Annual Report 2008 - The Hong Kong Chartered Governance ...

特許秘書. 潛能. 超越所見.

Annual Report 2008

The Hong Kong Institute ofChartered Secretaries

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

香港特許秘書公會

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.

Annual Report 2008 1

ContentsPresident’s Report 2Financial Highlights 6Report of Council 8Calendar of Significant Events 12The Institute and our Members 24Members’ Profile 28The Institute and our Students 30Students’ Profile 32The Institute and the Regulators 34The Institute and Mainland China 36Affiliated Persons’ Profile 45The Institute and the ICSA 46The Institute and Other Professional

and Academic Bodies 47Council Members’ Biographies 51Council Committees, Panels, Working Groups

and Task Forces 55Institute Representatives serving on External Panels,

Committees and Working Groups 61Secretariat 63Independent Auditors’ Report 66Audited Financial Statements

Income Statement 67Balance Sheet 68Cash Flow Statement 69Statement of Changes in Reserves 70Notes to the Financial Statements 71Appendix – ECPD Programme Seminar Report 83

Chartered Secretaries. More than meets the eye.2

President’s ReportYour Council identified ten initiatives

at the beginning of the year. Some

were carried over from previous years

and others were new, all are important

to the future of our profession.

Our first priority was to restructure

the Institute and secretariat in order

that we are able to meet the challenges

in the years ahead, especially those we

anticipate to encounter in Mainland

China.

With increased regulatory pressure,

a raised profile and the massive

challenge of establishing the

profession of Chartered Secretary

in Mainland China, your Council

decided to dissolve the Executive

Committee and its role, in monitoring

the finances and operations of the

Secretariat, was taken over by the

Council. From January 2008 onwards,

we held a Council meeting every

calendar month. The China Affairs

Committee (CAC) was dissolved as

of 1 August 2008 and its activities

incorporated into the three remaining

Committees of Council which are

now accountable for the Institute’s

activities in Mainland China as well as

those in Hong Kong.

By creating a more streamlined

secretariat and committee structure the

Council and its committees can focus

on their relevant areas of expertise in

the entire territory. This in turn allows

the committees to allocate whatever

resources they feel relevant in order

to get the job done, especially where

projects on the Mainland are concerned.

The CAC has done a fantastic job over

the years under the leadership of Vice

President Maurice Ngai, but in order

to maintain the momentum built up

by the CAC it was felt that, as in Hong

Kong, specialist committees should

be able to bring all of their resources

to bear on the projects they felt most

important, whether they be in Hong

Kong or the Mainland.

As far as the secretariat is

concerned, a new position

was opened in Shanghai and

if feasible we will establish

an office similar to the

Beijing Representative

Office in Shanghai. In

the head office in Hong

Kong, four new positions

were created. The first

was the appointment

of a General Manager

to focus on Mainland

issues as well as be

the official number

two to the Chief

Executive. The General

Manager has to integrate and

co-ordinate activities and projects

on the Mainland between the three

Committees of Council as well as

the supporting teams/staff of the

Secretariat among the offices in

Hong Kong, Beijing and Shanghai.

The new position was advertised

and our then Director, Education

and Examinations and Company

Secretary, Louisa Lau was selected

to take up the new position as

General Manager. As a consequence

a new Director, Education and

Examinations has been recruited

to fill the vacancy left by Louisa’s

promotion. The second position

created was the appointment of a

secretary to the General Manager.

The third appointment was the

appointment of the Institute’s first

ever dedicated Manager, Marketing.

The new branding and corporate

identity programme of last year

has created many opportunities to

expand the marketing horizons of

the profession, but in order to fully

exploit these it was felt necessary

to have a dedicated professional.

The new Manager, Marketing will

start in January 2009. The fourth

appointment, a Research Assistant,

will increase our research capacity

and will probably be filled in early

2009.

The new appointments

and new branding of the profession

have presented us with an opportune

moment to refurbish the current

office. Your Institute purchased the

current office in 2004 and this will be

the first proper refurbishment since

then.

As mentioned, the Council has decided

that the opportunities in both Hong

Kong and the Mainland are best served

by a more efficient and streamlined

Institute. Whilst the Hong Kong area

of our ICSA designated territory has

been well catered for the Mainland,

being virgin territory in terms of

the Chartered Secretary profession,

has presented different challenges.

The China strategy, first designed in

2004, has served us well, and we are

working from a firm base. However,

the first phase of that strategy,

the Affiliated Persons programme

is now a mature and established

programme, we therefore need

additional initiatives to maintain the

momentum of progress we have built

up on the Mainland. These include

establishing the Institute’s qualifying

scheme on the Mainland (i.e. the

International Qualifying Scheme or

IQS), both in its Hong Kong format

and a new Mainland IQS with suitable


adapted papers to take account of the

differences in Mainland law, taxation

and accounting procedures etc.

We are also actively seeking to

sign MOU’s with suitable Mainland

universities primarily in Shanghai

to provide Diploma Programmes for

those providing corporate services to

Shanghai listed companies, Shanghai

registered Wholly Foreign Owned

Enterprises (WFOE’s) as well as our

members working in Hong Kong and

Mainland China who are interested

to learn and know more about China

corporate practices.

The Institute’s IT systems play a

central role to the efficiency of the

secretariat and Council decreed

that the long awaited upgrade of

its Amelia CRM and web content

management systems should be

finalised and subjected to a rigorous

security audit as soon as possible.

The current scheduled is for the

systems to go live and be audited

in late 2008/ early 2009. This will be

followed by a significant upgrade of

the Institute’s website, including the

launch a “Career” section which will

not only include career advice but also

allow employers to advertise positions

within their organisations suitable for

Chartered Secretaries.

During the May 2008 meeting of

ICSA International Council, the

decision to revisit the issue of seeking

a WTO and International Labour

Organisation (ILO) classification for

“Corporate Governance, Compliance

and Secretarial Advisory ” (CGCSA)

services was sanctioned. Your Council

fully endorses this initiative and has

already held talks with the relevant

government departments on how

we can progress this issue. The

significance of this initiative lies in

the recognition of the CGCSA services

provided by the corporate secretarial

sector by national governments. Many

governments take their cue from

inter-governmental organisations

such as the WTO and ILO when

forging bi-lateral relations and

agreements. For example, in Hong

Kong, the government has gone to

great lengths to encourage business

to take advantage of the Closer

Economic Partnership Arrangement

(CEPA) made between the Mainland

and Hong Kong. However, none of the

CEPA agreements have included the

CGCSA services sectors specifically

because both the Mainland and Hong

Kong governments use the WTO

classifications of professions as their

guide and the WTO does not currently

recognise the CGCSA services sector

as a professional service provided

by professionals such as Chartered

Secretaries. There are also many other

examples that result in our chosen

profession not being recognised

internationally or locally in a new

piece of legislation or regulation.

Your Institute also staged its biennial

Corporate Governance Conference

in September 2008. This was priority

six on the Council’s list of initiatives.

There are other reports about this

conference, but I would like to

remind members of the massive

effort such an event requires from

the secretariat as well as the Council

and committee members in order to

be truly successful (which includes

being useful for members); my thanks

to all who helped in the planning and

execution of this excellent event.

Given the changing nature of the laws

and regulations both in actual and

interpretative terms Council keeps a

close eye on the Institute’s disciplinary

processes and procedures. During

the past several months a number

of procedural issues have come to

light that have prompted a re-think

of how we conduct our disciplinary

hearings. That is not to say that the

current procedures are in anyway

flawed, but Council believes that

justice must be done and seen to be

done in a transparent and efficient

manner. Thus, one of the initiatives

of Council was to engage external

parties to study and advise on possible

improvements to the procedural

elements of the disciplinary hearings

and to close any loopholes that allow

members to bypass the disciplinary

process by leaving the profession.

The re-write of the Companies

Ordinance provides an excellent

opportunity for the profession to

influence the business environment of

Hong Kong. We have representatives

on all four of the Companies Registry

Advisory Groups, as well as on the

Standing Committee on Company

Law Reform. Hopefully by giving

a practitioner’s viewpoint we can

contribute to ensuring that, in

accordance with the stated aims of

your Institute, that governance is a

boon not a burden to business.

I have already mentioned that the

secretariat has employed a Manager,

Marketing to help focus our marketing

and leverage our new branding. One

of the priorities this year and next

is focus on reaching employers and

help them understand the impact

and value Chartered Secretaries can

bring to an organisation. While we

have been reasonably successful in

getting our message across to the

regulators and government as well as

those in academia (both teachers and

students), we have still to penetrate

all levels of corporate Hong Kong. It

is true that most top listed companies

employ our members, often in the role

of company secretary (approximately

65% of the top 60 companies by

market capitalisation according to

August 2008 statistics), but our

penetration and awareness falls off


dramatically outside the top echelons

of business. Council believes that a

co-ordinated and focussed marketing

campaign will help in reaching this

market segment.

Initiative ten is the introduction of a

mandatory continuing professional

development programme for

Chartered Secretaries. This is

scheduled for completion and

initiation in 2010. The Professional

Development Committee under

the chairmanship of Immediate

Past President Richard Leung is

spearheading this project and great

progress has already been made with

the main proposal already having

gone through a number of drafts.

In December 2007 your Institute

proposed to HKEx that either it

or HKICS run a quality assurance

programme for company secretaries

of Hong Kong listed companies.

This would ensure that those listed

as the company secretary would be

both able and willing to do the job

properly, rather than being company

secretary in name only due to having

a recognised qualification. While

HKEx rejected the proposal at the

time, Council has decided that it

will continue to lobby for such a

programme in the interests of good

governance.

