6.3 Capital Levy and Nomination Right

When CDNIS was started in September 1991, there was an early recognition of the necessity to make parents to appreciate the capital needs of a school. Capital Levy and Nomination Right were introduced, at the start of CDNIS, to supplement CDNIS’ fund requirements.

A capital levy is payment of a non-refundable annual fee and a nomination right is a prepayment of capital levies and is a one-time refundable payment.

The funds from both sources were used for capital improvements and/or general revenue purposes.

In 1991, Capital Levy was set at HK,000.00 and the Nomination Right price was HK,000.00.

In 1992, both were adjusted to HK$ 8,000.00 and HK$ 25,000.00 respectively. Nomination Right was adjusted to become refundable up to three years in units of one-third and a “Corporate Debenture” was introduced for the first time. This entitled the holder to be free from Capital Levy and any future calls on capital. It was priced at HK$ 75,000.00 and only 2 corporate debentures were sold. As a result of the poor response, this element of the program was put on hold to allow CDNIS to build on its profile before opening up to the market.