the reserve fund, such proportion
as may be required to meet the 5 per cent dividend, guaranteed under rule
12(1), shall be debited to the reserve fund and credited to the
income and expenditure account.

(4) Where in any year, after crediting and debiting all the items specified in
paragraphs (1) and (3), the credit balance of the reserve fund exceeds the
aggregate of an amount equal to 5 per cent of the credit balance of the
contributors' accounts as at 31 August and the total amount of any outstanding
Government loans made under rule 12(2), any such excess may, at the discretion
of the board, be credited to the contributors' accounts under rule 12(5).

(5) When in any year the Financial Secretary determines under rule 12(4) that
any Government loan made under rule 12(2) shall be repaid, either in whole or
in part, then-

   (a)  if the credit balance of the reserve fund exceeds the amount of the
        loan to be repaid, that amount shall be debited to the reserve fund
        and credited to the dividend deficiency account; and

   (b)  if the credit balance of the reserve fund is less than the amount of
        the loan to be repaid, an amount representing such difference shall be
        debited to the income and expenditure account and credited to the
        reserve fund.

(6) In this rule and in rule 12, "income and expenditure account"
(收支帳目) means the account maintained for receiving the credits of
income from investments and income other than of a capital nature, and the
debits of expenses other than of a capital nature, relating to the operation
of the fund and for determining the surplus or deficit resulting from the
operation. (L.N. 239 of 1982)

"income and expenditure account" (收支帳目)