Looking to the FutureThe biggest challenges facing the

profession and the Institute are

developing the profession on the

Mainland whilst at the same time

maintaining and building on the

momentum in Hong Kong. These

coupled with the new marketing

campaign aimed at employers mean

that busy times are ahead, busier

perhaps, than even the past five years.

The other massive challenge facing

the Institute lies beyond the shores

of Hong Kong and the Mainland, in

the international arena. While HKICS

is a committed and active member

of ICSA, the future development of

the profession very much lies at the

feet of the UK Committee and how

they wish the international side of

the profession to develop. Currently

the UK has a built-in majority of

two on International Council. The

reasoning behind this is that as ICSA

was founded and is based in the UK

therefore control must remain in the

UK. Whether we agree or not with this

reasoning (whether ‘control’ should

be defined in terms of a majority of

International Council members is

another issue altogether) the fact

remains that this is the case.

It is also a fact that ICSA is an elite

and exclusive organisation. It is, if

you will, the necessary nature of the

organisation. To obtain membership of

ICSA one must have high standards of

academic ability, professionalism and

be of good character.

Such an organisation cannot be

a niche player within a particular

sector (in this case the CGCSA

services sector) and therefore be both

exclusive and elite and expect to be

seen as a truly global representative

voice of that sector. The corporate

secretarial profession is not the sole

reserve of Chartered Secretaries.

Other professionals such as lawyers,

compliance professionals and

accountants also serve as corporate

secretaries. While ICSA can be a

leading voice (as it can on issues of

governance generally) it simply cannot

be the truly globally representative

one as it excludes, for example, those

who serve as corporate secretaries in

the US.

However, exclusivity and elitism are

positive things for a profession. They

give the Institute and profession

gravitas and to those who know us,

an edge over the rest of the corporate

secretarial profession. This should not

be given up lightly, or indeed at all.

In order to have a truly global

role and voice the fact is that

corporate secretaries need to have

an international organisation (e.g.

one with representation from the

countries/areas such as the US, Japan,

China, India, Russia, the rest of the EU

other than the UK, etc) that is broad

in appeal, easy to join and far more

encompassing than ICSA as well as

being dedicated to achieving common

goals that will benefit all. It should be

a trade/lobbyist organisation rather

than a professional body.

If such a federation could be set up

this would not compromise standards

and therefore the reputation of ICSA

and its members, but would actually


provide a show case for ICSA in that

the other country representatives

could be introduced to the benefits of

professionalism and training in terms

of carrying out corporate secretarial

duties such as those possessed by

a Chartered Secretary. This has the

potential of allowing ICSA to expand

outside its traditional stronghold of

Commonwealth countries.

ICSA is what it is – an exclusive

and elite professional body with

a very specific brand of corporate

secretaryship called Chartered

Secretary. It should not compromise

its standards in order to try and reach

the unattainable goal (on its own)

of being the global representative of

the corporate secretarial profession.

In order to achieve this ICSA needs

to be a member of an international

federation of corporate secretaries –

preferably with each division

representing its own country. Such

an international organisation or

federation must be an inclusive one

that can lobby at the highest levels of

government and inter-governmental

organisations, rather than a

professional body such as ICSA.

HKICS would fully support this move

to set up a corporate secretarial

trade group whilst at the same time

maintain its membership of ICSA. The

special status that a professional body

such as ICSA has and rightly treasures

is one that should not be taken for

granted.

60 years in Hong KongBy 2009 Chartered Secretaries will

have been part of the business

landscape in Hong Kong for 60

years and we will celebrate this

fact starting with our 2009 Annual

Dinner . It is my hope that within

the next six years we will be

celebrating the firm establishment

of the profession of Chartered

Secretary in the Mainland while

at the same time being a member

of a truly global federation of

national bodies representing the

CGCSA services sector at the

highest levels of international and

inter-government organisations.

It is a tradition that I officially

thank all those involved in the

Institute’s affairs from members

of the Executive Committee

(now disbanded) and Council, to

Committee and Panel members

as well as those who have

contributed to research projects

and working groups during the

past year and indeed in years

previous, so thank you one and all.

You have made my second term as

President far easier and productive

than I could have hoped. A huge

vote of thanks must also be given

to the incredibly hardworking

secretariat whose achievements

are highly appreciated.

The future holds many challenges but

plenty of opportunities for our chosen

profession. The recent turmoil in

the financial markets has shown the

importance of good governance and

the risks of ignoring or only paying lip

service to governance issues. People,

not procedures, make governance

work. People such as Chartered

Secretaries who place integrity

and ethics not short term gain at

the centre of business. In times of

upheaval opportunities arise, we shall

seize them.

Natalia K. M. SengPresident

Hong Kong, 11 November 2008


Financial Highlights

2007/08 Income Portion

2007/08 Expenditure Portion

Surplus/(Deficit) Comparison 2004-2008

65% Subscriptions

10% Examination fees received

21% Revenue from functions held

4% Sundry income

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

15,4

84

14,5

69

915

19,5

78

16,4

87

3,0

91

16,3

79

16,6

13

-234

20,2

17

19,5

01

716

21,7

47

24,4

50

-2,7

03

HK$

’000

04 05 06 07 08

Total income

Total expenditure

Surplus/(Defi cit)

Remark: Total income included bank interest & investment income.


Income Distribution Comparison 2004-2008

Expenses Distribution Comparison 2004-2008

11,3

27

1,3

64

2,1

41

409

11,5

69

2,0

54

4,1

93

364

11,3

15

1,8

40

2,4

20

804

12,6

25

2,1

46

3,9

48

1,4

98

HK

$’0

00

04 05 06 07 08

Subscriptions

Examination fees received

Revenue from functions held

Sundry income14

,127

2,20

2

4,61

5

804

5,5

15

619

1,1

59

1,5

82

474

3,5

91

388

1,2

41

6,5

12

597

2,2

54

1,9

29

507

2,4

96

487

1,5

79

HK

$’0

00

04 05 06

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

9,5

23

699

1,7

48

715

1,1

52

2,9

86

870

1,8

08

HK

$’0

00

07 08

10,0

77

768

2,26

6

870

3,05

9

3,18

8

1,12

0

3,10

2

8,2

23

659

741

767

1,2

85

2,6

16

701

1,6

21


Report of CouncilThe Council is pleased to submit our Report, together with

the audited statement of accounts, for the financial year

ended 31 July 2008.

Principal ActivityThe Institute’s main activity is to promote good governance

and advance the efficient administration of commerce,

industry and public affairs. We achieve this by continually

developing the study and practice of governance,

secretaryship and administration of companies and other

bodies.

We set and worked on the following key strategic objectives

in the fiscal year:

1. Development in Mainland ChinaThe China Affairs Committee maintained close

contact with relevant regulators in the Mainland

and made five visits to relevant Mainland regulators

and government bodies during the fiscal year. The

Affiliated Persons Programme continues to be well

supported and is held in high regard by H-share

board secretaries and the regulators both in the

Mainland and Hong Kong. We organised four ECPD

seminars during the year with more than 300

participants attending. The Institute’s qualifying

examination, the International Qualifying Scheme

(IQS), was held in Beijing in December 2007 and

June 2008 for H-share board secretaries and their

subordinates. We also liaised with local universities

to co-organise executive training programmes

for Mainland enterprises in order to continue our

promotion of the value of the Chartered Secretary

profession.

2. Promotion of the Institute and the Chartered Secretary profession to university students in Hong Kong; monitoring the quality of the IQS examinationsThe Education Committee actively promoted the

Institute, the IQS and the Chartered Secretary

profession to university students, academics and

the general public in Hong Kong. During the year,

we participated in more than 42 promotional

activities and professional seminars with the nine

local universities.

One of the important tasks of the Education

Committee is to maintain the quality of the IQS

examinations and the collaborative courses held

with selected universities. The IQS examination

quality assurance system with its three tiers of

monitoring standards – from paper setting to

the final grading of scripts – ensures that the

qualification continues to more than fulfil the high

international standard required by the Institute of

Chartered Secretaries and Administrators.

Through the Student Ambassadors Programme

and Summer Internship Programme we have been

able to give undergraduates opportunities to gain

hands-on experience in professional practices.

This year, 230 students from local universities

took advantage of the 11 diverse and interesting

functions and activities arranged through the

Student Ambassadors Programme.

We held four IQS Information Sessions in Hong

Kong during the year. These sessions are designed

to help members of the general public learn more

about the Chartered Secretary profession and career

opportunities in it.

3. Membership mattersOne of our main aims is to build a strong identity

for the profession and the Chartered Secretary

brand. With this in mind, we launched our new

corporate identity in November 2007. The new

branding reflects our focus on the qualities of the

Chartered Secretary profession and the value they

bring to an organisation rather than on the Institute

as a body.

The Membership Committee takes disciplinary

matters seriously and this year has worked to raise

awareness among members of their professional

duties and obligations in upholding ethics and

standards. During the year, the Disciplinary Tribunal

heard two cases on alleged non-compliance with

the Institute’s regulations and one in relation to the

bankruptcy of a member.


4. Professional developmentThe Practitioner’s Endorsement (PE) element of the

Enhanced Continuing Professional Development

(ECPD) Programme has been very well received by

members, regulators and employers, all of whom

consider it to be a mark of excellence. To serve our

long-term aim of administering a quality assurance

certification programme for all those working

in the corporate secretarial sector, the PE is also

opened to Affiliated Persons, directors, lawyers and

accountants working in the corporate secretarial

field. We believe that continuing development of

professional competence is important and we place

strong emphasis on our ECPD Programme. Our

current projects include reviewing the feasibility of

launching a mandatory ECPD Programme.

We make submissions to the government and

regulators in response to their consultation papers

or whenever we consider that there are important

issues in respect of which we wish to express our

views. We also publish guidance notes and conduct

research projects relevant to the profession.

