China Unicom (Hong Kong) Limited presented their financial report for the year 2008 which analyzes the revenue collection, profit for the year and the value of the company as the end of the fiscal year. Based on the investment and value of income gained by the company, the business regularly pays dividends to the shareholders based on the ownership. China Unicom (Hong Kong) Limited had development opportunities in the year 20018 and the Board recommended the payment of final dividends at RMB0.2 per share. The recommended value of dividends paid to the shareholders was approximately RMB4.75 billion. The payment was given to all registered shareholders as at 31s December 2008. Comparing the dividend amount with the previous year, the company issued less value of dividends. In 2007, the final dividends paid were RMB6.43 billion.
The final dividends payable to the shareholders is recognized as a liability to the company. The liability is recorded in the financial systems in the proposed dividend financial period.
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| Retained profits | 2008 | 2007 |
| Proposed final dividend | 4,754 | 6,427 |
| Dividend payable | 149 | |
| Note: All amounts in Renminbi (“RMB”) millions) | ||
According to the state council, withholding tax of 5% is deducted on or after payment of dividends for in the year of payment. The dividend amount that is paid from the excess of profit earned is subject to withholding tax except in cases where the investor is a PRC Tax Resident Enterprise (“TRE”). The value of expected dividends for China Unicom (Hong Kong) Limited were based on the historical dividends previously paid. The historical analysis helps to identify the nature of the business in terms of profits and the number of investors in the company. The proposed dividends is not posted as a dividend payable in the financial statement but it is usually reflected as an appropriation of retained earnings.
