Annual Report 2008

特許秘書. 潛能. 超越所見. The Hong Kong Institute of Chartered Secretaries 香港特許秘書公會

Chartered Secretaries. More than meets the eye. 特許秘書. 潛能. 超越所見.

The Hong Kong Institute of Chartered Secretaries is an independent professional body with approximately 5,000 members including graduates and 2,500 students. It is dedicated to the promotion of its members’ role in the formulation and effective implementation of good corporate governance policies in Hong Kong and throughout China as well as the advancement of the profession of Chartered Secretary.

The Institute was first established in 1949 as an association of Hong Kong members of the Institute of Chartered Secretaries and Administrators (ICSA) of London. It became a branch of ICSA in 1990 before gaining local status in 1994 and changing its name to The Hong Kong Institute of Company Secretaries. In July 2005, the Institute changed its name to The Hong Kong Institute of Chartered Secretaries. The Institute retains its close relationship with ICSA, and all the Institute’s members are also ICSA members. Contents

President’s Report 2 Financial Highlights 6 Report of Council 8 Calendar of Significant Events 12 The Institute and our Members 24 Members’ Profile 28 The Institute and our Students 30 Students’ Profile 32 The Institute and the Regulators 34 The Institute and Mainland China 36 Affiliated Persons’ Profile 45 The Institute and the ICSA 46 The Institute and Other Professional and Academic Bodies 47 Council Members’ Biographies 51 Council Committees, Panels, Working Groups and Task Forces 55 Institute Representatives serving on External Panels, Committees and Working Groups 61 Secretariat 63 Independent Auditors’ Report 66 Audited Financial Statements Income Statement 67 Balance Sheet 68 Cash Flow Statement 69 Statement of Changes in Reserves 70 Notes to the Financial Statements 71 Appendix – ECPD Programme Seminar Report 83

Annual Report 2008 1 President’s Report

Your Council identified ten initiatives As far as the secretariat is at the beginning of the year. Some concerned, a new position were carried over from previous years was opened in Shanghai and and others were new, all are important if feasible we will establish to the future of our profession. an office similar to the Beijing Representative Our first priority was to restructure Office in Shanghai. In the Institute and secretariat in order the head office in Hong that we are able to meet the challenges Kong, four new positions in the years ahead, especially those we were created. The first anticipate to encounter in Mainland was the appointment China. of a General Manager to focus on Mainland With increased regulatory pressure, issues as well as be a raised profile and the massive the official number challenge of establishing the two to the Chief profession of Chartered Secretary Executive. The General in Mainland China, your Council Manager has to integrate and decided to dissolve the Executive co-ordinate activities and projects The new appointments Committee and its role, in monitoring on the Mainland between the three and new branding of the profession the finances and operations of the Committees of Council as well as have presented us with an opportune Secretariat, was taken over by the the supporting teams/staff of the moment to refurbish the current Council. From January 2008 onwards, Secretariat among the offices in office. Your Institute purchased the we held a Council meeting every Hong Kong, Beijing and Shanghai. current office in 2004 and this will be calendar month. The China Affairs The new position was advertised the first proper refurbishment since Committee (CAC) was dissolved as and our then Director, Education then. of 1 August 2008 and its activities and Examinations and Company incorporated into the three remaining Secretary, Louisa Lau was selected As mentioned, the Council has decided Committees of Council which are to take up the new position as that the opportunities in both Hong now accountable for the Institute’s General Manager. As a consequence Kong and the Mainland are best served activities in Mainland China as well as a new Director, Education and by a more efficient and streamlined those in Hong Kong. Examinations has been recruited Institute. Whilst the Hong Kong area to fill the vacancy left by Louisa’s of our ICSA designated territory has By creating a more streamlined promotion. The second position been well catered for the Mainland, secretariat and committee structure the created was the appointment of a being virgin territory in terms of Council and its committees can focus secretary to the General Manager. the Chartered Secretary profession, on their relevant areas of expertise in The third appointment was the has presented different challenges. the entire territory. This in turn allows appointment of the Institute’s first The China strategy, first designed in the committees to allocate whatever ever dedicated Manager, Marketing. 2004, has served us well, and we are resources they feel relevant in order The new branding and corporate working from a firm base. However, to get the job done, especially where identity programme of last year the first phase of that strategy, projects on the Mainland are concerned. has created many opportunities to the Affiliated Persons programme The CAC has done a fantastic job over expand the marketing horizons of is now a mature and established the years under the leadership of Vice the profession, but in order to fully programme, we therefore need President Maurice Ngai, but in order exploit these it was felt necessary additional initiatives to maintain the to maintain the momentum built up to have a dedicated professional. momentum of progress we have built by the CAC it was felt that, as in Hong The new Manager, Marketing will up on the Mainland. These include Kong, specialist committees should start in January 2009. The fourth establishing the Institute’s qualifying be able to bring all of their resources appointment, a Research Assistant, scheme on the Mainland (i.e. the to bear on the projects they felt most will increase our research capacity International Qualifying Scheme or important, whether they be in Hong and will probably be filled in early IQS), both in its Hong Kong format Kong or the Mainland. 2009. and a new Mainland IQS with suitable

2 Chartered Secretaries. More than meets the eye. adapted papers to take account of the sector by national governments. Many hearings. That is not to say that the differences in Mainland law, taxation governments take their cue from current procedures are in anyway and accounting procedures etc. inter-governmental organisations flawed, but Council believes that such as the WTO and ILO when justice must be done and seen to be We are also actively seeking to forging bi-lateral relations and done in a transparent and efficient sign MOU’s with suitable Mainland agreements. For example, in Hong manner. Thus, one of the initiatives universities primarily in Shanghai Kong, the government has gone to of Council was to engage external to provide Diploma Programmes for great lengths to encourage business parties to study and advise on possible those providing corporate services to to take advantage of the Closer improvements to the procedural Shanghai listed companies, Shanghai Economic Partnership Arrangement elements of the disciplinary hearings registered Wholly Foreign Owned (CEPA) made between the Mainland and to close any loopholes that allow Enterprises (WFOE’s) as well as our and Hong Kong. However, none of the members to bypass the disciplinary members working in Hong Kong and CEPA agreements have included the process by leaving the profession. Mainland China who are interested CGCSA services sectors specifically to learn and know more about China because both the Mainland and Hong The re-write of the Companies corporate practices. Kong governments use the WTO Ordinance provides an excellent classifications of professions as their opportunity for the profession to The Institute’s IT systems play a guide and the WTO does not currently influence the business environment of central role to the efficiency of the recognise the CGCSA services sector Hong Kong. We have representatives secretariat and Council decreed as a professional service provided on all four of the Companies Registry that the long awaited upgrade of by professionals such as Chartered Advisory Groups, as well as on the its Amelia CRM and web content Secretaries. There are also many other Standing Committee on Company management systems should be examples that result in our chosen Law Reform. Hopefully by giving finalised and subjected to a rigorous profession not being recognised a practitioner’s viewpoint we can security audit as soon as possible. internationally or locally in a new contribute to ensuring that, in The current scheduled is for the piece of legislation or regulation. accordance with the stated aims of systems to go live and be audited your Institute, that governance is a in late 2008/ early 2009. This will be Your Institute also staged its biennial boon not a burden to business. followed by a significant upgrade of Corporate Governance Conference the Institute’s website, including the in September 2008. This was priority I have already mentioned that the launch a “Career” section which will six on the Council’s list of initiatives. secretariat has employed a Manager, not only include career advice but also There are other reports about this Marketing to help focus our marketing allow employers to advertise positions conference, but I would like to and leverage our new branding. One within their organisations suitable for remind members of the massive of the priorities this year and next Chartered Secretaries. effort such an event requires from is focus on reaching employers and the secretariat as well as the Council help them understand the impact During the May 2008 meeting of and committee members in order to and value Chartered Secretaries can ICSA International Council, the be truly successful (which includes bring to an organisation. While we decision to revisit the issue of seeking being useful for members); my thanks have been reasonably successful in a WTO and International Labour to all who helped in the planning and getting our message across to the Organisation (ILO) classification for execution of this excellent event. regulators and government as well as “Corporate Governance, Compliance those in academia (both teachers and and Secretarial Advisory ” (CGCSA) Given the changing nature of the laws students), we have still to penetrate services was sanctioned. Your Council and regulations both in actual and all levels of corporate Hong Kong. It fully endorses this initiative and has interpretative terms Council keeps a is true that most top listed companies already held talks with the relevant close eye on the Institute’s disciplinary employ our members, often in the role government departments on how processes and procedures. During of company secretary (approximately we can progress this issue. The the past several months a number 65% of the top 60 companies by significance of this initiative lies in of procedural issues have come to market capitalisation according to the recognition of the CGCSA services light that have prompted a re-think August 2008 statistics), but our provided by the corporate secretarial of how we conduct our disciplinary penetration and awareness falls off

Annual Report 2008 3 dramatically outside the top echelons maintaining and building on the seen as a truly global representative of business. Council believes that a momentum in Hong Kong. These voice of that sector. The corporate co-ordinated and focussed marketing coupled with the new marketing secretarial profession is not the sole campaign will help in reaching this campaign aimed at employers mean reserve of Chartered Secretaries. market segment. that busy times are ahead, busier Other professionals such as lawyers, perhaps, than even the past five years. compliance professionals and Initiative ten is the introduction of a accountants also serve as corporate mandatory continuing professional The other massive challenge facing secretaries. While ICSA can be a development programme for the Institute lies beyond the shores leading voice (as it can on issues of Chartered Secretaries. This is of Hong Kong and the Mainland, in governance generally) it simply cannot scheduled for completion and the international arena. While HKICS be the truly globally representative initiation in 2010. The Professional is a committed and active member one as it excludes, for example, those Development Committee under of ICSA, the future development of who serve as corporate secretaries in the chairmanship of Immediate the profession very much lies at the the US. Past President Richard Leung is feet of the UK Committee and how spearheading this project and great they wish the international side of However, exclusivity and elitism are progress has already been made with the profession to develop. Currently positive things for a profession. They the main proposal already having the UK has a built-in majority of give the Institute and profession gone through a number of drafts. two on International Council. The gravitas and to those who know us, reasoning behind this is that as ICSA an edge over the rest of the corporate In December 2007 your Institute was founded and is based in the UK secretarial profession. This should not proposed to HKEx that either it therefore control must remain in the be given up lightly, or indeed at all. or HKICS run a quality assurance UK. Whether we agree or not with this programme for company secretaries reasoning (whether ‘control’ should In order to have a truly global of Hong Kong listed companies. be defined in terms of a majority of role and voice the fact is that This would ensure that those listed International Council members is corporate secretaries need to have as the company secretary would be another issue altogether) the fact an international organisation (e.g. both able and willing to do the job remains that this is the case. one with representation from the properly, rather than being company countries/areas such as the US, Japan, secretary in name only due to having It is also a fact that ICSA is an elite China, India, Russia, the rest of the EU a recognised qualification. While and exclusive organisation. It is, if other than the UK, etc) that is broad HKEx rejected the proposal at the you will, the necessary nature of the in appeal, easy to join and far more time, Council has decided that it organisation. To obtain membership of encompassing than ICSA as well as will continue to lobby for such a ICSA one must have high standards of being dedicated to achieving common programme in the interests of good academic ability, professionalism and goals that will benefit all. It should be governance. be of good character. a trade/lobbyist organisation rather than a professional body. Looking to the Future Such an organisation cannot be The biggest challenges facing the a niche player within a particular If such a federation could be set up profession and the Institute are sector (in this case the CGCSA this would not compromise standards developing the profession on the services sector) and therefore be both and therefore the reputation of ICSA Mainland whilst at the same time exclusive and elite and expect to be and its members, but would actually

4 Chartered Secretaries. More than meets the eye. provide a show case for ICSA in that 60 years in Hong Kong The future holds many challenges but the other country representatives By 2009 Chartered Secretaries will plenty of opportunities for our chosen could be introduced to the benefits of have been part of the business profession. The recent turmoil in professionalism and training in terms landscape in Hong Kong for 60 the financial markets has shown the of carrying out corporate secretarial years and we will celebrate this importance of good governance and duties such as those possessed by fact starting with our 2009 Annual the risks of ignoring or only paying lip a Chartered Secretary. This has the Dinner . It is my hope that within service to governance issues. People, potential of allowing ICSA to expand the next six years we will be not procedures, make governance outside its traditional stronghold of celebrating the firm establishment work. People such as Chartered Commonwealth countries. of the profession of Chartered Secretaries who place integrity Secretary in the Mainland while and ethics not short term gain at ICSA is what it is – an exclusive at the same time being a member the centre of business. In times of and elite professional body with of a truly global federation of upheaval opportunities arise, we shall a very specific brand of corporate national bodies representing the seize them. secretaryship called Chartered CGCSA services sector at the Secretary. It should not compromise highest levels of international and its standards in order to try and reach inter-government organisations. the unattainable goal (on its own) of being the global representative of It is a tradition that I officially the corporate secretarial profession. thank all those involved in the Natalia K. M. Seng In order to achieve this ICSA needs Institute’s affairs from members President to be a member of an international of the Executive Committee federation of corporate secretaries – (now disbanded) and Council, to Hong Kong, 11 November 2008 preferably with each division Committee and Panel members representing its own country. Such as well as those who have an international organisation or contributed to research projects federation must be an inclusive one and working groups during the that can lobby at the highest levels of past year and indeed in years government and inter-governmental previous, so thank you one and all. organisations, rather than a You have made my second term as professional body such as ICSA. President far easier and productive than I could have hoped. A huge HKICS would fully support this move vote of thanks must also be given to set up a corporate secretarial to the incredibly hardworking trade group whilst at the same time secretariat whose achievements maintain its membership of ICSA. The are highly appreciated. special status that a professional body such as ICSA has and rightly treasures is one that should not be taken for granted.

Annual Report 2008 5 Financial Highlights

2007/08 Income Portion

65% Subscriptions 10% Examination fees received 21% Revenue from functions held 4% Sundry income

2007/08 Expenditure Portion

40% Staff costs 3% Depreciation & amortisation expenses 9% Direct cost of functions held 4% Institute’s service charges 13% Promotion & public relations 13% Publications and printing 5% Student services 13% Utilities & sundry expenses

Surplus/(Deficit) Comparison 2004-2008 HK$’000 15,484 14,569 915 19,578 16,487 3,091 16,379 16,613 -234 20,217 19,501 716 21,747 24,450 -2,703

Total income Total expenditure Surplus/(Defi cit) 04 05 06 07 08 Remark: Total income included bank interest & investment income.

6 Chartered Secretaries. More than meets the eye. Income Distribution Comparison 2004-2008 HK$’000 11,327 1,364 2,141 409 11,569 2,054 4,193 364 11,315 1,840 2,420 804 12,625 2,146 3,948 1,498 14,127 2,202 4,615 804

Subscriptions Examination fees received Revenue from functions held Sundry income 04 05 06 07 08

Expenses Distribution Comparison 2004-2008 8,223 659 741 767 1,285 2,616 701 1,621 HK$’000 5,515 619 1,159 1,582 474 3,591 388 1,241 6,512 597 2,254 1,929 507 2,496 487 1,579

04 05 06 HK$’000 9,523 699 1,748 715 1,152 2,986 870 1,808 10,077 768 2,266 870 3,059 3,188 1,120 3,102

Staff costs Depreciation & amortisation expenses Direct cost of functions held Institute’s service charges Promotion & public relations Publications and printing Student services Utilities & sundry expenses 07 08

Annual Report 2008 7 Report of Council

The Council is pleased to submit our Report, together with One of the important tasks of the Education the audited statement of accounts, for the financial year Committee is to maintain the quality of the IQS ended 31 July 2008. examinations and the collaborative courses held with selected universities. The IQS examination Principal Activity quality assurance system with its three tiers of The Institute’s main activity is to promote good governance monitoring standards – from paper setting to and advance the efficient administration of commerce, the final grading of scripts – ensures that the industry and public affairs. We achieve this by continually qualification continues to more than fulfil the high developing the study and practice of governance, international standard required by the Institute of secretaryship and administration of companies and other Chartered Secretaries and Administrators. bodies. Through the Student Ambassadors Programme We set and worked on the following key strategic objectives and Summer Internship Programme we have been in the fiscal year: able to give undergraduates opportunities to gain hands-on experience in professional practices. 1. Development in Mainland China This year, 230 students from local universities The China Affairs Committee maintained close took advantage of the 11 diverse and interesting contact with relevant regulators in the Mainland functions and activities arranged through the and made five visits to relevant Mainland regulators Student Ambassadors Programme. and government bodies during the fiscal year. The Affiliated Persons Programme continues to be well We held four IQS Information Sessions in Hong supported and is held in high regard by H-share Kong during the year. These sessions are designed board secretaries and the regulators both in the to help members of the general public learn more Mainland and Hong Kong. We organised four ECPD about the Chartered Secretary profession and career seminars during the year with more than 300 opportunities in it. participants attending. The Institute’s qualifying examination, the International Qualifying Scheme 3. Membership matters (IQS), was held in Beijing in December 2007 and One of our main aims is to build a strong identity June 2008 for H-share board secretaries and their for the profession and the Chartered Secretary subordinates. We also liaised with local universities brand. With this in mind, we launched our new to co-organise executive training programmes corporate identity in November 2007. The new for Mainland enterprises in order to continue our branding reflects our focus on the qualities of the promotion of the value of the Chartered Secretary Chartered Secretary profession and the value they profession. bring to an organisation rather than on the Institute as a body. 2. Promotion of the Institute and the Chartered Secretary profession to The Membership Committee takes disciplinary university students in Hong Kong; matters seriously and this year has worked to raise monitoring the quality of the IQS awareness among members of their professional examinations duties and obligations in upholding ethics and The Education Committee actively promoted the standards. During the year, the Disciplinary Tribunal Institute, the IQS and the Chartered Secretary heard two cases on alleged non-compliance with profession to university students, academics and the Institute’s regulations and one in relation to the the general public in Hong Kong. During the year, bankruptcy of a member. we participated in more than 42 promotional activities and professional seminars with the nine local universities.