5. Financial and operations monitoringWe closely monitor the Institute’s significant

operational areas. These include financial

management, the Institute’s IT systems, upgrades

of Amelia – our customer relationship management

system-web systems and the overall development

of the secretariat staff including the use of staff

training facilities both internally and externally.

The Institute experienced a deficit of HK$2.7 million

during the fiscal year which was due to the ad

hoc development items in the new Corporate ID

and related promotional activities (a substantial

part of the approved Corporate ID expenses were

incurred and paid in late 2007 to 2008), IQS

examinations new rubric development, research

reports, sponsorship of the OECD Asian Roundtable

Conference on corporate governance held in Hong

Kong, legal expenses in disciplinary matters, and

a donation in response to an appeal for money

following the Sichuan earthquake disaster.

Taking out the extraordinary items, the Institute would

have an operational deficit of HK$614,936 in view of the

extensive functions, activities and research projects carried

out by the respective Committees and the Council for the

benefit of our Members and students during the year and

future.

StructureIn January 2008, the Institute changed its structure to

improve the efficiency and effectiveness of its operations

in Hong Kong and the Mainland. The Executive Committee

was dissolved and its role in monitoring the finances and

operations of the Secretariat was taken over by the Council.

The China Affairs Committee was also dissolved as of 1

August 2008 and its activities incorporated into the three

remaining Committees which are now accountable for the

Institute’s activities in Mainland China as well as those in

Hong Kong. The new structure of the Council Committees

and the Secretariat is set out on page 56 and page 64.

With the new structure we can focus our resources on

developing and implementing activities to improve the

recognition of the Chartered Secretary profession in the

Mainland.

The three operating committees are each chaired by a

Council member. The committees report directly to Council

and are responsible for implementing the Institute’s

strategic policies in both Hong Kong and Mainland China.

Education Committee – Chaired by Dr Brian Lo FCIS FCSResponsibilities include:

– Overseeing and monitoring standards of the IQS

and collaborative courses.

– Setting, monitoring and implementing studentship

regulatory policies.

– Promoting the IQS, the Institute and the Chartered

Secretary profession to university students.

– Establishing and maintaining contacts with relevant

academic and professional institutions to prepare

students for membership.

– Attending to disciplinary matters and the setting,

monitoring and implementing codes of ethics and

conduct for students.


Membership Committee – Chaired by Maurice W.F. Ngai FCIS FCS (PE)Responsibilities include:

– Setting membership admission policies, processing

applications and maintaining standards for

acceptance to membership of Institute graduates as

well as the processing and maintaining standards

for acceptance of Fellowship status of Associate

applicants.

– Attending to disciplinary matters and the setting,

monitoring and implementing codes of ethics and

conduct for members.

– Improving and maintaining members’ services and

benefits (not including professional development

and publishing).

– Developing an overall marketing communications

strategy for the profession.

– Implementing the Affiliated Persons Programme and

networking with regulators, government officials

and professional institutions in the Mainland.

Professional Development Committee – Chaired by Richard Leung FCIS FCS (PE)Responsibilities include:

– Implementing and maintaining ECPD standards

including the awarding of CPD points for the PE.

– Establishing and maintaining contact with

governmental and regulatory bodies in Hong Kong

to promote the Institute and profession.

– Organising professional training programmes in the

Mainland.

– Assuming editorial responsibility for all the

Institute’s published materials (with the exception

of the Annual Report).

– 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.

– Publishing research reports and developing

Guidance Notes.

– Responding to consultations conducted by

Government or Regulators.

Proposed Amendments to Institute’s Memorandum and Articles of AssociationPursuant to the current Institute’s constitution, the Council

cannot refuse membership de-registration due to failure to

pay subscription under Article 20 of the Institute’s articles

of association even if a member is under investigation.

Therefore, it is recommended to amend the constitution by

making Article 20 in line with Article 18 so that the Council

has the authority to refuse membership de-registration due

to failure to pay subscription and continue investigation

and/or disciplinary proceedings due to a member’s alleged

misconduct. The Companies Registry also recommends

that the Institute amends its Memorandum Clause 4.5(b)

regarding the description of the banking bodies. Changes

to the memorandum and articles of association are being

proposed to address the issue are:

“THAT the Institute’s memorandum and articles of

association be and are hereby amended as follows:

1. THAT the Institute’s Memorandum of Association

paragraph (b) of Clause 4.5 be altered by deleting

the words “the Hong Kong Association of Banks”

after the words “time being by” and replacing the

same with “The Hong Kong and Shanghai Banking

Corporation Limited or another licensed bank as

defined by the Banking Ordinance that is supervised

by the Hong Kong Monetary Authority and

approved by Council for Hong Kong dollars loans”;

2. THAT the Institute’s Articles of Association be

altered by the addition of the following sentence at

the end of Article 18:–

Where disciplinary action is being considered

against a member, his membership shall not

lapse under this Article 18 or Article 20 until the

procedure is completed.”


Council MembersMembers of Council during the financial year and at the

date of this report are as follows:

Prof. Alan K.M. Au FCIS FCS

April W.Y. Chan FCIS FCS(PE)

Bernard T.L. Wu FCIS FCS(PE)

Dr. Brian K.H. Lo FCIS FCS

Diana M.Y. Chung FCIS FCS(PE)

Doris W.N. Wong FCIS FCS

Douglas C. Oxley FCIS FCS

Edith Shih FCIS FCS(PE)

Maurice W.F. Ngai FCIS FCS(PE)

Natalia K.M. Seng FCIS FCS(PE)

Polly O.Y. Wong, FCIS FCS(PE)

Richard W.K. Leung FCIS FCS(PE)

Susie S.F. Cheung FCIS FCS

At the 2008 annual general meeting, April W.Y. Chan, Dr.

Brian K.H. Lo and Doris W.N. Wong will retire from Council

by rotation pursuant to Article 54.2 of the Institute’s

Articles of Association. April W.Y. Chan offer herself for re-

election. Dr. Brian K.H. Lo and Doris W.N. Wong will not

offer themselves for re-election. Council wishes to place

on record its appreciation for their valuable contribution to

the Institute during their membership of Council.

Pursuant to Article 57.2 of the Institute’s articles of

association, if the candidates running for election are

not more than the vacancies, the persons so running for

election shall, as from next annual general meeting, be

deemed to be duly elected members of the Council.

Pursuant to Article 54.6 of the Institute’s articles of

association, no elected member of Council holding office

as of 30 August 2005 has held office for a total of more

than 18 years and that no person who became an elected

member of Council after 30 August 2005 has held office as

an elected member for a total of more than 12 years.

None of the Council members had, during or at the end of

the year, an interest, directly or indirectly, in any contract

of significance with the Institute. Pursuant to Clause 4 of

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

member of Council.

Candidates for Election to the 2008 CouncilAt the close of the nomination date, including retiring

Council member April W.Y. Chan, two candidates, namely

Alberta K. Sie and Seaman S.M. Kwok, have been nominated

for election. As the number of candidates is not more than

the vacancies, the three candidates running for election,

namely, April W.Y. Chan, Alberta K. Sie and Seaman S.M.

Kwok shall be deemed to be duly elected members of the

Council at the Annual General Meeting to be held on 10

December 2008. April W. Y. Chan held office for four years

and may remain eligible to serve for a term of three years

without first ceasing to be a member of Council for one

year. Alberta K. Sie, after her serving of the six years’ term

with the Council, has retired upon the completion of the

2007 Annual General Meeting and she has ceased to be a

member of Council for one year. She is eligible to serve for

a term of three years. According to the Institute’s Article

54.6 no elected Council member should hold office for

more than 18 years. Seaman S. M. Kwok has held office

for a total of 16 years and 5 months having first been

appointed to the previous Executive Committee of ICSA-

HK Branch in May 1989 and has been a Council member

of HKICS until December 2005. If appointed at the 2008

AGM, his maximum tenure of Council membership will be

one year and seven months. Accordingly, his appointment

would cease on 1 June 2010. He will not, thus, be able to

serve the Council for a three-year term.

Financial StatementsThe deficit for the financial year ended 31 July 2008 and

the state of the Institute’s affairs at that date are set out on

pages 66 and 82 of the Financial Statements respectively.

Non-Current AssetsDetails of movements of fixed assets during the year are

set out in notes 13 and 14 of the accounts.

AuditorsA resolution to appoint Fan, Chan & Co. as Auditors of the

Institute to hold office until the conclusion of the next

annual general meeting and to authorise the Council to fix

their remuneration will be proposed at the forthcoming

annual general meeting.

By Order of the Council

Natalia K.M. SengPresident

Hong Kong, 11 November 2008


Calendar ofSignificant EventsEnhanced Continuing Professional Development (ECPD) ProgrammeDuring 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 CampA 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.

Seminar to Lingnan University students

August 2007

September 2007President’s Official Visit to BeijingAn 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 ShanghaiA 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

International Business School.President official visit to Beijing

Baptist University Economic Society Orientation CampA career talk was organised at the Orientation Camp for the

Economics Society, Student Union of Hong Kong Baptist

University on 17 August.

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


Press conference on Business ethics research report

ECPD seminar in Dalian

Company Secretaries Panel (CSP) LuncheonThe 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.

“Business Ethics” Research Report and Press ConferenceIn 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.

Affiliated Persons’ ECPD seminar ~ DalianAn 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 ~ DalianAn IQS information session was held in Dalian on

21 September to introduce the Chartered Secretary

profession and IQS examinations to H-share board

secretaries and their subordinates.

Tea ReceptionA Tea reception was held on 22 September for student

ambassadors, summer interns, subject prize and merit

certificate winners and the recipients of Institute

Scholarships.