8 Chartered Secretaries. More than meets the eye. 4. Professional development Taking out the extraordinary items, the Institute would The Practitioner’s Endorsement (PE) element of the have an operational deficit of HK$614,936 in view of the Enhanced Continuing Professional Development extensive functions, activities and research projects carried (ECPD) Programme has been very well received by out by the respective Committees and the Council for the members, regulators and employers, all of whom benefit of our Members and students during the year and consider it to be a mark of excellence. To serve our future. long-term aim of administering a quality assurance certification programme for all those working Structure in the corporate secretarial sector, the PE is also In January 2008, the Institute changed its structure to opened to Affiliated Persons, directors, lawyers and improve the efficiency and effectiveness of its operations accountants working in the corporate secretarial in Hong Kong and the Mainland. The Executive Committee field. We believe that continuing development of was dissolved and its role in monitoring the finances and professional competence is important and we place operations of the Secretariat was taken over by the Council. strong emphasis on our ECPD Programme. Our The China Affairs Committee was also dissolved as of 1 current projects include reviewing the feasibility of August 2008 and its activities incorporated into the three launching a mandatory ECPD Programme. remaining Committees which are now accountable for the Institute’s activities in Mainland China as well as those in We make submissions to the government and Hong Kong. The new structure of the Council Committees regulators in response to their consultation papers and the Secretariat is set out on page 56 and page 64. or whenever we consider that there are important With the new structure we can focus our resources on issues in respect of which we wish to express our developing and implementing activities to improve the views. We also publish guidance notes and conduct recognition of the Chartered Secretary profession in the research projects relevant to the profession. Mainland.

5. Financial and operations monitoring The three operating committees are each chaired by a We closely monitor the Institute’s significant Council member. The committees report directly to Council operational areas. These include financial and are responsible for implementing the Institute’s management, the Institute’s IT systems, upgrades strategic policies in both Hong Kong and Mainland China. of Amelia – our customer relationship management system-web systems and the overall development Education Committee – Chaired by Dr Brian Lo of the secretariat staff including the use of staff FCIS FCS training facilities both internally and externally. Responsibilities include:

The Institute experienced a deficit of HK$2.7 million – Overseeing and monitoring standards of the IQS during the fiscal year which was due to the ad and collaborative courses. hoc development items in the new Corporate ID and related promotional activities (a substantial – Setting, monitoring and implementing studentship part of the approved Corporate ID expenses were regulatory policies. incurred and paid in late 2007 to 2008), IQS examinations new rubric development, research – Promoting the IQS, the Institute and the Chartered reports, sponsorship of the OECD Asian Roundtable Secretary profession to university students. Conference on corporate governance held in Hong Kong, legal expenses in disciplinary matters, and – Establishing and maintaining contacts with relevant a donation in response to an appeal for money academic and professional institutions to prepare following the Sichuan earthquake disaster. students for membership.

– Attending to disciplinary matters and the setting, monitoring and implementing codes of ethics and conduct for students.

Annual Report 2008 9 Membership Committee – Chaired by Maurice – Publishing research reports and developing W.F. Ngai FCIS FCS (PE) Guidance Notes. Responsibilities include: – Responding to consultations conducted by – Setting membership admission policies, processing Government or Regulators. applications and maintaining standards for acceptance to membership of Institute graduates as Proposed Amendments to Institute’s well as the processing and maintaining standards Memorandum and Articles of Association for acceptance of Fellowship status of Associate Pursuant to the current Institute’s constitution, the Council applicants. cannot refuse membership de-registration due to failure to pay subscription under Article 20 of the Institute’s articles – Attending to disciplinary matters and the setting, of association even if a member is under investigation. monitoring and implementing codes of ethics and Therefore, it is recommended to amend the constitution by conduct for members. making Article 20 in line with Article 18 so that the Council has the authority to refuse membership de-registration due – Improving and maintaining members’ services and to failure to pay subscription and continue investigation benefits (not including professional development and/or disciplinary proceedings due to a member’s alleged and publishing). misconduct. The Companies Registry also recommends that the Institute amends its Memorandum Clause 4.5(b) – Developing an overall marketing communications regarding the description of the banking bodies. Changes strategy for the profession. to the memorandum and articles of association are being proposed to address the issue are: – Implementing the Affiliated Persons Programme and networking with regulators, government officials “THAT the Institute’s memorandum and articles of and professional institutions in the Mainland. association be and are hereby amended as follows:

Professional Development Committee – Chaired 1. THAT the Institute’s Memorandum of Association by Richard Leung FCIS FCS (PE) paragraph (b) of Clause 4.5 be altered by deleting Responsibilities include: the words “the Hong Kong Association of Banks” after the words “time being by” and replacing the – Implementing and maintaining ECPD standards same with “The Hong Kong and Shanghai Banking including the awarding of CPD points for the PE. Corporation Limited or another licensed bank as defined by the Banking Ordinance that is supervised – Establishing and maintaining contact with by the Hong Kong Monetary Authority and governmental and regulatory bodies in Hong Kong approved by Council for Hong Kong dollars loans”; to promote the Institute and profession. 2. THAT the Institute’s Articles of Association be – Organising professional training programmes in the altered by the addition of the following sentence at Mainland. the end of Article 18:–

– Assuming editorial responsibility for all the Where disciplinary action is being considered Institute’s published materials (with the exception against a member, his membership shall not of the Annual Report). lapse under this Article 18 or Article 20 until the procedure is completed.” – Overseeing the composition and operation of the Company Secretaries Panel, Technical Consultation Panel, Professional Services Panel, CPD Points Panel and Editorial Board of the Institute’s monthly journal.

10 Chartered Secretaries. More than meets the eye. Council Members Candidates for Election to the 2008 Council Members of Council during the financial year and at the At the close of the nomination date, including retiring date of this report are as follows: Council member April W.Y. Chan, two candidates, namely Alberta K. Sie and Seaman S.M. Kwok, have been nominated Prof. Alan K.M. Au FCIS FCS for election. As the number of candidates is not more than April W.Y. Chan FCIS FCS(PE) the vacancies, the three candidates running for election, Bernard T.L. Wu FCIS FCS(PE) namely, April W.Y. Chan, Alberta K. Sie and Seaman S.M. Dr. Brian K.H. Lo FCIS FCS Kwok shall be deemed to be duly elected members of the Diana M.Y. Chung FCIS FCS(PE) Council at the Annual General Meeting to be held on 10 Doris W.N. Wong FCIS FCS December 2008. April W. Y. Chan held office for four years Douglas C. Oxley FCIS FCS and may remain eligible to serve for a term of three years Edith Shih FCIS FCS(PE) without first ceasing to be a member of Council for one Maurice W.F. Ngai FCIS FCS(PE) year. Alberta K. Sie, after her serving of the six years’ term Natalia K.M. Seng FCIS FCS(PE) with the Council, has retired upon the completion of the Polly O.Y. Wong, FCIS FCS(PE) 2007 Annual General Meeting and she has ceased to be a Richard W.K. Leung FCIS FCS(PE) member of Council for one year. She is eligible to serve for Susie S.F. Cheung FCIS FCS a term of three years. According to the Institute’s Article 54.6 no elected Council member should hold office for At the 2008 annual general meeting, April W.Y. Chan, Dr. more than 18 years. Seaman S. M. Kwok has held office Brian K.H. Lo and Doris W.N. Wong will retire from Council for a total of 16 years and 5 months having first been by rotation pursuant to Article 54.2 of the Institute’s appointed to the previous Executive Committee of ICSA- Articles of Association. April W.Y. Chan offer herself for re- HK Branch in May 1989 and has been a Council member election. Dr. Brian K.H. Lo and Doris W.N. Wong will not of HKICS until December 2005. If appointed at the 2008 offer themselves for re-election. Council wishes to place AGM, his maximum tenure of Council membership will be on record its appreciation for their valuable contribution to one year and seven months. Accordingly, his appointment the Institute during their membership of Council. would cease on 1 June 2010. He will not, thus, be able to serve the Council for a three-year term. Pursuant to Article 57.2 of the Institute’s articles of association, if the candidates running for election are Financial Statements not more than the vacancies, the persons so running for The deficit for the financial year ended 31 July 2008 and election shall, as from next annual general meeting, be the state of the Institute’s affairs at that date are set out on deemed to be duly elected members of the Council. pages 66 and 82 of the Financial Statements respectively.

Pursuant to Article 54.6 of the Institute’s articles of Non-Current Assets association, no elected member of Council holding office Details of movements of fixed assets during the year are as of 30 August 2005 has held office for a total of more set out in notes 13 and 14 of the accounts. than 18 years and that no person who became an elected member of Council after 30 August 2005 has held office as Auditors an elected member for a total of more than 12 years. A resolution to appoint Fan, Chan & Co. as Auditors of the Institute to hold office until the conclusion of the next None of the Council members had, during or at the end of annual general meeting and to authorise the Council to fix the year, an interest, directly or indirectly, in any contract their remuneration will be proposed at the forthcoming of significance with the Institute. Pursuant to Clause 4 of annual general meeting. the Institute’s memorandum and articles of association, no member of Council shall be appointed to any salaried office of the Institute, or any fee paying office of the Institute and no remuneration shall be given by the Institute to any By Order of the Council member of Council. Natalia K.M. Seng President

Hong Kong, 11 November 2008

Annual Report 2008 11 Calendar of Significant Events August 2007

Enhanced Continuing Professional Development (ECPD) Programme During this CPD year, over 70 seminars and workshops were held covering a wide range of industry-related topics. A list of the seminars and workshops can be found on pages 83 to 88.

Lingnan University Orientation Camp A career talk for over 100 freshmen was held at the orientation camp for Business Administration Society of Lingnan University Student’s Union on 8 August.

One of the over 70 CPD seminars held during the year.

Baptist University Economic Society Orientation Camp A career talk was organised at the Orientation Camp for the Economics Society, Student Union of Hong Kong Baptist University on 17 August.

Seminar to Lingnan University students September 2007

President’s Official Visit to Beijing An official visit to Beijing took place on 5 September. The Institute’s President and delegates met with representatives from the China Securities Regulatory Commission (CSRC) and the State-owned Assets Supervision and Administration Commission of the State Council, and held a gathering with Institute’s Affiliated Persons.

Visit to Shanghai A visit to Shanghai took place on 6 and 7 September. Institute representatives met with representatives from the State-owned Assets Supervision and Administration Commission of the Shanghai Municipal Government, Shanghai Economic Management College and China Europe President official International Business School. visit to Beijing

12 Chartered Secretaries. More than meets the eye. Company Secretaries Panel (CSP) Luncheon The CSP luncheon on 13 September was attended by Martin Wheatley, Chief Executive Officer of the Securities and Futures Commission (SFC), and other senior SFC executives.

Press conference on Business ethics research report

“Business Ethics” Research Report and Press Conference In September 2007, we published a research paper entitled “Business Ethics”. A press conference to publicise the report was held at the Foreign Correspondents’ Club on 13 September.

ECPD seminar in Dalian

Affiliated Persons’ ECPD seminar ~ Dalian An Affiliated Persons’ ECPD seminar took place on 20 and 21 September in Dalian. The theme was “Mergers and Acquisitions” and 30 participants took part.

IQS Information session ~ Dalian An IQS information session was held in Dalian on 21 September to introduce the Chartered Secretary Mr. H.M. Tong at Fellows’ Luncheon profession and IQS examinations to H-share board secretaries and their subordinates.

Tea Reception Fellows’ Luncheon A Tea reception was held on 22 September for student A Fellows’ Luncheon was held on 24 September with ambassadors, summer interns, subject prize and merit Timothy HM Tong, Commissioner of the Independent certificate winners and the recipients of Institute Commission Against Corruption who delivered a speech Scholarships. on the ”Role of Chartered Secretaries in Promoting Ethics Management”.

Annual Report 2008 13 October 2007

Graduates’ Gathering This gathering on 3 October celebrated the achievement of graduate status by former students. Graduates’ certificates were presented at the ceremony, at which new graduates met with Council members and other senior members of the Institute.

Market Value Management Forum and Golden Board Secretary Award Ceremony On 27 October, the Institute’s Vice President and Chairman of China Affairs and Membership Committees Maurice Ngai delivered a speech on “Trends and Developments in Corporate Governance” at this forum in Shenzhen.

Graduates’ Gathering November 2007

Launch of New Corporate Identity and Branding The official launch of the Institute’s new corporate identity and re-branding took place on 1 November.

Corporate Governance Paper Competition Information Session at Peking University On 2 November an information session was held in Beijing on the Corporate Governance Paper Competition, that was jointly organised by the Institute and the Department of International Economics and Trade, School of Economics, Peking University.

Launch of corporate ID

Corporate Governance Paper Competition and Presentation Award The Corporate Governance Paper Competition and Presentation Award 2007 was held and prizes awarded on 9 November. The topic for this year’s competition was “Corporate Governance: Corporate Social Responsibility”.

Paper Competition Award presentation ceremony for Corporate Governance

14 Chartered Secretaries. More than meets the eye. H-share Training Programme 2007 A four-day H-share training programme jointly organised by the Institute and Hong Kong Exchanges and Clearing Company Ltd (HKEx) was held between 13 and 16 November.

CSP Luncheon A luncheon was held on 14 November and attended by members of the CSP.

H-share training programme

IQS Information Session An IQS Information Session to introduce the Chartered Secretary profession and IQS examinations to the general public was held on 17 November. More than 70 participants attended the event.

IQS Information Session

Expert Series To cater for the needs of its more experienced members, we held an Expert Series on “Meeting with Distinguished Speaker” on 28 November as part of the ECPD Programme. The guest speaker was Richard Williams, Head of Listing, HKEx.

Expert Series

Annual Report 2008 15 December 2007

Corporate Governance Symposium, Shanghai The second Corporate Governance Symposium on the theme “Corporate Social Responsibility”, was held in Shanghai on 6 and 7 December. The 16 speakers from Mainland China and Hong Kong included regulators, professional practitioners, investment bankers and H-share board secretaries. Around 100 participants – board secretaries and senior management from H-share and A-share companies – attended.

Symposium on Corporate Governance in Shanghai

Cocktail Reception – Meet the Registrar of Companies Members met Ada Chung, Registrar of Companies, Companies Registry at a special cocktail reception held on 10 December.

Anti-Money Laundering Forum 2007 An Anti-Money laundering (AML) Forum was held on 11 December. The purpose of the forum was to update members on legislation applicable to non-financial businesses and professionals, to help them perform proper AML due diligence, to provide tips on how to implement an egistrar of Companies Meeting the R effective AML compliance system, and to advise on the AML legal liabilities faced by professionals working as company services providers.

Annual General Meeting 2007 The Institute’s annual general meeting was held on 13 December.

Student Ambassadors Programme The Institute’s student ambassadors visited the Hong Kong Stock Exchange Ltd on 6 December.

Annual General Meeting 2007

16 Chartered Secretaries. More than meets the eye. January 2008

Corporate Governance at the crossroads The Institute hosted a “Corporate Governance at the crossroads” forum on 8 January. This forum drew upon a unique blend of experts who have both theoretical and practical experience to address the vexed issues of corporate stewardship, dual listings and ethics.

Professional Seminar A professional seminar was held on 10 January at the Hong Kong Polytechnic University for the Collaborative Course students.

Corporate Governance at the crossroads seminar

China Corporate & Regulatory Update (CCRU) 2008 The Institute hosted its second CCRU, which took the theme ”Regulatory Framework and Practices of Mainland and Hong Kong Listed Companies”, on 17 January. The event was supported by regulators from both Mainland China and Hong Kong with representatives from the China Securities Regulatory Commission, Ministry of Commerce, HKEx and SFC speaking at the event.

China Corporate and Regulatory Update

Annual Dinner 2008 We held our annual dinner on 17 January with more than 300 guests, members and students attending. The guest of honour was Eddy Fong, SBS JP, Chairman, SFC.

Annual Dinner Student Ambassadors Programme The Institute’s student ambassadors visited SFC on 29 January.

Annual Dinner Gu est of Honour: Mr. Eddy Fong SBS JP

Annual Report 2008 17 February 2008

Student Ambassadors Programme The Institute’s student ambassadors visited the Companies Registry on 4 February and Computershare Hong Kong Investors Services Ltd on 15 February.

Corporate Governance Training Programme in Hong Kong Our three-day corporate governance training programme for Mainland listed issuers, directors and senior executives was held between 15 and 18 February with 21 participants took part.

utershare HK Student Ambassador Programme – Visit to Comp Investors Services Ltd

March 2008

CSP Luncheon A CSP luncheon attended by Ada Chung, Registrar of Companies, and other senior officials from the Companies Registry was held on 12 March.

Visit to Shenzhen A visit to Shenzhen took place on 17 March. Institute representatives met with representatives from the Shenzhen Stock Exchange, Shenzhen Listed Companies Association, CSRC Shenzhen Regulatory Bureau and the State-owned Assets Supervision and Administration Commission of Shenzhen Municipal Government; we also Visit to Shenzhen held a gathering with the Institute’s Affilated Persons in Shenzhen.

Fellows’ Luncheon A Fellows’ Luncheon was held on 27 March. Leung Oi Sie Elsie GBM JP delivered a speech on the topic ”Can Functional Constituencies Survive Universal Suffrage?”.

Career Day 2008 The Career Day 2008 professional information seminar, held on 29 March, took the theme “More than meets the eye”. More than 140 participants attended the seminar in which five speakers shared their experiences as Chartered Secretaries and discussed career opportunities within the profession. Fellows’ Luncheon – President Natalia Seng FCIS FCS (PE) and Elsie Leung

18 Chartered Secretaries. More than meets the eye. April 2008

Graduates’ Gathering Student Ambassadors Programme This gathering on 8 April celebrated achievement of A professional seminar on the topic “Annual General Institute’s graduate status by former students. Graduates’ Meetings” was presented to student ambassadors on certificates were presented at the ceremony, at which new 2 April. graduates met Council members and other senior members of the Institute. Student Ambassadors Programme: CLP Annual General Meeting Cocktail Reception 2008 Student ambassadors attended CLP Holdings Ltd’s annual A cocktail reception for academics from the local general meeting on 29 April. universities was held on 11 April 2008. Around 30 senior academics from Hong Kong’s tertiary education institutions and other guests attended.

May 2008

Annual Corporate & Regulatory Update (ACRU) 2008 The Institute’s ninth ACRU was held on 9 May. The event was, once again, supported by Hong Kong’s regulators with the SFC, Companies Registry, HKEx and the Hong Kong Monetary Authority briefing Institute members and other professionals on the latest developments in their respective areas. With more than 800 delegates in attendance, this was the largest ACRU to date.

2008 OECD Roundtable on Corporate Annual Corporate and Regulatory Update 2008 Governance The Institute co-hosted along with the SFC, HKICPA and HKIoD, with financial support from the Japanese government, the 2008 OECD Roundtable on Corporate Governance on 13 and 14 May.

Joint seminar with the Hong Kong Institute of Certified Public Accountants (HKICPA) On 20 May the Institute conducted a joint seminar with the HKICPA on “The Shifting Balance of Power between Shareholders & the Board: New Corp’s Exodus of Delaware and Other Antipodean Tales”. Professor Jennifer G. Hill, Sydney Law School and CoSIG Visiting Scholar, was the guest speaker.

2008 OECD Roundtable

Annual Report 2008 19 Top 100 Listed Companies Corporate Governance Evaluation: Press Conference in Beijing On 21 May, Institute Vice-President and Chairman of the China Affairs and Membership Committees Maurice Ngai gave a presentation on corporate governance trends at a press conference entitled ”Top 100 Listed Companies Corporate Governance Evaluation in China”. The press conference was organised by the Corporate Governance Centre, China Social Sciences Academy, Protiviti Management Consulting Co and Centre of Testing and Evaluation, National School.

IQS Examinations and IQS Quality Assurance Information Session This session, held on 22 May, was to recruit examiners, markers and reviewers for the IQS examinations.

Fellows’ Luncheon A Fellows’ Luncheon was held on 28 May with Professor the Honourable Anthony Cheung Bing Leung, BBS, JP, Chairman of the Consumer Council, sharing his views on Quality Assurance Information Session the strengthening of consumer protection law in Hong Kong.

Corporate Governance Paper Competition Prize Presentation Ceremony On 29 May, prizes were presented to winners and runners up the corporate governance paper competition jointly organised by the Institute and Peking University.

Affiliated Persons’ ECPD seminar ~ Beijing An Affiliated Persons’ ECPD seminar took place on 29 and 30 May in Beijing. The theme was ”Connected Transactions” and the seminar attracted 55 participants.

in Beijing Corporate Governance Paper Competition

20 Chartered Secretaries. More than meets the eye. June 2008

Corporate Governance Paper Competition and Presentation Award 2008 – Briefing Session A briefing session on the third Corporate Governance Paper Competition and Presentation Award 2008 was held on 3 June. The session provided participants with information about the Institute as well as the competition.

Qingdao Study Tour A study tour to Qingdao which took place from 4 to 8 June was organised. The group visited local government bureaus and listed corporations. These included the State-owned Assets Supervision and Administration – Commission of Qingdao Municipal Government; Qingdao Development & Reform Commission; CSRC Qingdao Regulatory Bureau; and Qingdao Local Taxation Bureau. The tour also visited two listed corporations: Qingdao Mesnac Company Ltd and Tsingtao Brewery Company Ltd.

CSP Luncheon The CSP luncheon on 11 June was attended by Richard Qingdao Study Tour Williams, Head of Listing Division, HKEx, and other senior HKEx executives.

Visit to Hangzhou During a visit to Hangzhou on 11 June, Institute representatives met with representatives from Zhejiang University, CSRC Zhejiang Regulatory Bureau and the Listed Companies Association of Zhejiang.

Visit to Hangzhou

Annual Report 2008 21 Dragon Boat Races The dragon boat team of the Institute took part in the Tuen Ng Festival Dragon Boat race in Sai Kung on 8 June and the Hong Kong International Dragon Boat Races in Shatin on 14 June.

Joint seminar with the CPD Alliance Richard Leung, Institute immediate Past President and Chairman of Professional Development Committee, was one of the speakers at a seminar which took place on 16 June entitled “Updates on CPD and Future Trends” organised by the CPD Alliance and the South China Morning Post. Natalia Seng, Institute’s President, was one of the panelists Dragon boat team at the press conference relating to the CPD Alliance survey on “Employee Wellness of Hong Kong Professionals” which was held on the same date. These two events attracted wide media coverage.

Joint seminar with The Hong Kong Institute of Joint seminar with CoSIG, HKICPA and The Law Bankers (HKIB) Society of Hong Kong The Institute conducted a joint seminar with the HKIB on Professor Roberta Romano, Oscar M. Ruebhausen Professor “Practical Perspectives on Handling ‘Know Your Client Due of Law and Director of the Yale Law School Center for the Diligence’ on 21 June. Institute’s President, Natalia Seng study of Corporate Law was the guest speaker at this first and Rodney Au, Manager, Operational Risk & Compliance, collateral seminar, which was held on 26 June. National Australia Bank Ltd, were the guest speakers.

July 2008

Visit to Shanghai IQS Information Session ~ Hangzhou ICSA Professional Standards Committee delegates An IQS information session took place on 18 July in visited Shanghai on 2 July. The ICSA delegates met with Hangzhou. This session introduced the Chartered Secretary representatives from the Shanghai Stock Exchange and the profession and IQS examinations to H-share board CSRC Shanghai Regulatory Bureau. secretaries and their subordinates.

IQS Information Session New Students Orientation The second IQS Information Session, introducing the An orientation session for newly registered students took Chartered Secretary profession and IQS examinations to the place on 28 June with 27 students attending. general public, was held on 10 July and re-run on 26 July. More than 110 participants attended the two sessions.

Affiliated Persons’ ECPD Seminar ~ Hangzhou An Affiliated Persons’ ECPD seminar took place on 17 and 18 July in Hangzhou. The seminar took the theme ”Effective Board – Practical Corporate Governance” and attracted 64 participants.

22 Chartered Secretaries. More than meets the eye. Convocation 2007/2008 Our annual Convocation was rescheduled to 5 August and were delighted to have Paul Chow FCIS FCS, Chief Executive Officer, HKEx, as our guest of honour. Leung Oi Sie Elsie FCIS FCS received Honorary membership of the Institute at the event, which was attended by more than 50 newly elected Associates and Fellows.

Honorary Member – Ms. Elsie Leung FCIS FCS

Convocation 2008

Members at Convocation 2008

Annual Report 2008 23 The Institute and our Members Membership Publications Members are at the core of the Institute and much of what During this fiscal year we published three guidance notes we do is in support of our members, both in terms of their for our members. These guidance notes are designed to professional status and their collegiate relationships. be a practical resource on good governance, providing members with practical advice on topical issues relating We are keen to continue to develop and enhance our to corporate governance and company secretarial matters. membership strength. As at the end of July 2008, we had This year’s guidance notes were: 5,014 members and graduates, representing an increase of 2.2 per cent compared with the previous year. • Directors and Officers Insurance (October 2007)

We received 163 successful Associate applications, • Insider Dealing – Part I (March 2008) slightly down on last year, while there were 10 successful applications for Fellowship. The Fellowship status is • Insider Dealing – Part II (June 2008) recognised as the senior rank within the Institute, and is a clear statement of a member’s attainment of a premier We also issued our Anti-Money Laundering and Counter- position within the profession. Terrorist Financing (AML and CTF) Guidelines in April 2008. AML and CTF are two of the major challenges facing The ICSA International Council and the HKICS admitted the world today. Chartered Secretaries have a duty to Leung Oi Sie Elsie GBM JP as an Honorary Member of both ensure that they are up to date with the latest AML and The Hong Kong Institute of Chartered Secretaries and the CTF procedures not only to better serve their clients and Institute of Chartered Secretaries and Administrators on employers but also as a matter of professional integrity. 23 May 2008. Our guidelines are intended for use by all members. Particular attention is given to the trust and company As at 31 July 2008, our membership is as follows: service providers sector, an area where many of our members now work. By providing members with guidance

395 Graduates on what to look for in terms of AML/CTF, what steps they 4,244 Associates should take to avoid being party to money laundering 375 Fellows activities and how to report suspected money laundering and terrorist financing activities, the Institute hopes it can help members play a proactive role in deterring and detecting these activities.

Further guidance notes and guidelines will be published throughout the year, and we welcome suggestions or ideas for topics from members.

Membership Services

Professional Services Bulletin Board Update (BBU) Service The Institute provides a BBU service to members and graduates, through which information and announcements issued by various governments and regulatory bodies – including Hong Kong Exchanges & Clearing Limited, the Companies Registry, the Inland Revenue Department, the Official Receiver’s Office and the Securities & Futures Commission – are circulated via email in a timely manner. We also issue a China BBU which provides members with updates on latest regulatory developments in Mainland China. During the year, we issued 22 BBUs and 10 China BBUs.

Expert Series

24 Chartered Secretaries. More than meets the eye. Research Projects ECPD is a mandatory component of the Practitioners’ On 13 September 2007, we released a research paper Endorsement (PE), a public acknowledgement of the skills, entitled “Business Ethics”. This paper followed on from a experience and current knowledge essential to those serving survey of 1,150 Hong Kong-listed companies which was as company secretaries. In addition to meeting a four-year jointly conducted by the Institute and the Hong Kong Shue experience criterion, candidates must undertake at least Yan University. The survey aimed to ascertain companies’ 15 hours’ ECPD seminars or workshops each year for two views on issues relating to business ethics, including drivers consecutive years in order to qualify for PE certification. for running a business in an ethical manner; drivers for and barriers to the issue of a code of ethics; the prevalence of Now in its fourth year, the PE is widely recognised by the adoption of a whistle-blowing policy; and the provision employers as a mark of excellence which helps them to of ethics training. identify the best company secretaries. Holders of the PE can be readily identified by the use of the enhanced post- The report was based on the findings of the survey nominals FCS(PE) or ACS(PE). including a detailed analysis of the responses and the key tools that can be used in the promotion of business ethics. Members’ Discipline The report also contains several recommendations on how During the year, the Disciplinary Tribunal conducted two to promote business ethics in Hong Kong. cases on non-compliance with the Institute’s rules and regulations. These cases were referred by the Investigation The Institute made five submissions during the year to the Group from previous year during 2006/2007. No cases government and regulators on issues affecting government were referred by the Investigation Group to the Disciplinary and other business related terms. For more information, see Tribunal for further action. ”The Institute and the Regulators” on page 34.

Professional Development Since we launched our Enhanced Continuing Professional Development (ECPD) Programme in August 2004, the programme has gone from strength-to-strength. ECPD enhances our members’ expertise and has become a recognised quality assurance certification programme by employers and regulators.

The ECPD seminars/workshops cover a wide range of industry-related topics and attendance continues to be high. The ECPD Programme is recognised by the regulators for its quality content and the Institute is one of the two institutions accredited by Hong Kong Exchanges and Joint seminar with HKICPA Clearing Limited to provide directors’ training.

nar Mr. Martin Wheatley at the Corporate Governance semi

Annual Report 2008 25 Social Activities We held two Graduates’ Gatherings in October and April This year’s annual dinner was held at the Island Shangri- respectively during which graduates who had completed La Hotel on 17 January 2008. We were delighted to have the IQS through examination and collaborative courses Eddy Fong SBS JP, Chairman of the Securities and Futures were presented with their Graduates’ certificates. Over 50 Commission, as our guest of honour. Over 300 guests and graduates attended these events, at which they met senior members, including Affiliated Persons, who are company members of the Institute and Council members. secretaries of H-share companies, attended the dinner.

We held our annual convocation in early August during which Honorary Members, newly elected Associates and Fellows were awarded certificates signifying their outstanding achievements. We were honoured to have Paul Chow FCIS FCS, Chief Executive Officer, Hong Kong Exchanges and Clearing Limited, attending as our guest of honour. During the convocation, Leung Oi Sie Elsie FCIS FCS was awarded Honorary membership of the Institute in recognition of her expertise and general service to the Hong Kong community. We welcomed more than 90 members and guests to the Convocation, and news supplements to mark the occasion were published in the Hong Kong Economic Times and the South China Morning Post. Graduates’ Gathering

Our Fellows’ luncheons continue to be popular with our This year we organised a series of visits to corporations. Fellow members. These events allow the senior members of These included trips to the Hongkong International the Institute to hear presentations from speakers on topics Terminals, the Park’N’Shop fresh food distribution centre relating to regulations, economics and politics. and Hong Kong Electric Co Ltd’s Lamma Winds Turbine.

s’ Luncheon Professor the Honourable Cheung Bing Leung at Fellow Visit to Hongkong International Terminals

26 Chartered Secretaries. More than meets the eye. Our study tour to Qingdao enabled members to visit government bureaux and A- and H-share listed corporations. The government bureaux included the State- owned Assets Supervision and Administration, Commission of Qingdao Municipal Government, Qingdao Development & Reform Commission, Qingdao Regulatory Bureau, China Securities Regulatory Commission, Qingdao Local Taxation Bureau, Qingdao Mesnac Company Ltd and Tsingtao Brewery Company Ltd.

We also organised a series of social activities including dance classes, golf training and a dragon boat team (which entered both the Tuen Ng Festival and the International Dragon Boat races).

Other outings included the Yuen Long day trip during Qingdao Study tour 2008 which members and their families explored the old Chinese cultures and traditions of the area and enjoyed the special local cuisine.

Looking Ahead We continue to promote the Chartered Secretary profession and enhance the value of our membership, both professionally and socially. The steady growth in membership allows us to continue to exert a positive impact on the business community, making every member proud to be part of the Chartered Secretary profession.

Following on from the dissolution of the China Affairs Committee on 1 August 2008, the Membership Committee has taken over the running of the Affiliated Persons programme, liaison with stakeholders in Mainland China, and marketing the Chartered Secretary profession and the Institute in the Mainland.

Senior Fellows attending Fel lows’ Luncheon

Annual Report 2008 27 Members’ Profile

Employer Organisation Nature of Organisation’s Main Business

36% Listed Company 13% Banking/Financial 28% Private Ltd Company Institution 21% Partnership/ 13% Accounting Professional Firm 11% Manufacturing 6% Government/ 5% Construction/Property Quasi-government 8% Corporate Secretarial Organisation Services 3% Further/ 6% Retail/Distribution Higher Education 5% Civil Service 2% Sole Proprietor/ 5% Legal Self-Employed 5% Education Training 1% Association/Society 2% Telecommunications 1% Statutory Body 1% Public Utilities 2% Others 2% Management Consultancy 2% Transport/Logistics 2% Insurance 20% Others

Age Profile Gender Distribution

2% Under 29 37% Male 29% 30-39 63% Female 49% 40-49 16% 50-59 3% 60-69 1% Over 70

28 Chartered Secretaries. More than meets the eye. Number of Members (Including Graduates) 3,584 3,715 3,875 4,030 4,124 4,284 4,473 4,646 4,759 4,907 5,014

98 99 00 01 02 03 04 05 06 07 08

Admissions 172 178 186 204 219 258 278 261 192 232 206 188 159 181 225 191 229 206 218 198 177 163 13 15 15 14 28 21 8 15 28 13 10

98 99 00 01 02 03 04 05 06 07 08 98 99 00 01 02 03 04 05 06 07 08 98 99 00 01 02 03 04 05 06 07 08 Graduates Associates Fellows

Total number of Members/Graduates 310 328 335 304 283 289 345 368 342 372 395 3,031 3,130 3,273 3,447 3,539 3,677 3,806 3,946 4,060 4,166 4,244 243 257 267 279 302 318 322 332 357 369 375

98 99 00 01 02 03 04 05 06 07 08 98 99 00 01 02 03 04 05 06 07 08 98 99 00 01 02 03 04 05 06 07 08 Graduates Associates Fellows

Annual Report 2008 29 The Institute and our Students Student Statistics Studentship Policy and Implementation At 31 July 2008 the Institute had 2,556 current students, The Exemption Sub-Committee reviews and endorses of whom 626 were new students who registered during exemptions and recommends exemption policies and the fiscal year. For the same period last year, we had guidelines to the Education Committee. A total of 2,602 students and 550 new students registered. 342 exemption applications were reviewed and handled during the year. Examinations and Quality Assurance The International Qualifying Scheme (IQS), the profession’s With the support of the Assessment Review Panel and qualifying examination, is maintained and monitored at Exemption Sub-Committee, the Education Committee the highest international standard. This was the fifth year constantly reviews student registrations and related issues for the IQS: Two examination diets were held during the in order to manage the student base in an equitable and fiscal year with 1,776 students enrolling in the combined consistent manner. Policy updates this year included the subjects. The average pass rates for the December 2007 policy and procedures for the review of examination results and June 2008 diets were 28.8 per cent and 39.3 per cent and eligibility for exemptions for both IQS and collaborative respectively. course graduates.