Mr. H.M. Tong at Fellows’ Luncheon

Fellows’ LuncheonA Fellows’ Luncheon was held on 24 September with

Timothy HM Tong, Commissioner of the Independent

Commission Against Corruption who delivered a speech

on the ”Role of Chartered Secretaries in Promoting Ethics

Management”.


October 2007

Graduates’ GatheringThis 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 CeremonyOn 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.

November 2007

Launch of New Corporate Identity and BrandingThe 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 UniversityOn 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

Graduates’ Gathering

Corporate Governance Paper Competition and Presentation AwardThe 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”.

Award presentation ceremony for Corporate Governance Paper Competition


H-share Training Programme 2007A 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 LuncheonA luncheon was held on 14 November and attended by

members of the CSP.

IQS Information SessionAn 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.

H-share training programme

IQS Information Session

Expert SeriesTo 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


Corporate Governance Symposium, ShanghaiThe 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.

December 2007

Symposium on Corporate Governance in Shanghai

Cocktail Reception – Meet the Registrar of CompaniesMembers met Ada Chung, Registrar of Companies,

Companies Registry at a special cocktail reception held on

10 December.

Anti-Money Laundering Forum 2007An 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

effective AML compliance system, and to advise on the AML

legal liabilities faced by professionals working as company

services providers.

Meeting the Registrar of Companies

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

13 December.

Student Ambassadors ProgrammeThe Institute’s student ambassadors visited the Hong Kong

Stock Exchange Ltd on 6 December.

Annual General Meeting 2007


Corporate Governance at the crossroadsThe 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 SeminarA professional seminar was held on 10 January at the Hong

Kong Polytechnic University for the Collaborative Course

students.

January 2008

Corporate Governance at the crossroads seminar

China Corporate & Regulatory Update (CCRU) 2008The 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 2008We 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.

Student Ambassadors ProgrammeThe Institute’s student ambassadors visited SFC on

29 January.

Annual Dinner

Annual Dinner Guest of Honour: Mr. Eddy Fong SBS JP


February 2008

March 2008

Student Ambassadors ProgrammeThe 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 KongOur 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.

Student Ambassador Programme – Visit to Computershare HK

Investors Services Ltd

CSP LuncheonA CSP luncheon attended by Ada Chung, Registrar of

Companies, and other senior officials from the Companies

Registry was held on 12 March.

Visit to ShenzhenA 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

held a gathering with the Institute’s Affilated Persons in

Shenzhen.

Fellows’ LuncheonA 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 2008The 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.

Visit to Shenzhen

Fellows’ Luncheon – President Natalia Seng FCIS FCS (PE) and Elsie Leung


April 2008

May 2008

Graduates’ GatheringThis gathering on 8 April celebrated achievement of

Institute’s graduate status by former students. Graduates’

certificates were presented at the ceremony, at which new

graduates met Council members and other senior members

of the Institute.

Cocktail Reception 2008A cocktail reception for academics from the local

universities was held on 11 April 2008. Around 30 senior

academics from Hong Kong’s tertiary education institutions

and other guests attended.

Student Ambassadors ProgrammeA professional seminar on the topic “Annual General

Meetings” was presented to student ambassadors on

2 April.

Student Ambassadors Programme: CLP Annual General MeetingStudent ambassadors attended CLP Holdings Ltd’s annual

general meeting on 29 April.

Annual Corporate & Regulatory Update (ACRU) 2008The 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 GovernanceThe 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.

Annual Corporate and Regulatory Update 2008

2008 OECD Roundtable


Top 100 Listed Companies Corporate Governance Evaluation: Press Conference in BeijingOn 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 SessionThis session, held on 22 May, was to recruit examiners,

markers and reviewers for the IQS examinations.

Fellows’ LuncheonA 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

the strengthening of consumer protection law in Hong

Kong.

Quality Assurance Information Session

Corporate Governance Paper Competition Prize Presentation CeremonyOn 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 ~ BeijingAn Affiliated Persons’ ECPD seminar took place on 29 and

30 May in Beijing. The theme was ”Connected Transactions”

and the seminar attracted 55 participants.

Corporate Governance Paper Competition in Beijing


June 2008

Corporate Governance Paper Competition and Presentation Award 2008 – Briefing SessionA 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 TourA 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 LuncheonThe CSP luncheon on 11 June was attended by Richard

Williams, Head of Listing Division, HKEx, and other senior

HKEx executives.Qingdao Study Tour

Visit to HangzhouDuring 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


Dragon Boat RacesThe 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 AllianceRichard 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

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 Bankers (HKIB)The Institute conducted a joint seminar with the HKIB on

“Practical Perspectives on Handling ‘Know Your Client Due

Diligence’ on 21 June. Institute’s President, Natalia Seng

and Rodney Au, Manager, Operational Risk & Compliance,

National Australia Bank Ltd, were the guest speakers.

July 2008

Dragon boat team

Joint seminar with CoSIG, HKICPA and The Law Society of Hong KongProfessor Roberta Romano, Oscar M. Ruebhausen Professor

of Law and Director of the Yale Law School Center for the

study of Corporate Law was the guest speaker at this first

collateral seminar, which was held on 26 June.

Visit to ShanghaiICSA Professional Standards Committee delegates

visited Shanghai on 2 July. The ICSA delegates met with

representatives from the Shanghai Stock Exchange and the

CSRC Shanghai Regulatory Bureau.

IQS Information SessionThe second IQS Information Session, introducing the

Chartered Secretary profession and IQS examinations to the

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 ~ HangzhouAn 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.

IQS Information Session ~ HangzhouAn IQS information session took place on 18 July in

Hangzhou. This session introduced the Chartered Secretary

profession and IQS examinations to H-share board

secretaries and their subordinates.

New Students OrientationAn orientation session for newly registered students took

place on 28 June with 27 students attending.


Convocation 2007/2008Our 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


The Institute andour MembersMembershipMembers are at the core of the Institute and much of what

we do is in support of our members, both in terms of their

professional status and their collegiate relationships.

We are keen to continue to develop and enhance our

membership strength. As at the end of July 2008, we had

5,014 members and graduates, representing an increase of

2.2 per cent compared with the previous year.

We received 163 successful Associate applications,

slightly down on last year, while there were 10 successful

applications for Fellowship. The Fellowship status is

recognised as the senior rank within the Institute, and is

a clear statement of a member’s attainment of a premier

position within the profession.

The ICSA International Council and the HKICS admitted

Leung Oi Sie Elsie GBM JP as an Honorary Member of both

The Hong Kong Institute of Chartered Secretaries and the

Institute of Chartered Secretaries and Administrators on

23 May 2008.

As at 31 July 2008, our membership is as follows:

PublicationsDuring this fiscal year we published three guidance notes

for our members. These guidance notes are designed to

be a practical resource on good governance, providing

members with practical advice on topical issues relating

to corporate governance and company secretarial matters.

This year’s guidance notes were:

• Directors and Officers Insurance (October 2007)

• Insider Dealing – Part I (March 2008)

• Insider Dealing – Part II (June 2008)

We also issued our Anti-Money Laundering and Counter-

Terrorist Financing (AML and CTF) Guidelines in April

2008. AML and CTF are two of the major challenges facing

the world today. Chartered Secretaries have a duty to

ensure that they are up to date with the latest AML and

CTF procedures not only to better serve their clients and

employers but also as a matter of professional integrity.

Our guidelines are intended for use by all members.

Particular attention is given to the trust and company

service providers sector, an area where many of our

members now work. By providing members with guidance

on what to look for in terms of AML/CTF, what steps they

should take to avoid being party to money laundering

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.

395 Graduates

4,244 Associates

375 Fellows

Membership Services

Professional ServicesBulletin Board Update (BBU) ServiceThe 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


Research ProjectsOn 13 September 2007, we released a research paper

entitled “Business Ethics”. This paper followed on from a

survey of 1,150 Hong Kong-listed companies which was

jointly conducted by the Institute and the Hong Kong Shue

Yan University. The survey aimed to ascertain companies’

views on issues relating to business ethics, including drivers

for running a business in an ethical manner; drivers for and

barriers to the issue of a code of ethics; the prevalence of

the adoption of a whistle-blowing policy; and the provision

of ethics training.

The report was based on the findings of the survey

including a detailed analysis of the responses and the key

tools that can be used in the promotion of business ethics.

The report also contains several recommendations on how

to promote business ethics in Hong Kong.

The Institute made five submissions during the year to the

government and regulators on issues affecting government

and other business related terms. For more information, see

”The Institute and the Regulators” on page 34.

Professional DevelopmentSince 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

Clearing Limited to provide directors’ training.

ECPD is a mandatory component of the Practitioners’

Endorsement (PE), a public acknowledgement of the skills,

experience and current knowledge essential to those serving

as company secretaries. In addition to meeting a four-year

experience criterion, candidates must undertake at least

15 hours’ ECPD seminars or workshops each year for two

consecutive years in order to qualify for PE certification.

Now in its fourth year, the PE is widely recognised by

employers as a mark of excellence which helps them to

identify the best company secretaries. Holders of the PE

can be readily identified by the use of the enhanced post-

nominals FCS(PE) or ACS(PE).

Members’ DisciplineDuring the year, the Disciplinary Tribunal conducted two

cases on non-compliance with the Institute’s rules and

regulations. These cases were referred by the Investigation

Group from previous year during 2006/2007. No cases

were referred by the Investigation Group to the Disciplinary

Tribunal for further action.

Joint seminar with HKICPA

Mr. Martin Wheatley at the Corporate Governance seminar


Social ActivitiesThis year’s annual dinner was held at the Island Shangri-

La Hotel on 17 January 2008. We were delighted to have

Eddy Fong SBS JP, Chairman of the Securities and Futures

Commission, as our guest of honour. Over 300 guests and

members, including Affiliated Persons, who are company

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.

Our Fellows’ luncheons continue to be popular with our

Fellow members. These events allow the senior members of

the Institute to hear presentations from speakers on topics

relating to regulations, economics and politics.

We held two Graduates’ Gatherings in October and April

respectively during which graduates who had completed

the IQS through examination and collaborative courses

were presented with their Graduates’ certificates. Over 50

graduates attended these events, at which they met senior

members of the Institute and Council members.

This year we organised a series of visits to corporations.

These included trips to the Hongkong International

Terminals, the Park’N’Shop fresh food distribution centre

and Hong Kong Electric Co Ltd’s Lamma Winds Turbine.

Professor the Honourable Cheung Bing Leung at Fellows’ Luncheon

Graduates’ Gathering

Visit to Hongkong International Terminals


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

which members and their families explored the old Chinese

cultures and traditions of the area and enjoyed the special

local cuisine.

Looking AheadWe 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.

Qingdao Study tour 2008

Senior Fellows attending Fellows’ Luncheon


Members’ Profile

Gender Distribution

37% Male

63% Female

Employer Organisation

36% Listed Company

28% Private Ltd Company

21% Partnership/

Professional Firm

6% Government/

Quasi-government

Organisation

3% Further/

Higher Education

2% Sole Proprietor/

Self-Employed

1% Association/Society

1% Statutory Body

2% Others

Age Profile

2% Under 29

29% 30-39

49% 40-49

16% 50-59

3% 60-69

1% Over 70

Nature of Organisation’s Main Business

13% Banking/Financial

Institution

13% Accounting

11% Manufacturing

5% Construction/Property

8% Corporate Secretarial

Services

6% Retail/Distribution

5% Civil Service

5% Legal

5% Education Training

2% Telecommunications

1% Public Utilities

2% Management

Consultancy

2% Transport/Logistics

2% Insurance

20% Others


Number of Members (Including Graduates)

3,5

84

3,7

15

3,8

75

4,0

30

4,1

24

4,2

84

4,4

73

4,6

46

4,7

59

4,9

07

5,01

498 99 00 01 02 03 04 05 06 07 08

Admissions

Graduates Associates

98 99 00 01 02 03 04 05 06 07 08 98 99 00 01 02 03 04 05 06 07 08

Fellows

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

Total number of Members/Graduates

Graduates Associates Fellows

310

328

335

304

283

289

345

368

342

372

395

3,0

31

3,1

30

3,2

73

3,4

47

3,5

39

3,6

77

3,8

06

3,9

46

4,0

60

4,1

66

4,24

4

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


The Institute andour StudentsStudent StatisticsAt 31 July 2008 the Institute had 2,556 current students,

of whom 626 were new students who registered during

the fiscal year. For the same period last year, we had

2,602 students and 550 new students registered.

Examinations and Quality AssuranceThe International Qualifying Scheme (IQS), the profession’s

qualifying examination, is maintained and monitored at

the highest international standard. This was the fifth year

for the IQS: Two examination diets were held during the

fiscal year with 1,776 students enrolling in the combined

subjects. The average pass rates for the December 2007

and June 2008 diets were 28.8 per cent and 39.3 per cent

respectively.

A total of 73 students completed the IQS during the year

and advanced to graduate status. We were delighted to

award subject prizes and merit certificates for outstanding

performance to four candidates in the December 2007

examinations and to five candidates in the 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.

Studentship Policy and ImplementationThe Exemption Sub-Committee reviews and endorses

exemptions and recommends exemption policies and

guidelines to the Education Committee. A total of

342 exemption applications were reviewed and handled

during the year.

With the support of the Assessment Review Panel and

Exemption Sub-Committee, the Education Committee

constantly reviews student registrations and related issues

in order to manage the student base in an equitable and

consistent manner. Policy updates this year included the

policy and procedures for the review of examination results

and eligibility for exemptions for both IQS and collaborative

course graduates.

Student Disciplinary CasesAn important criterion in the membership qualifying

process is that an applicant should be a “fit and proper”

person in order to be admitted to the Institute’s

membership. No student disciplinary cases were reported in

either the December 2007 or June 2008 examinations.


Examination Support ServicesWe devote considerable resources to provide support

for our students through various forms of assistance in

preparing them for the IQS examinations.

(a) IQS Examination Preparatory CoursesThe 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 WorkshopsThe 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,

Hong Kong Taxation, Hong Kong Corporate Law,

Corporate Administration and Corporate Financial

Management, which were held in October and

November 2007 and in April 2008.

(c) New Students OrientationWe 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

prize winners also attended these events to share

their experiences. A total of 104 students came to

the three orientation sessions which were held in

August 2007 and in February and June 2008.

Other areas of student support include provision

of study outlines, helping with ordering ICSA Study

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 studentsDuring 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

New Students Orientation

IQS Information Session


Students’ Profile

Channels to Know HKICS

3% HKICS Road Shows/

Career Talks

3% Education &

Careers Expo

28% HKICS Website

11% Employer

19% Colleague

20% Friend or Relative

11% Tutor or Lecturer

3% Careers Service

1% Advertisement

1% Others

Age Distribution of newly registered students

17% 21-25

34% 26-30

23% 31-35

14% 36-40

7% 41-45

4% 46-50

1% 50 or above

Area of Activity of Current Job

41% Accountancy

37% Company Secretarial

3% Compliance

4% Financial Management

2% General Management

10% Legal Admin/

Contracts

2% Offi ce Administration

1% Personnel

Employment Organisation of newly registered students

30% Listed Company

29% Private Company

2% Partnership

8% Commercial/

Industrial Company

2% Government/

Quasi-government

Organisation/

Statutory Body

27% Professional Firm

2% Private Service

Company


Total number of Students

2,9

58

2,8

16

2,7

59

2,6

23

2,7

29

2,7

83

2,8

26

2,6

49

2,6

76

2,6

02

2,55

6

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


The Institute andthe RegulatorsInstitute RepresentationWe maintain a close dialogue and strong working

relationship with the regulators. Institute members are

invited to sit on various panels and working groups set up

by the regulators to contribute their valued professional

opinions. A list of such current representatives is listed on

pages 61 and 62.

SubmissionsWe make submissions to the government and regulators in

response to their consultation papers or whenever we wish

to express our views on issues we consider to be important.

Submissions made by the Institute during the last financial

year included:

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

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 PanelThe 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

last financial year:

• On 13 September 2007, attended by Martin

Wheatley, Chief Executive of the Securities and

Futures Commission (SFC), and other senior SFC

executives

• On 15 November 2007, attended by CSP members

only

• On 12 March 2008, attended by Ada Chung,

Registrar of Companies, and other senior executives

of the Companies Registry

• On 11 June 2008, attended by Richard Williams,

Head of Listing Division of HKEx, and other senior

HKEx executives

Mr. Paul Chow at the Convocation 2008

Mr. Richard Williams at the Expert Series


Professional DevelopmentThe Institute’s ECPD Programme supported by the

regulators. The Institute maintains its status as an

approved “recognised institution for providing Continuous

Professional Training” to the SFC for licensed persons

under the Securities and Futures Ordinance. We are also

one of the two institutions accredited by HKEx to provide

directors’ training.

Annual Corporate & Regulatory Update (ACRU) 2008We organised our ninth ACRU on 9 May 2008. This

successful event was, once again, supported by Hong Kong

regulators with the SFC, Companies Registry, HKEx and

Hong Kong Monetary Authority briefing our members and

other professionals on the latest developments in their

respective areas.

China Corporate & Regulatory Update (CCRU) 2008We also hosted our annual CCRU on 17 January 2008.

This increasingly popular 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.

Expert SeriesWe play an important role in developing a dialogue

between our experienced members and the regulators.

One of the ways in which we do this is by inviting senior

representatives from the regulators to be a guest speaker at

our Expert Series. At an event held on 28 November 2007

the guest speaker was Richard Williams, Head of Listing,

HKEx.

2008 OECD Roundtable on Corporate GovernanceThe 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 AheadWe continue to foster a close relationship with the

regulators to improve and enhance the stature of the

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.

Annual Corporate and Regulatory Update 2008

China Corporate and Regulatory Update 2008


The Institute and Mainland ChinaWe continue with our quest to develop the Chartered

Secretary profession and promote good governance in

the Mainland. We worked closely with authorities and

regulators in Mainland China during the year through

a combination of visits, study tours, presentations

and training programmes for board secretaries, senior

executives and directors.

Affiliated Persons Programme and ECPD SeminarsAs 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.

We organised our second Corporate Governance

Symposium in Shanghai on 6 and 7 December 2007 on the

theme corporate social responsibility. Speakers included

regulators, professional practitioners, institutional bankers

and H-share board secretaries from both Mainland China

and Hong Kong.

Through study tours and attendance at conferences in

the Mainland the Institute continues to work closely with

authorities and regulators in Mainland China to promote the

development of professional standards and good corporate

governance practices.

Networking in Mainland ChinaDuring the fiscal year, China Affairs Committee delegates

made four trips to Mainland China visiting Qingdao, Beijing,

Shanghai, Shenzhen and Hangzhou. Details of meetings

with regulators, government officials, institutions and

corporations are given in Table 2, on page 44.

The main purposes of these visits were to strengthen

networking on the Mainland; to present the progress of the

Affiliated Persons Programme; and to promote the importance

and position of the company secretary/board secretary and

the importance of corporate governance to various regulatory,

professional, academic and commercial organisations in

the Mainland. We also promoted the Institute’s professional

qualification and the qualifying examination, the IQS.