A total of 73 students completed the IQS during the year Student Disciplinary Cases and advanced to graduate status. We were delighted to An important criterion in the membership qualifying award subject prizes and merit certificates for outstanding process is that an applicant should be a “fit and proper” performance to four candidates in the December 2007 person in order to be admitted to the Institute’s examinations and to five candidates in the June 2008 membership. No student disciplinary cases were reported in examinations. either the December 2007 or June 2008 examinations.

Two Beijing-based IQS examination sessions were held in December 2007 and June 2008, during which Mainland candidates took the same examination papers at the same time as their counterparts in Hong Kong.

The Assessment Review Panel, which is responsible for assuring the integrity and quality of the examination papers, held meetings in January and July 2008 to review the examination scripts and related matters. The panel also held a policy meeting in October 2008 to discuss the development of and policy matters relating to the IQS examinations. This included a review of the Hong Kong syllabus, the examination rubric and a study on a China variant examination.

30 Chartered Secretaries. More than meets the eye. Examination Support Services prize winners also attended these events to share We devote considerable resources to provide support their experiences. A total of 104 students came to for our students through various forms of assistance in the three orientation sessions which were held in preparing them for the IQS examinations. August 2007 and in February and June 2008.

(a) IQS Examination Preparatory Courses The University of Hong Kong, School of Professional and Continuing Education holds three IQS examination preparatory courses, in March, June and September each year. A total of 943 students enrolled in the preparatory courses for the eight subjects during this fiscal year, compared with 893 students in the previous fiscal year.

(b) Examination Technique Workshops The Institute organises examination technique workshops to help students improve their examination skills as they prepare for the IQS examinations. This year 185 students enrolled in our workshops in Hong Kong Financial Accounting, New Students Orientation Hong Kong Taxation, Hong Kong Corporate Law, Corporate Administration and Corporate Financial Other areas of student support include provision Management, which were held in October and of study outlines, helping with ordering ICSA Study November 2007 and in April 2008. Texts and arranging discount rates for students purchasing reference textbooks with various bookstores. We also send monthly e-circulars covering student and other Institute’s news.

Promoting the Institute to potential students During the fiscal year we held four IQS information sessions – in July and November 2007 and two sessions in July 2008 – to raise public awareness of our Institute and the Chartered Secretary profession. A total of 262 participants attended these sessions, of which around 16 per cent subsequently registered as students.

Examination Technique Workshop

(c) New Students Orientation We held three orientation sessions for newly registered students, giving them the chance to get to know each other while also finding out more about the Institute. Members and IQS subject

IQS Information Session

Annual Report 2008 31 Students’ Profile

Age Distribution of newly registered Employment Organisation of newly students registered students

17% 21-25 30% Listed Company 34% 26-30 29% Private Company 23% 31-35 2% Partnership 14% 36-40 8% Commercial/ 7% 41-45 Industrial Company 4% 46-50 2% Government/ 1% 50 or above Quasi-government Organisation/ Statutory Body 27% Professional Firm 2% Private Service Company

Area of Activity of Current Job Channels to Know HKICS

41% Accountancy 3% HKICS Road Shows/ 37% Company Secretarial Career Talks 3% Compliance 3% Education & 4% Financial Management Careers Expo 2% General Management 28% HKICS Website 10% Legal Admin/ 11% Employer Contracts 19% Colleague 2% Offi ce Administration 20% Friend or Relative 1% Personnel 11% Tutor or Lecturer 3% Careers Service 1% Advertisement 1% Others

32 Chartered Secretaries. More than meets the eye. Total number of Students 2,958 2,816 2,759 2,623 2,729 2,783 2,826 2,649 2,676 2,602 2,556

98 99 00 01 02 03 04 05 06 07 08

Total number of New Graduates 203 136 212 209 231 205 303 273 191 229 206

98 99 00 01 02 03 04 05 06 07 08

Annual Report 2008 33 The Institute and the Regulators Institute Representation • On 13 September 2007, attended by Martin We maintain a close dialogue and strong working Wheatley, Chief Executive of the Securities and relationship with the regulators. Institute members are Futures Commission (SFC), and other senior SFC invited to sit on various panels and working groups set up executives by the regulators to contribute their valued professional opinions. A list of such current representatives is listed on • On 15 November 2007, attended by CSP members pages 61 and 62. only

Submissions • On 12 March 2008, attended by Ada Chung, We make submissions to the government and regulators in Registrar of Companies, and other senior executives response to their consultation papers or whenever we wish of the Companies Registry to express our views on issues we consider to be important. Submissions made by the Institute during the last financial • On 11 June 2008, attended by Richard Williams, year included: Head of Listing Division of HKEx, and other senior HKEx executives Submission to HKEx on Waiver 8 September 2007 from the Suitability for Company Secretaries of H-Share issuers under Rule 8.17 and 19A.16

Submission to HKEx on Periodic 5 November 2007 Financial Reporting

Submission to HKEx on Duties 12 November 2007 and Responsibilities of the Company Secretary of a Listed Company

Submission to Hong Kong Exchanges 22 April 2008 and Clearing Limited (HKEx) on Combined Consultation Paper on Mr. Richard Williams at the Expert Series Proposed Changes to Listing Rules

Submission to the Financial Services 9 July 2008 and the Treasury Bureau on Company Names, Directors’ Duties, Corporate Directorships & Registration of Charges

Company Secretaries Panel The Company Secretaries Panel (CSP) consists of 16 company secretaries from different Hong Kong main board listed companies. The panel holds quarterly luncheons, providing our opportunity for its members to exchange views and share experiences. The panel members also discuss issues arising from their work with distinguished guests. Four CSP luncheons were held in the t the Convocation 2008 last financial year: Mr. Paul Chow a

34 Chartered Secretaries. More than meets the eye. Professional Development China Corporate & Regulatory Update (CCRU) The Institute’s ECPD Programme supported by the 2008 regulators. The Institute maintains its status as an We also hosted our annual CCRU on 17 January 2008. approved “recognised institution for providing Continuous This increasingly popular event was supported by Professional Training” to the SFC for licensed persons regulators from both Mainland China and Hong Kong under the Securities and Futures Ordinance. We are also with representatives from the China Securities Regulatory one of the two institutions accredited by HKEx to provide Commission, Ministry of Commerce, HKEx and SFC speaking directors’ training. at the event.

Annual Corporate & Regulatory Update (ACRU) Expert Series 2008 We play an important role in developing a dialogue We organised our ninth ACRU on 9 May 2008. This between our experienced members and the regulators. successful event was, once again, supported by Hong Kong One of the ways in which we do this is by inviting senior regulators with the SFC, Companies Registry, HKEx and representatives from the regulators to be a guest speaker at Hong Kong Monetary Authority briefing our members and our Expert Series. At an event held on 28 November 2007 other professionals on the latest developments in their the guest speaker was Richard Williams, Head of Listing, respective areas. HKEx.

2008 OECD Roundtable on Corporate Governance The Institute co-hosted along with the SFC, HKICPA and HKIoD, with financial support from the Japanese government, the 2008 OECD Roundtable on Corporate Governance on 13 and 14 May. It is through hosting and participating in such high level events that we can raise the governance bar and promote the role Chartered Secretaries play in governance issues as well as in the wider business world.

Looking Ahead We continue to foster a close relationship with the regulators to improve and enhance the stature of the Annual Corporate and Regulatory Update 2008 Chartered Secretary profession in order to help improve overall standards of governance in Hong Kong and the Mainland; and increase public awareness of the added value, to Chartered Secretaries bring to a company.

The Institute also hosted its Corporate Governance biennial conference in September 2008.

The next CCRU and ACRU are scheduled for January 2009 and May 2009 respectively, and we continue to solicit strong support from the regulators for these informative and important events.

2008 China Corporate and Regulatory Update

Annual Report 2008 35 The Institute and Mainland China We continue with our quest to develop the Chartered Networking in Mainland China Secretary profession and promote good governance in During the fiscal year, China Affairs Committee delegates the Mainland. We worked closely with authorities and made four trips to Mainland China visiting Qingdao, Beijing, regulators in Mainland China during the year through Shanghai, Shenzhen and Hangzhou. Details of meetings a combination of visits, study tours, presentations with regulators, government officials, institutions and and training programmes for board secretaries, senior corporations are given in Table 2, on page 44. executives and directors.

Affiliated Persons Programme and ECPD Seminars As of 31 July 2008, 79 H-share board secretaries had joined the Affiliated Persons Programme. There are a number of services and events for the Affiliated Persons throughout the year. This fiscal year these included five ECPD seminars, which took place in September and December 2007 and in January, May and July 2008 in Dalian, Shanghai, Hong Kong, Beijing, and Hangzhou. The ECPD seminars are designed to enable the Affiliated Persons to understand not only the theory but more importantly the practical aspects of corporate secretarial practice from an international perspective. The seminars are highly regarded by regulators, H-share companies and participants. A summary of Affiliated Persons’ ECPD seminars is given in Table 1, on pages 38 to 44. Visit to Shanghai

Visit to Shenzhen ECPD seminars in Hangzhou The main purposes of these visits were to strengthen We organised our second Corporate Governance networking on the Mainland; to present the progress of the Symposium in Shanghai on 6 and 7 December 2007 on the Affiliated Persons Programme; and to promote the importance theme corporate social responsibility. Speakers included and position of the company secretary/board secretary and regulators, professional practitioners, institutional bankers the importance of corporate governance to various regulatory, and H-share board secretaries from both Mainland China professional, academic and commercial organisations in and Hong Kong. the Mainland. We also promoted the Institute’s professional qualification and the qualifying examination, the IQS. Through study tours and attendance at conferences in the Mainland the Institute continues to work closely with Institute representatives actively participated in functions authorities and regulators in Mainland China to promote the held by local authorities and organisations in promoting development of professional standards and good corporate the Institute and the profession. governance practices. 36 Chartered Secretaries. More than meets the eye. IQS Development in Mainland China The winner and the two runners up received intern posts We continue our strategy of developing the IQS and the offered by China COSCO Holdings Company Limited and Chartered Secretary profession in the Mainland. As of China Life Insurance (Group) Company, enabling them to 31 July 2008, the Institute had 25 registered students gain valuable practical experience with listed companies. and five members who are Mainland residents. Two IQS examinations diets were held in Beijing simultaneously A part of our ongoing work in promoting the Chartered with the Hong Kong sittings, in December 2007 and June Secretary profession and enhancing the awareness and 2008. practice of good corporate governance in Mainland companies, we actively liaised with Mainland universities We held two IQS information sessions, in Dalian and to organise corporate governance training for senior Hangzhou, during the year to introduce IQS and the management and executives of Mainland enterprises. Chartered Secretary profession to board secretaries and their subordinates in H-share listed issuers. China Updates We invited Mainland regulators and government officials In September 2007, we launched a Corporate Governance to give presentations at the second China Corporate Paper Competition programme in Beijing jointly with the Regulatory Update, which was held in January 2008. (For Department of International Economics and Trade, Peking further details, refer to ”The Institute and the Regulators”.) University. An information session held in November 2007 introduced the programme to the university’s We organised interviews with board secretaries and undergraduate students. Two rounds of paper reviews were regulators for our monthly journal CSJ; we also organised completed in April 2008 and a prize presentation ceremony a members’ Qingdao Study Tour in June 2008. (For further was held in May 2008 in Beijing. details, refer to page 27.)

A Bulletin Board Update (China) service circulates information and updates on relevant mainland rules and regulations to all members. This year we circulated more than 20 updates.

Corporate Governance Paper Competition (Beijing)

Annual Report 2008 37 Table 1: Affiliated Persons’ ECPD Seminars Summary

Date Topics (English) Speaker

20 – 21 Sept 2007: 9th Affiliated Persons’ ECPD seminar (Dalian) (Number of attendees: 32)

20 Sept 2007 Financing and Deal Structure Jane Hui Partner – Transaction Tax, China/HK, Ernst & Young Tax Services Ltd

Valuation & Pricing Analysis Bernard Poon Associate Director, Transaction Advisory Services, Ernst & Young Transactions Ltd

Due Diligence and Compliance: Cliff Chau Financial Perspective Partner, Financial Advisory Services, KPMG Huazhen

Due Diligence and Compliance: Li Ying Legal Perspective Partner, Beijing and Hong Kong Offices, Heller Ehrman LLP

Lena Chan Solicitor, Hong Kong Office, Heller Ehrman LLP

21 Sept 2007 Mergers and Acquisitions Strategy: Shelly Fan Mainland China M&A Senior Associate, China Investment Banking Group, Morgan Stanley Asia Ltd

Mergers and Acquisitions Strategy: Ying Wang Overseas M&A Vice President, Mergers and Acquisitions Advisory, Deutsche Bank

Post Mergers and Acquisitions Su Liang Integration Company Secretary, China Southern Airlines Company Ltd

Panel Discussion Panel members: Cliff Chau, Li Ying, Lena Chan, Ying Wang and Su Liang

38 Chartered Secretaries. More than meets the eye. Date Topics (English) Speaker

6 and 7 Dec 2007: Corporate Governance Symposium (Shanghai) (Number of attendees: 102)

6 Dec 2007 Opening Remarks Maurice Ngai Vice President and China Affairs Committee Chairman, HKICS

Welcome speech by honoured Ye Shao Xun guest General Manager, ShineWing Certified Public Accountants

Performing listed companies Zhang Xin Wen corporate social responsibilities Director, China Securities Regulatory Commission – and enhancing the corporate Beijing Regulatory Bureau governance structure

Enhance responsibilities of listed Zhou Qinye companies and to balance the General Manager, Shanghai Stock Exchange interests of all stakeholders

International CSR experiences and He Jie practice in China Head of Venture Enterprise Training Center, Shenzhen Stock Exchange

Evaluation on Top 100 listed Lu Tong companies in China 2007 Director, Corporate Governance Centre of China, and analysis on corporate Institute of World Economics and Politics, responsibilities Chinese Academy of Social Sciences

Enhance companies’ share value Ye Xiang via good corporate governance Managing Director, VisionGain Capital Limited

Motivation of managerial staff and Maggy Fang the balanced development of an Senior Consultant of Towers Perrin (Shenzhen) accountability system Consulting Co., Ltd.

CSR from the perspective of Gao Chaoshen international investors President of Schroders China

Case Study 1 – Positively Nie Ming undertake social responsibility Manager, Board Secretariat, General Service to be an outstanding enterprise Division, China Life Insurance Company Ltd citizen

CSR practices and the best Marco Liu international CSR practices Enterprise Risk Services Partner, Deloitte Touche Tohmatsu

Engrave responsibility, continuous Qi Jun contribution General Manager of Shanghai Wujing Chemical Co., Ltd.

Annual Report 2008 39 Date Topics (English) Speaker

7 Dec 2007 HKICS research reports on business Maurice Ngai ethics and environmental reporting Vice President and China Affairs Committee Chairman, HKICS

Case Study 2 – How do A- and Yao Jun H-share companies balance the Company Secretary of Ping An Insurance (Group) interests of stakeholders and Company of China Ltd. ensure their due diligence

The influence of CSR to the listed Diana Tsui companies’ value creation Corporate Social Responsibility Director, KPMG

Discussion and Q&A Chairman: Jiang Guoliang, Chief Representative of Beijing Representative Office, HKICS

Chairwoman: Yuan Lu, Assistant to Chairman of the Board, Secretary to the Board of Directors, Tsingtao Brewery Co., Ltd.