Institute representatives actively participated in functions

held by local authorities and organisations in promoting

the Institute and the profession.

ECPD seminars in Hangzhou

Visit to Shanghai

Visit to Shenzhen


IQS Development in Mainland ChinaWe continue our strategy of developing the IQS and the

Chartered Secretary profession in the Mainland. As of

31 July 2008, the Institute had 25 registered students

and five members who are Mainland residents. Two IQS

examinations diets were held in Beijing simultaneously

with the Hong Kong sittings, in December 2007 and June

2008.

We held two IQS information sessions, in Dalian and

Hangzhou, during the year to introduce IQS and the

Chartered Secretary profession to board secretaries and

their subordinates in H-share listed issuers.

In September 2007, we launched a Corporate Governance

Paper Competition programme in Beijing jointly with the

Department of International Economics and Trade, Peking

University. An information session held in November

2007 introduced the programme to the university’s

undergraduate students. Two rounds of paper reviews were

completed in April 2008 and a prize presentation ceremony

was held in May 2008 in Beijing.

The winner and the two runners up received intern posts

offered by China COSCO Holdings Company Limited and

China Life Insurance (Group) Company, enabling them to

gain valuable practical experience with listed companies.

A part of our ongoing work in promoting the Chartered

Secretary profession and enhancing the awareness and

practice of good corporate governance in Mainland

companies, we actively liaised with Mainland universities

to organise corporate governance training for senior

management and executives of Mainland enterprises.

China UpdatesWe invited Mainland regulators and government officials

to give presentations at the second China Corporate

Regulatory Update, which was held in January 2008. (For

further details, refer to ”The Institute and the Regulators”.)

We organised interviews with board secretaries and

regulators for our monthly journal CSJ; we also organised

a members’ Qingdao Study Tour in June 2008. (For further

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)


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:

Financial Perspective

Cliff Chau

Partner, Financial Advisory Services, KPMG

Huazhen

Due Diligence and Compliance:

Legal Perspective

Li Ying

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:

Mainland China M&A

Shelly Fan

Senior Associate, China Investment Banking

Group, Morgan Stanley Asia Ltd

Mergers and Acquisitions Strategy:

Overseas M&A

Ying Wang

Vice President, Mergers and Acquisitions

Advisory, Deutsche Bank

Post Mergers and Acquisitions

Integration

Su Liang

Company Secretary, China Southern Airlines

Company Ltd

Panel Discussion Panel members:

Cliff Chau, Li Ying, Lena Chan, Ying Wang and Su

Liang



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

guest

Ye Shao Xun

General Manager, ShineWing Certified Public

Accountants

Performing listed companies

corporate social responsibilities

and enhancing the corporate

governance structure

Zhang Xin Wen

Director, China Securities Regulatory Commission –

Beijing Regulatory Bureau

Enhance responsibilities of listed

companies and to balance the

interests of all stakeholders

Zhou Qinye

General Manager, Shanghai Stock Exchange

International CSR experiences and

practice in China

He Jie

Head of Venture Enterprise Training Center,

Shenzhen Stock Exchange

Evaluation on Top 100 listed

companies in China 2007

and analysis on corporate

responsibilities

Lu Tong

Director, Corporate Governance Centre of China,

Institute of World Economics and Politics,

Chinese Academy of Social Sciences

Enhance companies’ share value

via good corporate governance

Ye Xiang

Managing Director, VisionGain Capital Limited

Motivation of managerial staff and

the balanced development of an

accountability system

Maggy Fang

Senior Consultant of Towers Perrin (Shenzhen)

Consulting Co., Ltd.

CSR from the perspective of

international investors

Gao Chaoshen

President of Schroders China

Case Study 1 – Positively

undertake social responsibility

to be an outstanding enterprise

citizen

Nie Ming

Manager, Board Secretariat, General Service

Division, China Life Insurance Company Ltd

CSR practices and the best

international CSR practices

Marco Liu

Enterprise Risk Services Partner, Deloitte Touche

Tohmatsu

Engrave responsibility, continuous

contribution

Qi Jun

General Manager of Shanghai Wujing Chemical

Co., Ltd.



7 Dec 2007 HKICS research reports on business

ethics and environmental reporting

Maurice Ngai

Vice President and China Affairs Committee

Chairman, HKICS

Case Study 2 – How do A- and

H-share companies balance the

interests of stakeholders and

ensure their due diligence

Yao Jun

Company Secretary of Ping An Insurance (Group)

Company of China Ltd.

The influence of CSR to the listed

companies’ value creation

Diana Tsui

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

situation and trends of PRC listed

companies

Ma Shu Qing

Director, Comprehensive Division, Department

of Listed Company Supervision, China Securities

Regulatory Commission

China’s new Anti-Monopoly Law

and its implementation

Ye Jun

Deputy Division Director, Anti-Monopoly

Office, Department of Treaty & Law, Ministry of

Commerce, People’s Republic of China

Corporate Governance – the latest

trend and development

Michael Cheng

Senior Vice-President, Listing Division, Hong

Kong Exchanges and Clearing Ltd

Regulation of merger/acquisition

activities in Hong Kong with

recent case studies

Pinky Tse

Director, Corporate Finance Division, Securities

and Futures Commission



Investment banks: CDR –

Development and forecast

Kwan Siu Chan

Director, Securities and Funds Services, Head of

Depository Services, Asia Pacific, Citi

Corporate Governance and

Investment Risks of PRC

Companies Listed in Hong Kong:

Implications for Cross-border

Regulatory Collaboration

Dr. Leng Jing

Assistant Professor, Faculty of Law, The

University of Hong Kong

Returning from H share to IPO in

A share

Ye Yu Mang

Company Secretary, China Shipping Container

Lines Company Ltd

Panel discussion: Practical

considerations on dual listing of

A + H shares companies

Panel Chair:

Maurice Ngai

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


Lines Company Ltd

Xie Xin Yu

Deputy General Manager and Company

Secretary, Anhui Expressway Company Ltd



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

connected transactions

Chik Pui Hong

Partner, Baker & McKenzie

Gu Ning

Legal Assistant, Baker & McKenzie

Compliance and practice on

connected transactions in Hong

Kong and the mainland

Maurice Ngai

Connected transactions in

practice –

• Independent financial advice

• Audit on continuous connected

transactions and disclosure

• Connected persons

Terence Chan

Senior Manager, Assurance & Advisory Business

Services, Ernst & Young Hua Ming

Workshop and case analysis –

role play of independent director,

board secretary and auditor, and

discussion

Bernard Wu

Council member, Vice-Chairman of China Affairs

and Professional Development Committees, HKICS

Continuous connected

transactions – practice of investor

relations

Dr. Eva Chan

Head of Investor Relations, CC Land Holdings Ltd

Case study – management of

connected transactions

Ye Yu Mang


Lines Company Ltd

Panel discussion Chairman – Bernard Wu

Panel members: Maurice Ngai, Ye Yu Mang, Chik

Pui Hong, Gu Ning and Terence Chan



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

17 July 2008 Construction of mainland state-

owned enterprises’ internal control

system

Sun Qin Hong

Director-General, Bureau of Enterprise

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

requiring attention for companies

listed in mainboard of HKEx

Tommy Tong, Partner, Herbert Smith

Tom Chau, Partner, Herbert Smith

Induction to Directors and

function of board secretaries –

communication with shareholders

and effective meeting:

transparency and accountability

Polly Wong

Company Secretary/Assistant Financial

Controller, Dynamic Holdings Limited

18 July 2008 Disclosure of interest and insider

dealing

Maurice Ngai

Vice-President, Chairman of China Affairs and

Membership Committees, HKICS

Financial Reporting, Directors’

Report, Auditors Report, other

Financial Disclosure and Stock

Exchange’s post vetting enquiry

on financial disclosure

Raymond Chen

Partner, Technical, Deloitte Touche Tohmatsu

Workshop – Role play and case

study discussion

“Manfold Toy Company Limited:

Responsibility of director and

inter-related people” case study

Louisa Lau, Director, China Affairs, Education and

Examinations, HKICS

Kenneth Jiang, Chief Representative, Beijing

Representative Office, HKICS

Note of thanks to Independent Commission Against Corruption – Hong Kong Ethics

Development Centre is allowing the Institute to use the case study.


Number of ECPD hours achieved from August 2007 to July 2008

ECPD 0 – 7 hrs 7.5 – 10 hrs 10.5 – 15 hrs 15.5 – 20 hrs21 hrs and

above Total

No. of Affiliated Persons 24 7 17 6 24 78

Number of ECPD attendance frequency from August 2007 to July 2008

No. of sessions Nil One Two ThreeFour and

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－上海市經濟管理幹部學院

State-Owned Assets Supervision and Administration

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


Affiliated Persons’ Profile

Employer Organisation

85% State Owned

Enterprise

15% Private Enterprise

Gender Distribution

74% Male

26% Female

Age Profile

15% Under 35

56% 35-45 years

29% Over 46

Industry Type

6% Petro & Chemical

34% Machine

Building Industry

8% Steel & Raw Material

17% Transportation

4% Public Utility &

Environmental

Protection

4% Medicament Manufacture

6% Coal & Electricity

1% Logistics

20% Other Industries


The Institute and the ICSAThe 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.

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

Mainland China and the Chartered Secretary professional

worldwide.

Professional Standards Committee visit to Shanghai

Meeting at the Shanghai Stock Exchange


The Institute and OtherProfessional and Academic BodiesWe continue to nurture close working relationships with

local universities as well as with other professional bodies.