Panel members: Three speakers of 7 December 2007

Closing Remarks Zhang Kedong Partner of Shinewing CPA, CEO of Shanghai Office, Shinewing CPA

17 Jan 2008: China Corporate and Regulatory Update 2008 (Hong Kong) (Number of attendees: 60)

Opening remarks Natalia Seng President, HKICS

Corporate Governance: Current Ma Shu Qing situation and trends of PRC listed Director, Comprehensive Division, Department companies of Listed Company Supervision, China Securities Regulatory Commission

China’s new Anti-Monopoly Law Ye Jun and its implementation Deputy Division Director, Anti-Monopoly Office, Department of Treaty & Law, Ministry of Commerce, People’s Republic of China

Corporate Governance – the latest Michael Cheng trend and development Senior Vice-President, Listing Division, Hong Kong Exchanges and Clearing Ltd

Regulation of merger/acquisition Pinky Tse activities in Hong Kong with Director, Corporate Finance Division, Securities recent case studies and Futures Commission

40 Chartered Secretaries. More than meets the eye. Date Topics (English) Speaker

Investment banks: CDR – Kwan Siu Chan Development and forecast Director, Securities and Funds Services, Head of Depository Services, Asia Pacific, Citi

Corporate Governance and Dr. Leng Jing Investment Risks of PRC Assistant Professor, Faculty of Law, The Companies Listed in Hong Kong: University of Hong Kong Implications for Cross-border Regulatory Collaboration

Returning from H share to IPO in Ye Yu Mang A share Company Secretary, China Shipping Container Lines Company Ltd

Panel discussion: Practical Panel Chair: considerations on dual listing of Maurice Ngai A + H shares companies Vice-President and Chairman of China Affairs and Membership Committees, HKICS

Panelists: Dr. Leng Jing Assistant Professor, Faculty of Law, The University of Hong Kong

Ye Yu Mang Company Secretary, China Shipping Container Lines Company Ltd

Xie Xin Yu Deputy General Manager and Company Secretary, Anhui Expressway Company Ltd

Annual Report 2008 41 Date Topics (English) Speaker

29 and 30 May 2008: 12th Affiliated Persons’ ECPD seminar (Beijing) (Number of attendees: 55)

29 May 2008 Opening remarks Maurice Ngai Vice-President and Chairman of China Affairs and Membership Committees, HKICS

Rules and regulations on Chik Pui Hong connected transactions Partner, Baker & McKenzie

Gu Ning Legal Assistant, Baker & McKenzie

Compliance and practice on Maurice Ngai connected transactions in Hong Kong and the mainland

Connected transactions in Terence Chan practice – Senior Manager, Assurance & Advisory Business • Independent financial advice Services, Ernst & Young Hua Ming • Audit on continuous connected transactions and disclosure • Connected persons

Workshop and case analysis – Bernard Wu role play of independent director, Council member, Vice-Chairman of China Affairs board secretary and auditor, and and Professional Development Committees, HKICS discussion

Continuous connected Dr. Eva Chan transactions – practice of investor Head of Investor Relations, CC Land Holdings Ltd relations

Case study – management of Ye Yu Mang connected transactions Company Secretary, China Shipping Container Lines Company Ltd

Panel discussion Chairman – Bernard Wu Panel members: Maurice Ngai, Ye Yu Mang, Chik Pui Hong, Gu Ning and Terence Chan

42 Chartered Secretaries. More than meets the eye. Date Topics (English) Speaker

17 and 18 July: 13th Affiliated Persons’ ECPD seminar (Beijing) (Number of attendees: 64)

17 July 2008 Construction of mainland state- Sun Qin Hong owned enterprises’ internal control Director-General, Bureau of Enterprise system Evaluation, State-owned Assets Supervision and Administration Commission of the State Council, PRC

Internal audit & risk management Ooi Yang Chew Director, Greater China Risk Consulting and Internal Audit Services, Protiviti

Director’s liability and matters Tommy Tong, Partner, Herbert Smith requiring attention for companies listed in mainboard of HKEx Tom Chau, Partner, Herbert Smith

Induction to Directors and Polly Wong function of board secretaries – Company Secretary/Assistant Financial communication with shareholders Controller, Dynamic Holdings Limited and effective meeting: transparency and accountability

18 July 2008 Disclosure of interest and insider Maurice Ngai dealing Vice-President, Chairman of China Affairs and Membership Committees, HKICS

Financial Reporting, Directors’ Raymond Chen Report, Auditors Report, other Partner, Technical, Deloitte Touche Tohmatsu Financial Disclosure and Stock Exchange’s post vetting enquiry on financial disclosure

Workshop – Role play and case Louisa Lau, Director, China Affairs, Education and study discussion Examinations, HKICS

“Manfold Toy Company Limited: Kenneth Jiang, Chief Representative, Beijing Responsibility of director and Representative Office, HKICS inter-related people” case study

Note of thanks to Independent Commission Against Corruption – Hong Kong Ethics Development Centre is allowing the Institute to use the case study.

Annual Report 2008 43 Number of ECPD hours achieved from August 2007 to July 2008

21 hrs and ECPD 0 – 7 hrs 7.5 – 10 hrs 10.5 – 15 hrs 15.5 – 20 hrs above Total

No. of Affiliated Persons 24 7 17 6 24 78

Number of ECPD attendance frequency from August 2007 to July 2008

Four and No. of sessions Nil One Two Three above Total

No. of Affiliated Persons 23 26 20 6 3 78

Table 2: List of meetings with the regulators, government officials, institutions and corporations in Mainland China

President Official visit to Beijing: 5 September 2007

1. 中國證券監督管理委員會 China Securities Regulatory Commission

2. 國務院國有資產監督管理委員會 State-Owned Assets Supervision and Administration Commission of the State Council, PRC

Visit to Shanghai: 6 and 7 September 2007

1. 上海市國有資產監督管理委員會－上海市經濟管 State-Owned Assets Supervision and Administration 理幹部學院 Commission of Shanghai Municipal Government – Shanghai Economic Management College (SEMC)

2. 中歐國際工商學院 China Europe International Business School Visit to Shenzhen: 17 March 2008

1. 深圳證券交易所 Shenzhen Stock Exchange

2. 深圳上市公司協會 Shenzhen Listed Companies Association

3. 中國證券監督管理委員會深圳監管局 China Securities Regulatory Commission Shenzhen Regulatory Bureau

4. 深圳市人民政府國有資產監督管理委員會 State-Owned Assets Supervision and Administration Commission of Shenzhen Municipal Government

Visit to Hangzhou: 11 June 2008

1. 浙江大學 Zhejiang University

2. 浙江上巿公司協會 Listed Companies Association of Zhejiang

44 Chartered Secretaries. More than meets the eye. Affiliated Persons’ Profile

Employer Organisation Industry Type

85% State Owned 6% Petro & Chemical Enterprise 34% Machine 15% Private Enterprise Building Industry 8% Steel & Raw Material 17% Transportation 4% Public Utility & Environmental Protection 4% Medicament Manufacture 6% Coal & Electricity 1% Logistics 20% Other Industries

Gender Distribution Age Profile

74% Male 15% Under 35 26% Female 56% 35-45 years 29% Over 46

Annual Report 2008 45 The Institute and the ICSA The HKICS is an integral part of the London-based Institute of Chartered Secretaries and Administrators (ICSA). With over 100 years’ experience, the ICSA is a recognised global voice on governance and regulatory issues in the private, public and not-for-profit sectors. Working with government and other statutory bodies, the ICSA promotes best practice and provides guidance on good governance.

As the China Division of the ICSA, the HKICS has been promoting good governance through secretaryship and administration in Hong Kong since it formation, and is now active in extending this work to Mainland China.

Richard Leung is the current China Division representative on the International Council of the ICSA. visit to Shanghai Professional Standards Committee The ICSA International Council meets bi-annually to oversee the work of the international body and to set its strategic objectives. During the financial year, meetings were held in Brisbane, Australia in October 2007; and in Dublin, Ireland in May 2008.

The ICSA Professional Standards Committee (PSC) is responsible for setting, reviewing and monitoring the compliance of international standard, qualifying schemes and membership admission of individual territories and divisions of the ICSA. PSC also conducts an audit of standards as applied in individual territories. During the financial, PSC meetings were held in Mauritius in February 2008; and in Shanghai, China in July 2008.

We organised visits to the Shanghai Stock Exchange and CSRC Shanghai Regulatory Bureau on 2 July 2008 for PSC delegates to exchange views with these mainland regulators on the development of corporate governance in Meeting at the Mainland China and the Chartered Secretary professional Shanghai Stock Exchange worldwide.

46 Chartered Secretaries. More than meets the eye. The Institute and Other Professional and Academic Bodies We continue to nurture close working relationships with Student Ambassadors Programme and Summer local universities as well as with other professional bodies. Internship Programme The Student Ambassadors Programme, first launched in Collaborative Courses August 2006, helps promote the Institute and the Chartered A comprehensive review of Collaborative Courses Secretary profession to undergraduates in business, law Agreement (CCA) programmes requires an ongoing and accounting faculties. A total of 230 students enrolled monitoring of standards for the three post-graduate in the programme in 2007/2008. During the year, we courses graduates of which may be granted exemptions organised 11 events including professional seminars, visits from the Institute’s IQS. The next review of the three to professional firms and regulators, and attendance at the courses, listed below, will be held in the 2008/09 academic annual general meeting of Hong Kong-listed CLP Holdings year: Ltd.

• City University of Hong Kong – Master of Science in Our Summer Internship Programme allows students to Professional Accounting and Corporate Governance get hands-on experience in company secretarial firms or (Corporate Administration Stream) company secretarial departments of listed companies and professional firms. This year six companies have offered 13 internship posts to candidates.

Corporate Governance Paper Competition and Presentation Award The Corporate Governance Paper Competition and Presentation Award is an annual event run by the Institute for local university students. Through the competition we aim to promote good corporate governance among undergraduates of local universities. The 2008 competition, which marks the prelude to our sixth biennial Corporate Governance Conference, got underway in April 2008. A total of 22 papers were received by mid-July and all were subject to two rounds of review. The prize winners received their awards at the Corporate Governance Conference 2008 City University of Hong Kong Dr. Brian Lo FCIS FCS presenting at the on 12 September 2008.

• Open University of Hong Kong – Master of Corporate Governance

• The Hong Kong Polytechnic University – Master of Corporate Governance

During the year, 153 students from the three CCA programmes registered with the Institute; 116 graduates were granted full exemption from the IQS examinations and became Institute graduates.

We arrange new student orientations for each cohort of students on the collaborative courses. We also send regular updates to new students and graduates to keep them informed of the Institute’s activities.

Annual Report 2008 47 Professional Seminars and Networking with Another of our vital roles is to nurture closer working Universities relationships with local universities. In April we invited The Institute continues its promotion of the Chartered representatives from local universities to a cocktail Secretary profession to undergraduates, with 16 career reception. We also organised a luncheon meeting for talks and professional seminars organised with local the Academic Advisory Panel, which comprises eminent universities during the fiscal year. Participating universities academics in Hong Kong, to provide more information on were the Hong Kong Polytechnic University, City University the latest developments with regard to the Institute and of Hong Kong, the Open University of Hong Kong, the the Chartered Secretary profession. University of Hong Kong, the Chinese University of Hong Kong, Lingnan University, the Hong Kong University of Science and Technology, Hong Kong Shue Yan University and Hong Kong Baptist University.

Academic cocktail

Sponsorship of Student Associations ty We sponsored 18 functions including orientation camps, Networking day at Lingnan Universi information days, mentorship programmes and annual dinners for business, accountancy and legal student associations at local universities. During the year, our representatives attended ten of these activities and functions.

Scholarship We are pleased to have sponsored a total of 20 scholarships and subject prizes at local universities and colleges in order to encourage students to perform well in collaborative courses, relevant degree programmes, company secretarial and company law-related subjects.

48 Chartered Secretaries. More than meets the eye. Universities/College whose Students received 2008. Two of our Fellow members – Natalia Seng, HKICS Institute Scholarships/Subject Prizes President, and Rodney Au, Manager, Operational Risk • City University of Hong Kong & Compliance, National Australia Bank Ltd, were guest speakers at this seminar, which attracted 85 participants. • Hong Kong Baptist University

• Hong Kong Shue Yan University

• Lingnan University

• The Chinese University of Hong Kong

• The Hong Kong Polytechnic University

• The Hong Kong University of Science & Technology

• The Open University of Hong Kong

• The University of Hong Kong Joint seminar with Hong Kong Institute of Bankers Professional Development As part of our promotion of the Chartered Secretary profession to the general public and wider business world, Joint seminar with the Hong Kong Institute of we held a series of joint seminars with other professional Certified Public Accountants (HKICPA) bodies. A joint seminar with the HKICPA on “The Shifting Balance of Power between Shareholders & the Board: New Corp’s Joint seminar with The Hong Kong Institute of Exodus of Delaware and Other Antipodean Tales” was held Bankers (HKIB) on 20 May 2008. One hundred participants attended. To facilitate the understanding of the compliance unit of bankers on the difficulties Chartered Secretaries face when dealing with “know-your-client” issues, we held a joint seminar with the HKIB on “Practical Perspective on Handling ‘Know Your Client Due Diligence’” on 21 June

Joint seminar with The Law Society of Ho ng Kong and HKICPA

Annual Report 2008 49 Collaboration with the HKICPA and The Law Society Promotional Activities – Professional and of Hong Kong Academic Bodies This year we put a formal collaboration framework in place with the HKICPA and The Law Society of Hong Kong to Professional Seminars and Career Talks run a series of seminars on corporate governance topics. We took the good governance message to local academia The first of these seminars was held on 26 June 2008 and this year with professional seminars and career talks attracted 133 participants. The topic was “Sarbanes Oxley: introducing the Chartered Secretary profession, the The Road Ahead”. Institute and the IQS examinations to the following university students: CPD Alliance As a founding member of the CPD Alliance, we continued • City University of Hong Kong on 6 October 2007 our active participation in this grouping of 20 professional and 25 January 2008 bodies. Maria Kwan, Director, Professional Development, was appointed as Honorary Secretary at the CPD Alliance’s • Hong Kong Baptist University on 6 March 2008 annual general meeting held on 24 June 2008. • Hong Kong Shue Yan University on 22 February As part of the promotional activities of the ECPD 2008 Programme, Richard Leung, HKICS Immediate Past President and Chairman of Professional Development • Lingnan University on 2 April 2008 Committee, was one of the speakers at the seminar on “Updates on CPD and Future Trends” organised by the CPD • The Chinese University of Hong Kong on 12 April Alliance and South China Morning Post which took place 2007 and 7 April 2008 on 16 June 2008. Natalia Seng, HKICS President, was one of the panelists at the press conference that was held to • The Hong Kong Polytechnic University on 3 and 5 publicise the CPD Alliance survey on “Employee Wellness December 2007 and 10 January 2008 of Hong Kong Professionals” on the same date. These two events attracted wide media coverage. • The Hong Kong University of Science & Technology on 29 February 2008

• The Open University of Hong Kong on 25 February 2008

• The University of Hong Kong on 11 March and 23 April 2008

Looking Ahead We are proud to maintain our status as an accredited Continuing Professional Development (CPD) course provider recognised by The Law Society of Hong Kong. In addition, members of most relevant professional bodies in Hong Kong may take Institute courses as verifiable CPD courses for their own membership requirements.

We continue to maintain a close relationship with other professional and academic bodies to enhance the status of the company secretary and the Chartered Secretary profession in Hong Kong and Mainland China.

50 Chartered Secretaries. More than meets the eye. Council Members’ Biographies President Natalia K.M. Seng, FCIS FCS(PE) , MBA (Executive) Mrs. Seng is an Executive Director of Tricor Group. As Joint Head of Corporate Services and China Consultancy Services, she is responsible for the strategic development of the group’s corporate services in Hong Kong and Mainland China. She also plays a key role in advising listed and private company clients on corporate governance, regulatory and compliance issues. With the support from her professional teams, she is the outsourced company secretary of a number of listed issuers (including an H-share company and the manager of a listed REIT).

Mrs. Seng joined the Institute Council in 1996. She was Chairman of the Education Committee from 1999 to 2000 and from 2003 to 2006. She was elected President of the Institute in 2006.

Vice-Presidents April W.Y. Chan, FCIS FCS(PE) Mrs. Chan is Company Secretary of CLP Holdings Ltd. She has extensive experience in company secretarial practices and has been instrumental in developing and implementing the corporate governance framework in CLP.

Mrs. Chan joined the Institute Council in July 2004. She was Chairman of the Membership Committee in 2005 and 2006. She is currently Vice-President and the Chairman of the Company Secretaries Panel.

Maurice W.F. Ngai, FCIS FCS(PE), CPA, ACCA, MCF, MBA, LLB(Hons) Mr. Ngai, Director, Head of Listing Services of KCS Hong Kong Limited, has 19 years’ experience in various professional capacities including company secretary, chief financial officer, executive director and assistant managing director of a number of listed companies. He also acts as an independent director for a number of sizeable companies listed in Hong Kong, Mainland China and the US.

Mr. Ngai joined the Institute Council in 1999 and has been a Vice-President since 2002. Currently, he is also the Chairman of its Membership Committee. Since 2003, he had been the Chairman of the China Affairs Committee until it was dissolved as of 1 August 2008.

Treasurer Douglas C. Oxley, FCIS FCS Mr. Oxley has operated his own consulting firm since 1994. Prior to that, he taught at The Hong Kong Polytechnic University from 1978 to 1997 and was the Founding Course Leader of Bachelor of Arts (Honours) Degree in Accountancy.