Collaborative CoursesA comprehensive review of Collaborative Courses

Agreement (CCA) programmes requires an ongoing

monitoring of standards for the three post-graduate

courses graduates of which may be granted exemptions

from the Institute’s IQS. The next review of the three

courses, listed below, will be held in the 2008/09 academic

year:

• City University of Hong Kong – Master of Science in

Professional Accounting and Corporate Governance

(Corporate Administration Stream)

• Open University of Hong Kong – Master of

Corporate Governance

• The Hong Kong Polytechnic University – Master of


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.

Student Ambassadors Programme and Summer Internship ProgrammeThe Student Ambassadors Programme, first launched in

August 2006, helps promote the Institute and the Chartered

Secretary profession to undergraduates in business, law

and accounting faculties. A total of 230 students enrolled

in the programme in 2007/2008. During the year, we

organised 11 events including professional seminars, visits

to professional firms and regulators, and attendance at the

annual general meeting of Hong Kong-listed CLP Holdings

Ltd.

Our Summer Internship Programme allows students to

get hands-on experience in company secretarial firms or

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 AwardThe 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

on 12 September 2008.Dr. Brian Lo FCIS FCS presenting at the City University of Hong Kong


Professional Seminars and Networking with UniversitiesThe Institute continues its promotion of the Chartered

Secretary profession to undergraduates, with 16 career

talks and professional seminars organised with local

universities during the fiscal year. Participating universities

were the Hong Kong Polytechnic University, City University

of Hong Kong, the Open University of Hong Kong, the

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.

Another of our vital roles is to nurture closer working

relationships with local universities. In April we invited

representatives from local universities to a cocktail

reception. We also organised a luncheon meeting for

the Academic Advisory Panel, which comprises eminent

academics in Hong Kong, to provide more information on

the latest developments with regard to the Institute and

the Chartered Secretary profession.

Sponsorship of Student AssociationsWe sponsored 18 functions including orientation camps,

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.

ScholarshipWe 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.

Networking day at Lingnan University

Academic cocktail


Universities/College whose Students received Institute Scholarships/Subject Prizes• City University of Hong Kong

• 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

Professional DevelopmentAs part of our promotion of the Chartered Secretary

profession to the general public and wider business world,

we held a series of joint seminars with other professional

bodies.

Joint seminar with The Hong Kong Institute of Bankers (HKIB)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

2008. Two of our Fellow members – Natalia Seng, HKICS

President, and Rodney Au, Manager, Operational Risk

& Compliance, National Australia Bank Ltd, were guest

speakers at this seminar, which attracted 85 participants.

Joint seminar with the Hong Kong Institute of Certified Public Accountants (HKICPA)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” was held

on 20 May 2008. One hundred participants attended.

Joint seminar with The Law Society of Hong Kong and HKICPA

Joint seminar with Hong Kong Institute of Bankers


Collaboration with the HKICPA and The Law Society of Hong KongThis year we put a formal collaboration framework in place

with the HKICPA and The Law Society of Hong Kong to

run a series of seminars on corporate governance topics.

The first of these seminars was held on 26 June 2008 and

attracted 133 participants. The topic was “Sarbanes Oxley:

The Road Ahead”.

CPD AllianceAs a founding member of the CPD Alliance, we continued

our active participation in this grouping of 20 professional

bodies. Maria Kwan, Director, Professional Development,

was appointed as Honorary Secretary at the CPD Alliance’s

annual general meeting held on 24 June 2008.

As part of the promotional activities of the ECPD

Programme, Richard Leung, HKICS Immediate Past

President and Chairman of Professional Development

Committee, was one of the speakers at the seminar on

“Updates on CPD and Future Trends” organised by the CPD

Alliance and South China Morning Post which took place

on 16 June 2008. Natalia Seng, HKICS President, was one

of the panelists at the press conference that was held to

publicise the CPD Alliance survey on “Employee Wellness

of Hong Kong Professionals” on the same date. These two

events attracted wide media coverage.

Promotional Activities – Professional and Academic Bodies

Professional Seminars and Career TalksWe took the good governance message to local academia

this year with professional seminars and career talks

introducing the Chartered Secretary profession, the

Institute and the IQS examinations to the following

university students:

• City University of Hong Kong on 6 October 2007

and 25 January 2008

• Hong Kong Baptist University on 6 March 2008

• Hong Kong Shue Yan University on 22 February

2008

• Lingnan University on 2 April 2008

• The Chinese University of Hong Kong on 12 April

2007 and 7 April 2008

• The Hong Kong Polytechnic University on 3 and 5

December 2007 and 10 January 2008

• 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 AheadWe 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.


Council Members’Biographies

PresidentNatalia 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-PresidentsApril 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.

TreasurerDouglas C. Oxley, FCIS FCSMr. 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.


Professor Alan K.M. Au, FCIS FCS, FHKIM, MBA, MMS, PhDProfessor 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.


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, MIETDr. 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, SolicitorMs. 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 FCSMs. 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.


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.


Council Committees, Panels,Working Groups and Task ForcesStructure of the Institute (up to 31 July 2008)

Council

Executive Committee Chief Executive

Membership Committee

Investigation Group

Disciplinary Tribunal

Appeal Tribunal

Special Entry Scheme

Interview Panel

Re-election to Ordinary

Member Status CPD

Points Exemption

Assessment Panel

Education Committee

Exemption Sub-Committee

Assessment Review Panel

Academic Advisory Panel

Students Disciplinary

Sub-Committee

China Affairs CommitteeProfessional Development

Committee

Technical Consultation Panel

Professional Services Panel

Company Secretaries Panel

Editorial Board

CPD Points Panel


Structure of the Institute (From 1 August 2008)

Council

Chief Executive

Membership Committee Professional Development Committee Education Committee

Investigation Group Company Secretaries Panel Exemption Sub-Committee

Disciplinary Tribunal Professional Services Panel

Appeal Tribunal Technical Consultation Panel

Assessment Review Panel

Special Entry Scheme

Interview PanelEditorial Board

Academic Advisory Panel

CPD Points Panel

Student Disciplinary

Sub-Committee

Re-election to Ordinary Member

Status CPD Points

Exemption Assessment Panel


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



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



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


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


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


Institute Representatives serving on External Panels, Committees and Working Groups1. 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


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


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


Secretariat

HKICS Secretariat (up to 31 July 2008)

Chief Executive

Personal Assistant

Director, Membership

Assistant

Manager

Membership

Officer, Communications

Director, Professional Development

Assistant

Manager,

Professional

Development

2 X Officer,

Professional

Development

Director, Research & Technical

Director, Education & Examinations,

China Affairs

Assistant

Manager

Education &

Examinations

Officer,

Education &

Examinations

Manager,

Education &

Examinations

Accountant

Administrative

Assistant

Officer,

Accounts

Chief

Representative

Beijing

Representative

Office

Office

Secretary

BRO

Education &

Examinations

Manager

Administrative

Assistant, China

AffairsReceptionist

Officer,

Membership

Officer,

Information

Technology

Administrative

Officer


HKICS Secretariat (From 1 August 2008)

Based in Mainland

General Manager

Secretary(Vacant)

Director, Technical &

Research(Vacant)

Research

Assistant

(Vacant)

Manager, Marketing (Vacant)

Officer,

Communications

Director, Professional Development

Manager,

Professional

Development

2 x Officer,

Professional

Development

Director, Membership

Assistant

Manager,

Membership

Officer,

Membership

Officer,

Membership

– Mainland

Affairs

Director, Education & Examinations

Officer,

Education &

Examinations

Manager,

Education &

Examinations

2 x Assistant

Manager,

Education &

Examinations

Accountant

Officer,

Information

Technology

2 x

Administrative

Assistant

Officer,

Accounts

Administrative

Officer

Chief Representative

Beijing Representative

Office

Consultant

Receptionist

Office

Secretary

Chief Executive

Personal Assistant


Hong Kong Registered OfficeChief ExecutivePhillip Baldwin

General Manager and Company SecretaryLouisa T.M. Lau FCIS FCS(PE)

Director, MembershipCandy N.L. Wong

Director, Professional DevelopmentMaria Y.F. Kwan ACIS ACS(PE)

Director, Education & ExaminationsIvy W.C. Lo MHKCS, M. Ed

AccountantTracy L.K. Yan CPA, CPA(Aust)

Manager, Professional DevelopmentMichele K. Fong

Personal Assistant to Chief ExecutiveAlice Y.N. Lam

Assistant Manager, MembershipAdrian S.K. Wong

Assistant Manager, Education & ExaminationsMay P.S. Cheung

Assistant Manager, Education & ExaminationsVanessa W.Y. Kam

Officer, Membership – Mainland AffairsKaren C.L. Lam

Officer, MembershipAgnes I.L. Cheng

Officer, Education & ExaminationsBrian C.Y. Chan

Officer, Professional DevelopmentIvy C.S. Chow

Irene T.Y. Lau

Officer, AccountsJordan K.C. Wong

Officer, Information TechnologyLeo C.H. Chu

Administrative OfficerHelen Y.M. Tong

Officer, CommunicationsElaine Y.L. Cheung

Administrative AssistantKatherine S.C. Chan

Raynata W.T. Lee

Beijing Representative OfficeChief RepresentativeKenneth G.L. Jiang

ConsultantCharlotte Y.L. Xiao

Manager, Education & ExaminationsCarrie H.X. Wang

Office SecretaryYuki L.M. Zou

ReceptionistL.N. Chen

Beijing Representative Office

Hong Kong Secretariat


Independent Auditors’ ReportTO THE MEMBERS OFTHE 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 statementsThe 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 responsibilityOur 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.

OpinionIn 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


Income StatementFor 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


Balance SheetAt 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. OxleyPresident Treasurer


Cash Flow StatementFor the year ended 31 July 2008

2008 2007

Note HK$ HK$

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

Investing activitiesInterest 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


Statement of Changes in ReservesFor 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


Notes to the Financial StatementsFor the year ended 31 July 2008

1. Corporate status and principal activitiesThe 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 standardsIn 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.


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 policiesRevenue recognitionRevenue 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 equipmentBuildings 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.


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 receivablesTrade 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.

InvestmentsInvestments 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.



Cash and cash equivalentsCash 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 payablesTrade 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 goodwillAt 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.

InventoriesInventories, 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 currenciesTransactions 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.



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

Employee benefitsSalaries, 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.

ReservesThe 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 paymentThe 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 instrumentThe 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 riskCertain 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.


4. Financial instrument (continued)

Equity price risksThe 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 analysisThe 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 riskThe 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 riskThe 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 uncertaintyIn 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 amortisationThe 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.


5. Critical accounting judgments and key sources of estimation uncertainty (continued)

Allowances for bad and doubtful debtsThe 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 propertyAt 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. SubscriptionsSubscriptions 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


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. TaxationIn 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’ emolumentsDuring 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


13. Property, plant and equipment

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

Cost or valuationAt 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 DepreciationAt 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 valueAt 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.


14. Prepaid lease payments

HK$

CostAt 1 August 2006 14,530,000

At 31 July 2007 14,530,000

At 31 July 2008 14,530,000

Accumulated amortisationAt 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 valueAt 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).


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.


19. Note to cash flow statementReconciliation 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


Appendix – ECPDProgramme Seminar ReportECPD Programme Seminar Report (August 2007 – July 2008)

Date Topic Presenter

August 2007

1. 2 August 2007 The Law and Practice of Company

Meetings

Jenkin Suen, Barrister-at-Law, Des Voeux

Chambers

2. 7 August 2007 Internal Control for Listed

Companies (Re-run)

Brian Lo, Vice President and Company Secretary,

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

and Downsizing – Session II:

Business Expansion II (Re-run)

Ludwig Ng, Senior Partner, ONC Lawyers

Shen Ye, Senior Lawyer, Kingson Law Firm

5. 20 August 2007 Merger with and Acquisition on

Domestic Enterprises by foreign

Investors Provisions in PRC

Ying Li, Partner, Heller Ehrman

6. 25 August 2007 The essential elements of ADR and

the essence of an arbitration clause

Christopher To, Secretary-General, Hong Kong

International Arbitration Centre

7. 28 August 2007 Policies and Procedures for

Employment and Investment Visas

Helen Chan, Assistant Director, Visa and Policies

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



September 2007

1. 5 September 2007 Practical considerations in Mergers

& Acquisitions

Julianne Doe, Corporate Finance and Commercial

Partner, Hammonds

2. 7 September 2007 Common breaches of the Listing

Rules (Re-run)

Peter Chen, Counsel, O’Melveny & Myers

3. 8 September 2007 Latest China Individual Income Tax

Development (Re-run)

Joe H.Y. Zou, CICPA, Partner, Guangdong Kaowick

CPA

4. 11 September 2007 Employment (Amendment)

Ordinance 2007

Duncan Abate, Partner, Head of Employment and

Employee Benefits Group, JSM

5. 13 September 2007 Legal Issues in Business Expansion

and Downsizing – Session III:

Restructuring and Downsizing I (Re-

run)


Sherman Yan, Partner, ONC Lawyers

6. 14 September 2007 Ethics – The Core Value of

Leadership – 2007 Directors’ Forum

Co-organised with ICAC

7. 22 September 2007 Transfer and Repurchase of Shares

for Private Company

Gloria Ma, Director, Head of Registration and

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

and Downsizing – Session IV:

Restructuring and Downsizing II

(Re-run)


Sherman Yan, Partner, ONC Lawyers

3. 13 October 2007 Managing Fraud Risks – Session I:

Common Fraud Schemes

Allan Lee, Director, Horwath Hong Kong Group

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

Directors

Professor C. K. Low, Associate Professor in

Corporate Law, The Chinese University of Hong

Kong

6. 27 October 2007 Practical Tips on Drafting

Announcements

Shirley Lau, Partner, Troutman Sanders



November 2007

1. 3 November 2007 Managing Fraud Risks – Session II:

Fraud Risk Factors and Indicators


Ltd

2. 5 November 2007 How to Prepare an Outstanding

Annual Report

April Chan, Company Secretary, CLP Holdings Ltd

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

Enforcement of Judgments

Arrangement between Hong Kong

and the Mainland

Simon McCONNELL, Partner, Allens Arthur

Robinson

Frank POON, Deputy Solicitor General (Acting),

Legal Policy Division, Department of Justice

5. 22 November 2007 Close down a business in Hong

Kong

Frances Chan, Director and Head of Corporate

Restructuring, Corporate Secretarial, KCS Hong

Kong Ltd

6. 28 November 2007 Expert Series – Meeting With

Distinguished Speaker

Richard Williams, Head of Listing, Hong Kong

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:

Anti-fraud Measures and Controls


Ltd

Ricky Cheng, Director, Horwath Risk Advisory

Services Ltd

3. 10 December 2007 Due Diligence Exercise for Listing in

Hong Kong

C. K. Poon, Executive Director, Huabao

International Holdings Ltd

4. 12 December 2007 Forensic Accountancy and

Accounting Irregularities in Financial

Statements

Benny K. B. Kwok, Chartered Surveyor, Chartered

Accountant, www.Forensic.HK

5. 14 December 2007 Mergers and Acquisitions in Hong

Kong

Julianne Doe, Partner, Corporate Strategy &

Finance, Hammonds

6. 18 December 2007 China’s new Anti-Monopoly Law –

The Devil in the Detail

Hannah Ha, Partner, JSM

Gerry O’Brien, Registered Foreign Lawyer

(Victoria, Australia), JSM



January 2008

1. 4 January 2008 Restructuring for IPO from an

accountant’s perspective

Jack Chow, Partner, KPMG

2. 8 January 2008 Corporate Governance at the

crossroads

Various senior market practitioners

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

Update (“CCRU”) 2008

Various senior market practitioners

5. 21 January 2008 Cross Border M&A: Some Practical

Considerations

Teresa Ma, Partner, Linklaters

February 2008

1. 18 February 2008 Directors & Officers Liability

Insurance And Its Coverage

Christine Koo, Managing Partner, Christine M.

Koo & Ip, Solicitors & Notaries

2. 21 February 2008 Update on Foreign Investment in

Mainland China and the Catalogue

of Industries for Guiding Foreign

Investment (2007 Revision)

Yanni Song, Senior China Legal Consultant, JSM

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

4. 26 February 2008 Strategy to Review Financial

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

Law

Simon Wang, Partner – Tax Services, Deloitte

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

structures for Hong Kong companies

Debbie Annells, Managing Director, AzureTax Ltd,

Chartered Tax Advisers



May 2008

1. 9 May 2008 Annual Corporate and Regulatory

Update (“ACRU”) 2008

Representatives from the Securities & Futures

Commission, Companies Registry, Hong Kong

Stock Exchanges & Clearing Ltd and the Hong

Kong Monetary Authority

2. 20 May 2008 Joint Seminar of HKICS & HKICPA:

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

June 2008

1. 3 June 2008 Company Secretarial Practice in

China

Desmond Lau, Senior Manager – China Corporate

Services, Tricor Services Ltd

2. 12 June 2008 Backdating options – learn from the

mistakes of some U.S. cases

Professor Cindy A. Schipani, Ross School of

Business, University of Michigan

3. 14 June 2008 Pre-IPO series – Session I: Preparing

for IPO

C. K. Poon, Executive Director, Huabao

International Holdings Ltd

4. 16 June 2008 CPD Alliance/SCMP Continuing

Professional Development Seminar

2008

Representatives from various professional bodies

5. 21 June 2008 Joint Seminar with HKIB – Practical

Perspectives on handling “Know

your client due diligence”

Natalia Seng, Executive Director and Head of

Corporate Services, Tricor Services Ltd; HKICS

President

Rodney Au, Manager, Operational Risk &

Compliance, National Australia Bank Ltd.

6. 24 June 2008 Update on accounting standards – an

overview for Chartered Secretaries

and Directors

Ernest Lee, Partner, Technical Department, Ernst

& Young



7. 26 June 2008 Joint Seminar with HKICPA and The

Law Society: Sarbanes-Oxley: The

Road Ahead

Professor Roberta Romano, Oscar M. Ruebhausen

Professor of Law and Director, Yale Law School

July 2008

1. 8 July 2008 Company Secretarial Practice in

China (Re-run)

Desmond Lau, Senior Manager – China Corporate

Services, Tricor Services Ltd

2. 12 July 2008 Pre-IPO series – Session II:

Restructuring for IPO

Shirley Lau, Partner, Troutman Sanders

3. 18 July 2008 China’s New Enterprise Income Tax

Law (Re-run)

Simon Wang, Partner – Tax Services, Deloitte

Touche Tohmatsu

Annie Lau, Director – Tax Services, Deloitte

Touche Tohmatsu

4. 23 July 2008 Developing and Encouraging Ethical

Behaviors In Organisations

Professor Michael Hough, University of

Wollongong NSW Australia

5. 26 July 2008 Pre-IPO series – Session III:

Restructuring for IPO from an

accountant’s perspective

Jack Chow, Partner, KPMG

6. 29 July 2008 Common errors in documents

lodged with the Companies Registry

Amy Luk, Assistant Registry Manager

(Registration) 1, Companies Registry

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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 6177Fax傳真: (852) 2881 5050Email電郵: [email protected]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 9368Fax傳真: (8610) 6641 9078Email電郵: [email protected]網址: www.hkics.org.hk

Annual Report 2008 - The Hong Kong Chartered Governance ...

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