Mr. Oxley was a Hong Kong Committee member from 1979 to 1984. He joined the Institute Council in 2003 and was elected Treasurer in 2004.

Annual Report 2008 51 Professor Alan K.M. Au, FCIS FCS, FHKIM, MBA, MMS, PhD Professor Au, a Professor with The Open University of Hong Kong (OUHK), heads the Marketing, Management and Decision Science Strand of the Lee Shau Kee School of Business and Administration. His portfolio includes managing the BBA (Hons) in Corporate Administration, Master of Corporate Governance, and Doctor of Business Administration programmes. He is also a member of the Council and the Senate of OUHK. Before joining OUHK, Professor Au served in various academic positions in Hong Kong and New Zealand. He has published widely in international refereed journals, covering areas such as business ethics, global management and marketing. He is a Regional Editor for Cross-Cultural Management Journal and has undertaken associate editorships with two international journals.

Professor Au joined the Institute Council in 2003 and is a member of the ICSA’s Professional Standards Committee.

Susie S.F. Cheung, FCIS FCS, LLB, LLM (London) Ms. Cheung is the General Counsel and Company Secretary of The Hong Kong Mortgage Corporation Ltd which is wholly owned by the Hong Kong SAR Government through the Exchange Fund. She practised as a solicitor with London City law firms, specialising in banking, structured finance, aircraft finance and securitisation. She is a Co-Convenor of the Asia-Pacific Securitisation Association, which was set up by industry participants in Hong Kong to promote the growth and interests of the securitisation industry in Hong Kong, Mainland China and the region as a whole.

Ms. Cheung joined the Institute Council in 2007 and is Vice-Chairman of the Membership Committee.

Diana M.Y. Chung, FCIS FCS(PE) Ms. Chung is a Director of Corporate Services at Tricor Services Ltd. With over 30 years’ company secretarial experience, she has advised on company secretarial matters for a wide spectrum of businesses. Ms. Chung’s specialist areas include setting up new businesses, corporate reorganisations, company liquidations and trust administration.

Ms. Chung joined the Institute Council in 2002.

52 Chartered Secretaries. More than meets the eye. Richard W.K. Leung, FCIS FCS(PE), MA, LLB, Barrister (Immediate Past President) Mr. Leung is a Barrister-at-law with Des Voeux Chambers and a Chartered Secretary. He has 20 years’ professional experience, first in the accounting field, holding senior managerial positions in various renowned entities such as KPMG Management Consultants Ltd and Hutchison Paging Ltd, and for the past 11 years in legal practice as a barrister specialising in company, tax, civil and commercial litigation. Mr. Leung is also an independent non-executive director for two Hong Kong listed companies.

Mr. Leung joined the Institute Council in 1993. He was President in 2006 and has been Chairman of the Professional Development Committee since 2007.

Dr. Brian K.H. Lo FCIS FCS, DBA, MScIT, MBA, MPA, CEng, MIET Dr. Lo is Vice President and Company Secretary of APT Satellite Holdings Ltd. He has over 20 years’ experience in corporate and project management for a wide range of business sectors including high technology, telecommunications and manufacturing industry.

Dr. Lo joined the Institute Council in 2005 and has been Chairman of the Education Committee since 2007.

Edith Shih, FCIS FCS(PE), BSE, MA, MA, EdM, Solicitor Ms. Shih is Head Group General Counsel and Company Secretary of Hutchison Whampoa Limited. She heads a team of over 220 legal counsel and 50 company secretarial executives stationed in over 60 offices in 24 countries, overseeing the group’s legal and corporate secretarial affairs. She is also director and company secretary of a number of Hutchison group companies, including companies listed in Hong Kong, New York, London, Israel and Australia.

Ms. Shih joined the Institute Council in 2007. She has been a member of the Company Secretaries Panel since 1998, the Technical Consultation Panel since 2005, the Membership Committee and the Re-election to Ordinary Member Status CPD Exemptions Assessment Panel in 2007. Ms. Shih is currently Vice- Chairman of the Education Committee.

Doris W.N. Wong, FCIS FCS Ms. Wong is Head of Secretariat of DBS Group in Hong Kong. She has over 20 years’ experience in corporate secretarial practice and general administration. Previously, she was in charge of the corporate communications and corporate affairs function of a major listed group in Hong Kong.

Ms. Wong joined the Institute Council in 2005.

Annual Report 2008 53 Polly O.Y. Wong, FCIS FCS(PE) Ms. Wong is Company Secretary of Dynamic Holdings Ltd. She is primarily in charge of all corporate governance and legal matters for the listed group, dealing with compliance with listing and statutory requirements as well as keeping abreast of relevant technical and legislative developments. She has 20 years’ professional experience in the corporate governance, regulatory and compliance affairs of listed companies.

Ms. Wong joined the Institute Council in 2007.

Bernard T.L. Wu, FCIS FCS(PE) Mr. Wu is Head of Investment Banking of MasterLink Securities (H.K.) Corporation Ltd. He has more than 11 years’ professional experience in the company secretarial field and is mainly responsible for the provision of investment banking advice to various listed or to-be-listed companies, and on mergers and acquisitions and initial public offer exercises to various stock exchanges, including liaison with regulators and professional parties and drafting of relevant documentation.

Mr. Wu joined the Institute Council in 2007 and is currently Vice-Chairman of the Professional Development Committee.

54 Chartered Secretaries. More than meets the eye. Council Committees, Panels, Working Groups and Task Forces Structure of the Institute (up to 31 July 2008)

Council

Executive Committee Chief Executive

Professional Development Membership Committee Education Committee China Affairs Committee Committee

Investigation Group Exemption Sub-Committee Company Secretaries Panel

Disciplinary Tribunal Assessment Review Panel Professional Services Panel

Appeal Tribunal Academic Advisory Panel Technical Consultation Panel

Special Entry Scheme Students Disciplinary Editorial Board Interview Panel Sub-Committee

Re-election to Ordinary CPD Points Panel Member Status CPD Points Exemption Assessment Panel

Annual Report 2008 55 Structure of the Institute (From 1 August 2008)

Council

Chief Executive

Professional Development Membership Committee Education Committee Committee

Investigation Group Company Secretaries Panel Exemption Sub-Committee

Disciplinary Tribunal Professional Services Panel Assessment Review Panel

Appeal Tribunal Technical Consultation Panel Academic Advisory Panel

Special Entry Scheme Student Disciplinary Editorial Board Interview Panel Sub-Committee

Re-election to Ordinary Member CPD Points Panel Status CPD Points Exemption Assessment Panel

56 Chartered Secretaries. More than meets the eye. The following appointments to Committees, Panels and Working Groups were approved by Council for a one-year term from 1 January 2008 to 31 December 2008.

Committees/Panels/Working Groups Chairmen, Vice-chairmen and Members

China Affairs Committee Maurice W.F. Ngai (Chairman) Note: CAC ceased to function as of 1 August 2008 Bernard T.L. Wu (Vice Chairman) Dr. Eva Y.W. Chan Edith Shih Alberta Sie

Education Committee Dr. Brian K.H. Lo (Chairman) Edith Shih (Vice Chairman) Francis K.T. Yuen (Vice Chairman) Alberta K. Sie Ivan K.W. Tam Doris W.N. Wong Duffy C.N. Wong Polly O.Y. Wong

Exemption Sub-Committee Alberta K. Sie (Chairman) Nelson Y.C. Chiu Miranda S.P. Sin Connie T.M. Wong Sandy H.K. Yan

Student Disciplinary Sub-Committee Dr. Brian K.H. Lo (Chairman) Professor Alan K.M. Au Angie W.S. Fung Francis K.T. Yuen

Assessment Review Panel Duffy C.N. Wong (Chairman) Dr. Lubanski C.F. Lam Dr. Brian K.H. Lo Clement C.Y. Shum Horace H.M. Wong David S.O. Yip Francis K.T. Yuen Dr. Susanna L.M. Yuen

Council members 2007/2008 Annual Report 2008 57 Committees/Panels/Working Groups Chairmen, Vice-chairmen and Members

Examinations Review Panel Chairmen – Law Panel Duffy C.N. Wong – Accounting Panel David S.O. Yip – Management Panel Horace H.M. Wong

Academic Advisory Panel Professor Chan Ka Lok Professor Charles J.P. Chen Professor Ferdinand A. Gul Professor Simon S.M. Ho Professor Ip Yiu Keung Professor Nyaw Mee Kau Professor Amy H.L. Lau Professor C.K. Low Dr. Ricky W.F. Szeto

Membership Committee Maurice W.F. Ngai (Chairman) Susie S.F. Cheung (Vice Chairman) Professor Alan K.M. Au Dr. Eva Y.W. Chan Angie W.S. Fung Edwin Ing

Special Entry Scheme Interview Panel Davy K.F. Lee (Chairman) Mike W. Scales Duffy C.N. Wong Horace H.M. Wong

Investigation Group Duffy C.N. Wong (Chairman) Robin S.W. Ching Roger L.C. Leung K.W. Ma Mike W. Scales

Disciplinary Tribunal Edwin Ing (Chairman) John R. Brewer Angie W.S. Fung Davy K.F. Lee

58 Chartered Secretaries. More than meets the eye. Committees/Panels/Working Groups Chairmen, Vice-chairmen and Members

Appeal Tribunal Peter W. Greenwood (Chairman) Lila M.L. Fong Gloria S.K. Ma Joseph K.S. Mau

Re-election to Ordinary Member Status CPD Dr. Eva Y.W. Chan Points Exemption Assessment Panel Polly O.Y. Wong Bernard T.L. Wu

Professional Development Committee Richard W.K. Leung (Chairman) Bernard T.L. Wu (Vice Chairman) Elly Y.L. Chan Ken K.K. Chan Diana M.Y. Chung Grace W.W. Kwok Ernest C.H. Lee Joseph K.S. Mau Dr. David T.C. Ng Polly O.Y. Wong

Committees/Panels/Working Groups Chairmen, Vice-chairmen and Members

Company Secretaries Panel April W.Y. Chan (Chairman) Wilson W.S. Chan Lila M.L. Fong David Y.H. Fu Theresa L.P. Ho Eric S.K. Ip Roger L.C. Leung Timon C.Y. Liu Joseph K.S. Mau Neil M. NcNamara Stella S.Y. Or Mike W. Scales Edith Shih Eirene Yeung Susan C.L. Yip Wendy W.Y. Yung

Professional Services Panel Samantha P.Y. Suen (Chairman) (also served as the Anti-Money Laundering Rodney H.N. Au Working Group) Elly Y.L. Chan Katherine S.C. Chiu Amy S.P. Ho Kitty K.S. Liu Gloria S.K. Ma David T.C. Ng Natalia K.M. Seng Effy Y.C. Yeung

Annual Report 2008 59 Committees/Panels/Working Groups Chairmen, Vice-chairmen and Members (continued)

Technical Consultation Panel Richard W.K. Leung (Chairman) Ashley Alder Dr. Douglas Arner Paul D. Campbell April W.Y. Chan Professor Say H. Goo Peter W. Greenwood Kim Toh Guat Veronica S.M. Lin Professor C.K. Low Edith Shih Vanessa Stott Wendy W.Y. Yung

Editorial Board Phillip Baldwin Fanny S.K. Cheng Kieran Colvent Paul Davis Maria Y.F. Kwan Grace W.W. Kwok

CPD Points Panel Richard W.K. Leung (Chairman) Maria Y.F. Kwan Grace W.W. Kwok Joseph K.S. Mau

60 Chartered Secretaries. More than meets the eye. Institute Representatives serving on External Panels, Committees and Working Groups 1. International

ICSA International Council Richard W.K. Leung

2. Government & Regulatory Bodies

a. Companies Registry Diana M.Y. Chung – Customer Liaison Group

b. Official Receiver’s Office Patrick Cowley – Services Advisory Committee Alberta K. Sie

c. Inland Revenue Department Samantha P.Y. Suen – Users’ Committee

d. Electoral Affairs Commission Natalia K.M. Seng – HKICS authorised representative (President)

e. Financial Services & the Treasury Bureau Natalia K.M. Seng – Corporate Governance Working Group

f. Financial Services and the Treasury Bureau Members: Wendy W.Y. Yung – Advisory Groups for the Rewrite of Companies Ordinance Natalia K.M. Seng Eirene Yeung Richard W.K. Leung

Alternate members: Richard W.K. Leung Paul D.S. Moyes Natalia K.M. Seng Samantha P.Y. Suen

Annual Report 2008 61 3. Business Sector/Professional Bodies

a. Hong Kong Management Association Seaman S.M. Kwok – Best Annual Report Awards

b. Hong Kong Institute of Certified Public Accountants i) Best Corporate Governance Disclosure Awards – Quality Review Peter W. Greenwood – Judges Panel April W.Y. Chan

4. Academic Bodies

a. City University of Hong Kong Doris W.N. Wong i) Member of Departmental Advisory Committee on Accountancy

ii) External Examiner and Moderator for Francis K.T. Yuen Master of Arts in Professional Accounting & Corporate Governance

b. The Open University of Hong Kong i) Advisory Peers Group (APG) Marketing Polly O.Y. Wong and International Business Strand

ii) External Examiner for Master of Clement C.Y. Shum Corporate Governance

c. Vocational Training Council Diana M.Y. Chung – Accountancy Training Board

d. Caritas Francis Hsu College Seaman S.M. Kwok i) External Examiners of Higher Diploma in Corporate Management programme

62 Chartered Secretaries. More than meets the eye. Secretariat

HKICS Secretariat (up to 31 July 2008)

Chief Executive

Personal Assistant

Director, Director, Director, Director, Officer, Professional Research & Education & Examinations, Membership Accountant Development Technical China Affairs Communications

Chief Assistant Manager, Representative Assistant Manager, Education & Beijing Manager Professional Examinations Representative Membership Development Office

Assistant BRO 2 X Officer, Manager Education & Officer, Officer, Professional Education & Examinations Membership Accounts Development Examinations Manager

Officer, Education & Office Examinations Secretary

Administrative Officer, Administrative Administrative Assistant, China Receptionist Information Affairs Officer Assistant Technology

Annual Report 2008 63 HKICS Secretariat (From 1 August 2008)

Chief Executive

Personal Assistant

General Secretary Manager (Vacant)

Chief Director, Director, Representative Manager, Director, Technical & Director, Education & Beijing Marketing Professional Research Accountant Membership Examinations Representative (Vacant) Development (Vacant) Office

2 x Assistant Manager, Assistant Research Officer, Manager, Officer, Professional Manager, Consultant Assistant Information Education & Communications Development Membership (Vacant) Technology Examinations

2 x Officer, Officer, Officer, Office Officer, Professional Education & Membership Secretary Accounts Development Examinations

Officer, Manager, Membership Administrative Education & Receptionist – Mainland Examinations Officer Affairs

2 x Administrative Assistant

Based in Mainland 64 Chartered Secretaries. More than meets the eye. Hong Kong Registered Office Officer, Information Technology Chief Executive Leo C.H. Chu Phillip Baldwin Administrative Officer General Manager and Company Secretary Helen Y.M. Tong Louisa T.M. Lau FCIS FCS(PE) Officer, Communications Director, Membership Elaine Y.L. Cheung Candy N.L. Wong Administrative Assistant Director, Professional Development Katherine S.C. Chan Maria Y.F. Kwan ACIS ACS(PE) Raynata W.T. Lee

Director, Education & Examinations Beijing Representative Office Ivy W.C. Lo MHKCS, M. Ed Chief Representative Kenneth G.L. Jiang Accountant Tracy L.K. Yan CPA, CPA(Aust) Consultant Charlotte Y.L. Xiao Manager, Professional Development Michele K. Fong Manager, Education & Examinations Carrie H.X. Wang Personal Assistant to Chief Executive Alice Y.N. Lam Office Secretary Yuki L.M. Zou Assistant Manager, Membership Adrian S.K. Wong Receptionist L.N. Chen Assistant Manager, Education & Examinations May P.S. Cheung

Assistant Manager, Education & Examinations Vanessa W.Y. Kam

Officer, Membership – Mainland Affairs Karen C.L. Lam

Officer, Membership Agnes I.L. Cheng Beijing Representative Office Officer, Education & Examinations Brian C.Y. Chan

Officer, Professional Development Ivy C.S. Chow Irene T.Y. Lau

Officer, Accounts Jordan K.C. Wong

Hong Kong Secretariat Annual Report 2008 65 Independent Auditors’ Report

TO THE MEMBERS OF THE HONG KONG INSTITUTE OF CHARTERED SECRETARIES 香港特許秘書公會 (incorporated in Hong Kong and limited by guarantee)

We have audited the financial statements of The Hong Kong Institute of Chartered Secretaries set out on pages 67 to 82, which comprise the balance sheet as at 31 July 2008, and the income statement, statement of changes in reserves and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Council’s responsibilities for the financial statements The Council is responsible for the preparation and the true and fair presentation of these financial statements in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the Hong Kong Companies Ordinance. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and the true and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit, and to report our opinion solely to you, as a body, in accordance with section 141 of the Hong Kong Companies Ordinance, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and true and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the council, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements give a true and fair view of the state of the Institute’s affairs as at 31 July 2008 and of its deficit and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in accordance with the Hong Kong Companies Ordinance.

Fan, Chan & Co. Certified Public Accountants Hong Kong, 20 October 2008

66 Chartered Secretaries. More than meets the eye. Income Statement For the year ended 31 July 2008

2008 2007 Note HK$ HK$

Subscriptions (6) 14,126,691 12,624,781 Other revenue (7) 7,620,919 7,592,268

21,747,610 20,217,049

Staff costs (8) (10,076,819 ) (9,522,715 ) Depreciation and amortisation expenses (768,316 ) (698,715 ) Other operating expenses (9) (13,604,995 ) (9,279,977 )

(24,450,130 ) (19,501,407 )

(Deficit) Surplus for the year (2,702,520 ) 715,642

Annual Report 2008 67 Balance Sheet At 31 July 2008

2008 2007 Note HK$ HK$

Non-current assets Property, plant and equipment (13) 4,727,549 4,604,247 Prepaid lease payments (14) 14,443,920 14,461,136

19,171,469 19,065,383

Current assets Cash and bank balances (15) 4,684,591 1,389,511 Fixed and call deposits at banks with original maturities within 3 months (15) 115,842 5,104,225 Financial assets at fair value through profit or loss (16) 10,085,603 9,852,782 Debtors, deposits and prepayments (17) 1,579,316 1,207,149 Inventories 45,137 25,217

16,510,489 17,578,884

Current liabilities Accounts payable and provisions (18) 4,189,764 2,746,953

Net current assets 12,320,725 14,831,931

Net assets 31,492,194 33,897,314

Reserves 31,492,194 33,897,314

The financial statements were approved and authorised for issue by the Council on 20 October 2008 and are signed on its behalf by:

Natalia K.M. Seng Douglas C. Oxley President Treasurer

68 Chartered Secretaries. More than meets the eye. Cash Flow Statement For the year ended 31 July 2008

2008 2007 Note HK$ HK$

Operating activities Net cash (used in) generated from operations (19) (1,356,718 ) 295,549

Investing activities Interest received 264,264 347,285 Purchase of fixtures and equipment (577,002 ) (200,806 ) Acquisitions of financial assets at fair value through profit or loss (1,326,000 ) (1,637,614 ) Proceeds on sale of financial assets at fair value through profit or loss 1,302,153 1,671,934

Net cash (used in) from investing activities (336,585 ) 180,799

Net (decrease) increase in cash and cash equivalents (1,693,303 ) 476,348 Cash and cash equivalents at the beginning of the year 6,493,736 6,017,388

Cash and cash equivalents at the end of the year 4,800,433 6,493,736

Analysis of the balances of cash and cash equivalents

Bank balances and cash 4,684,591 1,389,511 Fixed and call deposits at banks with original maturities within 3 months 115,842 5,104,225

4,800,433 6,493,736

Annual Report 2008 69 Statement of Changes in Reserves For the year ended 31 July 2008

Company General Examination law prize Research Revaluation Fund prize fund fund fund reserve Total HK$ HK$ HK$ HK$ HK$ HK$

Balance at 1 August 2006, as restated 32,071,233 58,985 50,425 62,534 1,067,095 33,310,272

Deficit on revaluation – – – – (128,600 ) (128,600 )

Surplus for the year ended 31 July 2007 715,642 – – – – 715,642

Interest income appropriated (4,095 ) 1,983 2,112 – – –

Balance at 31 July 2007 32,782,780 60,968 52,537 62,534 938,495 33,897,314

Balance at 1 August 2007 32,782,780 60,968 52,537 62,534 938,495 33,897,314

Surplus on revaluation – – – – 297,400 297,400

Deficit for the year ended 31 July 2008 (2,702,520 ) – – – – (2,702,520 )

Interest income appropriated (2,338 ) 1,258 1,080 – – –

Balance at 31 July 2008 30,077,922 62,226 53,617 62,534 1,235,895 31,492,194

70 Chartered Secretaries. More than meets the eye. Notes to the Financial Statements For the year ended 31 July 2008

1. Corporate status and principal activities The Institute is limited by guarantee, such that under the provisions of the memorandum of association, every member shall, in the event of the Institute being wound up, contribute such amount as may be required to meet the liabilities of the Institute, but not exceeding HK$10 for each member. The registered address and principal place of operation is located at 3/F., Hong Kong Diamond Exchange Building, 8 Duddell Street, Central, Hong Kong.

The principal activities of the Institute are to promote and advance the efficient administration of commerce, industry and public affairs by the continued development of the study and practice of company secretaryship and administration of companies and other bodies.

The Institute’s financial statements are expressed in Hong Kong dollars because that is the currency of primary economic environment in which the Institute operates.

2. Application of new and revised Hong Kong financial reporting standards In the current year, the Institute has applied, for the first time, a number of new Hong Kong Financial Reporting Standards (“HKFRSs”), Hong Kong Accounting Standard (“HKASs”) and Interpretations (“HK(IFRICs)”) (hereinafter collectively referred to as “new HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) that are effective for the Institute’s accounting periods beginning on or after 1 August 2007. The impact of adoption of new HKFRSs is discussed below:

There have been no significant changes to the accounting policies applied in these financial statements for the years presented as a result of new HKFRSs issued by HKICPA. However, as a result of the adoption of HKFRS 7, Financial instruments: there have been some additional disclosures provided as follows:

As a result of the adoption of HKFRS 7, the financial statements include expanded disclosure about the significance of the financial instruments and the nature and extent of risks arising from those instruments, compared with the information previously required to be disclosed by HKAS 32, Financial instruments: Disclosure and presentation. These disclosures are provided throughout these financial statements, in particular in note 4.

HKFRS 7 does not have any material impact on the classification, recognition and measurement of the amounts recognised in the financial instruments.

The Institute has not early applied the following new standard, amendment or interpretations that have been issued but are not yet effective. The Council of the Institute anticipates that the application of these new standard, amendment or interpretations will have no material impact on the results and the financial position of the Institute.

Annual Report 2008 71 2. Application of new and revised Hong Kong financial reporting standards (continued)

Effective for accounting periods beginning on or after

HKFRS 2 (Amendment) Share-based Payment – Vesting Conditions and Cancellations 1 January 2009 HKFRS 3 (Revised) Business Combination 1 July 2009 HKFRS 8 Operating Segments 1 January 2009 HKAS 1 (Revised) Presentation of Financial Statements 1 January 2009 HKAS 23 (Revised) Borrowing Cost 1 January 2009 HKAS 27 (Revised) Consolidated and Separate Financial Statements 1 July 2009 HKAS 32 & 1 (Revised) Puttable Financial Instruments and Obligations 1 January 2009 Arising on Liquidation HK(IFRIC) – INT 12 Service Concession Arrangements 1 January 2008 HK(IFRIC) – INT 13 Customer Loyalty Programmes 1 July 2008 HK(IFRIC) – INT 14 HKAS19: The Limit on a Defined Benefit Asset, Minimum Funding 1 January 2008 Requirements and their Interaction

The financial statements have been prepared on the historical cost basis except for revaluation of financial instruments and building under long lease. The principal accounting policies adopted are set out below.

3. Significant accounting policies Revenue recognition Revenue is recognised when it is probable that the economic benefits will flow to the Institute and when the revenue can be measured reliably, on the following bases:

Members and graduates subscription income is recognised on time proportionate basis.

Students subscription income is recognised on time proportionate basis.

Examination fees received and function income are recognised in the period in which the examinations and functions are held.

Interest income is recognised on an accrual basis.

Property, plant and equipment Buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the balance sheet date.

72 Chartered Secretaries. More than meets the eye. 3. Significant accounting policies (continued) Property, plant and equipment (continued) Any revaluation increase arising on the revaluation of such buildings is credited to the properties revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of such buildings is charged to profit or loss to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation of that assets.

Depreciation on revalued buildings is charged to profit or loss. On the subsequent sales or retirement of a revalued property, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to general fund.

Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to write off the cost or valuation of assets, other than land using the straight-line method over their estimated useful lives as follows:

Buildings 50 years Leasehold improvements 5 years Fixtures and fittings 3 years Office furniture 5 years Office equipment 5 years

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.

Trade receivables Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Where the effect of discounting would be immaterial, the receivables are stated at cost less impairment losses for bad and doubtful debts.

Investments Investments are recognised and derecognised on a trade date basis where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, plus directly attributable transaction cost.

At subsequent reporting dates, debt securities that the Institute has the expressed intention and ability to hold to maturity (held-to-maturity debt securities) are measured at amortised cost using the effective interest method, less any impairment loss recognised to reflect irrecoverable amounts.

Investments other than held-to-maturity debt securities are classified as either investments held for trading (fair value through profit or loss) or as available-for-sale, and are measured at subsequent reporting dates at fair value. Where securities are held for trading purposes, gains and losses arising from changes in fair value are included in profit or loss for the period. For available-for-sale investments, gains and losses arising from changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the profit or loss for the period. Impairment losses recognised in profit or loss for equity investments classified as available-for-sale are not subsequently reversed through profit or loss. Impairment losses recognised in profit or loss for debt instruments classified as available-for-sale are subsequently reversed if an increase in the fair value of the instrument can be objectively related to an event occurring after the recognition of the impairment loss.

Annual Report 2008 73 3. Significant accounting policies (continued) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Trade and other payables Trade and other payables are initially recognised at fair value and thereafter stated at amortised cost unless the effect of discounting would be immaterial, in which case they are stated at cost.

Impairment of tangible and intangible assets excluding goodwill At each balance sheet date, the Institute reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual assets, the Institute estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-gnerating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as revaluation increase.

Inventories Inventories, comprising souvenirs and textbooks held for sale, are stated at the lower of cost and net realisable value. Cost is determined on a first-in, first-out basis. Net realisable value is the price at which inventories can be sold in the normal course of business after allowing for the costs of realisation.

Foreign currencies Transactions in currencies other than Hong Kong dollars are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in income statement for the year, except for exchange differences arising on non-monetary assets and liabilities where the changes in fair value are recognised directly in reserve.

74 Chartered Secretaries. More than meets the eye. 3. Significant accounting policies (continued) Leases Finance leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Operating leases Leases where substantially all the rewards and risks of ownership of assets remain with the lessors accounted for as operating leases. Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

Borrowing costs Borrowing costs are recognised as an expense in the period in which they are incurred.

Employee benefits Salaries, annual bonuses and the cost to the Institute of non-monetary benefits are accrued in the year in which the associated services are rendered by employees of the Institute.

Pension obligations Contributions to the Mandatory Provident Fund Scheme are charged as an expense as they fall due.

Reserves The fund balances of the Institute are classified as General fund, Examination prize fund, Company law prize fund and Research fund as follows:

The General fund consists of accumulated surplus from the income statement.

Examination prize fund and Company law fund is for payment of prize of outstanding performance in examination and in Company law.

Research fund is for payment of research project that is of value to the Institute.

Prepaid lease payment The use right of leasehold land component is classified as a prepaid lease payment and is amortised on a straight- line basis over the lease term.

4. Financial instrument The Institute’s major financial instruments include investments, accounts receivables and accounts payables. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

Currency risk Certain investments, accounts receivables and accounts payable of the Institute are denominated in foreign currencies. The Institute currently does not have a foreign currency hedging policy. However, the management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arises.

Transactions denominated the United States Dollars mainly arise from the Institute’s operation in Hong Kong. Pursuant to Hong Kong’s Linked Exchange Rate System under which Hong Kong Dollars is pegged to the United States Dollars, the Council considers there are no significant foreign exchange risks with respect to the United States Dollars.

Annual Report 2008 75 4. Financial instrument (continued) Equity price risks The Institute is exposed to equity price risk through its investment in unlisted debt securities, outside Hong Kong. The Council manages this exposure by maintaining a portfolio of investments with different risk and return profiles. As the Institute’s policy is only to invest on such investments by its surplus funds, the exposure may not have significant impact on the Institute’s financial position. In addition, the Institute has appointed external professional fund manager to monitor the price risk and will consider hedging the risk exposure should the need arise.

Sensitivity analysis The sensitivity analysis below have been determined based on the exposure to equity price risk at the reporting date.

If equity prices had been 5% higher/lower:

– net deficit for the year ended 31 July 2008 would decrease/increase by HK$504,280 (2007: net surplus increase/decrease by HK$492,639). This is mainly due to the changes in fair value of financial assets at fair value through profit or loss.

The Institute’s sensitivity to equity prices has not changed significantly from prior year.

Credit risk The Institute’s credit risk is primarily attributable to accounts receivables. The Council has a defined credit policy in place with general credit terms ranging from 0 to 180 days. The exposure to credit risks is monitored on an ongoing basis. The Institute has no significant concentrations of credit risk from members. Subscription revenue from members is settled mainly in cash. The subscriptions from members are payable in advance yearly. Members will be removed from the members’ register if subscriptions were not paid within 6 months from the date of billing.

Liquidity risk The Institute’s policy is to regularly monitor current and expected liquidity requirements and its compliance with lending covenants, to ensure that it maintains sufficient reserves of cash to meet its liquidity requirements in the short and longer term.

5. Critical accounting judgments and key sources of estimation uncertainty In the process of applying the entity’s accounting policies which are described in note 3, management has made the following judgment that have significant effect on the amounts recognised in the financial statements. The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are also discussed below.

Depreciation and amortisation The Institute’s net book value of property, plant and equipment as at 31 July 2008 was HK$4,727,549. The Institute depreciates the property, plant and equipment on a straight line basis over the estimated useful lives as stated in note 3, commencing from the dates the plant and equipment are placed into productive use. The estimated useful lives and dates that the Institute places the property, plant and equipment into productive use reflects the Council’s estimate of the periods that the Institute intends to derive future economic benefits from the use of the Institute’s property, plant and equipment.

76 Chartered Secretaries. More than meets the eye. 5. Critical accounting judgments and key sources of estimation uncertainty (continued) Allowances for bad and doubtful debts The policy for allowance of bad and doubtful debts of the Institute is based on the evaluation of collectability and aging analysis of accounts and on management’s judgment. A considerable amount of judgment is required in assessing the ultimate realisation of these receivables, including the current creditworthiness and the past collection history of each customer. If the financial conditions of members of the Institute were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Fair value of property At the balance sheet date, the Institute’s building under long lease are stated at fair value of HK$3,600,000 (2007: HK$3,370,000) based on the valuation performed by an independent qualified professional valuer. In determining the fair value, the valuers have based on market value existing use basis which involves, inter-alia, certain estimates, including comparable market transactions, appropriate capitalisation rates and reversionary income potential and redevelopment potential. In relying on the valuation, management has exercised their judgment and is satisfied that the method of valuation is reflective of the current market conditions.

6. Subscriptions Subscriptions comprise subscription fees received from members, graduates and students during the year.

7. Other revenue

2008 2007 HK$ HK$

Bank interest income 264,264 347,285 Examination fees received from students 2,201,552 2,146,031 Revenue from functions held 4,615,139 3,947,501 Sundry income 330,990 432,849 Realised gain on disposal of financial assets at fair value through profit or loss 27,531 12,928 Increase in fair value of financial assets at fair value through profit or loss 181,443 705,674

7,620,919 7,592,268

8. Staff costs

2008 2007 HK$ HK$

Salaries, allowances and other benefits 9,421,780 8,914,306 Contributions to the MPF Scheme 655,039 608,409

10,076,819 9,522,715

Annual Report 2008 77 9. Other operating expenses

2008 2007 HK$ HK$

Auditors’ remuneration 27,300 26,000 Direct cost of functions held 2,265,609 1,748,105 Institute’s service charges 870,176 715,042 Operating lease rental – land and building 220,247 121,564 Promotion and public relations 3,058,511 1,152,027 Publications and printing 3,187,669 2,986,557 Student services 1,120,334 870,564 Sundry expenses 2,208,932 1,072,350 Utilities 562,813 539,743 Net foreign exchange loss 83,404 48,025

13,604,995 9,279,977

10. Taxation In the opinion of the Council, the Institute is a professional association and not more than half of the receipts from subscriptions are from persons who claim or would be entitled to claim that their subscriptions are allowable deductions against their own business profits for the purpose of Section 16 of the Inland Revenue Ordinance. The Institute is therefore not subject to profits tax under Section 24(2) of the Inland Revenue Ordinance, and no provision for Hong Kong profits tax has been made in the financial statements.

11. Council members’ emoluments During the years ended 31 July 2008 and 2007, no amounts have been paid in respect of Council members’ emoluments, Council members’ or past Council members’ pension or for any compensation to members of Council or past members of Council in respect of loss of office.

12. Key management personnel’s emoluments

2008 2007 HK$ HK$

Salaries 4,225,860 3,749,514 Performance benefits 728,158 587,500 Retirement benefits 289,266 219,117

5,243,284 4,556,131

78 Chartered Secretaries. More than meets the eye. 13. Property, plant and equipment

Building under Leasehold Office Office long lease improvements furniture equipment Total HK$ HK$ HK$ HK$ HK$

Cost or valuation At 1 August 2006 3,570,000 1,109,043 257,134 1,951,302 6,887,479 Additions – – 79,738 121,068 200,806 Revaluation (200,000 ) – – – (200,000 )

At 31 July 2007 3,370,000 1,109,043 336,872 2,072,370 6,888,285 Additions – 236,389 51,567 289,046 577,002 Revaluation 230,000 – – – 230,000

At 31 July 2008 3,600,000 1,345,432 388,439 2,361,416 7,695,287

Representing: Cost – 1,345,432 388,439 2,361,416 4,095,287 Revaluation 3,600,000 – – – 3,600,000

3,600,000 1,345,432 388,439 2,361,416 7,695,287

Accumulated Depreciation At 1 August 2006 – 450,882 128,439 1,094,618 1,673,939 Charge for the year 71,400 221,809 59,081 329,209 681,499 Elimination on revaluation (71,400 ) – – – (71,400 )

At 31 July 2007 – 672,691 187,520 1,423,827 2,284,038 Charge for the year 67,400 269,086 66,737 347,877 751,100 Elimination on revaluation (67,400 ) – – – (67,400 )

At 31 July 2008 – 941,777 254,257 1,771,704 2,967,738

Net book value At 31 July 2008 3,600,000 403,655 134,182 589,712 4,727,549

At 31 July 2007 3,370,000 436,352 149,352 648,543 4,604,247

The net book value of buildings comprises:

2008 2007 HK$ HK$

Building in Hong Kong - Long leases 3,600,000 3,370,000

On 31 July 2007, the buildings in net carrying value of HK$3,370,000 were revaluated to HK$3,600,000 by Knight Frank Petty Limited, professional surveyor on the open market value basis. The gain arising on revaluation of HK$297,400 was credited to leasehold land and building revaluation reserve.

Annual Report 2008 79 14. Prepaid lease payments

HK$

Cost At 1 August 2006 14,530,000

At 31 July 2007 14,530,000

At 31 July 2008 14,530,000

Accumulated amortisation At 1 August 2006 51,648 Charge for the year 17,216

At 31 July 2007 68,864 Charge for the year 17,216

At 31 July 2008 86,080

Net book value At 31 July 2008 14,443,920

At 31 July 2007 14,461,136

The Institute’s prepaid lease payments represent leasehold land in Hong Kong held under long lease.

The leasehold land is amortised on a straight-line basis over the remaining term of the lease.

The fair value of the leasehold land at 31 July 2008 as revalued by Knight Frank Petty Limited, professional surveyor on the open market value basis was HK$27,400,000 (2007: HK$23,630,000).

15. Time deposits, cash and bank balances

2008 2007 HK$ HK$

Fixed and call deposits at bank with original maturities within 3 months 115,842 5,104,225 Cash and bank balances 4,684,591 1,389,511

4,800,433 6,493,736

Time deposits, cash and bank balances of the Institute denominated in HKD and USD amount to HK$1,962,233 (2007: HK$699,355) and HK$2,809,977 (2007: HK$5,771,910) respectively. Remaining balances are denominated in other currencies.

The effective interest rate on time deposits is 0.45 per cent (2007: 2.55 per cent). These deposits have an average maturity within 90 days (2007: 90 days).

80 Chartered Secretaries. More than meets the eye. 16. Financial assets at fair value through profit or loss

2008 2007 HK$ HK$

Unlisted debt securities, outside Hong Kong At market value 10,085,603 9,852,782

As at 31 July 2008, investments represented funds set aside for investment by external professional fund managers on behalf of the Institute.

17. Debtors, deposits and prepayments

2008 2007 HK$ HK$

Accounts receivable 1,020,126 773,770 Prepayments 435,060 325,370 Deposits 124,130 108,009

1,579,316 1,207,149

The Council members consider that the carrying amount of debtors, deposits and prepayments approximates to their fair value.

The amount of the Institute’s debtors, deposits and prepayments expected to be recovered or recognised as expense after more than one year is HK$124,130 (2007: HK$108,009). All of the other debtors, deposits and prepayments are expected to be recovered or recognised as expense within one year.

18. Accounts payable and provisions

2008 2007 HK$ HK$

Accounts payable 1,108,022 1,218,122 Accrual and provisions 1,122,187 818,029 Receipt in advance 1,959,555 710,802

4,189,764 2,746,953

Accounts payable and provisions of the Institute denominated in HKD and GBP amount to HK$3,579,539 (2007: HK$1,957,385), and HK$610,225 (2007: HK$789,568) respectively.

The Council members consider that the carrying amount of accounts payables approximates to their fair value.

Annual Report 2008 81 19. Note to cash flow statement Reconciliation for deficit to net cash from operations

2008 2007 HK$ HK$

(Deficit) Surplus for the year (2,702,520 ) 715,642 Adjustments for: Depreciation 751,100 681,499 Amortisation of prepaid lease payments 17,216 17,216 Interest income (264,264 ) (347,285 ) Realised gain on disposal of financial assets at fair value through profit or loss (27,531 ) (12,928 ) Increase in fair value of financial assets at fair value through profit or loss (181,443 ) (705,674 )

Operating (deficit) surplus before changes in working capital (2,407,442 ) 348,470 Increase in debtors, deposits and prepayments (372,167 ) (418,370 ) (Increase) decrease in inventories (19,920 ) 15,549 Increase in trade and other payables 1,442,811 349,900

Net cash (used in) generated from operation (1,356,718 ) 295,549

20. Operating leases arrangement

2008 2007 HK$ HK$

The Institute as lessee Minimum lease payments under operating leases recognised in income statement for the year 220,247 121,564

The Institute leased its Beijing representative office under operating lease arrangements. The term of the lease was negotiated at 3 years.

At the balance sheet date, the total future minimum lease payments under non-cancellable operating leases are as follows:

2008 2007 HK$ HK$

Land and buildings – Within one year 345,130 211,560 – In the second to fifth year, inclusive 105,780 317,340

450,910 528,900

82 Chartered Secretaries. More than meets the eye. Appendix – ECPD Programme Seminar Report ECPD Programme Seminar Report (August 2007 – July 2008)

Date Topic Presenter

August 2007

1. 2 August 2007 The Law and Practice of Company Jenkin Suen, Barrister-at-Law, Des Voeux Meetings Chambers

2. 7 August 2007 Internal Control for Listed Brian Lo, Vice President and Company Secretary, Companies (Re-run) APT Satellite Holdings Ltd

3. 14 August 2007 Impact of BVI BC Act 2004 Grace Ma, General Manager, Technical Services, Offshore Incorporations H.K. Ltd

4. 16 August 2007 Legal Issues in Business Expansion Ludwig Ng, Senior Partner, ONC Lawyers and Downsizing – Session II: Shen Ye, Senior Lawyer, Kingson Law Firm Business Expansion II (Re-run)

5. 20 August 2007 Merger with and Acquisition on Ying Li, Partner, Heller Ehrman Domestic Enterprises by foreign Investors Provisions in PRC

6. 25 August 2007 The essential elements of ADR and Christopher To, Secretary-General, Hong Kong the essence of an arbitration clause International Arbitration Centre

7. 28 August 2007 Policies and Procedures for Helen Chan, Assistant Director, Visa and Policies Employment and Investment Visas Team, Immigration Department, HKSAR

8. 29 August 2007 Workshop on AGM April Chan, Company Secretary, CLP Holdings Ltd Sally Chan, Assistant Company Secretary, CLP Holdings Ltd

Annual Report 2008 83 Date Topic Presenter

September 2007

1. 5 September 2007 Practical considerations in Mergers Julianne Doe, Corporate Finance and Commercial & Acquisitions Partner, Hammonds

2. 7 September 2007 Common breaches of the Listing Peter Chen, Counsel, O’Melveny & Myers Rules (Re-run)

3. 8 September 2007 Latest China Individual Income Tax Joe H.Y. Zou, CICPA, Partner, Guangdong Kaowick Development (Re-run) CPA

4. 11 September 2007 Employment (Amendment) Duncan Abate, Partner, Head of Employment and Ordinance 2007 Employee Benefits Group, JSM

5. 13 September 2007 Legal Issues in Business Expansion Ludwig Ng, Senior Partner, ONC Lawyers and Downsizing – Session III: Sherman Yan, Partner, ONC Lawyers Restructuring and Downsizing I (Re- run)

6. 14 September 2007 Ethics – The Core Value of Co-organised with ICAC Leadership – 2007 Directors’ Forum

7. 22 September 2007 Transfer and Repurchase of Shares Gloria Ma, Director, Head of Registration and for Private Company Compliance Services, Corporate Secretarial, KCS Hong Kong Ltd

October 2007

1. 4 October 2007 Scheme of Arrangement Richard Leung, Barrister-at-Law, Des Voeux Chambers; HKICS Past President Anson Wong, Barrister-at-Law, Des Voeux Chambers

2. 11 October 2007 Legal Issues in Business Expansion Ludwig Ng, Senior Partner, ONC Lawyers and Downsizing – Session IV: Sherman Yan, Partner, ONC Lawyers Restructuring and Downsizing II (Re-run)

3. 13 October 2007 Managing Fraud Risks – Session I: Allan Lee, Director, Horwath Hong Kong Group Common Fraud Schemes Ltd

4. 17 October 2007 Risk Management Patrick Rozario, Principal, Business Risk Services, Grant Thornton

5. 25 October 2007 Balancing the Scales in Favour of Professor C. K. Low, Associate Professor in Directors Corporate Law, The Chinese University of Hong Kong

6. 27 October 2007 Practical Tips on Drafting Shirley Lau, Partner, Troutman Sanders Announcements

84 Chartered Secretaries. More than meets the eye. Date Topic Presenter

November 2007

1. 3 November 2007 Managing Fraud Risks – Session II: Allan Lee, Director, Horwath Hong Kong Group Fraud Risk Factors and Indicators Ltd

2. 5 November 2007 How to Prepare an Outstanding April Chan, Company Secretary, CLP Holdings Ltd Annual Report

3. 9 November 2007 Tax Investigation and Prosecution Godwin Ng, Barrister-at-Law Ho Chi Ming, Barrister-at-Law

4. 13 November 2007 The Mutual Recognition and Simon McCONNELL, Partner, Allens Arthur Enforcement of Judgments Robinson Arrangement between Hong Kong Frank POON, Deputy Solicitor General (Acting), and the Mainland Legal Policy Division, Department of Justice

5. 22 November 2007 Close down a business in Hong Frances Chan, Director and Head of Corporate Kong Restructuring, Corporate Secretarial, KCS Hong Kong Ltd

6. 28 November 2007 Expert Series – Meeting With Richard Williams, Head of Listing, Hong Kong Distinguished Speaker Exchanges and Clearing Ltd

December 2007

1. 6 December 2007 Doing business in Macao Louisa Ho Mei Va, Vice President, Union of Associations of Professional Accountants of Macao

2. 8 December 2007 Managing Fraud Risks – Session III: Allan Lee, Director, Horwath Hong Kong Group Anti-fraud Measures and Controls Ltd Ricky Cheng, Director, Horwath Risk Advisory Services Ltd

3. 10 December 2007 Due Diligence Exercise for Listing in C. K. Poon, Executive Director, Huabao Hong Kong International Holdings Ltd

4. 12 December 2007 Forensic Accountancy and Benny K. B. Kwok, Chartered Surveyor, Chartered Accounting Irregularities in Financial Accountant, www.Forensic.HK Statements

5. 14 December 2007 Mergers and Acquisitions in Hong Julianne Doe, Partner, Corporate Strategy & Kong Finance, Hammonds

6. 18 December 2007 China’s new Anti-Monopoly Law – Hannah Ha, Partner, JSM The Devil in the Detail Gerry O’Brien, Registered Foreign Lawyer (Victoria, Australia), JSM

Annual Report 2008 85 Date Topic Presenter

January 2008

1. 4 January 2008 Restructuring for IPO from an Jack Chow, Partner, KPMG accountant’s perspective

2. 8 January 2008 Corporate Governance at the Various senior market practitioners crossroads

3. 12 January 2008 Business set-up in Mainland China Joe H.Y. Zou, CICPA, Partner, Guangdong Kaowick CPA

4. 17 January 2008 China Corporate and Regulatory Various senior market practitioners Update (“CCRU”) 2008

5. 21 January 2008 Cross Border M&A: Some Practical Teresa Ma, Partner, Linklaters Considerations

February 2008

1. 18 February 2008 Directors & Officers Liability Christine Koo, Managing Partner, Christine M. Insurance And Its Coverage Koo & Ip, Solicitors & Notaries

2. 21 February 2008 Update on Foreign Investment in Yanni Song, Senior China Legal Consultant, JSM Mainland China and the Catalogue of Industries for Guiding Foreign Investment (2007 Revision)

3. 23 February 2008 Restructuring for IPO Shirley Lau, Partner, Troutman Sanders

4. 26 February 2008 Strategy to Review Financial Allan Lee, Director, Horwath Hong Kong Group Statements Ltd

March 2008

1. 8 March 2008 Insider dealing and SFC investigation Sherman Yan, Partner, ONC Lawyers

2. 17 March 2008 Companies Act 2006 Professor Michael Lower, Associate Professor, Chinese University of Hong Kong

3. 28 March 2008 China’s New Enterprise Income Tax Simon Wang, Partner – Tax Services, Deloitte Law Touche Tohmatsu Annie Lau, Director – Tax Services, Deloitte Touche Tohmatsu

April 2008

1. 2 April 2008 Price-sensitive Information Laurence L. Li, Barrister-at-Law, Temple Chambers

2. 21 April 2008 Tax efficient onshore/offshore Debbie Annells, Managing Director, AzureTax Ltd, structures for Hong Kong companies Chartered Tax Advisers

86 Chartered Secretaries. More than meets the eye. Date Topic Presenter

May 2008

1. 9 May 2008 Annual Corporate and Regulatory Representatives from the Securities & Futures Update (“ACRU”) 2008 Commission, Companies Registry, Hong Kong Stock Exchanges & Clearing Ltd and the Hong Kong Monetary Authority

2. 20 May 2008 Joint Seminar of HKICS & HKICPA: Professor Jennifer G. Hill, Sydney Law School and The Shifting Balance of Power CoSIG Visiting Scholar between Shareholders & the Board: New Corp’s Exodus of Delaware and Other Antipodean Tales

June 2008

1. 3 June 2008 Company Secretarial Practice in Desmond Lau, Senior Manager – China Corporate China Services, Tricor Services Ltd

2. 12 June 2008 Backdating options – learn from the Professor Cindy A. Schipani, Ross School of mistakes of some U.S. cases Business, University of Michigan

3. 14 June 2008 Pre-IPO series – Session I: Preparing C. K. Poon, Executive Director, Huabao for IPO International Holdings Ltd

4. 16 June 2008 CPD Alliance/SCMP Continuing Representatives from various professional bodies Professional Development Seminar 2008

5. 21 June 2008 Joint Seminar with HKIB – Practical Natalia Seng, Executive Director and Head of Perspectives on handling “Know Corporate Services, Tricor Services Ltd; HKICS your client due diligence” President Rodney Au, Manager, Operational Risk & Compliance, National Australia Bank Ltd.

6. 24 June 2008 Update on accounting standards – an Ernest Lee, Partner, Technical Department, Ernst overview for Chartered Secretaries & Young and Directors

Annual Report 2008 87 Date Topic Presenter

7. 26 June 2008 Joint Seminar with HKICPA and The Professor Roberta Romano, Oscar M. Ruebhausen Law Society: Sarbanes-Oxley: The Professor of Law and Director, Yale Law School Road Ahead

July 2008

1. 8 July 2008 Company Secretarial Practice in Desmond Lau, Senior Manager – China Corporate China (Re-run) Services, Tricor Services Ltd

2. 12 July 2008 Pre-IPO series – Session II: Shirley Lau, Partner, Troutman Sanders Restructuring for IPO

3. 18 July 2008 China’s New Enterprise Income Tax Simon Wang, Partner – Tax Services, Deloitte Law (Re-run) Touche Tohmatsu Annie Lau, Director – Tax Services, Deloitte Touche Tohmatsu

4. 23 July 2008 Developing and Encouraging Ethical Professor Michael Hough, University of Behaviors In Organisations Wollongong NSW Australia

5. 26 July 2008 Pre-IPO series – Session III: Jack Chow, Partner, KPMG Restructuring for IPO from an accountant’s perspective

6. 29 July 2008 Common errors in documents Amy Luk, Assistant Registry Manager lodged with the Companies Registry (Registration) 1, Companies Registry

88 Chartered Secretaries. More than meets the eye. Design and Printing: iOne Financial Press Limited Account Servicing Centre: +852 2879 8787 www.ione.com.hk The Hong Kong Institute of Chartered Secretaries 香港特許秘書公會 Hong Kong Office 香港辦事處

3F., Hong Kong Diamond Exchange Building, 8 Duddell Street, Central, Hong Kong 香港中環都爹利街8號香港鑽石會大廈3樓

Tel電話: (852) 2881 6177 Fax傳真: (852) 2881 5050 Email電郵: [email protected] Website網址: www.hkics.org.hk

Beijing Representative Office 北京代表處

Rms 1014-1015, 10F., Jinyu Mansion, No. 129 Xuanwumen Xidajie, Xicheng District, Beijing, China P.C. 100031 北京市西城區宣武門西大街甲129號金隅大廈10層1014-1015室 郵政編號100031

Tel電話: (8610) 6641 9368 Fax傳真: (8610) 6641 9078 Email電郵: [email protected] Website網址: www.hkics.org.hk